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HomeMy Public PortalAbout2022-05-17-Lynwood_Agenda_RegularThis Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603-0220, ext. 200. Procedures for Addressing the Council IN ORDER TO EXPEDITE CITY COUNCIL BUSINESS, WE ASK THAT ALL PERSONS WISHING TO ADDRESS THE COUNCIL SUBMIT YOUR COMMENTS IN ADVANCE TO CITYCLERK@LYNWOOD.CA.US OR FILL OUT A FORM PROVIDED AT THE PODIUM, AND TO TURN IT IN TO THE CITY CLERK PRIOR TO THE START OF THE MEETING. FAILURE TO FILL OUT SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE COUNCIL IN THE ABSENCE OF THE UNANIMOUS CONSENT OF THE COUNCIL. AGENDA City Council Regular Meeting TO BE HELD ON May 17, 2022 COUNCIL CHAMBERS - 11350 BULLIS RD. LYNWOOD, CA 90262 or Web conference via ZOOM - To participate via Zoom or by telephone: 1-669-900-9128 or 1-253-215-8782 Meeting ID: 835 2029 8238 Duly Posted on 5/13/2022 By MQ 6:00 PM 1.CALL TO ORDER 2.CERTIFICATION OF AGENDA POSTING BY CITY CLERK 3.ROLL CALL OF COUNCIL MEMBERS Jorge Casanova, Mayor Jose Luis Solache, Mayor Pro Tem Oscar Flores, Council Member Marisela Santana, Council Member Rita Soto, Council Member 4.PLEDGE OF ALLEGIANCE 5.INVOCATION 6.PRESENTATIONS/PROCLAMATIONS Update on Law Enforcement Issues City Council Members Reporting on Meetings Attended (Gov. Code Section 53232.3 (D)). Legislative Update City Video(s) 7.COUNCIL RECESS TO: City Council Regular Meeting - Page 1 of 473 Lynwood Successor Agency Lynwood Housing Authority Lynwood Public Financing Authority PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) NON-AGENDA PUBLIC ORAL COMMUNICATIONS THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE COUNCIL ON ITEMS WITHIN THE JURISDICTION OF THE COUNCIL AND NOT LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL DISCUSSION OF THE ISSUE BY THE COUNCIL, BUT COUNCIL MAY REFER THE MATTER TO STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M. Brown Act, Government Code Section 54954.2 (a).) PUBLIC HEARING 8.FISCAL YEAR 2022-23 ANNUAL ACTION PLAN Comments: The City Council will conduct a public hearing for citizens input on the adoption of the City's Annual Action Plan for the Fiscal Year (FY) period July 1, 2022 through June 30, 2023. The City anticipates having a total of $1,078,831 of CDBG funds available to allocate and $1,844,395 in HOME funds available to allocate for the 2022-23 year. (CD) Recommendation: It is recommended that the City Council take the following actions: 1. Conduct a public hearing and take public testimony on the Annual Action Plan covering the period July 1, 2022 – June 30, 2023. 2. Approve the CDBG and HOME funding recommendations, authorizing the submittal of the City’s FY 2022-23 Annual Action Plan (Attachment C) to the U.S. Department of Housing and Urban Development. 3. Authorize the City Manager to execute all appropriate and necessary documents to receive funding and implement approved use. 4. Approve the CDBG amount of $330,000 to be allocated for the City’s CIP Public Facilities and Infrastructures (Street Improvement Project). 5. Award the following public service agencies city CDBG funds and authorize the City Manager to execute agreements: Code Enforcement - $234,633 City of Lynwood – Afterschool Program - $55,500 City of Lynwood – Senior Program - $39,000 City of Lynwood – Sports Program - $12,000 HOPICS - $25,000 Lynwood Athletics Community Services - $15,000 The Harmony Project - $15,000 CONSENT CALENDAR ALL MATTERS LISTED UNDER THE CONSENT CALENDAR WILL BE ACTED UPON BY ONE MOTION AFFIRMING THE ACTION RECOMMENDED ON THE AGENDA. THERE WILL BE NO SEPARATE DISCUSSION ON THESE ITEMS PRIOR TO VOTING UNLESS MEMBERS OF THE COUNCIL OR STAFF REQUEST SPECIFIC ITEMS TO BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION. 9.APPROVAL OF THE WARRANT REGISTER Comments: City of Lynwood warrant register dated May 17, 2022 for FY 2021-2022. (FIN) City Council Regular Meeting - Page 2 of 473 Recommendation: Staff respectfully recommends that the City Council of the City of Lynwood approve the warrant register dated May 17, 2022 for FY 2021-2022. 10.TREASURER'S MONTHLY INVESTMENT REPORT Comments: The purpose of this item is to have the Honorable Mayor and the Lynwood City Council review the Treasurer’s Monthly Investment Report as required by State Statutes. (CT) Recommendation: It is recommended that the City Council for the City of Lynwood receive and file the attached Monthly Investment Report. The following information is provided to ensure City Council is informed of the investment activities for the City. 11.FINANCIAL STATUS REPORT – APRIL 2022 Comments: The Finance & Administration Department has prepared the attached monthly financial status report for the General Fund for the City of Lynwood. It is the objective of the Department to prepare a monthly status report on a monthly basis. (FIN) Recommendation: Staff recommends that the City Council receive and file this report. 12.APPROVING PENSION UNFUNDED ACCRUED LIABILITY (“UAL”) REFINANCE WITH THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY IN MAXIMUM AMOUNT OF $50,000,000 (FEDERALLY TAXABLE); APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS Comments: The City Council previously directed staff to evaluate the potential financial benefits of refinancing the City of Lynwood's (“City”) Pension Unfunded Accrued Liability (“UAL”) with the California Public Employees’ Retirement System (“CalPERS”). Based on analysis done to date, it appears savings to the City’s General Fund may be achieved from a refinancing; however, the municipal bond market is experiencing high levels of volatility and ultimate expected savings will not be known until interest rates can be locked. Staff recommends the City Council approve the resolutions and related lease documents so that the Lynwood Public Financing Authority (“Financing Authority”) is in a position to issue Lease Revenue Bonds to refinance the City’s pension obligation with CalPERS. Staff will work with its financial consultants to closely monitor the market in the coming months. (FIN) Recommendation: 1. Staff recommends that the City Council consider adoption of the attached Resolution No. ______ entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY, APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS” 2. Staff recommends that the Lynwood Public Financing Authority consider adoption of the attached Resolution No. ______ entitled, “A RESOLUTION OF THE LYNWOOD PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF LEASE REVENUE BONDS, AUTHORIZING AND DIRECTING EXECUTION OF AN INDENTURE, A LEASE, City Council Regular Meeting - Page 3 of 473 A SITE LEASE, AND CERTAIN OTHER DOCUMENTS, AUTHORIZING THE NEGOTIATION FOR THE SALE OF BONDS, AND AUTHORIZING OTHER RELATED ACTIONS” 13.A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD ADOPTING A STEP PLACEMENT AND SALARY SETTING POLICY IN ACCORDANCE WITH THE AUDITOR OF THE STATE OF CALIFORNIA'S AUDIT FINDINGS AND CONCLUSIONS Comments: City Council to consider adopting a resolution consolidating the City's Step Placement and Salary Setting policies into one to satisfy the Auditor of the State of California's Audit findings and conclusions. (HR) Recommendation: Staff recommends that the City Council of the City of Lynwood adopt the attached resolution entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD ADOPTING A STEP PLACEMENT AND SALARY SETTING POLICY IN ACCORDANCE WITH THE AUDITOR OF THE STATE OF CALIFORNIA'S AUDIT FINDINGS AND CONCLUSIONS." 14.AUTHORIZING THE PROCUREMENT OF CITY FLEET VEHICLES AND SPORTS FIELD EQUIPMENT Comments: The approved 2021-2023 Citywide Budget with amendments includes funds for the appropriation of fleet and equipment purchases. Pursuant to Lynwood Municipal Code Section 6-3.7(b)(2), purchases of supplies, equipment and routine services where dollar amount involved are $25,000 or more shall be by formal competitive bid. (REC) Recommendation: Staff recommends that the Lynwood City Council adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE PURCHASE OR LEASE OF CITY FLEET VEHICLES AND SPORTS FIELD EQUIPMENT AS DETERMINED APPROPRIATE BY THE CITY MANAGER FOR CITY OPERATIONS” 15.CONTINUATION OF AN EMERGENCY ACTION PER PUBLIC CONTRACT CODE SECTION 22050 FOR THE EMERGENCY ACTION AT WELL NO. 19 Comments: The City Council delegated to the City Manager or his or her designee the authority to order any action specified under California Public Contract Code Section 22050(a)(1) pursuant to Section 22050(b). On April 5, 2022, the City Council found that there is a need for emergency action on Well No. 19. Public Contract Code Section 22050(c)(2) requires the City Council to review the emergency action at every regularly scheduled Council Meeting to determine by four-fifths vote that there is a need to continue the action. (PW) Recommendation: Staff recommends for the City Council to adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD FINDING THAT THERE IS A NEED TO CONTINUE THE EMERGENCY ACTION, BY WAY OF A FOUR- FIFTHS VOTE OF ITS MEMBERS, PURSUANT TO PUBLIC CONTRACT CODE SECTION 22050(c)(1) WITH RESPECT TO THE EMERGENCY REHABILITATION ON WELL NO. 19.” City Council Regular Meeting - Page 4 of 473 16.CONTINUATION OF AN EMERGENCY ACTION PER PUBLIC CONTRACT CODE SECTION 22050 FOR THE EMERGENCY ACTION AT THE NATATORIUM Comments: The City Council delegated to the City Manager or his or her designee the authority to order any action specified under California Public Contract Code Section 22050(a)(1) pursuant to Section 22050(b). On April 5, 2022, the City Council found that there is a need for emergency action at the Natatorium. Public Contract Code Section 22050(c)(2) requires the City Council to review the emergency action at every regularly scheduled Council Meeting to determine by four-fifths vote that there is a need to continue the action. (PW) Recommendation: Staff recommends for the City Council to adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNW OOD FINDING THAT THERE IS A NEED TO CONTINUE THE EMERGENCY ACTION, BY WAY OF A FOUR-FIFTHS VOTE OF ITS MEMBERS, PURSUANT TO PUBLIC CONTRACT CODE SECTION 22050(c)(1) WITH RESPECT TO THE EMERGENCY REHABILITATION AT THE NATATORIUM.” 17.CONSIDERATION OF A RESOULTION PROCLAIMING A LOCAL EMERGENCY, RATIFYING THE PROCLAMATION OF A STATE OF EMERGENCY BY GOVERNOR NEWSOM, FINDING THAT THE PROCLAIMED STATE OF EMERGENCY CONTINUES TO IMPACT THE ABILITY TO MEET SAFELY IN PERSON, AND DECLARING THAT THE CITY COUNCIL AND CITY COMMISSIONS AND COMMITTEES WILL COTINUE TO MEET REMOTELY IN ADHERENECE WITH AB 361 IN ORDER TO ENSURE THE HEALTH AND SAFETY OF THE PUBLIC Comments: Beginning in March 2020, Governor Newsom issued a series of Executive Orders aimed at containing the novel coronavirus (COVID-19). Among these were several Executive Orders N-25- 20, N-29-20, N-35-20 (collectively, the Brown Act Orders) that waived requirements in the Brown Act expressly or impliedly requiring the physical presence of city councilmembers, staff, or the public at local agency meetings. On September 16, 2021, Governor Newsom signed Assembly Bill AB 361 (Rivas, 2021), which allows cities to continue to meet remotely during proclaimed states of emergency under modified Brown Act requirements that are similar, but not identical to the rules and procedures established by the Brown Act Orders. (CA) Recommendation: Staff is recommending that the City Council adopt a City Council Resolution entitled: “A Resolution Proclaiming a Local Emergency, Ratifying the Proclamation of a State of Emergency by Governor Newsom, Finding that the Proclaimed State of Emergency Continues to Impact the Ability to Meet Safely in Person, and Declaring that the City Council and City Commissions and Committees Will Continue to Meet Remotely in Adherence With AB 361 in Order to Ensure the Health and Safety of the Public” NEW/OLD BUSINESS 18.AWARD OF CONTRACT AND APPROVAL TO FS CONTRACTORS, INC. FOR THE SIDEWALK IMPROVEMENT PROJECT AT WRIGHT ROAD FROM FERNWOOD AVE TO DUNCAN AVE AND CITYWIDE PRIORITY 1 SIDEWALK IMPROVEMENT PROJECT FY22/FY23 PROJECT (CIP 4011.68.022) Comments: Over the course of a year, Lynwood residents have submitted requests for sidewalk improvements on various locations throughout the City. Staff collected all requests and created a list of priority locations where sidewalk improvements are most needed. In addition, the resident derived priority City Council Regular Meeting - Page 5 of 473 list, the City identified needed sidewalk improvements along Wright Road from Fernwood Avenue to Duncan Avenue. As such, the Public Works Department, Engineering Division commissioned of Willdan Engineering to develop plans, specifications and estimate for the aforementioned sidewalk improvements along Wright Road and the Citywide Priority 1 Sidewalk Improvement locations. (PW) Recommendation: Staff recommends that the City Council adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD AWARDING A CONTRACT TO FS Contractors, inc. AS THE LOWEST RESPONSIBLE BIDDER, IN THE Amount OF $556,090 FOR THE SIDEWALK IMPROVEMENT PROJECT WRIGHT ROAD FROM FERNWOOD AVE TO DUNCAN AVE AND CITYWIDE PRIORITY 1 SIDEWALK IMPROVEMENT PROJECT FY22/FY23 PROJECT (sidewalk and wheelchair ramp repairs- cip 4011.68.022); AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; APPROVING TO REDUC THE PROJECT BUDGET FOR THE ALEXANDER AVENUE, LOUISE STREET, POPE AVENUE, PENDLETON AVENUE, SEMINOLE AVENUE, AND SHIRLEY AVENUE STREET, WATER, AND SEWER IMPROVEMENT PROJECT (CIP 4011.68.088) IN THE AMOUNT OF $150,000 AND APPROPRIATING SAID AMOUNT OF $150,000 FROM THE MEASURE M BOND (FUND 2357) TO THE SIDEWALK AND WHEELCHAIR RAMP REPAIRS –CIP 4011.68.022). 19.AWARD OF CONTRACT AND APPROVAL TO HARDY AND HARPER, INC. FOR THE SAN CARLOS AVE., SAN JUAN AVE., SAN LUIS AVE., SAN VICENTE AVE., THORSON AVE., AND ALVADA ST. STREET IMPROVEMENT PROJECT (CDBG FUNDED PROJECT NO:4011.68.103) Comments: Award of contract to Hardy and Harper for CDBG funded street improvement projects. (PW) Recommendation: Staff recommends that the City Council adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD AWARDING A CONTRACT TO HARDY AND HARPER, INC. AS THE LOWEST RESPONSIBLE BIDDER, IN THE AMOUNT OF $650,000 FOR THE SAN CARLOS AVENUE, SAN JUAN AVENUE, SAN LUIS AVENUE, SAN VICENTE AVENUE, ALVADA STREET AND THORSON AVENUE STREET IMPROVEMENT PROJECT (CDBG FUNDED PROJECT NO:4011.68.103); AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; AND AUTHORIZING AN APPROPRIATION AND BUDGET IN THE AMOUNT OF $737,317 FOR THE PROJECT." 20.CITY COUNCIL ORAL AND WRITTEN COMMUNICATION 21.STAFF ORAL COMMENTS ADJOURNMENT THE NEXT REGULAR MEETING WILL BE HELD ON JUNE 7, 2022 AT 6:00 P.M. IN THE COUNCIL CHAMBERS OF THE CITY HALL ANNEX, 11350 BULLIS ROAD, CITY OF LYNWOOD, CALIFORNIA. City Council Regular Meeting - Page 6 of 473 Agenda Item # 8. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: John Yonai, Interim Director of Community Development SUBJECT: FISCAL YEAR 2022-23 ANNUAL ACTION PLAN Recommendation: It is recommended that the City Council take the following actions: 1. Conduct a public hearing and take public testimony on the Annual Action Plan covering the period July 1, 2022 – June 30, 2023. 2. Approve the CDBG and HOME funding recommendations, authorizing the submittal of the City’s FY 2022- 23 Annual Action Plan (Attachment C) to the U.S. Department of Housing and Urban Development. 3. Authorize the City Manager to execute all appropriate and necessary documents to receive funding and implement approved use. 4. Approve the CDBG amount of $330,000 to be allocated for the City’s CIP Public Facilities and Infrastructures (Street Improvement Project). 5. Award the following public service agencies city CDBG funds and authorize the City Manager to execute agreements: Code Enforcement - $234,633 City of Lynwood – Afterschool Program - $55,500 City of Lynwood – Senior Program - $39,000 City of Lynwood – Sports Program - $12,000 HOPICS - $25,000 Lynwood Athletics Community Services - $15,000 The Harmony Project - $15,000 Background: The City of Lynwood is a federal entitlement grant recipient of Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) funds from U.S. Department of Housing and Urban Development (HUD). As part of the process to receive funding, the City must undertake development of a Consolidated Plan and Annual Action Plan. It is called a Consolidated Plan because it consolidates the application process for HUD’s four entitlement grants into one consolidated plan and application. The four grants are CDBG, HOME, Housing Opportunities for Persons with AIDS (HOPWA), and Emergency Shelter Grant (ESG). All four grants are driven by an entitlement formula process set by the federal government. The City is eligible to participate in two of these programs (CDBG and HOME). City Council Regular Meeting - Page 7 of 473 FY 2022-23 CDBG Allocation City Administration As part of the requirements of the federal Consolidated Plan process, the City is required to hold a public hearing regarding the projected use of funds prior to adoption of its Consolidated Plan and Annual Action Plan. In order to receive the FY 2022-23 allocations, the City must comply with the following requirements of the Consolidated Plan final rule regarding pre-submission requirements: Fulfill citizen participation requirements by conducting a public hearing to receive citizen input regarding annual funding needs; Publish a draft Plan and Annual Action Plan for a 30-day comment period in order to receive citizen input regarding the final document; and Conduct a public hearing adopting the final Plan and the Annual Action Plan. The Annual Action Plan is part of the Consolidated Plan, which takes all HUD requirements regarding planning, needs analysis, reporting, budgeting, citizen participation and certifications and incorporates them into one process. The full Consolidated Plan must be completed once every five years and the Annual Action Plan must be completed annually. On March 2, 2022, the CDBG Advisory Board conducted a public hearing to receive input on the development of the City’s Annual Action Plan for the period of July 1, 2022 - June 30, 2023. On April 6, 2022, the CDBG Advisory Board reviewed and finalized the FY 2022-23 CDBG and HOME funding recommendations for the City Council’s consideration, which are included in this staff report. Discussion and Analysis: While the federal funding awards have not yet been announced by HUD, the City estimates it will receive close to the same funding as received in FY 2021-22 which was approximately $1,078,831 in CDBG funds, which is an approximate 6.2% cut to its FY 2021-22 allocation, and $542,802 in HOME funds, which is an approximate 3.2% increase from its FY 2021-22 allocation. When combined with projected reallocated carryover funds and anticipated program income, the City anticipates having a total of $1,108,831 of CDBG funds available to allocate and $1,844,395 in HOME funds available to allocate for the 2022-23 year. In addition, the City will also be carrying over approximately $350,000 in allocated CDBG-CV funds. After much deliberation and thought, it is being proposed that the below activities be funded under the CDBG and HOME programs and included in the City’s Annual Action Plan for the FY 2022-23. CDBG Funds In reviewing the CDBG recommendations it would be appropriate for the City Council to remember that only three broad funding categories are considered eligible under CDBG-regulations. A project must either provide benefits to low- or moderate-income persons, eliminate slum or blighted conditions, or satisfies an urgent need. In addition, of the CDBG funds received, no more than 15% ($161,500) of the annual grant amount plus anticipated program income can be used for social service activities, no more than 20% ($215,766) of the grant amount plus anticipated program income can be used for Planning and Administrative services, and, at least, 70% of all funds must be used for low-to-moderate income activities. There were seven (7) funding requests submitted to the City. Six (6) of these requests qualify under the social service activity cap (City of Lynwood Afterschool Program, City of Lynwood Senior Center, City of Lynwood Sports Program, HOPICS, Lynwood Athletics Community Services, and The Harmony Project) and one (1) request qualifies under the Planning and Administrative services cap (Fair Housing Foundation). While these are all worthwhile organizations, based on the severe decrease in CDBG funding, it will be impossible to fund all of them at the level requested. In evaluating each of the agencies requests, funding is being recommended based on the agency’s past performance, compliance with program guidelines, and need for service. A detail list of funding request versus funding recommendation can be found in Attachment “A”. A detailed list of funding recommendations under the CDBG program is provided below. City Council Regular Meeting - Page 8 of 473 General Administration $ 202,766 Fair Housing Contract $ 13,000 Subtotal $ 215,766 Rehabilitation Administration $ 98,932 Emergency Grants $ 25,000 Lead/Asbestos Testing $ 3,000 Lead/Asbestos Remediation $ 10,000 Subtotal $ 136,932 Public Safety Code Enforcement $ 234,633 Subtotal $ 234,633 Social Services City of Lynwood Afterschool Program $ 55,500 City of Lynwood Senior Program $ 39,000 City of Lynwood Sports Program $ 12,000 HOPICS $ 25,000 Lynwood Athletics Community Services $ 15,000 The Harmony Project $ 15,000 Subtotal $ 161,500 Public Facilities and Infrastructures Street Improvement Project $ 330,000 Subtotal $ 330,000 Total CDBG Allocation $1,078,831 FY 2022-23 HOME Allocation City Administration General Administration $ 54,280 Subtotal $ 54,280 Programs Down Payment Assistance Program $ 190,000 Down Payment Assistance Program - Carryover $ 190,000 Owner-Occupied Rehabilitation Loans $ 67,102 Owner-Occupied Rehabilitation Loans - Carryover $ 687,800 Owner-Occupied Rehabilitation Grants $ 150,000 Subtotal $ 1,284,902 Community Housing Development Organization (CHDO) CHDO $ 81,420 CHDO- Carryover $ 423,793 Subtotal $ 505,213 Total HOME Allocation $ 1,844,395 HOME Funds In reviewing the HOME funds recommendations, it would be appropriate for the City Council to remember that no more than 10% ($54,280) can be used for administrative and program delivery activities. At least 15% ($81,420) must be set aside for a CHDO, as constituted under the regulations. The balance of funds can only be used for housing activities. A detailed list of funding recommendations under the HOME program is provided below. It should be noted that all the proposed projects meet the CDBG and HOME eligibility requirements. Fiscal Impact: City Council Regular Meeting - Page 9 of 473 The Annual Action Plan includes HUD funding allocation from the CDBG and HOME programs, which will be included in the FY 2022-23 Annual Operating Budget. Coordinated With: City Manager’s Office Department of Finance & Administration Services Department of Public Works Department of Recreation & Community Services ATTACHMENTS: Description Attachment A - Social Service Funding (CDBG Program) Attachment B - Draft Annual Action Plan City Council Regular Meeting - Page 10 of 473 PROJECT 2021-22 Approved Budget 2022-23 Requests 2022-23 Recommended Budget Program Description City of Lynwood Afterschool Program 55,000$ 146,487$ 55,500$ After-school program (i.e. homework assistance/tutoring, seasonal sports, field trips, etc.) City of Lynwood Senior Program 39,000$ 106,682$ 39,000$ Senior programs (i.e. nutritious meals, referral services, senior activities, and special events) City of Lynwood Sports Program 10,000$ 147,989$ 12,000$ After-school youth recreational sports HOPICS 25,000$ 25,000$ 25,000$ Homeless Services including temporary housing Lynwood Athletics Community Services 15,000$ 50,000$ 15,000$ Youth sports - Football, Baseball and Cheerleading The Harmony Project 15,000$ 15,000$ 15,000$ Youth music lessons and ensemble participation TOTAL REQUESTS 159,000.00$ 491,158.00$ 161,500.00$ 15% Cap 161,824.65$ 161,824.65$ 161,824.65$ TOTAL CDBG GRANT 1,078,831.00$ 1,078,831.00$ 1,078,831.00$ Difference 2,824.65$ (329,333.35)$ 324.65$ ATTACHMENT A COMMUNITY DEVELOPMENT BLOCK GRANT BUDGET SOCIAL SERVICES City Council Regular Meeting - Page 11 of 473 ANNUAL ACTION PLAN July 1, 2022 – June 30, 2023 Approved by City Council TBD Submitted to: United States Department of Housing and Urban Development (HUD) TBD City Council Regular Meeting - Page 12 of 473 Annual Action Plan 2022 2 OMB Control No: 2506-0117 (exp. 09/30/2021) Page Intentionally Left Blank City Council Regular Meeting - Page 13 of 473 Annual Action Plan 2022 3 OMB Control No: 2506-0117 (exp. 09/30/2021) Executive Summary AP-05 Executive Summary - 24 CFR 91.200(c), 91.220(b) 1. Introduction Lynwood is one of the Gateway Cities in the County of Los Angeles. It is centrally located between two freeways, Interstate 105 and Interstate 710 and just 10 minutes from the Los Angeles International Airport. Incorporated in 1921, Lynwood is approximately 4.9 square miles with a population of approximately 70,700 residents. It is a dense and diversely multi-cultural City, and historically remains a bedroom community with a predominantly young population. Each year between May and July, the City submits an Annual Action Plan (“Action Plan”) covering the period July 1st of that year through June 30th of the following year to the U.S. Department of Housing and Urban Development (HUD). An Action Plan is required by HUD in order for the City to receive federal funds under the Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) programs. The Action Plan includes the proposed activities, resources and expenditures for the CDBG and HOME programs. This is the third out of five Action Plans under the City’s 2020-2024 Consolidated Plan. A more general summary of each project and each amount the City is proposing in the FY 2022-23 can be found under section AP-20 Annual Goals and Objectives. In general, the City will continue to carry out programs that primary benefit low and moderate-income person including program administration, fair housing, residential programs, and public services that aid youth, at-risk families, seniors, and the disabled. In addition, the City will continue to use a portion of CDBG funds for its code enforcement and infrastructure improvement programs, which will take place in the City’s adopted target/revitalization areas. 2. Summarize the objectives and outcomes identified in the Plan This could be a restatement of items or a table listed elsewhere in the plan or a reference to another location. It may also contain any essential items from the housing and homeless needs assessment, the housing market analysis or the strategic plan. The strategies and projects outlined in the Con Plan are intended to benefit low- and moderate-income residents, improve distressed and blighted neighborhoods with high concentrations of low- and moderate-income residents, and positively impact the City as a whole. These Strategies will be coordinated with other federal and state grant programs and local initiatives in order to meet the objectives outlined in the plan. The Annual Action Plan will focus on goals established within the Five- Year Con Plan. City Council Regular Meeting - Page 14 of 473 Annual Action Plan 2022 4 OMB Control No: 2506-0117 (exp. 09/30/2021) During the development of the Con Plan, the City solicited input from residents to identify and prioritize the various community needs. Furthermore, the City consulted with local public and private service providers to assess the housing and community development needs of low- to moderate-income households and special needs households. The City consulted with the Los Angeles County Development Authority (formally the Los Angeles County Development Commission) and nonprofit organizations to determine funding needs for housing and services for homeless persons, low- to moderate-income persons, and low-income neighborhoods. Priority areas of need as determined from public participation and research for the Con Plan include the following: 1. Promote, increase, and maintain homeownership for low- and moderate-income (LMI) households; 2. Provide safe, affordable, and decent housing for LMI renters; 3. Preserve the City's existing affordable housing stock for LMI households in the O to 80 percent of Area Median Income (AMI) category; 4. Provide homelessness prevention services to individuals and families who are at imminent risk of homelessness; 5. Provide supportive services to homeless individuals and families; 6. Provide supportive services to seniors and youth; 7. Provide accessibility improvements to public roads and facilities; and 8. Promote fair housing among all income categories. 3. Evaluation of past performance This is an evaluation of past performance that helped lead the grantee to choose its goals or projects. The City's is in its third year (2022) of it Five Year Con Plan (FY 2020-2024). Overall, the strategies and goals outlined in the Con Plan are evaluated and reported out annually through the CAPER process. The CAPER covers a program year (July 1st-June 30th) and is prepared by the City's Community Development Department. The City has made progress meeting Con Plan goals and priority needs. Many of the activities performed have contributed to stabilizing the City's low-income neighborhoods and improved the living conditions of low- to moderate-income families and individuals.  Major activities focused on preservation of the City's affordable housing stock through renovations performed on owner-occupied housing. The scope of the renovations varied depending on the program and household needs with improvements ranging from basic health and safety improvements to full-scale renovation projects eliminating blighted conditions. City Council Regular Meeting - Page 15 of 473 Annual Action Plan 2022 5 OMB Control No: 2506-0117 (exp. 09/30/2021)  Improvements to the City’s public infrastructures help improve the appearance of neighborhoods and create a more appealing environment.  Funding of non-profit agencies that serve the low- and moderate-income seniors and youth help organizations better meet the needs of their clients.  Housing, supportive services, and case management were provided to homeless persons through services offered by HOPICS (a City CDBG subrecipient) and Los Angeles Homeless Service Authority. Emergency, transitional, and permanent support was provided based on client need. Funding of non-profit facilities that serve the homeless and other eligible recipients and neighborhoods align with the goals and strategies outlined in the Con Plan. The City continues to strategically collaborate with partner organizations in order to leverage limited available funds and expertise to provide resources to address ongoing affordable housing issues.  Housing Choice Vouchers (Section 8) administered by the Los Angeles County Development Authority (LACDA) on behalf of the City, offered tenant assistance for those qualifying low- to moderate-income residents. The most recent past performance evaluation and reporting can be found in the FY 2020-21 Comprehensive Annual Performance Evaluation Report (CAPER). This report provides both summary and details of resources, distribution, and accomplishments for CDBG and HOME funded programs. 4. Summary of Citizen Participation Process and consultation process Summary from citizen participation section of plan. Consultation with both public and private organizations that service Lynwood residents by either providing shelter/housing; own/manage housing for low- and moderate-income seniors and families; build housing for low- and moderate-income seniors and families; and/or provide some type of services to populations with special needs (i.e. elderly, homeless, disabled, etc.) has been an ongoing process since the development of the original Consolidated Plan. Organizations receiving direct CDBG funding have been in regular contact with City staff. Other organizations are consulted on an as needed basis, are invited to comment of the draft Action Plan, or have been present at various public hearings held by the City. On December 30, 2021, the City announced that it was soliciting proposals from community-based organizations, nonprofits, City departments, and citizens interested in applying for funds and providing services to the Lynwood community. The application form requests a description of the need and/or problem to be addressed by the project. The deadline for submittal of the applications was February 3, 2022, 5:00 pm. The City conducted two public hearings. The first public hearing focuses on performance and the needs of the community as they relate to housing, homelessness, and community development needs such as infrastructure, improvement and public services. This hearing took place before the Lynwood Community Development Block Grant (CDBG) Advisory Board Commission on March 2, 2022. The second public City Council Regular Meeting - Page 16 of 473 Annual Action Plan 2022 6 OMB Control No: 2506-0117 (exp. 09/30/2021) hearing provides citizens with an opportunity to comment on the draft Action Plan. This hearing took place by Web conference via ZOOM in front of the Lynwood City Council on May 17, 2022. Minutes of these meetings are on file with the City Clerk’s Office. Notice of each public hearing was published in the Lynwood Press Wave at least 10 days prior to the hearing date and sent to the organizations listed in Appendix B and adjacent jurisdictions. Notices of the public hearing were also posted 10 days prior to each public hearing within the 3 public places at City Hall (City website, inside City Hall, and outside City Hall at the kiosk). In addition, the City sent a letter to the directors of the CDBG/HOME Programs for each of the following jurisdictions: Cities of Compton, Downey, Los Angeles County Department Authority, Paramount, and South Gate. The letter formally stated that the update to the City’s FY 2022-23 Action Plan was currently being prepared. The letter requested input from these jurisdictions on any activities that could be coordinated in such a way to achieve comprehensive community goals. The letter also requested information on any non-housing community development that might warrant coordination with our community. No written consultation was received. In addition, each of the above-mentioned jurisdictions was invited to comment on the City’s draft Con Plan. No comments were received. 5. Summary of public comments This could be a brief narrative summary or reference an attached document from the Citizen Participation section of the Con Plan. A summary of the comments received is provided under the section "Citizen Participation Comments". 6. Summary of comments or views not accepted and the reasons for not accepting them All comments were received. 7. Summary The City of Lynwood's FY 2022-23 Action Plan reflects a unified vision to meet the identified needs of the community and provide benefits to low- and moderate-income individuals and families over the next year, financial assistance, and support of the community will be directed toward the following areas:  Expand affordable housing opportunities;  Expand homeless prevention and supportive services;  Expand the improvement of public roads and infrastructures;  Maintain vital public services; and  Expand Fair Housing choice and access. City Council Regular Meeting - Page 17 of 473 Annual Action Plan 2022 7 OMB Control No: 2506-0117 (exp. 09/30/2021) PR-05 Lead & Responsible Agencies – 91.200(b) 1. Agency/entity responsible for preparing/administering the Consolidated Plan Describe the agency/entity responsible for preparing the Consolidated Plan and those responsible for administration of each grant program and funding source. Agency Role Name Department/Agency CDBG Administrator LYNWOOD Community Development Department HOME Administrator LYNWOOD Community Development Department Table 1 – Responsible Agencies Narrative (optional) Lead Agency - The City of Lynwood’s Community Development Department is the lead department for policy direction, review of funding applications, project review, and decisions on annual Action Plan ("the Plan") funding recommendations to the City Council. Annual Action Plan Team - The City of Lynwood’s Community Development Department is responsible for preparation of the Plan, and for coordinating the update of all of the information contained therein of a demographic or programmatic nature. The Community Development Department also conducts a review of applications for eligibility and adherence to HUD National Objectives, which are then submitted to the City Council for further review and funding recommendations. The City Council approves the Plan.  The City Council has appointed the Community Development Block Grant (CDBG) Advisory Board to serve in an advisory capacity to the Lynwood City Council on matters pertaining to the City’s CDBG and HOME programs and use of funds. The CDBG Advisory Board reviews the draft Plan and provides a setting for public testimony. The CDBG Advisory Board holds one public hearing on the Plan to solicit public comments. The CDBG Advisory Board also schedules at least one meeting for discussion of the Plan. After which, the City Council holds a public hearing approving the Plan and authorizing the submittal to HUD. HUD has 45 days to review, modify, or reject the Plan. City Council Regular Meeting - Page 18 of 473 Annual Action Plan 2022 8 OMB Control No: 2506-0117 (exp. 09/30/2021) The Community Development Department is also responsible for responding to HUD inquiries regarding the Plan such as HUD-directed new initiatives in regard to Plan preparation and budget reporting of project activities. The City’s Finance Department, working in cooperation with the Community Development Department and other City departments and agencies, plays an active role in identifying the financial status of slow- moving projects as well as projects ready to fund so that grant resources are used more efficiently. Consolidated Plan Public Contact Information John Yonai Interim Director of Community Development (310) 603-0220, Ext. 605 jyonai@lynwood.ca.us City Council Regular Meeting - Page 19 of 473 Annual Action Plan 2022 9 OMB Control No: 2506-0117 (exp. 09/30/2021) AP-10 Consultation – 91.100, 91.200(b), 91.215(l) 1. Introduction As part of the FY 2022-23 Action Plan development, the City undertook outreach activities to consult and coordinate with nonprofit agencies, government agencies, and residents regarding the needs of the community. Outreach efforts have been summarized in the Executive Summary section of this Action Plan. Provide a concise summary of the jurisdiction’s activities to enhance coordination between public and assisted housing providers and private and governmental health, mental health and service agencies (91.215(l)) As required by the regulations, the City consulted with a wide range of public and private entities that provide housing, health services, and social services for low to moderate-income residents. Organizations receiving direct CDBG funding have been in regular contact with City of Lynwood staff. Other organizations are consulted on an as needed basis, are invited to comment of the draft Plan, or have been present at various public hearings held by the City. The City worked with a number of agencies including the following:  American Red Cross  California Department of Housing and Community Development  City of Lynwood, Public Works Department  City of Lynwood, Recreation and Community Services Department  County of Los Angeles, Department of Health Services  Fair Housing Foundation  Harmony Project  HOPICS Lynwood Access Center  Los Angeles County Development Authority (LACDA) (formerly known as the Housing Authority of the County of Los Angeles)  Lynwood Athletics Community Services  Lynwood School District  Los Angeles County Sheriff’s Department  Los Angeles Homeless Services Authority  St. Francis Medical Center Foundation  US Department of Housing and Urban Development City Council Regular Meeting - Page 20 of 473 Annual Action Plan 2022 10 OMB Control No: 2506-0117 (exp. 09/30/2021) Describe coordination with the Continuum of Care and efforts to address the needs of homeless persons (particularly chronically homeless individuals and families, families with children, veterans, and unaccompanied youth) and persons at risk of homelessness. The City consulted with the Housing Authority of the County of Los Angeles and nonprofit organizations (i.e. Los Angeles Homeless Services Authority, HOPICS Lynwood Access Center, Shields for Families, etc.) to determine funding needs for housing and services for homeless persons, low to moderate-income persons, and low-income neighborhoods. The City also coordinated with PATH’s (People Assisting the Homeless) efforts in the development of the Gateway Cities Homeless Plan. Describe consultation with the Continuum(s) of Care that serves the jurisdiction's area in determining how to allocate ESG funds, develop performance standards for and evaluate outcomes of projects and activities assisted by ESG funds, and develop funding, policies and procedures for the operation and administration of HMIS Lynwood does not receive or allocate Emergency Solutions Grant (ESG) funds. The City collaborates with local service providers to meet the needs of the homeless. In addition, the City continues to collaborate with Los Angeles Homeless Services Authority and local service providers to assist this segment of the population. 2. Describe Agencies, groups, organizations and others who participated in the process and describe the jurisdiction’s consultations with housing, social service agencies and other entities City Council Regular Meeting - Page 21 of 473 Annual Action Plan 2022 11 OMB Control No: 2506-0117 (exp. 09/30/2021) Table 2 – Agencies, groups, organizations who participated 1 Agency/Group/Organization Fair Housing Foundation Agency/Group/Organization Type Service-Fair Housing What section of the Plan was addressed by Consultation? Housing Need Assessment Non-Homeless Special Needs Market Analysis Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? City staff met with the Fair Housing Foundation to consult regarding the Five Year Consolidated Plan and Annual Action Plan process, the Analysis of Impediments to Fair Housing Choice (AI), actions that should be taken to affirmatively further fair housing, etc. 2 Agency/Group/Organization Housing Authority of the County of Los Angeles (HACoLA) Agency/Group/Organization Type PHA What section of the Plan was addressed by Consultation? Public Housing Needs Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? City staff contacted the Los Angeles County Development Authority (LACDA), which was formerly known as the Housing Authority of the County of Los Angeles, to discuss characteristics and data needs regarding LACDA Public Housing and Section 8 inventory, public housing needs, and priorities. 3 Agency/Group/Organization Los Angeles County Health Department Agency/Group/Organization Type Health Agency Other government - County City Council Regular Meeting - Page 22 of 473 Annual Action Plan 2022 12 OMB Control No: 2506-0117 (exp. 09/30/2021) What section of the Plan was addressed by Consultation? Housing Need Assessment Homeless Needs - Chronically homeless Homeless Needs - Families with children Homelessness Needs - Veterans Homelessness Needs - Unaccompanied youth Homelessness Strategy Non-Homeless Special Needs Anti-poverty Strategy Lead-based Paint Strategy Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? City staff met with County Health staff to consult on information regarding lead poisoning and homelessness issues. The County Health staff provided information on the number of children under the age of 6 with elevated blood levels within Lynwood, training on how to reduce the number, and materials that could be distributed to the community. In addition, County Health staff provided information on how best to coordinate our efforts to combat homelessness. 4 Agency/Group/Organization Los Angeles County Development Authority Agency/Group/Organization Type Other government - County What section of the Plan was addressed by Consultation? Homeless Needs - Chronically homeless Homeless Needs - Families with children Homelessness Needs - Veterans Homelessness Needs - Unaccompanied youth Homelessness Strategy Non-Homeless Special Needs Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? City staff contacted LACDA to consult on issues related to homelessness and coordinating efforts to combat homelessness. City Council Regular Meeting - Page 23 of 473 Annual Action Plan 2022 13 OMB Control No: 2506-0117 (exp. 09/30/2021) 5 Agency/Group/Organization LOS ANGELES HOMELESS SERVICES AUTHORITY Agency/Group/Organization Type Other government - County What section of the Plan was addressed by Consultation? Homeless Needs - Chronically homeless Homeless Needs - Families with children Homelessness Needs - Veterans Homelessness Needs - Unaccompanied youth Homelessness Strategy Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? City staff contacted Los Angeles Homeless Service Authority (LAHSA) to consult on issues related to homelessness and coordinating efforts to combat homelessness, including the City ongoing commitment to support and participate in the annual homeless count. 6 Agency/Group/Organization Special Service for Groups (HOPICS) Agency/Group/Organization Type Services-homeless What section of the Plan was addressed by Consultation? Homeless Needs - Chronically homeless Homeless Needs - Families with children Homelessness Needs - Veterans Homelessness Needs - Unaccompanied youth Homelessness Strategy Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? City staff met with HOPICS staff to discuss characteristics and needs of homeless individuals, youth, families, and "at-risk" individuals and families. 7 Agency/Group/Organization The Harmony Project Agency/Group/Organization Type Services-Children What section of the Plan was addressed by Consultation? Public Service Program City Council Regular Meeting - Page 24 of 473 Annual Action Plan 2022 14 OMB Control No: 2506-0117 (exp. 09/30/2021) Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? City staff met with Harmony staff to discuss services that would assist in improving the well-being of low-income persons and aid the youth. 8 Agency/Group/Organization Lynwood Athletics Community Services Agency/Group/Organization Type Services-Children What section of the Plan was addressed by Consultation? Public Service Program Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? City staff met with Lynwood Athletics Community Services staff to discuss services that would assist in improving the well-being of low-income persons and aid the youth. 9 Agency/Group/Organization City of Lynwood Agency/Group/Organization Type Other government - Local What section of the Plan was addressed by Consultation? Housing Need Assessment Public Housing Needs Homeless Needs - Chronically homeless Homeless Needs - Families with children Homelessness Needs - Veterans Homelessness Needs - Unaccompanied youth Homelessness Strategy Non-Homeless Special Needs HOPWA Strategy Market Analysis Economic Development Anti-poverty Strategy Lead-based Paint Strategy Public Service Program City Council Regular Meeting - Page 25 of 473 Annual Action Plan 2022 15 OMB Control No: 2506-0117 (exp. 09/30/2021) Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? In order to obtain a comprehensive assessment of the needs and priorities within the community, the Action Plan process included consultation with Lynwood citizens, service providers, Council Members, CDBG Advisory Board Members, and City staff. In addition, a public survey was conducted on the City's website. Identify any Agency Types not consulted and provide rationale for not consulting No Agency type was excluded from providing input on the FY 2022-23 Action Plan. Other local/regional/state/federal planning efforts considered when preparing the Plan Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the goals of each plan? Continuum of Care County of Los Angeles The County is a Continuum of Care (CoC) applicant and conducts homeless counts, surveys of the homeless population, and strategic planning to end homelessness. Consistent with the goals of the CoC, the City's Strategic Plan in the Con Plan will provide support to nonprofits that meet the social service needs of LMI residents with a direct emphasis on assisting the homeless. City of Lynwood's 2021- 2029 Housing Element City of Lynwood The Housing Element provides goals and recommendations for improving the housing conditions in the City of Lynwood. Analysis of Impediments City of Lynwood Actions to address impediments identified in the Analysis of Impediments (AI) are incorporated in the City's Con Plan, Action Plan, and CAPER. Table 3 – Other local / regional / federal planning efforts City Council Regular Meeting - Page 26 of 473 Annual Action Plan 2022 16 OMB Control No: 2506-0117 (exp. 09/30/2021) Narrative (optional) The City will continue its coordination efforts with local, regional, and federal agencies to further the goals and objectives of the FY 2022-23 Action Plan. In doing this, the City contacted adjacent communities (which included cities of Compton, Downey, LACDA, Paramount, and South Gate) informing them that Lynwood was currently preparing its FY 2022-23 Action Plan and requested input from these jurisdictions on any activities that could be coordinated in such a way to achieve comprehensive community goals as well as any information on any non-housing community development that might warrant coordination with our community. No comments were received. In addition, each of the above-mentioned jurisdictions was invited to comment on the City’s draft Action Plan. No comments were received. In addition, the City will continue to cooperate and coordinate with public and private agencies that includes, but is not limited to, the following:  California Department of Housing and Community Development  City of Lynwood, Public Works Department  City of Lynwood, Recreation and Community Services Department  County of Los Angeles, Department of Health Services  Fair Housing Foundation  Harmony Project  HOPICS Lynwood Access Center  Housing Authority of the County of Los Angeles  Lynwood Athletics Community Services  Lynwood School District  Los Angeles County Sheriff’s Department  Los Angeles Homeless Services Authority  St. Francis Medical Center Foundation  US Department of Housing and Urban Development  Adjacent communities City Council Regular Meeting - Page 27 of 473 Annual Action Plan 2022 17 OMB Control No: 2506-0117 (exp. 09/30/2021) AP-12 Participation – 91.105, 91.200(c) 1. Summary of citizen participation process/Efforts made to broaden citizen participation Summarize citizen participation process and how it impacted goal-setting As part of the preparation of the FY 2022-23 Action Plan, the City reached out to both public and private organizations that service residents of Lynwood by either providing shelter/housing; own and manage housing for low- and moderate-income seniors and families; build housing for low- and moderate-income seniors and families; and/or provide some type of services to populations with special needs (i.e. elderly, homeless, disabled, etc.). Organizations receiving direct CDBG funding have been in regular contact with City staff. Other organizations are consulted on an as needed basis, and are invited to all public meetings held by the City and requested to comment on the draft Action Plan. On December 30, 2021, the City announced that it was soliciting proposals from community-based organizations, nonprofits, City departments, and citizens interested in applying for funds and providing services to the Lynwood community. The application form requests a description of the need and/or problem to be addressed by the project. The deadline for submittal of the applications was February 3, 2022, 5:00 pm. The City conducted two public hearings. The first public hearing focuses on performance and the needs of the community as they relate to housing, homelessness, and community development needs such as infrastructure, improvement and public services. This hearing took place before the Lynwood Community Development Block Grant (CDBG) Advisory Board Commission on March 2, 2022. In addition, on April 6, 2022, the CDBG Advisory Board reviewed and finalized the FY 2022-23 CDBG and HOME funding recommendations for the City Council's consideration. Following this meeting, a second public hearing provides citizens with an opportunity to comment on the draft Action Plan took place in front of the Lynwood City Council on May 17, 2022. Minutes of these meetings are on file with the City Clerk’s Office. Notice of each public hearing was published in the Lynwood Press Wave 10 days prior to the hearing date and sent to the organizations listed in Appendix B. Notices of the public hearing were also posted 10 days prior to each public hearing within the 3 public places at City Hall (City website, inside City Hall, and outside City Hall at the kiosk). On April 14, 2022, notice of the availability of the Action Plan was published in the Lynwood Press Wave announcing the 30-day public comment period to begin on April 14, 2022 and concluded on May 16, 2022. A copy of the draft Action Plan was placed on display at the Lynwood Library, the City's City Clerk’s Office, and the City of Lynwood’s Community Development Department. Notices were also sent to the organizations listed in the Appendix B and adjacent jurisdictions. The City did not receive any comments during this 30-day review period from the community, agencies or organizations. City Council Regular Meeting - Page 28 of 473 Annual Action Plan 2022 18 OMB Control No: 2506-0117 (exp. 09/30/2021) In addition, on February 11, 2022, the City contacted adjacent communities (which included cities of Compton, Downey, LACDA, Paramount, and South Gate) informing them that Lynwood was currently preparing its FY 2022-23 Action Plan and requested input from these jurisdictions on any activities that could be coordinated in such a way to achieve comprehensive community goals as well as any information on any non-housing community development that might warrant coordination with our community. No comments were received. The City also sent a formal letter to these same communities on April 14, 2022, inviting them to comment on the City’s draft FY 2022-23 Action Plan. Again, no comments were received. City Council Regular Meeting - Page 29 of 473 Annual Action Plan 2022 19 OMB Control No: 2506-0117 (exp. 09/30/2021) Citizen Participation Outreach Sort O rder Mode of O utreach Target of O utreach Summary of response/att endance Summary o f comments r eceived Summary of c omments not accepted and reasons URL (If applicable) 1 Newspaper Ad Community Wide Two (2) notices were placed in the Lynwood Press Wave notifying citizens of two (2) separate public hearings. The dates of the notices were February 17, 2022 and May 5, 2022. None None City Council Regular Meeting - Page 30 of 473 Annual Action Plan 2022 20 OMB Control No: 2506-0117 (exp. 09/30/2021) Sort O rder Mode of O utreach Target of O utreach Summary of response/att endance Summary o f comments r eceived Summary of c omments not accepted and reasons URL (If applicable) 2 Internet Outreach Community Wide On February 17, 2022 and May 5, 2022, two (2) public hearing notices were placed on City of Lynwood's website and posted in two (2) other locations at City Hall (within City Hall and at the outside Kiosk). None None http://lynwood.ca.us/ City Council Regular Meeting - Page 31 of 473 Annual Action Plan 2022 21 OMB Control No: 2506-0117 (exp. 09/30/2021) 3 Public Hearing Community Wide Two (2) citywide public hearings were held: March 2, 2022 (CDBG Advisory Board) and May 17, 2022 (City Council). March 2, 2022: This public hearing was conducted by Web conference Via Zoom. There were over 7 people in attendance at this earing with five (5) speakers requesting March 2, 2022: Five (5) non- profit organizatio ns made presentatio ns requesting CDBG funding for FY 22-23 (City of Lynwood Afterschool Program, City of Lynwood Senior Center, City of Lynwood Sports Program, Fair Housing Foundation, HOPICS, Lynwood Athletics None http://services.lynwood.ca.us/WebLink/Browse.aspx?id =4&dbid=0&repo=Laserfiche City Council Regular Meeting - Page 32 of 473 Annual Action Plan 2022 22 OMB Control No: 2506-0117 (exp. 09/30/2021) CDBG funding for FY 2022-23. May 17, 2022: This public hearing was conducted by Web conference via ZOOM. While City staff was unable to determine if anyone was on the call for this public hearing, there were no speakers or written comments received. Community Services, and The Harmony Project). May 17, 2022: This public hearing was conducted by Web conference via ZOOM. While City staff was unable to determine if anyone was on the call for this public hearing, there were no speakers or written comments received. 4 Newspaper Ad Community Wide On April 14, 2022, a None None City Council Regular Meeting - Page 33 of 473 Annual Action Plan 2022 23 OMB Control No: 2506-0117 (exp. 09/30/2021) Sort O rder Mode of O utreach Target of O utreach Summary of response/att endance Summary o f comments r eceived Summary of c omments not accepted and reasons URL (If applicable) notice was placed in the Lynwood Press Wave notifying citizens of the 30-day review period for the FY 2022- 23 Action Plan. City Council Regular Meeting - Page 34 of 473 Annual Action Plan 2022 24 OMB Control No: 2506-0117 (exp. 09/30/2021) Sort O rder Mode of O utreach Target of O utreach Summary of response/att endance Summary o f comments r eceived Summary of c omments not accepted and reasons URL (If applicable) 5 Internet Outreach Community Wide On April 14, 2022, one public notice was placed on City of Lynwood's website and posted in two (2) other locations at City Hall (within City Hall and at the outside Kiosk) notifying citizens of the 30-day review period for the FY 2022- 23 Action Plan. http://lynwood.ca.us/ City Council Regular Meeting - Page 35 of 473 Annual Action Plan 2022 25 OMB Control No: 2506-0117 (exp. 09/30/2021) Sort O rder Mode of O utreach Target of O utreach Summary of response/att endance Summary o f comments r eceived Summary of c omments not accepted and reasons URL (If applicable) 6 Email to social service agencies Social Service Agencies The City sent direct email notices to currently funded CDBG social service groups notifying them of the public hearing on March 2, 2022 and May 17, 2022. None None City Council Regular Meeting - Page 36 of 473 Annual Action Plan 2022 26 OMB Control No: 2506-0117 (exp. 09/30/2021) 7 Letter to Adjacent Cities Residents of Public and Assisted Housing Adjacent Citites On February 11, 2022, the City sent a formal letter to adjacent communities (which included cities of Compton, Downey, LACDA, Paramount, and South Gate) informing them that Lynwood was currently preparing its FY 2022-23 Action Plan and requested input from these jurisdictions on any activities that None None City Council Regular Meeting - Page 37 of 473 Annual Action Plan 2022 27 OMB Control No: 2506-0117 (exp. 09/30/2021) Sort O rder Mode of O utreach Target of O utreach Summary of response/att endance Summary o f comments r eceived Summary of c omments not accepted and reasons URL (If applicable) could be coordinated in such a way to achieve comprehensi ve community goals as well as any information on any non- housing community development that might warrant coordination with our community. City Council Regular Meeting - Page 38 of 473 Annual Action Plan 2022 28 OMB Control No: 2506-0117 (exp. 09/30/2021) Sort O rder Mode of O utreach Target of O utreach Summary of response/att endance Summary o f comments r eceived Summary of c omments not accepted and reasons URL (If applicable) 8 Letter to Adjacent Cities Adjacent Cities On April 14, 2022, the City sent a formal letter to adjacent communities (which included cities of Compton, Downey, LACDA, Paramount, and South Gate)inviting them to comment on the City’s draft FY 2022-23 Action Plan. None None City Council Regular Meeting - Page 39 of 473 Annual Action Plan 2022 29 OMB Control No: 2506-0117 (exp. 09/30/2021) Sort O rder Mode of O utreach Target of O utreach Summary of response/att endance Summary o f comments r eceived Summary of c omments not accepted and reasons URL (If applicable) 9 Public Meeting Community Wide On April 6, 2022, the CDBG Advisory Board reviewed and finalized the FY 2022- 23 CDBG and HOME funding recommenda tions for the City Council's consideratio n. None None http://services.lynwood.ca.us/WebLink/Browse.aspx?id =253618&dbid=0&repo=Laserfiche Table 4 – Citizen Participation Outreach City Council Regular Meeting - Page 40 of 473 Annual Action Plan 2022 30 OMB Control No: 2506-0117 (exp. 09/30/2021) Expected Resources AP-15 Expected Resources – 91.220(c)(1,2) Introduction Expected Resources While the federal funding awards have not yet been announced by HUD, the City estimates it will receive close to the same funding as received in FY 2021-22 which was approximately $1,078,831 in CDBG funds, which is an approximate 6.2% cut to its FY 2021-22 allocation, and $542,802 in HOME funds, which is an approximate 3.2% increase from its FY 2021-22 allocation. When combined with projected reallocated carryover funds and anticipated program income, the City anticipates having a total of $1,108,831 of CDBG funds available to allocate and $1,844,395 in HOME funds available to allocate for the 2022-23 year. In addition, the City will also be carrying over approximately $350,000 in allocated CDBG-CV funds. Carryover Funds/Reallocated Funds CDBG Funding: It is anticipated that approximately $30,000 will be carried over from FY 2021-22 projects into FY 2022-23. These funds will be reallocated to assist in the funding of a new FY 2022-23 Public Works Project. HOME Funding: It is anticipated that approximately $877,800 will be carried over from FY 2021-22 projects into FY 2022-23. These funds will be reallocated to assist in the funding of the FY 2022-23 Owner-Occupied Rehabilitation Loan Program. In addition, $423,793 in CHDO funds will be carried over into FY 2022-23. CDBG-CV: It is anticipated that approximately $350,000 in allocated CDBG-CV funds will be carried over into FY 2022-23 to continue to fund the Essential Goods Reimbursement Program ($4,000), Housing and Utility Assistance Program ($22,000), and the Small Business Rental Assistance City Council Regular Meeting - Page 41 of 473 Annual Action Plan 2022 31 OMB Control No: 2506-0117 (exp. 09/30/2021) Program ($175,000). Anticipated Resources Program Source of Funds Uses of Funds Expected Amount Available Year 1 Expected Amount Available Remainder of ConPlan $ Narrative Description Annual Allocation: $ Program Income: $ Prior Year Resources: $ Total: $ CDBG public - federal Acquisition Admin and Planning Economic Development Housing Public Improvements Public Services 1,078,831 0 30,000 1,108,831 2,573,405 In Year 2, the City expects to receive $1,078,831 in CDBG entitlement funds. Any unencumbered funds from prior year(s) resources will be allocated towards public infrastructure improvements. City Council Regular Meeting - Page 42 of 473 Annual Action Plan 2022 32 OMB Control No: 2506-0117 (exp. 09/30/2021) Program Source of Funds Uses of Funds Expected Amount Available Year 1 Expected Amount Available Remainder of ConPlan $ Narrative Description Annual Allocation: $ Program Income: $ Prior Year Resources: $ Total: $ HOME public - federal Acquisition Homebuyer assistance Homeowner rehab Multifamily rental new construction Multifamily rental rehab New construction for ownership TBRA 542,802 0 1,301,593 1,844,395 1,857,023 In Year 2, the City expects to receive $542,802 in HOME entitlement funds. Any unencumbered funds from prior year(s) resources will be allocated towards the Owner-Occupied Rehabilitation Loan program. Table 5 - Expected Resources – Priority Table Explain how federal funds will leverage those additional resources (private, state and local funds), including a description of how matching requirements will be satisfied The City will continue to use state and local funds to leverage federal entitlement dollars, including but not limited to:  City General Funds (Code Enforcement, Lucy Avalos Community Center, and Lynwood Senior Center);  In-kind Donations; and  Local, State, and Federal Funds (Public Work Projects). City Council Regular Meeting - Page 43 of 473 Annual Action Plan 2022 33 OMB Control No: 2506-0117 (exp. 09/30/2021) In addition, the following service providers budgeted additional federal and non-federal funds to their activities through funding from other cities, in-kind donations, United Way and other charitable organizations, and the Federal and State governments:  Harmony Project  Special Service for Groups (HOPICS Lynwood Access Center)  Lynwood Athletics Community Services  Fair Housing Foundation The City is a 100% HOME match reduction community; therefore, no HOME match is required City Council Regular Meeting - Page 44 of 473 Annual Action Plan 2022 34 OMB Control No: 2506-0117 (exp. 09/30/2021) If appropriate, describe publically owned land or property located within the jurisdiction that may be used to address the needs identified in the plan The City currently owns three properties (Alameda Triangle) that will be used for a future housing development that will be made up of both for sale market rate townhomes and affordable apartments. In addition, the City owns another 10 properties that have been approved for development of a 67-unit multi-family affordable (low- and moderate-income) apartment complex. The City's former Redevelopment Agency (herein referred to as the "Successor Agency") also owns a few properties. It is the Successor Agency’s intent to use these properties to incentivize developers to address either the housing needs economic development needs of the community. Discussion Redundant - Not Used City Council Regular Meeting - Page 45 of 473 Annual Action Plan 2022 35 OMB Control No: 2506-0117 (exp. 09/30/2021) Annual Goals and Objectives AP-20 Annual Goals and Objectives Goals Summary Information Sort Order Goal Name Start Year End Year Category Geographic Area Needs Addressed Funding Goal Outcome Indicator 1 Planning and Administration 2020 2024 Administration Not Applicable Administration CDBG: $202,766 HOME: $54,280 Other: 1 Other 2 Expand Fair Housing Choice and Access 2020 2024 Fair Housing City-wide Fair Housing Education CDBG: $13,000 Public service activities for Low/Moderate Income Housing Benefit: 200 Households Assisted 3 Planning and Administration - CDBG Rehabilitation 2020 2024 Planning and Administration Not Applicable Administration CDBG: $98,932 Other: 1 Other 4 Repair Aging Housing Infrastructure 2020 2024 Affordable Housing City-wide Housing Rehabilitation CDBG: $25,000 HOME: $754,902 Homeowner Housing Rehabilitated: 10 Household Housing Unit 5 Increase the Supply of Lead Safe Housing 2020 2024 Affordable Housing City-wide Housing Rehabilitation CDBG: $13,000 Homeowner Housing Rehabilitated: 5 Household Housing Unit City Council Regular Meeting - Page 46 of 473 Annual Action Plan 2022 36 OMB Control No: 2506-0117 (exp. 09/30/2021) Sort Order Goal Name Start Year End Year Category Geographic Area Needs Addressed Funding Goal Outcome Indicator 6 Code Enforcement 2020 2024 Affordable Housing Deteriorating and/or Deteriorated Area Code Enforcement and Blight Removal CDBG: $234,633 Housing Code Enforcement/Foreclosed Property Care: 200 Household Housing Unit 7 Public Vital Public Services 2020 2024 Non-Homeless Special Needs City-wide Supportive Services Needs CDBG: $161,500 Public service activities for Low/Moderate Income Housing Benefit: 240 Households Assisted 8 Provide Vital Homeless Services 2020 2024 Homeless City-wide Homeless Needs CDBG: $25,000 Homelessness Prevention: 10 Persons Assisted 9 Expand Affordable Housing Opportunities 2020 2024 Affordable Housing City-wide Affordable Housing HOME: $190,000 Direct Financial Assistance to Homebuyers: 2 Households Assisted 10 Improve/Upgrade Public Facilities/Infrastructures 2020 2024 Non-Housing Community Development Area Benefit Neighborhood Public Facilities and Infrastructure Improvements CDBG: $330,000 Public Facility or Infrastructure Activities for Low/Moderate Income Housing Benefit: 3000 Households Assisted Table 6 – Goals Summary Goal Descriptions City Council Regular Meeting - Page 47 of 473 Annual Action Plan 2022 37 OMB Control No: 2506-0117 (exp. 09/30/2021) 1 Goal Name Planning and Administration Goal Description Provide funds toward the payment of reasonable administrative costs and carrying charges related to the planning and execution of community development activities financed in whole or in part by CDBG and HOME funds. This applies to the 20% CDBG Planning and Administration and 10% HOME Planning and Administration cost. 2 Goal Name Expand Fair Housing Choice and Access Goal Description Provide funds for the Fair Housing Foundation to prepare and administer a Fair Housing Counseling Program in the City of Lynwood 3 Goal Name Planning and Administration - CDBG Rehabilitation Goal Description Provide funds for the direct delivery program costs for the Owner-Occupied Rehabilitation Programs. 4 Goal Name Repair Aging Housing Infrastructure Goal Description This program provides funds toward the Owner-Occupied Rehabilitation Programs, which assists low to moderate-income households in maintaining a safe and decent living environment. 5 Goal Name Increase the Supply of Lead Safe Housing Goal Description This program provides for the testing, clearance testing (including risk assessment), and, if necessary, remediation of lead/asbestos hazards of units constructed prior to 1978 that participate in the City’s Owner-Occupied Rehabilitation Program. 6 Goal Name Code Enforcement Goal Description This program provides a proactive code enforcement in eligible low and moderate-income block groups based on an official designation of deteriorating and/or deteriorated area. 7 Goal Name Public Vital Public Services Goal Description Provide needed public services that assist low- to moderate-income individuals and families including, but not limited to, youth services, senior and special needs services, nutrition and preventative health services, etc. City Council Regular Meeting - Page 48 of 473 Annual Action Plan 2022 38 OMB Control No: 2506-0117 (exp. 09/30/2021) 8 Goal Name Provide Vital Homeless Services Goal Description Provide funds for the funding of a resource center to assist the homeless or those at-risk of homelessness. This program provides a full range of social services for clients including providing temporary housing. 9 Goal Name Expand Affordable Housing Opportunities Goal Description Provide funding for new housing development and/ or programs that assist low- and moderate- income families with finding housing solutions including programs that increase homeownership, development of housing for special needs populations, support integrated housing solutions and plans, and reduce barriers to affordable housing consistent with the City's Analysis for Impediment to Fair Housing Choice. 10 Goal Name Improve/Upgrade Public Facilities/Infrastructures Goal Description Provide ongoing assistance to improve and/or upgrade public facilities (ADA improvements) & infrastructures (street improvements such as streets, sidewalks, curbing, safe routes to school, addressing public safety concerns, etc.). City Council Regular Meeting - Page 49 of 473 Annual Action Plan 2022 39 OMB Control No: 2506-0117 (exp. 09/30/2021) Projects AP-35 Projects – 91.220(d) Introduction Expected Resources While the federal funding awards have not yet been announced by HUD, the City estimates it will receive close to the same funding as received in FY 2021-22 which was approximately $1,078,831 in CDBG funds, which is an approximate 6.2% cut to its FY 2021-22 allocation, and $542,802 in HOME funds, which is an approximate 3.2% increase from its FY 2021-22 allocation. When combined with projected reallocated carryover funds and anticipated program income, the City anticipates having a total of $1,108,831 of CDBG funds available to allocate and $1,844,395 in HOME funds available to allocate for the 2022-23 year. In addition, the City will also be carrying over approximately $350,000 in allocated CDBG-CV funds. Carryover Funds/Reallocated Funds CDBG Funding: It is anticipated that approximately $30,000 will be carried over from FY 2021-22 projects into FY 2022-23. These funds will be reallocated to assist in the funding of a new FY 2022-23 Public Works Project. HOME Funding: It is anticipated that approximately $877,800 will be carried over from FY 2021-22 projects into FY 2022-23. These funds will be reallocated to assist in the funding of the FY 2022-23 Owner- Occupied Rehabilitation Loan Program. In addition, $423,793 in CHDO funds will be carried over into FY 2022-23. CDBG-CV: It is anticipated that approximately $350,000 in allocated CDBG-CV funds will be carried over into FY 2022-23 to continue to fund the Essential Goods Reimbursement Program ($4,000), Housing and Utility Assistance Program ($22,000), and the Small Business Rental Assistance Program ($175,000) City Council Regular Meeting - Page 50 of 473 Annual Action Plan 2022 40 OMB Control No: 2506-0117 (exp. 09/30/2021) Projects # Project Name 1 General Administration 2 Fair Housing Foundation 3 Owner-Occupied Rehabilitation Program - Administration 4 Owner-Occupied Rehabilitation Program - Emergency Grants 5 Owner-Occupied Rehabilitation Program - Lead/Asbestos Testing 6 Owner-Occupied Rehabilitation Program - Lead/Asbestos Remediation 7 Code Enforcement 8 City of Lynwood Afterschool Program 9 City of Lynwood Senior Program 10 City of Lynwood Sports Program 11 HOPICS 12 Lynwood Athletics Community Services 13 The Harmony Project 14 Street Improvement Project 15 HOME Administration 16 Owner-Occupied Rehabilitation Program - HOME Grants 17 Owner-Occupied Rehabilitation Program - HOME Loans 18 Down Payment Assistance Program 19 Community Housing Development Organization (CHDO) Table 7 - Project Information Describe the reasons for allocation priorities and any obstacles to addressing underserved needs The allocation priorities are established based on the results of the Needs Assessment, Market Analysis, and public input (which takes place annually as part of the Action Plan process). These assessments, coupled with the City's capacity to address needs with available funds, resulted in these projects being selected. All of these projects meet various needs, as identified in the Priority Needs section of this Plan. The City of Lynwood faces a number of potential obstacles in meeting affordable housing needs, community development needs, and underserved needs including the lack of affordable land for housing development, funding constraints to address the stated needs, and continued reductions of CDBG, HOME, and other federal funding sources in each fiscal year. The City will continue to look for non-traditional ways to develop affordable housing units and meet community development needs; work to combine funding sources and leverage private funds to develop affordable housing; and, to work with the federal government to ensure that sufficient funding continues in order to meet needs. City Council Regular Meeting - Page 51 of 473 Annual Action Plan 2022 41 OMB Control No: 2506-0117 (exp. 09/30/2021) AP-38 Project Summary Project Summary Information City Council Regular Meeting - Page 52 of 473 Annual Action Plan 2022 42 OMB Control No: 2506-0117 (exp. 09/30/2021) 1 Project Name General Administration Target Area Not Applicable Goals Supported Planning and Administration Needs Addressed Administration Funding CDBG: $202,766 Description Provide funds toward the payment of reasonable administrative costs and carrying charges related to the planning and execution of community development activities financed in whole or in part by CDBG funds. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities N/A Location Description City of Lynwood Planned Activities This program will provide for payment of reasonable administration costs and carrying charges related to the planning and execution of community development activities financed in whole or in part by CDBG funds. 2 Project Name Fair Housing Foundation Target Area City-wide Goals Supported Expand Fair Housing Choice and Access Needs Addressed Fair Housing Education Funding CDBG: $13,000 Description Provide funds for the Fair Housing Foundation to prepare and administer a Fair Housing Counseling Program in the City of Lynwood. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is the intent of the Fair Housing Foundation to assist 200 low- to moderate-income residents. Location Description City of Lynwood City Council Regular Meeting - Page 53 of 473 Annual Action Plan 2022 43 OMB Control No: 2506-0117 (exp. 09/30/2021) Planned Activities Through a sub-recipient contract with the Fair Housing Foundation, this program will provide for the preparation and administration of a Fair Housing Counseling Program. 3 Project Name Owner-Occupied Rehabilitation Program - Administration Target Area Not Applicable Goals Supported Planning and Administration - CDBG Rehabilitation Needs Addressed Administration Funding CDBG: $98,932 Description Provide funds for the direct delivery program costs for the Owner- Occupied Rehabilitation Programs. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities N/A Location Description City of Lynwood Planned Activities This program will provide for the direct delivery program costs for the Owner-Occupied Rehabilitation Programs. 4 Project Name Owner-Occupied Rehabilitation Program - Emergency Grants Target Area City-wide Goals Supported Repair Aging Housing Infrastructure Needs Addressed Housing Rehabilitation Funding CDBG: $25,000 Description Provide funds for a $5,000 emergency grant to homeowners who are low- to moderate-income and need funding for correction to emergency code deficiencies that constitute an immediate health and/or safety issue. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 5 low- to moderate-income households will benefit from this program. Location Description City of Lynwood City Council Regular Meeting - Page 54 of 473 Annual Action Plan 2022 44 OMB Control No: 2506-0117 (exp. 09/30/2021) Planned Activities This program will provide funds toward the Owner-Occupied Rehabilitation Program for Emergency Grants, which will assist low- to moderate-income households in maintaining a safe and decent living environment. 5 Project Name Owner-Occupied Rehabilitation Program - Lead/Asbestos Testing Target Area City-wide Goals Supported Increase the Supply of Lead Safe Housing Needs Addressed Housing Rehabilitation Funding CDBG: $3,000 Description Provide funds for testing and clearance testing (including risk assessment) of units constructed prior to 1978 that participate in the City's Owner-Occupied Rehabilitation Program (Emergency Grants). Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 5 low- to moderate-income households will benefit from this program. Location Description City of Lynwood Planned Activities This program will provide for the testing and clearance testing (including risk assessment) of lead/asbestos hazards of units constructed prior to 1978 that participated in the City's Owner- Occupied Rehabilitation Program (Emergency Grants). 6 Project Name Owner-Occupied Rehabilitation Program - Lead/Asbestos Remediation Target Area City-wide Goals Supported Increase the Supply of Lead Safe Housing Needs Addressed Housing Rehabilitation Funding CDBG: $10,000 Description Provide grant funds to remediate lead/asbestos hazards in units participating in the City's Owner-Occupied Rehabilitation Program (Emergency Grants). Target Date 6/30/2023 City Council Regular Meeting - Page 55 of 473 Annual Action Plan 2022 45 OMB Control No: 2506-0117 (exp. 09/30/2021) Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 5 low- to moderate-income households will benefit from this program. Location Description City of Lynwood Planned Activities This program will provide remediation of lead/asbestos hazards of units constructed prior to 1978 that participate in the City's Owner-Occupied Rehabilitation Program (Emergency Grants). 7 Project Name Code Enforcement Target Area Deteriorating and/or Deteriorated Area Goals Supported Code Enforcement Needs Addressed Code Enforcement and Blight Removal Funding CDBG: $234,633 Description Provide funds for a proactive code enforcement program in eligible low- and moderate-income block groups based on an official designation of deteriorating and/or deteriorated areas. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 200 low- to moderate-income households will benefit from this program Location Description City of Lynwood Planned Activities This program will provide a proactive code enforcement program in eligible low- and moderate-income block groups based on an official designation of deteriorating and/or deteriorated areas. 8 Project Name City of Lynwood Afterschool Program Target Area City-wide Goals Supported Public Vital Public Services Needs Addressed Supportive Services Needs Funding CDBG: $55,500 Description Provide funds for towards the After-School Program (i.e. homework assistance/tutoring, seasonal sports, field trips, etc.) offered at the Lucy Avalos Community Center for the youth up to 18 years of age that are still in school. City Council Regular Meeting - Page 56 of 473 Annual Action Plan 2022 46 OMB Control No: 2506-0117 (exp. 09/30/2021) Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 75 low- to moderate-income youth will benefit from this program. Location Description Lucy Avalos Community Center @ Burke-Ham Park - 11832 Atlantic Avenue, Lynwood Planned Activities The After-School Program will assist with funding towards an after- school program that provides homework assistance/tutoring, seasonal sports, field trips, etc. for youth (up to 18 years of age who are still in school) of low- to moderate-income families. 9 Project Name City of Lynwood Senior Program Target Area City-wide Goals Supported Public Vital Public Services Needs Addressed Supportive Services Needs Funding CDBG: $39,000 Description Provide funds for a Senior Program. The Senior Program provides a number of services at the City's Senior Center including nutritious meals, referral services, senior activities, and special events to seniors living in Lynwood to help promote the role of nutrition, preventive health issues, and long-term care. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 100 seniors will benefit from this program. Location Description Lynwood Senior Citizen Center - 11329 Ernestine Avenue, Lynwood Planned Activities The Lynwood Senior Center will provide nutritious meals, referral services, senior activities, and special events to seniors living in Lynwood. 10 Project Name City of Lynwood Sports Program Target Area City-wide Goals Supported Public Vital Public Services Needs Addressed Supportive Services Needs City Council Regular Meeting - Page 57 of 473 Annual Action Plan 2022 47 OMB Control No: 2506-0117 (exp. 09/30/2021) Funding CDBG: $12,000 Description Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 10 low- to moderate-income youth will benefit from this program. Location Description Lynwood City Park - 11301 Bullis Road, Lynwood Burke-Ham Park - 11832 Atlantic Ave, Lynwood Planned Activities After-school youth recreational sports 11 Project Name HOPICS Target Area City-wide Goals Supported Provide Vital Homeless Services Needs Addressed Homeless Needs Funding CDBG: $25,000 Description Provide funds for the funding of a resource center to assist the homeless or those at-risk of homelessness. This program provides a full range of social services for clients including providing temporary housing. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 25 homeless/at-risk of homelessness will benefit from this program. Location Description City of Lynwood Planned Activities Through a sub-recipient contract with HOPICS, this program will provide a resource center within Lynwood to assist with homelessness and at-risk of homelessness. 12 Project Name Lynwood Athletics Community Services Target Area City-wide Goals Supported Public Vital Public Services Needs Addressed Supportive Services Needs City Council Regular Meeting - Page 58 of 473 Annual Action Plan 2022 48 OMB Control No: 2506-0117 (exp. 09/30/2021) Funding CDBG: $15,000 Description Provide funds for the Lynwood Athletics Community Services program. The Lynwood Athletics Community Services program provides youth sports and recreational activities for students of low- to moderate- income families. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 20 low- to moderate-income youth will benefit from this program. Location Description Lynwood High School - 4050 E. Imperial Highway, Lynwood Planned Activities The Lynwood Athletics Community Services will provide youth sports and recreational activities for students of low- to moderate-income families 13 Project Name The Harmony Project Target Area City-wide Goals Supported Public Vital Public Services Needs Addressed Supportive Services Needs Funding CDBG: $15,000 Description Provide funds for the Harmony Project. Through this program, approximately 50 low- to moderate-income youth under the age of 18 are provided with music lessons and ensemble participation. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 45 low- to moderate-income youth under the age of 18 will benefit from this program. Location Description City of Lynwood Planned Activities Through a sub-recipient contract with the Harmony Project, this program will provide music lessons and ensemble participation services to youth under the age of 18 who meet the income requirements. 14 Project Name Street Improvement Project Target Area Area Benefit Neighborhood Goals Supported Improve/Upgrade Public Facilities/Infrastructures City Council Regular Meeting - Page 59 of 473 Annual Action Plan 2022 49 OMB Control No: 2506-0117 (exp. 09/30/2021) Needs Addressed Public Facilities and Infrastructure Improvements Funding CDBG: $330,000 Description Provide funding towards street improvements that is in need of repairs. Improvements will include ADA complaint curb ramps, rehabilitated curbs, gutters, sidewalks, driveway approaches, and pavement. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 16,000 persons will benefit from this project. Location Description Area Benefit Planned Activities Through this program, the City plans to make needed street improvements including ADA complaint curb ramps, rehabilitated curbs, gutters, sidewalks, driveway approaches, and pavement to one City street that is in need of repairs. 15 Project Name HOME Administration Target Area Not Applicable Goals Supported Planning and Administration Needs Addressed Administration Funding HOME: $54,280 Description Provide funds toward the payment of reasonable administrative costs and carrying charges related to the planning and execution of community development activities financed in whole or in part by HOME funds. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities N/A Location Description City of Lynwood Planned Activities N/A 16 Project Name Owner-Occupied Rehabilitation Program - HOME Grants Target Area City-wide Goals Supported Repair Aging Housing Infrastructure City Council Regular Meeting - Page 60 of 473 Annual Action Plan 2022 50 OMB Control No: 2506-0117 (exp. 09/30/2021) Needs Addressed Housing Rehabilitation Funding HOME: $150,000 Description Provide funds for a $10,000 grant to homeowners who meet the low- to moderate-income criteria for repairs related to interior and exterior code deficiencies and general home improvements. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 15 low- to moderate-income households will benefit from this program. Location Description City of Lynwood Planned Activities This program will provide funds toward the Owner-Occupied Rehabilitation Program for Grants, which will assist low- to moderate- income households in maintaining a safe and decent living environment. 17 Project Name Owner-Occupied Rehabilitation Program - HOME Loans Target Area City-wide Goals Supported Repair Aging Housing Infrastructure Needs Addressed Housing Rehabilitation Funding HOME: $754,902 Description Provide funds for the City's low interest (0%) deferred payment loan (maximum loan amount $35,000) to homeowners who meet the low- to moderate-income criteria and need financial assistance to make repairs and improvements. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 10 low- to moderate-income households will benefit from this program. Location Description City of Lynwood Planned Activities This program will provide funds toward the Owner-Occupied Rehabilitation Loan Program for HOME loans, which assist low- to moderate-income households who own and occupy their homes and need financial assistance to make repairs and improvements. City Council Regular Meeting - Page 61 of 473 Annual Action Plan 2022 51 OMB Control No: 2506-0117 (exp. 09/30/2021) 18 Project Name Down Payment Assistance Program Target Area City-wide Goals Supported Expand Affordable Housing Opportunities Needs Addressed Affordable Housing Funding HOME: $190,000 Description Provide funds for first time homebuyers through the City's Down Payment Assistance Program. The amount of the loan will vary depending on the value of the house to be purchased to assist the homebuyer in achieving a 25% down payment. The maximum allowable loan will be $95,000. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 2 low- to moderate-income households will benefit from this program. Location Description City of Lynwood Planned Activities This program will provide funds for first time homebuyers through the City's Down Payment Assistance Program. The amount of the loan will vary depending on the value of the house to be purchased to assist the homebuyer in achieving a 25% down payment. The maximum allowable loan will be $95,000. 19 Project Name Community Housing Development Organization (CHDO) Target Area City-wide Goals Supported Expand Affordable Housing Opportunities Needs Addressed Affordable Housing Funding HOME: $81,420 Description Provide funds for the production of affordable housing unit using the 15% CHDO set-aside funding as required under the HOME program. Target Date 6/30/2023 Estimate the number and type of families that will benefit from the proposed activities It is anticipated that 1 low- to moderate-income households will benefit from this program. Location Description City of Lynwood City Council Regular Meeting - Page 62 of 473 Annual Action Plan 2022 52 OMB Control No: 2506-0117 (exp. 09/30/2021) Planned Activities This program will provide for the production of one affordable housing unit using the 15% CHDO set-aside funding as required under the HOME program. City Council Regular Meeting - Page 63 of 473 Annual Action Plan 2022 53 OMB Control No: 2506-0117 (exp. 09/30/2021) AP-50 Geographic Distribution – 91.220(f) Description of the geographic areas of the entitlement (including areas of low-income and minority concentration) where assistance will be directed Area Benefit CDBG Infrastructure/Public Works improvements are considered an area benefit activity. An area benefit is an activity that meets the identified needs of low and moderate-income persons residing in an area where at least 51% of the residents are low and moderate-income persons. The benefits of this type of activity are available to all persons in the area regardless of income. Potentially eligible activities include street improvements, façade improvements in neighborhood commercial districts, graffiti removal, and code enforcement. Citywide In order to prevent the concentration of low-income persons, City housing programs and social service programs are marketed and available throughout the City. The programs are not directed to any one geographical area but rather the extremely low to moderate-income (0 to 80% of the MFI) persons and families. The City wants to promote a balanced and integrated community and is committed to providing assistance throughout the City. Deteriorated/Deteriorating Areas Code Enforcement activities are limited to eligible low- and moderate-income block groups based on an official designation of deteriorating and/or deteriorated areas. On August 20, 2013, the City transmitted a letter to U.S. Department of Housing and Urban Development, LA Office that described the City’s Low and Moderate-Income “Target Area” and “Deteriorating Areas” and the qualifying conditions in each census tract. The five census tracts comprising the deteriorated areas include 5400, 5402, 5403, 5405, and 5418. Not Applicable The not applicable area is for CDBG and HOME Administration activities. The City has traditionally used 80% or more of its CDBG resources to benefit these special areas and/or to operate programs available exclusively to low and moderate-income people (whereas HUD regulations only require a minimum 70% low/mod benefit level for CDBG activities). In order to continue to achieve this high ratio of low/mod benefit for its CDBG resources, and because of the compelling need to assist City Council Regular Meeting - Page 64 of 473 Annual Action Plan 2022 54 OMB Control No: 2506-0117 (exp. 09/30/2021) these target areas, the City will continue to target CDBG resources to these special geographic areas. Geographic Distribution Target Area Percentage of Funds Area Benefit Neighborhood 28 City-wide 27 Not Applicable 20 Deteriorating and/or Deteriorated Area 25 Table 8 - Geographic Distribution Rationale for the priorities for allocating investments geographically Some activities are intended to serve only income-eligible persons and these are accomplished on a citywide basis. Other activities such as infrastructure improvements can be accomplished in area benefit neighborhoods per CDBG regulations. While code enforcement can only be implemented in areas where there are low-income persons, that qualify as deteriorated and where other community efforts are being undertaken. Discussion Redundant - Not Used City Council Regular Meeting - Page 65 of 473 Annual Action Plan 2022 55 OMB Control No: 2506-0117 (exp. 09/30/2021) Affordable Housing AP-55 Affordable Housing – 91.220(g) Introduction The demand for affordable housing for low- and moderate-income households in Lynwood has been persistent, as the analyses in the Consolidated Plan have demonstrated. The City established maintenance of affordable housing as a high priority need, and established a goal of rehabilitating 50 owner-occupied housing units in order to maintain the City’s stock of affordable units over the five-year period of the Consolidated Plan. In addition, the City is focusing on creating new affordable units in cooperation with a Community Housing Development Organization (CHDO). The City does not own any public housing units or provide a Section 8 Housing Choice Voucher program. Instead, the City works with the Housing Authority of the County of Los Angeles who administers a Section 8 Housing Choice Voucher program within Lynwood. The needs of the homeless are handled through nonprofit organizations and the Los Angeles Homeless Service Authority. One Year Goals for the Number of Households to be Supported Homeless 0 Non-Homeless 10 Special-Needs 0 Total 10 Table 9 - One Year Goals for Affordable Housing by Support Requirement One Year Goals for the Number of Households Supported Through Rental Assistance 0 The Production of New Units 0 Rehab of Existing Units 10 Acquisition of Existing Units 0 Total 10 Table 10 - One Year Goals for Affordable Housing by Support Type Discussion The City of Lynwood anticipates assisting 10 low to moderate-income homeowners through the Owner- City Council Regular Meeting - Page 66 of 473 Annual Action Plan 2022 56 OMB Control No: 2506-0117 (exp. 09/30/2021) Occupied Rehabilitation Program. Low to moderate-income is defined as 0 to 80% of the MFI. City Council Regular Meeting - Page 67 of 473 Annual Action Plan 2022 57 OMB Control No: 2506-0117 (exp. 09/30/2021) AP-60 Public Housing – 91.220(h) Introduction There are no public housing projects in the City. The City works with the Housing Authority of the County of Los Angeles who provides rental assistance to the residents of Lynwood through the Federal Section 8 Voucher program. The primary objective of this program is to assist low-income (0 to 50% of MFI) persons and households in making rents affordable. There is currently a lengthy waiting list for the Section 8 Program with the average wait from three to five years, if not longer. Each applicant is selected from the waiting list in sequence, based upon date of preliminary application and Voucher availability. Actions planned during the next year to address the needs to public housing N/A Actions to encourage public housing residents to become more involved in management and participate in homeownership N/A If the PHA is designated as troubled, describe the manner in which financial assistance will be provided or other assistance N/A Discussion Redundant - Not Used City Council Regular Meeting - Page 68 of 473 Annual Action Plan 2022 58 OMB Control No: 2506-0117 (exp. 09/30/2021) AP-65 Homeless and Other Special Needs Activities – 91.220(i) Introduction The Los Angeles Homeless Services Authority (LAHSA), a Joint Powers Authority (JPA), is the lead agency in the Los Angeles Continuum of Care and coordinates funds for programs providing shelter, housing, and services to homeless persons in Los Angeles County. LAHSA partners with the County of Los Angeles to integrate services and housing opportunities to ensure a wide distribution of service and housing options throughout the Los Angeles Continuum of Care. The City of Lynwood is located in Service Planning Area (SPA) 6 and will continue to collaborate with LAHSA and other local agencies in providing services for homeless persons. In addition, the City of Lynwood provides funding towards HOPICS, which is a resource center to assist the homeless or those at-risk of homelessness. HOPICS’ provides a full range of social services for clients including providing temporary housing. Describe the jurisdictions one-year goals and actions for reducing and ending homelessness including Reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs The City of Lynwood is not a direct provider of homeless services. Through the CDBG program for FY 2022- 23, the City will be providing funding towards HOPICS, which is a resource center to assist the homeless or those at-risk of homelessness. HOPICS’ provides a full range of social services for clients including providing temporary housing. In addition, the City refers homeless persons to emergency shelters, transitional housing, and supportive housing operated by public and private agencies located near the City. The City also collaborates and is an active partner with LAHSA. The City participated in LAHSA’s 2022 Homeless Youth and Homeless Adult Count, which were conducted in February 2022. Addressing the emergency shelter and transitional housing needs of homeless persons The City of Lynwood is not a direct provider of homeless services. Through the CDBG program for FY 2022- 23, the City will be providing funding towards HOPICS, which is a resource center to assist the homeless or those at-risk of homelessness. HOPICS’ provides a full range of social services for clients including providing temporary housing. In addition, the City refers homeless persons to emergency shelters, transitional housing, and supportive housing operated by public and private agencies located near the City. The City also amended the Zoning Code to include provisions for transitional and supportive housing. Helping homeless persons (especially chronically homeless individuals and families, families City Council Regular Meeting - Page 69 of 473 Annual Action Plan 2022 59 OMB Control No: 2506-0117 (exp. 09/30/2021) with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again As stated above, the City coordinates efforts with LAHSA and HOPICS to assist homeless persons in making the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again. In addition, as previously mentioned, the City amended the Zoning Code to permit the development of transitional and supportive housing. Helping low-income individuals and families avoid becoming homeless, especially extremely low-income individuals and families and those who are: being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); or, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs. In addition to the agencies listed above, the City will continue to seek and work with local non-profit agencies who provide emergency food, clothing, and referral services to low-income Lynwood residents (i.e. LAHSA, 2-1-1, food banks, etc.). Discussion See discussion above. City Council Regular Meeting - Page 70 of 473 Annual Action Plan 2022 60 OMB Control No: 2506-0117 (exp. 09/30/2021) AP-75 Barriers to affordable housing – 91.220(j) Introduction: See discussion below. Actions it planned to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment The City of Lynwood is committed to addressing the negative effects of public policies over which it has control. In order to promote integration and prevent low-income concentrations, the City designed its affordable housing programs to be available Citywide. This priority also serves to make sure that the City does not have any policies, rules, or regulations that would lead to minority or racial concentrations. Over the years, Lynwood has demonstrated a willingness to encourage housing development of all types. It has approved several zone changes and Code amendments to allow for development of a variety of housing types, including those that benefit low and moderate-income people. It also makes an effort to fast-track projects and process permits in a timely manner. The City maintains its current posture of openness and willingness to entertain new ideas and eliminate any regulatory barriers under its control in the provision of a variety of housing to meet the needs of all income groups. In addition, the City continues to work cooperatively within existing legislatively mandated constraints and worked to develop and/or encourage public policies that foster further affordable housing development and assistance. Discussion: Redundant - Not Used City Council Regular Meeting - Page 71 of 473 Annual Action Plan 2022 61 OMB Control No: 2506-0117 (exp. 09/30/2021) AP-85 Other Actions – 91.220(k) Introduction: The priority needs established in the Five-Year Consolidated Plan form the basis for establishing objectives and outcomes in the FY 2022-23 Annual Action Plan, which are as follows:  Address obstacles to meet underserved needs;  Foster and maintain affordable housing;  Reduce lead-based paint hazards;  Promote equal housing opportunity;  Reduce the number of poverty-level families;  Develop institutional structure;  Enhance coordination between public and private housing and social service agencies; and  Planning and Administration. Actions planned to address obstacles to meeting underserved needs The City of Lynwood faces a number of potential obstacles in meeting affordable housing and community development needs and underserved needs through the CDBG and HOME program including lack of affordable land for housing development, funding constraints to address community development needs, and continued reductions for CDBG, HOME, and other federal funding sources in each fiscal year. As entitlement grants shrink or remain level-funded, the cost of delivering services and completing projects increase, resulting in financial obstacles to meet needs. Although the availability of federal, state and other private resources continue to decline, the City has been able to meet underserved needs by leveraging General funds with CDBG and HOME funds. Lynwood provides people with special needs with various services, activities, and programs operated by the City and public and private agencies and institutions. The City will continue to look for non-traditional ways to develop affordable housing units and meet community development needs; work to combine funding sources and leverage private funds to develop affordable housing; and, to work with the federal government to ensure that sufficient funding continues in order to meet needs. Actions planned to foster and maintain affordable housing The City of Lynwood will foster and maintain affordable housing through the different programs funded with CDBG and HOME funds. Home improvement financial assistance will continue to be provided to low- and moderate-income families to reserve housing standards. Code enforcement activities will remain an important component for maintaining and improving Lynwood’s housing stock, focusing on problems that City Council Regular Meeting - Page 72 of 473 Annual Action Plan 2022 62 OMB Control No: 2506-0117 (exp. 09/30/2021) threaten safety and security. The City will also continue to collaborative with public agencies, government agencies, housing developers, non-profit agencies, and residents to further maintain housing affordability. The City will use its own City newsletter and website, as well as community events to promote these services, and to promote its housing and community service programs. Through these efforts, it is the City’s goal to maintain housing affordability. Actions planned to reduce lead-based paint hazards As of FY 2001-02, the City of Lynwood began implementing the new HUD Lead Based Paint Regulations (Title X), which requires all federally assisted housing programs, including rehabilitation, homeownership, and tenant-based subsidy systems, to address lead hazards. The City will continue its program of education and eradication of lead-based paint through the operation of its Owner-Occupied Rehabilitation Programs. This program provides assistance to low- and moderate- income homeowners; the target groups most likely to be living in older housing with lead-based paint. The City has procured the service of a State Certified Lead Consultant to provide the following:  Lead-based paint and soil inspection  Lead-based paint risk assessment  Lead-based paint hazard reduction monitoring  Post-hazard reduction clearance test. Under the Owner-Occupied Rehabilitation Programs, the City will continue to provide each owner who participates with both oral and written information regarding the dangers of lead-based paint and what to do about it. Owners of properties constructed prior to 1978 will be required to meet certain lead-based paint requirements prior to being assisted. These requirements include the following:  Distribution of lead-based paint notification pamphlets to all households occupying assisted units.  Inspection of all properties for defective paint surfaces.  Abatement of all defective paint surfaces identified at the time of the inspection. Through the Owner-Occupied Rehabilitation Programs, financial assistance will be provided to eradicate the problem. Full abatement will be undertaken in all rehabilitation projects over $25,000. It is the responsibility of the City's Executive Assistant to the Community Development Department to ensure that properties constructed prior to 1978 meet the lead-based paint requirements and any abatement of defective paint surfaces are completed by contractors certified by the State of California Department of City Council Regular Meeting - Page 73 of 473 Annual Action Plan 2022 63 OMB Control No: 2506-0117 (exp. 09/30/2021) Health Services. A copy of the contractor's certification is kept on file. Actions planned to reduce the number of poverty-level families The City will continue to provide resources to households living in poverty through networks of social and public service agencies and programs. Specifically, poverty-level families will receive: health education services, fair housing services, recreational services, improved infrastructure, and referrals to County services offering other financial assistance. In addition, during FY 2022-23, the City will collaborate with the Housing Authority of the County of Los Angeles where rental assistance vouchers will be provided to Lynwood families. Actions planned to develop institutional structure The City of Lynwood is governed by a five-member City Council. The City Council reviews, holds hearings, approves the funding priorities, and approves the submission of the Action Plan to HUD. The City’s Community Development Department is the lead agency in the coordination of the Action Plan. It coordinates the economic activities, develops and implements the programs that rehabilitate and preserve the neighborhoods, develops and rehabilitates affordable housing, and provides rental assistance to the very low-income and special-needs segments of the City's population. While the Community Development Department has the major responsibility for the Action Plan budgeting, project formulation, and program implementation, other City departments, government agencies, social service agencies, and Lynwood residents play an important role. There are several inter- departmental programs, primarily in the area of neighborhood quality of life that are composed of a wide variety of City agencies. All are funded through the CDBG or HOME as a funding source; but in many cases, departmental funds and other funding augment and leverage Action Plan Resources. Guidelines for expenditure of CDBG and HOME funds are provided as needed or when changes to programs occur. Periodically, the Community Development Department provides departments and City-related agencies with training in HUD grant regulations. There are many organizations that actively collaborate in the areas of housing, homeless services, and community and economic development, and coordinate closely in both the preparation and implementation of the Action Plan. The City, for its part, will promote and encourage fair housing and single-family home rehabilitation. One of the biggest challenges facing the City is the lack of or ever-decreasing amount of funds available in maintaining and furthering housing and community development goals. In addition, foundation giving is declining. A related challenge is the need for better coordination and cooperation between the City and social service and health providers. For homeless activities, a seamless approach to provision of transitional and permanent housing services requires that such providers be actively involved in each facet of the Continuum of Care. However, other housing activities, such as rehabilitation, demolition of abandoned or hazardous units, acquisition of sites for potential single family and multifamily affordable City Council Regular Meeting - Page 74 of 473 Annual Action Plan 2022 64 OMB Control No: 2506-0117 (exp. 09/30/2021) housing, home ownership assistance, and new construction need to be integrated within the social service and health provider community as well. The key to a strong institutional structure is the ability to develop and share data on the progress and status of beneficiaries through the development of integrated information systems. There are now several data information systems in place that, to various degrees, track the progress of a variety of beneficiaries from initial intake, through provision of services, and to completion of participation Institutions playing a major role in delivery of community development programs often have different mandates, and consequently different priorities and strategies to achieve them. These mandates are most often imposed by Congress, and reflected through the regulations of federal funding agencies. In several cases, goals may overlap or conflict. The City will continue to work with a wide range of public and community social service agencies to meet and address the various needs of the community. The City is an active member of the Gateway Cities Council of Governments, an organization that is a key element of the institutional structure. Actions planned to enhance coordination between public and private housing and social service agencies The City will carry out this Action Plan through various organizations including a number of social service agencies funded through CDBG grant funds (HOPICS, Lucy Avalos Community Center, Lynwood Athletics Community Services, Lynwood Senior Center, The Harmony Project, Lynwood Sports Program, and the Fair Housing Foundation). In addition, various City departments will work together to achieve the goals of this Action Plan, including the Public Safety Division (Code Enforcement), the Housing Services Division (Owner-Occupied Rehabilitation Loan Programs), and the Public Works Department (Infrastructure improvements). The City also works with the State, other local governments (County of Los Angeles), private industry construction contractors, non-profit organizations and social service providers to provide community, housing, and social service programs and projects. In addition, the City works with the Los Angeles Homeless Services Authority (LAHSA) to provide critical information regarding homeless services and identifying and prioritizing gaps and needs in the regional system of care. The City participated in the February 2022 Homeless Count organized by LAHSA. The City is committed to extend and strengthen partnerships among all levels of government and the private sector, including for-profit and non-profit organizations. The means of cooperation and coordination with these various groups will continue to enhance the services provided to our residents. Discussion: While the primary actors in the Action Plan process is the City Council and the Community Development City Council Regular Meeting - Page 75 of 473 Annual Action Plan 2022 65 OMB Control No: 2506-0117 (exp. 09/30/2021) Department, there are a significant number of City agencies and departments that oversee a wide variety of grants and programs that provide services to low- and moderate-income City residents, and play an important role in implementing the Action Plan as mentioned above. City Council Regular Meeting - Page 76 of 473 Annual Action Plan 2022 66 OMB Control No: 2506-0117 (exp. 09/30/2021) Program Specific Requirements AP-90 Program Specific Requirements – 91.220(l)(1,2,4) Introduction: Projects planned with all CDBG funds expected to be available during the year are identified in the Projects Table. The following identifies program income that is available for use that is included in projects to be carried out. Community Development Block Grant Program (CDBG) Reference 24 CFR 91.220(l)(1) Projects planned with all CDBG funds expected to be available during the year are identified in the Projects Table. The following identifies program income that is available for use that is included in projects to be carried out. 1. The total amount of program income that will have been received before the start of the next program year and that has not yet been reprogrammed 0 2. The amount of proceeds from section 108 loan guarantees that will be used during the year to address the priority needs and specific objectives identified in the grantee's strategic plan. 0 3. The amount of surplus funds from urban renewal settlements 0 4. The amount of any grant funds returned to the line of credit for which the planned use has not been included in a prior statement or plan 0 5. The amount of income from float-funded activities 0 Total Program Income: 0 Other CDBG Requirements 1. The amount of urgent need activities 0 2. The estimated percentage of CDBG funds that will be used for activities that benefit persons of low and moderate income. Overall Benefit - A consecutive period of one, two or three years may be used to determine that a minimum overall benefit of 70% of CDBG funds is used to benefit persons of low and moderate income. Specify the years covered that include this Annual Action Plan. 75.00% City Council Regular Meeting - Page 77 of 473 Annual Action Plan 2022 67 OMB Control No: 2506-0117 (exp. 09/30/2021) HOME Investment Partnership Program (HOME) Reference 24 CFR 91.220(l)(2) 1. A description of other forms of investment being used beyond those identified in Section 92.205 is as follows: The City of Lynwood does not use atypical loans or grant instruments of non-conforming loan guarantees. The City plans to use only the forms of investment and assistance that are explicitly listed in 92.205(b). No other forms of investment and assistance are planned in FY 2022-23. 2. A description of the guidelines that will be used for resale or recapture of HOME funds when used for homebuyer activities as required in 92.254, is as follows: The City does not plan to use more than one set of provisions. While the City will be updating the Down Payment Assistance Program guidelines, the City will use "Recapture" Provisions when applicable as indicated below. Recapture revisions reflect the following model: "The City will recapture the entire direct amount of HOME assistance." Summary of Provisions:  The provisions indicate the direct subsidy to be recaptured.  The provisions limit the amount to be recaptured to the net proceeds for sale of property.  No resale provision, only recapture.  Fair return is calculated during recapture; owner investment is returned first and the owner is allowed to recover property investments or costs for improvements.  No use of presumption of affordability. Again, the City will be developing updated guidelines for the City's Down Payment Assistance Program. The guidelines will establish provisions for the recapture of the HOME investment according to the federal regulations (Section 92.254). The resale and recapture provisions will be described in the guidelines. In addition, the provisions will be described to the program participants prior to the purchase of the home. The guidelines will contain the following Resale/Recapture provisions: RECAPTURE. This requirement is a mechanism to recapture the entire direct amount of HOME assistance if the HOME recipient decides to sell the house within the affordability period at whatever price the market will bear. Recaptured funds may be used for any HOME-eligible activity. To ensure affordability, the City has established the following recapture requirements: 1. The homebuyer may sell the property to any willing buyer. 2. The sale of the property during the affordability period triggers repayment of the direct HOME subsidy that the buyer received when he/she originally purchased the home. 3. The City will recapture the entire amount of the HOME assistance from the homeowner under the following conditions: a) upon the sale of property; b) upon the transfer of title; c) when the property is no longer the participant’s principal residence; d) when the house City Council Regular Meeting - Page 78 of 473 Annual Action Plan 2022 68 OMB Control No: 2506-0117 (exp. 09/30/2021) is refinanced with cash out. (Refinancing is permitted only to reduce the homeowner’s monthly payment). 4. Owner investment returned first. The City will allow the homeowner to recover the homeowner’s entire investment (down payment and capital improvements made by the owner since the purchase of the property) before recapturing the HOME investment. 5. Amount subject to recapture. The HOME investment that is subject to recapture is based on the amount of HOME assistance that enabled the homeowner to buy the dwelling unit. This includes any HOME assistance that reduced the purchase price from the fair market value to an affordable price. The recaptured funds will be used by the City to carry out HOME-eligible activities. 6. The recapture requirement will be enforced by the following legal documents that will include the recapture requirements: a) A recorded Subordinate Deed of Trust securing repayment of the HOME subsidy; b) A recorded promissory Note secured by a Deed of Trust. 3. A description of the guidelines for resale or recapture that ensures the affordability of units acquired with HOME funds? See 24 CFR 92.254(a)(4) are as follows: See above. 4. Plans for using HOME funds to refinance existing debt secured by multifamily housing that is rehabilitated with HOME funds along with a description of the refinancing guidelines required that will be used under 24 CFR 92.206(b), are as follows: The City does not currently plan to use HOME funds to refinance existing debt secured by multifamily housing. Redundant - Not Used City Council Regular Meeting - Page 79 of 473 Annual Action Plan 2022 69 OMB Control No: 2506-0117 (exp. 09/30/2021) Attachments City Council Regular Meeting - Page 80 of 473 Annual Action Plan 2022 70 OMB Control No: 2506-0117 (exp. 09/30/2021) Citizen Participation Comments City Council Regular Meeting - Page 81 of 473 Annual Action Plan 2022 71 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 82 of 473 Annual Action Plan 2022 72 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 83 of 473 Annual Action Plan 2022 73 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 84 of 473 Annual Action Plan 2022 74 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 85 of 473 Annual Action Plan 2022 75 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 86 of 473 Annual Action Plan 2022 76 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 87 of 473 Annual Action Plan 2022 77 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 88 of 473 Annual Action Plan 2022 78 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 89 of 473 Annual Action Plan 2022 79 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 90 of 473 Annual Action Plan 2022 80 OMB Control No: 2506-0117 (exp. 09/30/2021) Grantee Unique Appendices City Council Regular Meeting - Page 91 of 473 Annual Action Plan 2022 81 OMB Control No: 2506-0117 (exp. 09/30/2021) APPENDICES City Council Regular Meeting - Page 92 of 473 Annual Action Plan 2022 82 OMB Control No: 2506-0117 (exp. 09/30/2021) Reserved City Council Regular Meeting - Page 93 of 473 Annual Action Plan 2022 83 OMB Control No: 2506-0117 (exp. 09/30/2021) APPENDIX A Glossary of Terms Income Groups: Extremely low income Other very low income Very low income Other low income Low income Federal-moderate income Federal-above moderate income The table below shows the equivalent terms in this Plan, the Consolidated Plan Rule, the National Affordable Housing Act (NAHA), and California law. Income California Consolidated Calif. Level Consolidated Plan Plan Rule NAHA Law 0-30%* Extremely Low Extremely Low Very Low Very Low 31-50%* Very Low Low City Council Regular Meeting - Page 94 of 473 Annual Action Plan 2022 84 OMB Control No: 2506-0117 (exp. 09/30/2021) 51-80%* Low Moderate Other Low Other Lower 81-95%* Fed.-Moderate Middle Moderate Not used *With adjustments. Low-income concentration: A county in which the percentage of low-income households is 10 percent or higher than the statewide percentage. Minority concentration: A county in which the percentage of households in a specific minority group is 10 percent or more, higher than the statewide percentage for that minority group. City Council Regular Meeting - Page 95 of 473 Annual Action Plan 2022 85 OMB Control No: 2506-0117 (exp. 09/30/2021) General Definitions of Terms Used with the Consolidate Plan Affordability Gap: The extent to which gross housing costs, including utility costs, exceed 30 percent of gross income. Affordable Housing: Affordable housing is generally defined as housing where the occupant is paying no more than 30 percent of gross income for gross housing costs, including utility costs. AIDS and Related Diseases: The disease of acquired immunodeficiency syndrome or any conditions arising from the etiologic agent for acquired immunodeficiency syndrome. Alcohol/Other Drug Addiction: A serious and persistent alcohol or other drug addiction that significantly limits a person's ability to live independently. Assisted Household or Person: For the purpose of identification of goals, an assisted household or person is one, which during the period covered by the annual plan will receive benefits through the Federal funds, either alone or in conjunction with the investment of other public or private funds. The program funds providing the benefit(s) may be from any funding year or combined funding years. A renter is benefited if the person takes occupancy of affordable housing that is newly acquired, newly rehabilitated, or newly constructed, and/or receives rental assistance through new budget authority. An existing homeowner is benefited during the year if the home's rehabilitation is completed. A first-time homebuyer is benefited if a home is purchased during the year. A homeless person is benefited during the year if the person becomes an occupant of transitional or permanent housing. A non-homeless person with special needs is considered as being benefited, however, only if the provision of supportive services is linked to the acquisition, rehabilitation, or new construction of a housing unit and/or the provision of rental assistance during the year. Households or persons who will benefit from more than one program activity must be counted only once. To be included in the goals, the housing unit must, at a minimum, satisfy the HUD Section 8 Housing Quality Standards (see 24 CFR section 882.109). City Council Regular Meeting - Page 96 of 473 Annual Action Plan 2022 86 OMB Control No: 2506-0117 (exp. 09/30/2021) Committed: Generally means there has been a legally binding commitment of funds to a specific project to undertake specific activities. Community Housing Development Organization (CHDO) - A private non-profit, community-based service organization whose primary purpose is to provide and develop decent, affordable housing for the community it serves. Consolidated Plan (or "the plan"): The document that is submitted to HUD that serves as the planning document (comprehensive housing affordability strategy and community development plan) of the jurisdiction and an application for funding under any of the Community Planning and Development formula grant programs (CDBG, ESG, HOME, or HOPWA). Cost Burden > 30%: The extent to which gross housing costs, including utility costs, exceed 30 percent of gross income, based on data published by the U.S. Census Bureau. Cost Burden > 50% (Severe Cost Burden): The extent to which gross housing costs, including utility costs, exceed 50 percent of gross income, based on data published by the U.S. Census Bureau. Disabled Household: A household composed of one or more persons at least one of whom is an adult (a person of at least 18 years of age) who has a disability. A person shall be considered to have a disability if the person is determined to have a physical, mental or emotional impairment that: (1) is expected to be of long-continued and indefinite duration, (2) substantially impeded his or her ability to live independently, and (3) is of such a nature that the ability could be improved by more suitable housing conditions. A person shall also be considered to have a disability if he or she has a developmental disability as defined in the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6001-6006). The term also includes the surviving member or members of any household described in the first sentence of this paragraph who were living in an assisted unit with the deceased member of the household at the time of his/her death. City Council Regular Meeting - Page 97 of 473 Annual Action Plan 2022 87 OMB Control No: 2506-0117 (exp. 09/30/2021) Economic Independence and Self-Sufficiency Programs: Programs undertaken by Public Housing Agencies (PHAs) to promote economic independence and self-sufficiency for participating families. Such programs may include Project Self-Sufficiency and Operation Bootstrap programs that originated under earlier Section 8 rental certificate and rental voucher initiatives, as well as the Family Self-Sufficiency program. In addition, PHAs may operate locally developed programs or conduct a variety of special projects designed to promote economic independence and self- sufficiency. Elderly Household: For HUD rental programs, a one or two person household in which the head of the household or spouse is at least 62 years of age. Elderly Person (Housing): A person who is at least 62 years of age. Elderly Person (Public Service): A person who is at least 50 years of age. Emergency Shelter: Any facility with overnight sleeping accommodations, the primary purpose of which is to provide temporary shelter for the homeless in general or for specific populations of the homeless. Existing Homeowner: An owner-occupant of residential property who holds legal title to the property and who uses the property as his/her principal residence. Extremely Low-Income Family: Family whose income is between 0 and 30 percent of the median income for the area, ad determined by HUD with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than 30 percent of the median for the area on the basis of HUD's findings that such variations are necessary because of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes. City Council Regular Meeting - Page 98 of 473 Annual Action Plan 2022 88 OMB Control No: 2506-0117 (exp. 09/30/2021) Family: The Bureau of Census defines a family as a householder (head of household) and one or more other persons living in the same household who are related by birth, marriage or adoption. Family Self-Sufficiency (FSS) Program: A program enacted by Section 554 of the National Affordable Housing Act which directs Public Housing Agencies (PHAs) and Indian Housing Authorities (IHAs) to use Section 8 assistance under the rental certificate and rental voucher programs, together with public and private resources to provide supportive services to enable participating families to achieve economic independence and self-sufficiency. Federal Preference for Admission: The preference given to otherwise eligible applicants under HUD's rental assistance programs who, at the time they seek housing assistance, are involuntarily displaced, living in substandard housing, or paying more that 50 percent of family income for rent. First-Time Homebuyer: An individual or family who has not owned a home during the three-year period preceding the HUD-assisted purchase of a home that must be used as the principal residence of the homebuyer, except that any individual who is a displaced homemaker or a single parent may not be excluded from consideration as a first-time homebuyer on the basis that the individual, while a homemaker or married, owned a home with his or her spouse or resided in a home owned by the spouse. FmHA: The Farmers Home Administration, or programs it administers. For Rent: Year round housing units that are vacant and offered/available for rent. For Sale: Year round housing units that are vacant and offered/available for sale only. Frail Elderly: An elderly person who is unable to perform at least 3 activities of daily living (i.e., eating, dressing, bathing, grooming, and household management activities). City Council Regular Meeting - Page 99 of 473 Annual Action Plan 2022 89 OMB Control No: 2506-0117 (exp. 09/30/2021) Group Quarters: Facilities providing living quarters that are not classified as housing units. Examples include: prisons, nursing homes, dormitories, military barracks, and shelters. Home: The HOME Investment Partnerships Program, which is authorized by Title II of the National Affordable Housing Act. Homeless Family with Children: A family composed of the following types of homeless persons: at least one parent or guardian and one child under the age of 18, a pregnant woman, or a person in the process of securing legal custody of a person under the age of 18. Homeless Person: A youth (17 years or younger) not accompanied by an adult (18 years or older) or an adult without children, who is homeless (not imprisoned or otherwise detained pursuant to an Act of Congress or a State law). Homeless Youth: Unaccompanied person 17 years of age or younger who is living in situations described by terms "sheltered" or unsheltered". Homeless Subpopulations: Include but are not limited to the following categories of homeless persons: severely mentally ill only, alcohol/drug addicted only, severely mentally ill and alcohol/drug addicted, fleeing domestic violence, youth, and persons with HIV/AIDS. HOPE 1: The HOPE for Public and Indian Housing Homeownership Program, which is authorized by Title IV, Subtitle A of the National Affordable Housing Act. HOPE 2: The HOPE for Homeownership of Multifamily Units Program, which is authorized by Title IV, Subtitle B of the National Affordable Housing Act. City Council Regular Meeting - Page 100 of 473 Annual Action Plan 2022 90 OMB Control No: 2506-0117 (exp. 09/30/2021) HOPE 3: The HOPE for Homeownership of Single Family Homes Program, which is authorized by Title IV, Subtitle C of the National Affordable Housing Act. Household: One or more persons occupying a housing unit (U.S. Census definition). See also "Family". Housing Problems: Households with housing problems include those that: (1) occupy units meeting the definition of Physical Defects; (2) meet the definition of overcrowded; and (3) meet the definition of cost burden greater than 30%. Housing Unit: An occupied or vacant house, apartment, or a single room (SRO housing) that is intended as separate living quarters. (U.S. Census definition) HUD: The United States Department of Housing and Urban Development. Jurisdiction: A State or unit of general local government. Institutions/Institutional: Group quarters for persons under care or custody. (U.S. Census definition) Large Family: Family of five or more persons. Large Related: A household of 5 or more persons, which includes at least one person, related to the householder by blood, marriage or adoption. Lead-Based Paint Hazard: Any condition that causes exposure to lead from lead-contaminated dust, lead-contaminated soil, lead-contaminated paint that is deteriorated or present in City Council Regular Meeting - Page 101 of 473 Annual Action Plan 2022 91 OMB Control No: 2506-0117 (exp. 09/30/2021) accessible surfaces, friction surfaces, or impact surfaces that would result in adverse human health effects as established by the appropriate Federal agency. (Residential Lead-Based Paint Hazard Reduction Act of 1992 definition.) LIHTC: (Federal) Low Income Housing Tax Credit. Low-Income Families: Low-income families whose incomes do not exceed 50 percent of the median family income for the area, as determined by HUD with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than 50 percent of the median for the area on the basis of HUD's findings that such variations are necessary because of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes. Low-Income Concentration: An area where the total household incomes do not exceed 80 percent of the median income for the area, as determined by HUD with adjustments for smaller and larger families. (This term corresponds to low- and moderate-income households in the CDBG Program.) Middle-Income Families: Family whose income is between 80 percent and 95 percent of the median income for the area, as determined by HUD with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than 95 percent of the median for the area on the basis of HUD's findings that such variations are necessary because of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes. Minority: The City of Lynwood recognizes the following racial and ethnic categories: Black/African American Asian American Indian, Alaskan Native City Council Regular Meeting - Page 102 of 473 Annual Action Plan 2022 92 OMB Control No: 2506-0117 (exp. 09/30/2021) Pacific Islander Hispanic (all races) Minority Concentration: Any area with greater than 40 percent minority household. Moderate Income Family: Family whose income is between 80 percent of the median income for the area, as determined by HUD with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than 80 percent of the median for the area on the basis of HUD's findings that such variations are necessary because of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes. Moderate-Income Concentration: An area where the total household incomes are between 81 percent and 95 percent of the median income for the area, as determined by HUD with adjustments for smaller and larger families. (This definition is different than that for the CDBG Program.) Non-Elderly Household: A household, which does not meet the definition of “Elderly Household,” as, defined above. Non-Homeless Persons with Special Needs: Includes frail elderly persons, persons with AIDS, disabled families, and families participating in organized programs to achieve economic self- sufficiency. Non-Institutional: Group quarters for persons not under care or custody. (U.S. Census definition used) Occupied Housing Unit: A housing unit that is the usual place of residence of the occupant(s). City Council Regular Meeting - Page 103 of 473 Annual Action Plan 2022 93 OMB Control No: 2506-0117 (exp. 09/30/2021) Other Household: A household of one or more persons that does not meet the definition of a Small Related household, Large Related household or Elderly Household. Other Income: Households whose incomes exceed 80 percent of the median income for the area, as determined by the Secretary, with adjustments for smaller and larger families. Other Low-Income: Households whose incomes are between SI percent and 80 percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than 80 percent of the median for the area on the basis of HUD's findings that such variations are necessary because of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes. (This term corresponds to moderate-income in the CDBG Program.) Other Vacant: Vacant year round housing units that are not For Rent or For Sale. This category would include Awaiting Occupancy or Held. Overcrowded: A housing unit containing more than one person per room. (U.S. Census definition) Rent Burden > 30% (Cost Burden): The extent to which gross rents, including utility costs, exceed percent of gross income, based on data published by the U.S. Census Bureau. Rent Burden > 50% (Severe Cost Burden): The extent to which gross rents, including utility costs, exceed 50 percent of gross income, based on data published by the U.S. Census Bureau. Rental Assistance: Rental assistance payments provided as either project-based rental assistance or tenant rental assistance. City Council Regular Meeting - Page 104 of 473 Annual Action Plan 2022 94 OMB Control No: 2506-0117 (exp. 09/30/2021) Rent: A household that rents the housing unit it occupies, including both units rented for cash and units occupied without cash payment of rent. (U.S. Census definition) Renter Occupied Unit: Any occupied housing unit that is not owner occupied, including units rented for cash and those occupied without payment of cash rent. Rural Homelessness Grant Program: Rural Homeless Housing Assistance Program, which is authorized by Subtitle G, Title IV of the Stewart B. McKinney Homeless Assistance Act. Secondary Housing Activity: A means of providing or producing affordable housing -- such as rental assistance, production, rehabilitation or acquisition -- that will receive fewer resources and less emphasis than primary housing activities for addressing a particular housing need. (See also, "Primary Housing Activity".) Section 215: Section 215 of Title 11 of the National Affordable Housing Act. Section 215 defines "affordable" housing projects under the HOME program. Service Needs: The particular services identified for special needs populations, which typically may include transportation, personal care, housekeeping, counseling, meals, case management, personal emergency response, and other services to prevent premature institutionalization and assist individuals to continue living independently. Severe Cost Burden: See Cost Burden > 50%. Severe Mental Illness: A serious and persistent mental or emotional impairment that significantly limits a person's ability to live independently. City Council Regular Meeting - Page 105 of 473 Annual Action Plan 2022 95 OMB Control No: 2506-0117 (exp. 09/30/2021) Sheltered: Families and persons whose primary nighttime residence is a supervised publicly or privately operated shelter, including emergency shelters, transitional housing for the homeless, domestic violence shelters, residential shelters for runaway and homeless youth, and any hotel/motel/ apartment voucher arrangement paid because the person is homeless. This term does not include persons living doubled up or in overcrowded or substandard conventional housing. Any facility offering permanent housing is not a shelter, or are its residents homeless. Small Related: A household of 2 to 4 persons which includes at least one person related to the householder by birth, marriage, or adoption. Substandard Condition and not Suitable for Rehab.: By local definition, dwelling units that are in such poor condition as to be neither structurally nor financially feasible for rehabilitation. Substandard Condition but Suitable for Rehab.: By local definition, dwelling units that do not meet standard conditions but are both financially and structurally feasible for rehabilitation. This does not include units that require only cosmetic work-, correction or minor livability problems or maintenance work. Substantial Amendment: A major change in an approved housing strategy. It involves a change to the five-year strategy, which may be occasioned by a decision to undertake activities or programs inconsistent with that strategy. Substantial Rehabilitation: Rehabilitation of residential property at an average cost for the project in excess of $25,000 per dwelling unit. Supportive Housing: Housing, including Housing Units and Group Quarters that have a supportive environment and includes a planned service component. City Council Regular Meeting - Page 106 of 473 Annual Action Plan 2022 96 OMB Control No: 2506-0117 (exp. 09/30/2021) Supportive Service Need in FSS Plan: The plan that PHAs administering a Family Self-Sufficiency program are required to develop to identify the services they will provide to participating families and the source of funding for those services. The supportive services may include child care; transportation; remedial education; education for completion of secondary or pose secondary schooling; job training, preparation of counseling; substance abuse treatment and counseling; training in homemaking and parenting skills; money management, and household management; counseling in homeownership; job development and placement; follow-up assistance after job placement; and other appropriate services. Supportive Services: Services: Services provided to residents of supportive housing for the purpose of facilitating the independence of residents. Some examples are case management, medical or psychological counseling and supervision, childcare, transportation, and job training. Tenant-Based (Rental) Assistance: A form of rental assistance in which the assisted tenant may move from a dwelling unit with a right to continued assistance. The assistance is provided for the tenant, not for the project. Total Vacant Housing Units: Unoccupied year round housing units. (U.S. Census definition) Transitional Housing: A project that is designed to provide housing and appropriate supportive services to homeless persons to facilitate movement to independent living within 24 months, or longer period approved by HUD. Unsheltered: Families and individuals whose primary nighttime residence is a public or private place not designed for, or ordinarily used as, a regular sleeping accommodation for human beings (e.g., streets, parks, alleys). Vacant Awaiting Occupancy or Held: Vacant year round housing units that have been rented or sold and are currently awaiting occupancy, and vacant year round housing units that are held by owners or renters for occasional use. (U.S. Census definition) City Council Regular Meeting - Page 107 of 473 Annual Action Plan 2022 97 OMB Control No: 2506-0117 (exp. 09/30/2021) Vacant Housing Unit: Unoccupied year-round housing units that are available or intended for occupancy at any time during the year. Worst-Case Needs: Unassisted, very low-income renter households who pay more than half of their income for rent, five in seriously substandard housing which includes homeless people) or have been involuntarily displaced. Year Round Housing Units: Occupied and vacant housing units intended for year round use. (U.S. Census definition.) Housing units for seasonal or migratory use are excluded. City Council Regular Meeting - Page 108 of 473 Annual Action Plan 2022 98 OMB Control No: 2506-0117 (exp. 09/30/2021) Reserved City Council Regular Meeting - Page 109 of 473 Annual Action Plan 2022 99 OMB Control No: 2506-0117 (exp. 09/30/2021) APPENDIX B City of Lynwood’s Low and Moderate-Income “Area Benefit” & “Deteriorating Areas” City Council Regular Meeting - Page 110 of 473 Annual Action Plan 2022 100 OMB Control No: 2506-0117 (exp. 09/30/2021) Reserved City Council Regular Meeting - Page 111 of 473 Annual Action Plan 2022 101 OMB Control No: 2506-0117 (exp. 09/30/2021) Low- and Moderate-Income Concentration “Area Benefit” Census Tract Block Group Number Low/Mod Population Total Population % of Low/Mod 5400.00 2 1310 1725 73.39% 3 425 650 65.38% 4 2400 3040 78.95% 5401.01 1 735 950 77.37% 2 1145 2000 57.25% 3 905 1630 55.52% 4 1295 2290 56.55% 5401.02 1 760 1290 58.91% 2 995 1650 60.30% 3 1985 2545 78.00% 4 1000 1210 82.64% 5402.01 1 980 1080 90.74% 2 735 935 78.61% City Council Regular Meeting - Page 112 of 473 Annual Action Plan 2022 102 OMB Control No: 2506-0117 (exp. 09/30/2021) 5402.02 1 1885 2080 90.63% 2 2440 2650 92.08% 3 860 1190 72.27% 4 800 800 100.00% 5402.03 1 2650 3155 83.99% 2 1200 1215 98.77% 3 870 1050 82.86% 5403 1 550 1045 52.63% 2 1265 1485 85.19% 3 385 425 90.59% 4 1775 2045 86.80% 5405.01 1 1230 1710 71.93% 2 900 935 96.26% 3 830 1110 74.77% 4 1415 1790 79.05% City Council Regular Meeting - Page 113 of 473 Annual Action Plan 2022 103 OMB Control No: 2506-0117 (exp. 09/30/2021) 5405.02 1 2530 3220 78.57% 2 1035 1630 63.50% 3 1530 1805 84.76% 5417 1 585 835 70.06% 2 720 1215 59.26% 3 645 1060 60.85% 5 1420 1600 88.75% 6 650 900 72.22% 5418.01 1 1350 1515 89.11% 2 1075 1810 59.39% 3 1845 2245 82.18% 5418.02 1 990 1465 67.58% 3 1620 2090 77.51% 4 650 795 81.76% City Council Regular Meeting - Page 114 of 473 Annual Action Plan 2022 104 OMB Control No: 2506-0117 (exp. 09/30/2021) 5420 1 1130 1545 73.14% 3 2025 2460 82.32% Source: 2011-2015 American Community Survey (ACS) City Council Regular Meeting - Page 115 of 473 Annual Action Plan 2022 105 OMB Control No: 2506-0117 (exp. 09/30/2021) Area Benefit An area benefit is an activity that meets the identified needs of low and moderate-income persons residing in an area where at least 51% of the residents are low and moderate- income persons (otherwise known as a “deteriorated area”). The benefits of this type of activity are available to all persons in the area regardless of income. Potentially eligible activities include code enforcement, public infrastructure improvements, façade improvements in neighborhood commercial districts, and graffiti removal. Boundaries/Location An area benefit will be offered within the Census Tracts and Block Groups noted below, which are all located within the exterior boundaries of the City of Lynwood. See attached form titled “Code Enforcement Boundaries of Operation in Deteriorated/Deteriorating Areas” for detail description of each area. Census Tract: 5400.00 Block Group Number(s): 2, 3, 4 County: 06037 Census Tract: 5401.01 Block Group Number(s): 1, 2, 3, 4 County: 06037 Census Tract: 5401.02 Block Group Number(s): 1, 2, 3, 4 County: 06037 Census Tract: 5402.01 Block Group Number(s): 1, 2 County: 06037 Census Tract: 5402.02 Block Group Number(s): 1, 2, 3, 4 County: 06037 Census Tract: 5402.03 Block Group Number(s): 1, 2, 3 County: 06037 Census Tract: 5403.00 Block Group Number(s): 1, 2, 3, 4 County: 06037 Census Tract: 5405.01 Block Group Number(s): 1, 2, 3, 4 County: 06037 Census Tract: 5405.02 Block Group Number(s): 1, 2, 3 County: 06037 Census Tract: 5417.00 Block Group Number(s): 1, 2, 3, 5, 6, County: 06037 Census Tract: 5418.01 Block Group Number(s): 1, 2, 3 County: 06037 Census Tract: 5418.02 Block Group Number(s): 1, 3, 4 County: 06037 Census Tract: 5420.00 Block Group Number(s): 1, 3 County: 06037 City Council Regular Meeting - Page 116 of 473 Annual Action Plan 2022 106 OMB Control No: 2506-0117 (exp. 09/30/2021) Deteriorated or Deteriorating Area(s) Definition of “deteriorated/deteriorating” for the purpose of code enforcement eligible under 570.202 (c). Lynwood defines a “deteriorated or deteriorating” neighborhood as one in which three or more of the deficiencies below are present in a significant number of units. Stagnant or declining property values because of blighted conditions in the identified areas are typical conditions that are significantly affecting once vibrant neighborhoods. In these areas, at least 51 percent of the residents have incomes below the 80 percent income median. 1. Abundant substandard housing, to include illegal garage conversions and illegal additions 2. Inadequate or unsafe plumbing, heating, or electrical facilities 3. Aging and obsolete housing stock 4. Conditions resulting from a defect that normal maintenance cannot correct; 5. Vacant, condemned or demolished properties due to noncompliance with laws, ordinances or regulations 6. Structures with creaks or holes in ceilings, walls, floors 7. Broken or cracked plaster, peeling paint; 8. Rodent vermin infestation; 9. Inadequate heat or no heating 10. Damaged roofing and broken windows 11. Unsafe, congested, poorly designed, or deficient streets; 12. Other equally significant building or environmental deficiencies. Description of Code Enforcement Activity 24 CFR 570.202(c) The City proposes to use CDBG funds to partially fund code enforcement activities as related to the enforcement of state and local codes. Although Lynwood’s code enforcement inspections are conducted City-wide, the use of the proposed CDBG funds City Council Regular Meeting - Page 117 of 473 Annual Action Plan 2022 107 OMB Control No: 2506-0117 (exp. 09/30/2021) would be limited to inspections within the City’s designated deteriorated areas as part of the City’s overall goal of improving the deteriorated areas. In addition to the code enforcement program, the City will also concurrently provide other activities to arrest the decline in each area, which includes offering fair housing services for rental properties, a City-supported Owner-Occupied Rehabilitation Program to help improve the housing stock, funding (as available) for public improvements as well as encourage private improvements, economic development, and other related services. Upon the completion of an inspection where issues are found, the Public Safety Officer will provide either information as related to the City’s Fair Housing Program for renters or the Owner-Occupied Rehabilitation Program for homeowners. The City expects to charge the salaries of Public Safety Officers conducting code enforcement inspections, along with related overhead costs, within the eligible “deteriorating” areas. Inspections outside of the designated code enforcement areas would be paid from the City's general funds. The Public Safety Officer’s daily logs for inspections within the eligible “deteriorating” areas would be the source documentation for charging the CDBG program for inspections/enforcement and include the Census Tract/Block Group, the type of inspection, and information given to assist in correcting any found violation. City Council Regular Meeting - Page 118 of 473 Annual Action Plan 2022 108 OMB Control No: 2506-0117 (exp. 09/30/2021) “Deteriorated/Deteriorating Areas” Census Tract Block Groups % L/M Income Conditions 5400.00 5400.00 5400.00 2 3 4 73.39 65.38 78.95 Census tract 5400 is 75% deteriorated. Conditions include overcrowding, substandard housing and garage conversions, and other accessory structures. Location of area borders the I-105 freeway and experiences illegal dumping, heavy graffiti and is a constant source of blight. 5401.01 5401.01 5401.01 1 2 3 4 77.37 57.25 55.52 56.55 Census tract 5401.01 borders South Gate and is rapidly deteriorating. The area is highly dense, overcrowded, has Illegal building additions, code violations, as well as poor property maintenance. Graffiti tags, as well as the presence of vacant or abandoned buildings also add to the deterioration of the neighborhood. 5401.02 5401.02 5401.02 5401.02 1 2 3 4 58.91 60.30 78.00 82.64 Census tract 5401.02 is a deteriorating area. Conditions include illegal structures, substandard housing with numerous code violations, and poor property maintenance. Census tract 5402.01 borders South Gate and is rapidly deteriorating. The area is highly dense, overcrowded, has Illegal building additions, code violations, as well as poor property City Council Regular Meeting - Page 119 of 473 Annual Action Plan 2022 109 OMB Control No: 2506-0117 (exp. 09/30/2021) 5402.01 5402.01 1 2 90.74 78.61 maintenance. Graffiti tags, as well as the presence of vacant or abandoned buildings also add to the deterioration of the neighborhood. 5402.02 5402.02 5402.02 5402.02 1 2 3 4 90.63 92.08 72.27 100.00 Census tract 5402.02 borders South Gate and is rapidly deteriorating. The area is highly dense, overcrowded, has Illegal building additions, code violations, as well as poor property maintenance. Graffiti tags, as well as the presence of vacant or abandoned buildings also add to the deterioration of the neighborhood. 5402.03 5402.03 5402.03 1 2 3 83.99 98.77 82.86 Census tract 5402.03 is a deteriorating area. The area is highly dense, overcrowded, has Illegal building additions, code violations, as well as poor property maintenance. Graffiti tags, as well as the presence of vacant or abandoned buildings also add to the deterioration of the neighborhood. 5403.00 5403.00 5403.00 5403.00 1 2 3 4 52.63 85.19 90.59 86.80 Census tract 5403 borders South Gate and Watts, and is rapidly deteriorating. The area is highly dense, overcrowded, has Illegal building additions, code violations, as well as poor property maintenance. Graffiti tags, as well as the presence of vacant or abandoned buildings also add to the deterioration of the neighborhood. 5405.01 5405.01 5405.01 5405.01 1 2 3 4 71.93 96.26 74.77 79.05 Census tract 5405.01 boarders the unincorporated area of Los Angeles County and is a deteriorating area. Conditions include illegal structures, substandard housing with numerous code violations and poor property maintenance. 5405.02 1 78.57 Census tract 5405.02 boarders unincorporated area of Los Angeles County and the City of Compton, and is a deteriorating. Conditions City Council Regular Meeting - Page 120 of 473 Annual Action Plan 2022 110 OMB Control No: 2506-0117 (exp. 09/30/2021) 5405.02 5405.02 2 3 63.50 84.76 include illegal structures, substandard housing with numerous code violations and poor property maintenance. 5417.00 5417.00 5417.00 5417.00 5417.00 1 2 3 5 6 70.06 59.26 60.85 88.75 72.22 Census tract 5417 is deteriorated and made up of aging and obsolete housing stock. Conditions include illegal structures, substandard housing, and overcrowding and poor property maintenance. Census Tract Block Groups % L/M Income Conditions 5418.01 5418.01 5418.01 1 2 3 89.11 59.39 82.18 Census tract 5418.01 borders the City of Compton and is a deteriorated area. Conditions include aging and obsolete housing stock, vegetation issues, trash and debris, illegal structures, substandard housing, overcrowding and graffiti. This census tract is also a high crime area. 5418.02 5418.02 5418.02 1 3 4 67.58 77.51 81.76 Census tract 5418.02 borders the City of Compton and is a deteriorated area. Conditions include aging and obsolete housing stock, vegetation issues, trash and debris, illegal structures, substandard housing, overcrowding and graffiti. This census tract is also a high crime area. 5420 5420 1 3 73.14 82.32 Census tract 5420 borders the City of Compton and is a deteriorated area. Conditions include aging and obsolete housing stock, vegetation issues, trash and debris, illegal structures, substandard housing, overcrowding and graffiti. This census tract is also a high crime area. City Council Regular Meeting - Page 121 of 473 Annual Action Plan 2022 111 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 122 of 473 Annual Action Plan 2022 112 OMB Control No: 2506-0117 (exp. 09/30/2021) Reserved City Council Regular Meeting - Page 123 of 473 Annual Action Plan 2022 113 OMB Control No: 2506-0117 (exp. 09/30/2021) APPENDIX C LEAD BASED PAINT MATRIX CDBG and HOME-Funded Rehabilitation Programs Requirements < $5,000 $5,000 - $25,000 > $25,000 Approach to Lead Hazard Evaluation and Reduction Do no harm. Identify and control lead hazards. Identify and abate lead hazards. Application to Program Application reviewed and approved; agreement determines commitment. Application reviewed and approved; agreement determines commitment. Application reviewed and approved; agreement determines commitment. Scope of Work Scope of work to determine if painted surfaces will be disturbed; begin to identify lead hazards. Scope of work to determine if painted surfaces will be disturbed; begin to identify lead hazards, Scope of work to determine if painted surfaces will be disturbed; begin to identify lead hazards. Notification Lead hazard pamphlet; notification to buyers; notification. of evaluation; notification of reduction. Lead hazard pamphlet; notification to buyers; notification of evaluation; notification of reduction. Lead hazard pamphlet; notification to buyers; notification of evaluation; notification of reduction. Lead Hazard Evaluation Paint testing required by certified paint inspectors* or risk assessors* for surfaces disturbed during rehabilitation. Paint testing required by certified inspectors* for surfaces disturbed during rehabilitation; risk assessment on entire dwelling and soil. Paint testing required by certified inspectors* for surfaces disturbed during rehabilitation; risk assessment on entire dwelling and soil. Relocation Requirements Relocation from work area. Relocation from unit may be required when extensive rehabilitation occurs in kitchens, bathrooms, etc. Relocation from unit may be required when extensive rehabilitation occurs in kitchens, bathrooms, etc. City Council Regular Meeting - Page 124 of 473 Annual Action Plan 2022 114 OMB Control No: 2506-0117 (exp. 09/30/2021) IF LEAD IS PRESENT OR PRESUMED: Lead Hazard Reduction Repair lead-based paint disturbed during rehabilitation and apply a new coat of paint; Safe Work Practices (SWP) that restrict types of paint removal methods, provide for occupant protection, and require cleaning after lead hazard reduction activities. Interim controls on lead- based paint include addressing friction and impact surfaces, creating smooth and cleanable surfaces, encapsulation, removing or covering lead based paint and paint stabilization through-out unit; SWP. Abatement to lead-based paint involves permanently removing lead-based paint hazards, often through paint and component removal, and enclosure and interim controls on exterior surfaces not disturbed by rehab.; SWP. Clearance Clearance testing on repaired surfaces by certified professional*. Clearance testing performed unit-wide and soil. Clearance testing performed unit wide and soil. Options Presume lead-based paint; SWP. Presume lead-based paint; use standard treatments. Presume lead-based paint; abate all applicable surfaces. Contractor Qualifications SWP-contractors familiar with Safe Treatment Methods and Prohibited Treatment Methods. Interim controls or Standard Treatments- accredited lead based paint worker course or lead-based paint abatement supervisor’s course. Abatement contractors- trained and state-certified abatement supervisors and accredited lead abatement worker training. *Certified Paint Inspectors must successfully complete an Environmental Protection Agency (EPA) or state accredited training program and receive state certification; Certified Risk Assessors must successfully complete an Environmental Protection Agency (EPA) or state-accredited training program, receive state certification, and have related experience. City Council Regular Meeting - Page 125 of 473 Annual Action Plan 2022 115 OMB Control No: 2506-0117 (exp. 09/30/2021) Reserved City Council Regular Meeting - Page 126 of 473 Annual Action Plan 2022 116 OMB Control No: 2506-0117 (exp. 09/30/2021) APPENDIX D CITY OF LYNWOOD CITIZEN PARTICIPATION PLAN (For all Federally Funded Grant Programs) INTRODUCTION Pursuant to Section 104(a)(3) of the Housing and Community Development Act of 1974 as amended, the City of Lynwood first adopted this Citizen Participation Plan in 1978 and processed revisions as needed from time-to-time. By doing so, the City acknowledges the integral role of citizen participation in the process of planning and development, and the execution of the Community Development Block Grant (CDBG) program, the HOME Investment Partnership Act (HOME) program, and all other Federally Funded Grant programs. This document outlines basic tenets of the citizen participation regulations and will remain in effect throughout the implementation of the City's entitlement awards from the federal government, or until these funds are completely exhausted. The following details Lynwood's Citizen Participation Plan: POLICY STATEMENT It is the policy of the City of Lynwood to provide for full involvement by the community and its residents in the planning, development, implementation and evaluation of programs funded under the Housing and Community Development Act of 1974, as amended, including the CDBG and HOME programs. City Council Regular Meeting - Page 127 of 473 Annual Action Plan 2022 117 OMB Control No: 2506-0117 (exp. 09/30/2021) CDBG is a federal entitlement grant that allows entitlement jurisdictions to undertake a variety of housing and community development programming for persons who are primarily low to moderate income. The HOME program provides funding for a variety of affordable housing development and assistance. This Citizen Participation Plan sets forth the procedures and guidelines to be implemented by the City to provide for the continuing participation by the citizens of Lynwood. The City acknowledges the need for, and the role, of citizen involvement, but also recognizes that the final determination and responsibility for policy development rests with the City Council. This plan may be amended from time-to-time and shall remain in effect until superseded by a new plan or until the City no longer participates in programs that require such a plan. Citizen Participation does not restrict the responsibility or the authority of the City for the development execution of its Consolidated Plan, Annual Action Plan, and Consolidated Annual Performance and Evaluation Report (CAPER). A. Consolidated Plan A Consolidated Plan consolidates the application process for the U.S. Department of Housing and Urban Development’s (HUD’s) four entitlement grants into one consolidated plan and application. The four grants are CDBG, HOME, Housing Opportunities for Persons with AIDS (HOPWA), and Emergency Shelter Grant (ESG). All four grants are driven by an entitlement formula process set by the federal government. The City is eligible to participate in two of these programs (CDBG and HOME). The full Consolidated Plan must be completed once every five years B. Annual Action Plan The Annual Action Plan is a part of the Consolidated Plan, which takes all HUD requirements regarding planning, needs analysis, reporting, budgeting, citizen participation and certifications and incorporates them into one process. The Annual Action Plan must be completed annually. C. Consolidated Annual Performance and Evaluation Plan (CAPER) City Council Regular Meeting - Page 128 of 473 Annual Action Plan 2022 118 OMB Control No: 2506-0117 (exp. 09/30/2021) The CAPER describes the overall use of federal CDBG and HOME funds received from HUD in relationship to the needs of the community as outlined in the City’s Annual Action Plan. D. Public Hearing A public hearing is a public meeting that has been publicly noticed in a local newspaper of general circulation, or noticed in a fashion which otherwise follows local procedures for formal noticing of public hearings. Public hearings are required prior to the adoption of the Consolidated Plan, Action Plan, and Substantial Amendments to either plan. E. Urgency Needs A Federal, State, or Local declared Emergency or Crisis. SCOPE OF PARTICIPATION A. Citizens’ Roles All citizens of Lynwood are encouraged to participate in the public meetings and hearings and to contact the City’s Community Development Department with regard to any questions they may have concerning the process and programs under the Consolidated Plan, the Annual Action Plan, or the CAPER. The City holds a minimum of two (2) public hearings during the course of its program year. One is regarding community needs for the Consolidated Plan or Annual Action Plan and one is regarding the funding of projects for the fiscal year. The City may elect to hold additional public hearings as needed. In addition, the City may hold planning meetings during the development of its Consolidated Plan or Annual Action Plan. The Consolidated Plan or Annual Action Plan is published for a 30-day comment period, while the CAPER is published for a 15-day comment period. All public hearings and meetings will generally take place at the hour of 6:00 p.m., or soon thereafter as the matter may be heard, either in the main City Hall Council Chambers, 11330 Bullis Road, Lynwood, California 90262 or in the Council Chambers at the City Hall Annex Building, 11350 Bullis Road, Lynwood, California 90262, unless another location and/or time is publicized in advance. All notices published announcing the public hearing or meeting will reflect the time and City Council Regular Meeting - Page 129 of 473 Annual Action Plan 2022 119 OMB Control No: 2506-0117 (exp. 09/30/2021) location within the notice. In the event of Urgency Needs, specific procedural changes such as conducting virtual meetings or via tele/video conferencing may be implemented. The agenda for each hearing or meeting will be posted within City Hall, at the outside City Hall Kiosk, and the City’s Website (http://lynwood.ca.us/) at least 72 hours prior to the meeting. Questions and comments regarding the Citizen Participation Plan may be addressed as follows: City of Lynwood Community Development Department 11330 Bullis Road Lynwood, California 90262 Attention: Director of Community Development (310) 603-0220 B. Written Comments The City encourages the submission of views and written comments by citizens regarding the Citizen Participation Plan, Consolidated Plan, Annual Action Plan, and CAPER. The comments may be submitted to the City’s Director of Community Development or the City Clerk’s Office at any time. In addition, comments may be submitted to the City Council at the time of their meeting where the corresponding item will be discussed. The City will respond to all written comments within fifteen (15) working days and state the reasons for the action taken on the proposal or view. All comments or views that were not accepted will be attached to the final plan, amendment or performance evaluation, along with the reasons why they were not accepted. City Council Regular Meeting - Page 130 of 473 Annual Action Plan 2022 120 OMB Control No: 2506-0117 (exp. 09/30/2021) C. City’s Role Technical Assistance and Accessibility To help facilitate citizen input, the City will provide technical assistance (through its staff) to the community, neighborhood associations, and to groups of low- and moderate-income residents who request such assistance. Questions regarding specific programs can be answered by program staff and guidelines for programs will be made available on request. There is no charge for one copy of program materials. On request, the City will make available translators/interpreters for speakers other than English, as available, for meetings and hearings relating to the Consolidated Plan, Annual Action Plan and CAPER. The City’s primary language is English. Public hearings will be held in the City Council Chambers at the Annex Building or the main City Hall Council Chambers, both of which are accessible to the handicapped and disabled. Persons requiring translation should contact the City Clerk’s Office at least 72 hours in advance of the meeting to make arrangements. The City Clerk’s Office can be reached at (310) 603-0220. Citizens with handicaps/disabilities who need special accommodation in order to access program information must contact the City Clerk’s Office at least 72 hours in advance with its reasonable accommodation request. Reasonable accommodation includes the following: providing materials in a different and/or larger typeface/font; providing materials in an alternative medium, making special arrangements for meeting attendance. The City Clerk’s Office can be reached at (310) 603-0220. Public Information In order for citizens to become informed and involved in the program, the City will provide comprehensive access to program information. The following information will be made available during the planning process of program development and implementation: City Council Regular Meeting - Page 131 of 473 Annual Action Plan 2022 121 OMB Control No: 2506-0117 (exp. 09/30/2021) a. Amount of Entitlement b. Types of activities that are eligible for funding and activities previously funded c. Ineligible activities d. Schedule of meetings and hearings and the process to be followed by the City in approving applications e. Citizen Participation Plan In addition, documents relevant to the Consolidated Plan, Annual Action, or CAPER are available to all citizens during normal working hours. Normal working hours are defined, as Monday through Thursday from 7:00 a.m. to 6:00 p.m. Copies of the following materials are available for review at City Hall: a. Mailings and promotional material b. Records of hearings and meetings c. Prior applications d. Reports required by HUD e. Regulations and issuances governing aspects of the program f. Records of prior use of funds for the last five (5) years Citizen involvement, as stated earlier, will be sought in the development, implementation and evaluation stages of the City’s plan. This will be accomplished in the following manner: COMMUNITY DEVELOPMENT BLOCK GRANT ADVISORY BOARD (CDBG BOARD) The CDBG Board, when requested, shall assist the Lynwood City Council in conducting the public hearings and/or meetings on the grant application for funding as well as use of funds for the CDBG and HOME grant programs. The CDBG Board serves in an advisory capacity only with all final decisions made by the Lynwood City Council. The CDBG Board assures that the housing and community development needs of Lynwood’s low- and moderate-income residents are addressed with the use of these funds. As the CDBG Board acts in an advisory capacity only, the City Council may elect to bypass this board and hold any and/or all public hearings and meetings at the City Council level if so desired. City Council Regular Meeting - Page 132 of 473 Annual Action Plan 2022 122 OMB Control No: 2506-0117 (exp. 09/30/2021) CONSOLIDATED PLAN DEVELOPMENT/ANNUAL ACTION PLAN Citizens will be invited to provide input into development of the 5-Year Consolidated Plan and Annual Action Plan, including identification of needs and setting of priorities, through public hearings and/or community meetings and public comment period, as scheduled by the City of Lynwood. IMPLEMENTATION Citizen involvement in the program implementation shall be in the form of public hearings and/or community meetings, as scheduled by the City of Lynwood. EVALUATION Citizens will be given the opportunity to review and comment on the entitlement programs, including the opportunity to review evaluation of the program, projects and activities. This will be in the form of public comment period and/or public hearing as applicable. PUBLIC HEARINGS AND MEETINGS Public hearings shall provide the major source of citizen input on proposed neighborhood improvement programs, activities, policies and procedures. At a minimum, the City will conduct two separate public hearings at two (2) different stages of the program year in order to address housing and community development needs. At least one of these hearings will be conducted before the proposed Consolidated Plan/Annual Action Plan is adopted. All public hearings will be held in either the City Council Chambers at the Annex Building or the main City Hall Council Chambers, both of which are accessible to the handicapped and disabled. City Council Regular Meeting - Page 133 of 473 Annual Action Plan 2022 123 OMB Control No: 2506-0117 (exp. 09/30/2021) To ensure that all city residents have ample opportunity to take notice of all scheduled public hearings, all notices regarding such hearings, including the date, time and location, shall be published in a local newspaper of general circulation at least ten (10) days prior to date of public hearing. All notices will be published in either the Long Beach Press Telegram or the Lynwood Press Wave, as well as posted in a minimum of three (3) public locations, which includes within City Hall, at the outside City Hall Kiosk, and the City’s Website (http://lynwood.ca.us/). The Council may hold additional hearings as necessary for the Consolidated Plan, Annual Action Plan, CAPER, and/or substantial amendments to the adopted Consolidated Plan/Annual Action Plan. All hearings will be noticed in the same manner as hearings for the Consolidated Plan/Annual Action Plan process. Minutes of all hearings shall be kept by the City in accordance with its standard practice. Copies of minutes shall be available on request, in accordance with City’s adopted practice. The City shall also consult with surrounding jurisdictions, other local and state agencies as applicable, regional partners, and applicable non-profit organizations as part of the process. PUBLIC HEARING NOTICES As stated above, in order to give adequate notice of public hearings, the City shall publish a legal notice in a newspaper of general circulation. In addition, all notices shall also be posted and/or available at City Hall, at the outside City Hall Kiosk, and the City’s Website (http://lynwood.ca.us/). All legal notices shall be published at a minimum of ten (10) days prior to the hearing and shall contain the following: A. Date of the Hearing B. Time of the Hearing C. Place of the Hearing D. Topics to be considered City Council Regular Meeting - Page 134 of 473 Annual Action Plan 2022 124 OMB Control No: 2506-0117 (exp. 09/30/2021) E. Basic information and/or Summary PROGRAM AMENDMENTS U.S. Department of Housing and Urban Development regulations state that a grantee shall amend its Consolidated Plan submission whenever it decides not to carry out an activity described in the Consolidated Plan, to carry out an activity not previously described, or to substantially change the purpose, scope, location, or beneficiaries of an activity. Furthermore, the grantee is required to develop and make public its criteria for what constitutes a substantial change. A substantial change is herein defined as any amendment that changes program beneficiaries, the location of approved activities and major budget shifts between approved activities. A major budget shift is defined as an increase or decrease in budget of more than 30 percent in the amount budgeted in the Consolidated Plan and/or Annual Action Plan for that activity, except that changes $25,000 or less will not be considered substantial. Amended amounts will not be cumulative, that is, each amendment will stand on its own for purposes of determining the 30 percent threshold. In the event that an amendment to the Consolidated Plan and/or Annual Action Pan qualifies as a substantial change, citizens will be given an opportunity to participate in the planning process. This opportunity will be afforded to the citizens in the following manner: A. Publication of Information for 30-day Comment Period B. Adoption of change through public hearing process, as outlined above C. Publication of 30-day comment period and notification of public hearing may run concurrently. All substantial amendments to the Consolidated Plan and/or Annual Action Plan and any and all amendments to the Citizen Participation Plan will be reviewed by and must receive approval from the City Council. The City may make minor changes to the Annual Action Plan, including any changes not included in the definition of a "substantial change" above, as needed, so long as the changes do not constitute a substantial amendment as described above. Such minor City Council Regular Meeting - Page 135 of 473 Annual Action Plan 2022 125 OMB Control No: 2506-0117 (exp. 09/30/2021) changes to the Annual Action Plan do not require a public review and comment period or a public hearing. However, City Council approval of activity funding changes may be required based on the amount and City policy. URGENCY NEEDS Upon the Declaration of a Federal, State, or Local Emergency, the public participation process may be modified as determined by HUD. CITIZEN SERVICE REQUESTS AND GRIEVANCE PROCEDURE Citizens should be aware that any questions or grievances, regarding entitlement programs and projects could be submitted to City of Lynwood, Community Development Department located at 11330 Bullis Road, Lynwood, 90262. During the actual development of the Consolidated Plan, Annual Action Plan, or CAPER submission, written concerns or complaints shall initiate a written response indicating assessment of the complaint and/or proposals and actions taken to address the complaints and/or proposals before final submission of the Consolidated Plan, Annual Action Plan, or CAPER to HUD as outlined under Scope of Participation (B) “Written Comments”. The City shall ensure that reasonable attempts are made to respond to questions or complaints in a timely manner, usually within fifteen (15) working days after receipt of the inquiry. If complaints are not addressed at the City level, citizens may forward such concerns or complaints to HUD. Although HUD will consider objections submitted at any time, such objections should be submitted within thirty (30) days of the submission of either the Consolidated Plan, Annual Action Plan, or CAPER to HUD. Any written inquiries submitted to HUD should be addressed as follows: U.S. Department of Housing and Urban Development Los Angeles Area Office, CPD Division 300 N. Los Angeles Street, Suite #4054 City Council Regular Meeting - Page 136 of 473 Annual Action Plan 2022 126 OMB Control No: 2506-0117 (exp. 09/30/2021) Los Angeles, California 90012 Objections submitted to HUD must meet one or more of the following criteria: A. The description of needs and objectives are plainly inconsistent with available facts and data. B. The activities to be undertaken are plainly inappropriate to meeting the needs and objectives identified by the applicant jurisdiction. C. The submission does not comply with specific requirements or law. D. The submission proposes the undertaking of ineligible activities. City Council Regular Meeting - Page 137 of 473 Annual Action Plan 2022 127 OMB Control No: 2506-0117 (exp. 09/30/2021) APPENDIX E CITY OF LYNWOOD RESIDENTIAL ANTI-DISPLACEMENT AND RELOCATION ASSISTANCE PLAN FISCAL YEARS 2020-2024 INTRODUCTION Section 509 of the Housing and Community Development Act (HCD) of 1987 amended Section 104 of the HCD Act of 1974 by adding a new subsection. The new Section 104(d) of the HCD Act became effective October 1, 1988, and provides that a grant under Section 106, Community Development Block Grant (CDBG) Programs may be made only if the grantee certifies that it is following a residential anti-displacement and relocation assistance plan. The residential anti-displacement and relocation assistance plan under Section 104(d) must contain two components: (1) A requirement to replace all low- and moderate-income dwelling units that are demolished or converted to a use other than low- and moderate-income housing as a direct result of the use of CDBG assistance and, (2) a relocation assistance component. A certification and plan is required even if the grant will not result in demolition or in the conversion of a low- and moderate-income unit to use other than low- and moderate-income housing. The document serves as the residential anti-displacement and relocation assistance plan for the Fiscal Year 2020-2024 Five Year Consolidated Plan, which is July 1, 2020 through June 30, 2025. In implementation of the relocation activities related to this plan, Section 104(d) of the HCD Act of 1974, as amended and the Uniform Relocation Assistance and Real Property Acquisitions Policies Act of 1970 as amended will be followed. The following details the City of Lynwood's Plan. City Council Regular Meeting - Page 138 of 473 Annual Action Plan 2022 128 OMB Control No: 2506-0117 (exp. 09/30/2021) RESIDENT/Al ANTI DISPLACEMENT AND RELOCATION ASSISTANCE PLAN UNDER SECTION 104 (d) OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974, AS AMENDED. A. The City of Lynwood will replace all occupied and vacant unoccupied low- and moderate-income dwelling units demolished or converted to a use other than as low- and moderate-income housing as a direct result of activities assisted with funds provided under the Housing and Community Development Act of 1974, as amended, as described in 24 CFR, 570.606 (b)(l). B. All replacement housing will be provided within three (3) years of the commencement of the demolition or rehabilitation relating to conversion. Before obligating or expending funding that will directly result in such demolition or conversion, the City of Lynwood will make public and submit to the HUD Field Office the following information in writing. 1. A description of the proposed assisted activity; 2. The general location on a map and approximate number of dwelling units by size (number of bedrooms) that will be demolished or converted to a use other than low and moderate income dwelling units as a result of the assisted activity; 3. A time schedule for the commencement and completion of the demolition or conversion; 4. The general location on a map and approximate number of dwelling units by size (number of bedrooms) that will be provided as replacement dwelling units; 5. The source of funding and a time schedule for the provision of replacement dwelling units, and 6. The basis for concluding that each replacement dwelling unit will remain a low- and moderate-income dwelling unit for at least ten (10) years from the date of initial occupancy. City Council Regular Meeting - Page 139 of 473 Annual Action Plan 2022 129 OMB Control No: 2506-0117 (exp. 09/30/2021) C. The City of Lynwood will provide relocation assistance, as described in 24 CFR 570.606(b)(2), to each low- and moderate-income household displaced by the demolition of housing or by the conversion of a low- and moderate-income dwelling unit to another use as a direct result to assisted activities. D. Consistent with the goals and objectives of activities assisted under the Act, the City of Lynwood will take the following steps to minimize the displacement of persons from their homes: Provide replacement housing as described in 24 CFR 570.606(b)(l) and outlined as follows: 1. One-for-One replacement units - all occupied and vacant low and moderate income dwelling units (units that could be occupied) that are demolished or converted to a use other than low and moderate income dwelling units as a direct result of CDBG activities will be replaced by the City by private developers with low and moderate income dwelling units. 2. The replacement of low and moderate income dwelling units may include public housing or existing housing receiving Section 8 project-based assistance. 3. The replacement of low- and moderate-income dwelling units will be provided within three years of the commencement of the demolition or rehabilitation related to the conversion and will meet the following requirements. a. The unit will be located within the City's jurisdiction. b. The units will be sufficient in number and size to house the number of occupants that could have been housed in the units that are demolished or converted. The number of occupants that may be housed shall be determined in accordance with local housing occupancy codes. c. The units will be provided in standard condition and may include units that have been raised from substandard to standard. RELOCATION ADVISORY ASSISTANCE A. The City will administer its relocation program, including providing relocation assistance and the preparation of claims for processing by the City’s Community Development Department. B. The Relocation Program will provide maximum assistance to minimize the hardship of displacement to all persons displaced from their dwellings and to displaced businesses to assure their re-establishment with a minimum of delay. City Council Regular Meeting - Page 140 of 473 Annual Action Plan 2022 130 OMB Control No: 2506-0117 (exp. 09/30/2021) C. Personal and continuing contact will be maintained with those to be displaced until they are satisfactorily relocated, and where hardship is evident, a follow-up call will be made to ease the transition of the move. The following specific services will be provided. 1. Each person or business required to move will be personally interviewed, and a detailed and clear explanation of benefits will be made. The interview will be conducted in the language most easily understood by the displaced person. 2. The U.S. Department of Housing Development informational brochures will be delivered to residential and commercial owners and tenants in a timely manner. 3. A member of the staff will continuously make field surveys to locate housing resources and business vacancies for referrals. Referrals will be made to standard housing comparable to the occupied housing and in close proximity to employment, medical, shopping, transportation and eating facilities. Additionally, real estate brokers will be informed of the displacement, and their cooperation will be solicited in making referrals. Referrals to commercial sites will be made relative to commercial operators' needs in location, square footage requirements, trade area, and other business location criteria. Inspection of housing resources will be undertaken prior to referral and after the move of the displaced person. 4. If transportation is needed to field check referrals, the staff member or consultant will provide such transportation. 5. Assistance will be given by explaining procedures to purchase a home, including the purpose of and charges made through escrow. 6. If social service agencies in the community could provide a needed service, referrals will be made and follow-up programs will be instituted. The referral services could be Social Security Administration, Department of Public Social Services, Veteran's Administration, Los Angeles County Development Authority (LACDA), and other local service agencies. 7. Where necessary, efforts will be made to trace self-relocatees. 8. Assistance will be given in filing relocation claims, and these claims will be submitted to City’s Community Development Department. 9. Delivery of benefit check will be made promptly and follow-up claims will be made. City Council Regular Meeting - Page 141 of 473 Annual Action Plan 2022 131 OMB Control No: 2506-0117 (exp. 09/30/2021) RELOCATION ASSISTANCE Each low and moderate income household that is displaced as a direct result of CDBG assisted activities shall be provided with relocation assistance. The low- and moderate- income household may elect to receive assistance described in 24 CFR Part 49 (HUD's regulations implementing the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970) or assistance as described under Section 104(d) of the Housing and Community Development Act of 1974, as amended by Section 509 of the 1987 HCD Act provisions. Displaced low- and moderate-income households will receive relocation assistance provided to displaced persons required under 24 CFR 49, Subpart C (General Relocation Requirements) and Subpart D (Payment for Moving and Related Expenses) whether the households receive assistance under the CFR or Section 104 (d) of the Act. Briefly, those benefits are as follows. Residential Benefits:  Actual moving and related expenses, as the Agency determines to be reasonable and necessary, including expenses outlined in 49 CFR 24.301.  Fixed payment for moving expenses as described in 49 CFR 24.302. Non-Residential Benefits:  Payment for actual reasonable moving and related expenses as described in 49 CFR 24.303.  Reestablishment expense as described in 49 CFR 24.304.  Ineligible moving and related expenses as described in 49 CFR 24.304(b) and 49 CFR 24.305 will not be provided.  Fixed payments for moving expenses as described in 49 CFR 24.306. COST ESTIMATE OF RELOCATION BENEFITS City Council Regular Meeting - Page 142 of 473 Annual Action Plan 2022 132 OMB Control No: 2506-0117 (exp. 09/30/2021) Since no relocation activity is contemplated, it is not possible to provide a cost estimate of relocating payment at this time. However, should it become necessary to make relocation payments, these payments will be funded with CDBG funds. PLAN FOR DISBURSEMENTS OF RELOCATION BENEFITS The disbursement of relocation benefits will be made in an orderly and readily available manner. All claims for relocation payments must be submitted within 18 months after the displacement of the claimant. Relocation claim forms will be prepared by the relocation staff; the forms will be explained in detail to the claimant. Once the signature of the displacee has been obtained, the prepared forms, accompanied by a memorandum explaining the particular need, etc., of the claimant will be promptly delivered to the City’s Community Development Department for review, approval, and preparation of warrants. Upon verification of vacating the acquired property, the relocation benefits will be delivered. Advanced payments will be processed when it is evident that there is a hardship. These payments will be delivered in a timely way to assure ease in securing relocated housing commitments. A claim must be supported by the necessary documentation, which may include itemized receipted moving bills, income tax returns, opening/closing escrow statements, verification of rental data and any other information deemed appropriate and necessary to support the claim. Payments will be processed in all claim papers and related evidence will become permanent records of the City’s Community Development Department as part of the individual files maintained for each displaced person or business. If a business does not file a claim for any of the above benefits, it may file for In-Lieu of Moving and Related Expenses Payment. No payment of this kind shall be made unless the City’s Community Development Department satisfied that the business cannot be relocated without substantial loss of patronage and is not part of a commercial enterprise City Council Regular Meeting - Page 143 of 473 Annual Action Plan 2022 133 OMB Control No: 2506-0117 (exp. 09/30/2021) having at least one other establishment not being acquired, which is engaged in the same or similar business. This payment represents the average annual net income for the two years prior to displacement, except that the payment may not be less than $1,000 or more than $20,000 (49 FR 24.306 {a}). Payments will be processed in a timely manner to minimize hardship. LAST RESORT HOUSING Last resort housing is not contemplated as it has been determined comparable replacement housing will be available for project residents within a reasonable period prior to displacement. However, if it is necessary, procedures as referenced in the Uniform Act will be followed. City Council Regular Meeting - Page 144 of 473 Annual Action Plan 2022 134 OMB Control No: 2506-0117 (exp. 09/30/2021) Grantee SF-424's and Certification(s) City Council Regular Meeting - Page 145 of 473 Annual Action Plan 2022 135 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 146 of 473 Annual Action Plan 2022 136 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 147 of 473 Annual Action Plan 2022 137 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 148 of 473 Annual Action Plan 2022 138 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 149 of 473 Annual Action Plan 2022 139 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 150 of 473 Annual Action Plan 2022 140 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 151 of 473 Annual Action Plan 2022 141 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 152 of 473 Annual Action Plan 2022 142 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 153 of 473 Annual Action Plan 2022 143 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 154 of 473 Annual Action Plan 2022 144 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 155 of 473 Annual Action Plan 2022 145 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 156 of 473 Annual Action Plan 2022 146 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 157 of 473 Annual Action Plan 2022 147 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 158 of 473 Annual Action Plan 2022 148 OMB Control No: 2506-0117 (exp. 09/30/2021) City Council Regular Meeting - Page 159 of 473 Annual Action Plan 2022 149 OMB Control No: 2506-0117 (exp. 09/30/2021) RESERVED City Council Regular Meeting - Page 160 of 473 Agenda Item # 9. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Harry Wong, Director of Finance & Administration Lilly Hampton, Senior Accounting Technician SUBJECT: APPROVAL OF THE WARRANT REGISTER Recommendation: Staff respectfully recommends that the City Council of the City of Lynwood approve the warrant register dated May 17, 2022 for FY 2021-2022. Background: N/A Discussion and Analysis: N/A Fiscal Impact: FY 2021-2022 Coordinated With: City Manager City Attorney ATTACHMENTS: Description WARRANT RUNS 5 17 2022 WARRANT RESOLUTION City Council Regular Meeting - Page 161 of 473 apCkHist Void-Check Listing Page: 1 05/10/2022 3:17PM City of Lynwood Bank code: apbank Void Check# Date Vendor Status ClearNoid Date Reason-Void Reissue Inv. Date Amount Paid Check Total -- 202613 09/07/2021 013362 ALEXIS ALATORRE 05/05/2022 STALE DATED 07/06/2021 20.00 20.00 202672 09/07/2021 013364 JUAN RAMOS 05/05/2022 STALE DATED 07/10/2021 20.00 20.00 202725 09/07/2021 013389 ALFREDO CORTEZ 05/05/2022 STALE DATED 08/24/2021 99.00 99.00 202729 09/07/2021 013381 DERICK JUNG 05/05/2022 STALE DATED 08/24/2021 60.00 60.00 202731 09/07/2021 013379 FRANCISCO LIMA 05/05/2022 STALE DATED 08/24/2021 0.13 0.13 202733 09/07/2021 013382 DELMY MARQUEZ 05/05/2022 STALE DATED 08/24/2021 8.74 8.74 202734 09/07/2021 013383 JOSE LUIS MARQUEZ 05/05/2022 STALE DATED 08/24/2021 11.71 11 .71 203238 11/16/2021 000608 HUB INTERNATIONAL 05/09/2022 STALE DATED 204556 02/28/2021 452.36 05/09/2022 000608-033121 03/31/2021 179.71 05/09/2022 · 000608-043021 04/30/2021 179.71 05/09/2022 000608-053121-A 06/03/2021 91.49 05/09/2022 000608-053121 06/03/2021 88.22 991.49 204362 04/19/2022 001087 FANTASY FLOWERS AND 05/05/2022 PAID BY-L.U.S.D 04/30/2022 562.28 562.28 204378 04/19/2022 002861 MAGIC JUMP 05/05/2022 PAID BY-L.U.S.D 03/31/2022 513.00 513.00 204388 04/19/2022 013518 EDUARDO OLIVARES 05/05/2022 PAID BY-L.U.S.D 04/30/2022 555.00 555.00 204401 04/19/2022 012506 VICTOR HUGO RUBIO 05/05/2022 PAID BY-L.U.S.D 03/30/2022 745.00 745.00 apbank Total: 3,586.35 12 checks in this report Total Checks: 3,586.35 Page:1 City Council Regular Meeting - Page 162 of 473 vchlist 05/03/2022 Bank code: Voucher 1316 1320 1323 1326 3:04:13PM apbank Date Vendor 3/24/2022 005794 INTERNAL REVENUE SERVICE Electronic Financial Transaction List City of Lynwood Invoice PO# Ben143935 3/24/2022 001357 EMPLOYMENT DEVELOPMENT DEPT. Ben143943 3/24/2022 005794 INTERNAL REVENUE SERVICE 3/24/2022 001357 EMPLOYMENT DEVELOPMENT DEPT. 4 Vouchers for bank code : 4 Vouchers in this report apbank Ben143967 Ben143973 Page: 2 Description/Account Amount SOCIAL SECURITY: PAYMENT 913.76 Total : 913.76 STATE WITHHOLDING TAXES: 37.28 Total : 37.28 SOCIAL SECURITY: PAYMENT 40,287.55 Total : 40,287.55 STATE WITHHOLDING TAXES: 12,665.79 Total: 12,665.79 Bank total: 53,904.38 Total vouchers : 53,904.38 Page: 2 City Council Regular Meeting - Page 163 of 473 vchlist 05/03/2022 Bank code : Voucher 204544 204545 204546 204547 204548 204549 9:27:03AM apbank Date Vendor 4/28/2022 013395 M&C CONSTRUCTION GROUP INC 4/28/2022 013532 OLAGUE, MARIA 5/2/2022 013288 SPECTRUM 5/2/2022 013288 SPECTRUM 5/2/2022 013288 SPECTRUM 5/2/2022 011831 VAL TOR COMMERCIAL, CLEANING 6 Vouchers for bank code : 6 Vouchers in this report apbank Prepaid-Check List City of Lynwood Invoice 1060 04232022 0543478041622 0603173041522 0031912041622 366 Page: 3 PO# Description/Account Amount 06-009470 WROUGHT IRON FENCING 26,075.00 Total: 26,075.00 08-004892 EARTH DAY AND COMMUNITY GARDEN 621 .50 Total: 621.50 12-000365 INTERNET AND CABLE FOR CITY FACILITIES 219.98 Total: 219.98 12-000365 INTERNET AND CABLE FOR CITY FACILITIES 182.72 Total: 182.72 12-000365 INTERNET AND CABLE FOR CITY 150.06 Total: 150.06 08-004905 SENIOR CENTER SERVICE FEE 1,175.00 Total: 1,175.00 Bank total: 28,424.26 Total vouchers : 28,424.26 Page: 3 City Council Regular Meeting - Page 164 of 473 vchlist 05/10/2022 11:05:37AM Prepaid-Check List City of Lynwood Bank code: Voucher 204550 204551 204552 204553 204554 204555 204556 apbank Date Vendor 5/9/2022 002699 STATE WATER CONTROL BOARD 5/9/2022 000486 LIBERTY UTILITIES Invoice --------- 547787 158555-040422 164055-040422 164060-040422 5/9/2022 013502 DC & ASSOCIATES PAINTING COMPANY, 1922 5/9/2022 013474 PETTY CASH-C.M.O.-1 5/9/2022 008668 SOLACHE, JOSE LUIS 5/9/2022 000163 SOUTHERN CALIFORNIA EDISON 5/9/2022 000608 HUB INTERNATIONAL INS.SVCS,INC 7 Vouchers for bank code : 7 Vouchers in this report apbank 013474-032122 008668-051522 000163050222 000608-022821 000608-033121 000608-043021 000608-053121 000608-053121-A PO# 06-009474 06-009486 06-009486 06-009486 06-009494 08-004601 08-004601 08-004601 08-004601 08-004646 Page: 4 Description/Account Amount PERMIT REGISTRATION LYNWOOD 600.00 Total : 600.00 WATER USE FOR IRRIGATION 120.31 WATER USE FOR IRRIGATION 24.65 WATER USE FOR IRRIGATION 24.65 Total : 169.61 ADOPT A SENIOR-PAINTING 3,500.00 Total : 3,500.00 REPLENISH PETTY CASH BOX 763.00 Total : 763.00 PER DIEM 241.50 Total : 241.50 LIGHT & POWER SERVICES 2,192.36 Total: 2,192.36 LIABILITY INSURANCE 452.36 LIABILITY INSURANCE 179.71 LIABILITY INSURANCE 179.71 LIABILITY INSURANCE 88.22 LIABILITY CERT FOR REC INSTRUCTORS 91.49 Total: 991.49 Bank total: 8,457.96 Total vouchers : 8,457.96 Page: 4 City Council Regular Meeting - Page 165 of 473 vchlist Check List Page: 5 05/11/2022 4:02:19PM City of Lynwood Bank code : apbank Voucher Date Vendor Invoice PO# Description/Account Amount 204557 5/17/2022 005711 ACE COMMERCIAL, INC. 144434 01-001703 PRINTING OF THE LNP MAY ISSUE 6,193.00 Total: 6,193.00 204558 5/17/2022 000743 ADMINISTRATIVE SVCS. CO-OP 12469 08-004690 SENIORS TRANSPORTATION 7,522.64 Total: 7,522.64 204559 5/17/2022 001994 ALIN'S PARTY SUPPLY CO. 576907 08-004788 DECORATIONS FOR EVENTS 130.50 Total: 130.50 204560 5/17/2022 007439 ALL CITY MANAGEMENT SVCS, INC. 76954 11-001916 SCHOOL CROSSING GUARD SERVICES 14,562.97 Total: 14,562.97 204561 5/17/2022 013497 ALTA LANGUAGE SERVICES, INC IS589148 05-001921 BILINGUAL TESTING 275.00 Total : 275.00 204562 5/17/2022 010746 ALVAREZ-GLASMAN & COLVIN 2021-11-20230-5 02-002525 LEGAL SERVICES 2,593.50 Total : 2,593.50 204563 5/17/2022 002452 AMERICAN LANGUAGE SVCS. 68280 01-001653 TRANSLATION SERVICES 524.20 Total : 524.20 204564 5/17/2022 003312 AMERICAN RENTALS 498823 06-009180 SUPPLIES AND EQUIPMENT 590.71 498823-A 06-009483 SUPPLIES AND EQUIPMENT 43.05 500745 06-009483 SUPPLIES AND EQUIPMENT 207.93 Total: 841.69 204565 5/17/2022 000943 APPLEONE EMPLOYMENT SERVICES 01-6252648 02-002592 TEMP AGENCY SERVICES 1,315.33 01-6260970 02-002592 TEMP AGENCY SERVICES 661.80 Total: 1,977.13 204566 5/17/2022 004536 APWA 798260-053123 MEMBERSHIP DUES 277.50 Total : 277.50 204567 5/17/2022 005344 AT&T MOBILITY 287260367753X040822 12-000367 CELL PHONE SERVICE 3,085.34 287260367753X040822A 10-000212 CITY TREASURER APPLE IPAD AIR 654.99 Total : 3,740.33 Page: 5 City Council Regular Meeting - Page 166 of 473 vchlist Check List Page: 6 05/11/2022 4:02:19PM City of Lynwood Bank code : apbank Voucher Date Vendor Invoice PO# Description/Account Amount 204568 5/17/2022 004285 AVANT GARDE, INC. 7593 11-001919 HOUSING CONSUL TING SERVICES 1,641.25 7597 06-008790 FUNDING ADMINISTRATION 1,220.00 Total: 2,861.25 204569 5/17/2022 011001 AYALA, EDWIN 49336 CANCELLED RESERVATION 100.00 Total : 100.00 204570 5/17/2022 004986 BIOMETRICS4ALL, INC COLYN0095 05-001877 LIVE SCAN RELAY FEE 25.50 Total : 25.50 204571 5/17/2022 000884 BLUE DIAMOND MATERIALS 2643611 06-009187 OPERATING SUPPLIES 88.11 Total : 88.11 204572 5/17/2022 004773 BSN SPORTS 916723027 08-004876 TENNIS COURTS NETS 871.50 Total : 871.50 204573 5/17/2022 000300 BUBBS HARDWARE 231 06-009188 OPERATING SUPPLIES 8.79 232 06-009188 OPERATING SUPPLIES 3.20 Total: 11.99 204574 5/17/2022 000032 CAL ADDISON 032 06-009135 REPAIRS & MAINTENANCE 360.00 033 06-009135 REPAIRS & MAINTENANCE 130.00 034 06-009135 REPAIRS & MAINTENANCE 225.00 036 06-009135 REPAIRS & MAINTENANCE 130.00 Total: 845.00 204575 5/17/2022 000488 CANON SOLUTIONS AMERICA, INC 6000247623 12-000386 CANON PRINTS AND MAINTENANCE 22.00 6000391270 12-000386 CANON PRINTS AND MAINTENANCE 2,595.31 6000457011 12-000386 CANON PRINTS AND MAINTENANCE 214.71 Total: 2,832.02 204576 5/17/2022 001195 CDW GOVERNMENT V736556 12-000390 LENOVO THINKCENTRE COMPUTERS 11,175.38 V780392 12-000389 VMWARE RENEWAL 3,000.00 Total: 14,175.38 204577 5/17/2022 001168 CINTAS CORPORATION NO. 2 8405655238 08-004694 FIRST AID SUCABINETS SUPPLIES 407.02 Total: 407.02 Page: 6 City Council Regular Meeting - Page 167 of 473 vchlist 05/11/2022 Bank code: Voucher 204578 204579 204580 204581 204582 204583 204584 204585 204586 204587 204588 4:02:19PM apbank Date Vendor 5/17/2022 000702 CINTAS DOCUMENT MANAGEMENT 5/17/2022 013531 CIVIC PLUS, LLC 5/17/2022 010754 COOL IMAGE WATER, OBA/ AMERICAN 5/17/2022 001306 CORELOGIC SOLUTIONS, LLC. 5/17/2022 010638 COURT OF CALIFORNIA, COUNTY OF LA 5/17/2022 000138 DAILY JOURNAL CORPORATION Check List City of Lynwood Invoice 8405662665 224086 1133 1498 1511 30598302 30603547 7 40A-033122 B3573604 B3578377 B3579432 5/17/2022 001987 DISTRICT OF SOUTHERN CALIF., WATER 001987-033122 5/17/2022 005210 ESPARZA, HILARIO M. 005210-040622 5/17/2022 003983 GALLS QUARTERMASTER BC1591591 5/17/2022 000993 GRM INFORMATION MANAGEMENT 0452140 0453926 5/17/2022 003338 HILLYARD-LOS ANGELES 604714067 604714068 PO# 08-004720 12-000393 05-001880 05-001880 02-002586 12-000363 12-000363 11-001922 11-002084 11-001923 11-001923 06-009159 11-002090 11-001927 12-000371 12-000371 06-009239 06-009239 Page: 7 Description/Account Amount FIRST AID STAFF CABINET SUPPLIES 53.26 Total: 53.26 CITY WEBSITE REDESIGN 19,978.78 Total : 19,978.78 PURIFIED DRINKING WATER 5.99 PURIFIED DRINKING WATER 5.99 PURIFIED DRINKING WATER 17.97 Total: 29.95 PROPERTY OWNER INFORMATION 265.23 PROPERTY OWNER INFORMATION 265.23 Total : 530.46 PARKING CITATIONS AND BAIL 17,858.00 Total : 17,858.00 PUBLIC HEARING NOTICES 290.00 PUBLICATION SERVICES 120.00 PUBLICATION SERVICES 867.01 Total: 1,277.01 GROUNDWATER PRODUCTION 120,162.12 Total: 120,162.12 CDBG ADVISORY BOARD MEMBER 50.00 Total: 50.00 UNIFORM SUPPLIES 564.35 Total : 564.35 OFFSITE TAPE STORAGE 99.10 OFFSITE TAPE STORAGE 96.10 Total : 195.20 OPERATING SUPPLIES 550.08 OPERATING SUPPLIES 663.85 Page: 7 City Council Regular Meeting - Page 168 of 473 vchlist Check List Page: 8 05/11/2022 4:02:19PM City of Lynwood Bank code : apbank Voucher Date Vendor Invoice PO# Description/Account Amount 204588 5/17/2022 003338 003338 HILLYARD-LOS ANGELES (Continued) Total : 1,213.93 204589 5/17/2022 002623 ICMA 981562-063023 MEMBERSHIP DUES-SHANELL SHIP 200.00 Total : 200.00 204590 5/17/2022 005848 INFRASTRUCTURE ENGINEERS 26147 06-008766 HSIP CYCLE 9 DESIGN IMPERIAL 61.40 26670 06-009362 INSPECTION SERVICES FOR 16,720.00 26679 06-009358 CIP PROJECT MANAGEMENT 308.00 26681 06-009358 CIP PROJECT MANAGEMENT 154.00 26779 06-009358 CIP PROJECT MANAGEMENT 308.00 Total : 17,551.40 204591 5/17/2022 005848 INFRASTRUCTURE ENGINEERS 26650 06-007071 CONSUL TING SERVICES 2,028.00 Total : 2,028.00 204592 5/17/2022 008254 JCL TRAFFIC SERVICES 114130 06-009462 STREET SIGNS AND SUPPLIES 314.93 Total : 314.93 204593 5/17/2022 013304 JOE A GONSALVES & SON 159721 06-009485 ADVOCACY SERVICES 4,000.00 159794 06-009485 ADVOCACY SERVICES 4,000.00 Total : 8,000.00 204594 5/17/2022 003547 KANE, BALLMER & BERKMAN 27206 11-002085 SPECIAL COUNSEL LEGAL 3,327.00 27207 11-002085 SPECIAL COUNSEL LEGAL 787.50 Total : 4,114.50 204595 5/17/2022 013434 KILEY & ASSOCIATES,LLC 8 01-001662 PROFESSIONAL SERVICES 5,000.00 Total : 5,000.00 204596 5/17/2022 011443 L.A. COUNTY REGISTRAR-RECORDER 011443-2022 11-002092 ENVIRONMENTAL DOCUMENT 2,623.00 Total: 2,623.00 204597 5/17/2022 011064 LEAGUEAPPS, INC. 48730050 08-004898 LAUNCH PACKAGE FEE 495.00 Total: 495.00 204598 5/17/2022 013521 LOS ANGELES ENGINEERING, INC 1-EAST 06-009482 CONSTRUCTION OF THE LYNWOOD 72,021.88 1-WEST 06-009482 CONSTRUCTION OF THE LYNWOOD 262,437.50 Page: 8 City Council Regular Meeting - Page 169 of 473 vchlist 05/11/2022 Bank code : Voucher 204598 204599 204600 204601 204602 204603 204604 204605 204606 204607 4:02:19PM apbank Date Vendor Check List City of Lynwood Invoice 5/17/2022 013521 013521 LOS ANGELES ENGINEERING, INC (Continued) 5/17/2022 003313 LOS ANGELES METROPOLITAN 6014477 6014621 6014841 6014953 6015125 6015333 6015530 6015768 5/17/2022 000111 MANAGED HEAL TH NElWORK PRM-071421 5/17/2022 002761 MARCO POWER EQUIPMENT 21214896 21214898 5/17/2022 003069 MEDCO SUPPLY CO. IN95072990 5/17/2022 013504 MINER, LTD 5310502932 5/17/2022 013504 MINER, LTD 5310502932-A 5/17/2022 013530 MINISPORTSBALLS.COM 42200477 5/17/2022 013065 MKN & ASSOCIATES 100567 5/17/2022 008782 MSJ ACCESS INC 91068194 91068198 Page: 9 PO# Description/Account Amount Total: 334,459.38 02-002589 BUS PASS SUBSIDY 20.00 02-002589 BUS PASS SUBSIDY 40.00 02-002589 BUS PASS SUBSIDY 64.00 02-002589 BUS PASS SUBSIDY 63.00 02-002589 BUS PASS SUBSIDY 20.00 02-002589 BUS PASS SUBSIDY 20.00 02-002589 BUS PASS SUBSIDY 184.00 02-002589 BUS PASS SUBSIDY 84.00 Total: 495.00 05-001882 EMPLOYEE ASSISTANCE PROGRAM 323.95 Total: 323.95 06-009244 SUPPLIES, REPAIRS, MACHINERY 1,764.00 06-009244 SUPPLIES, REPAIRS, MACHINERY 57.82 Total : 1,821.82 08-004893 SUPPLIES FOR SUMMER PROGRAMS 424.83 Total: 424.83 06-009457 EAST WALL ROLL UP DOOR 4,191.42 Total: 4,191.42 06-009487 EAST WALL ROLL UP DOOR 261.12 Total: 261.12 08-004889 SPECIAL NEEDS CELEBRATION 2,762.16 Total: 2,762.16 06-009476 CORRECTION TO THE URBAN 805.93 Total: 805.93 06-009432 LOCKSMITH SERVICES 447.50 06-009432 LOCKSMITH SERVICES 335.39 Total: 782.89 Page: 9 City Council Regular Meeting - Page 170 of 473 vchlist Check List Page: 10 05/11/2022 4:02:19PM City of Lynwood Bank code : apbank Voucher Date Vendor Invoice PO# Description/Account Amount 204608 5/17/2022 009647 MV CHENG & ASSOCIATES, INC. 4/30/2022 02-002590 PRINCIPAL ACCOUNTANT 9,820.00 Total : 9,820.00 204609 5/17/2022 000475 NATIONWIDE ENVIRONMENTAL SVCS. 32310 06-009209 GRAFFITI REMOVAL SERVICES 47,793.09 32310-A 11-001938 GRAFFITI REMOVAL SERVICES 5,310.34 32342 06-009245 CATCHBASIN CLEANING 3,885.94 32342-A 06-009490 CATCHBASIN CLEANING 17,788.94 32371 06-009246 STREET SWEEPING SERVICES 45,867.37 32371-A 11-001954 STREET SWEEPING SERVICES 4,536.33 Total : 125,182.01 204610 5/17/2022 013534 NICHE ACADEMY LLC 6546 08-004899 NICHE ACADEMY SUBSCRIPTION 1,600.00 Total: 1,600.00 204611 5/17/2022 011922 NORTH STAR LAND CARE LLC 1601-312 06-009320 TREE TRIMMING, MAINTENANCE 8,203.00 Total: 8,203.00 204612 5/17/2022 000078 OFFICE DEPOT, INC. 222559371002 02-002573 OFFICE SUPPLIES 11.71 234275962001 06-009210 OFFICE SUPPLIES 682.27 235239029001 02-002542 OFFICE SUPPLIES 149.93 Total : 843.91 204613 5/17/2022 005562 ORKIN PEST CONTROL 231778814 08-004718 MONTHLY PEST CONTROL SERVICE 359.00 Total : 359.00 204614 5/17/2022 013538 PAYARES, LINDA 349723462 CANCELLED EVENT 150.00 Total: 150.00 204615 5/17/2022 008307 PHOENIX GROUP INFORMATION SYS 032022204 11-001941 PARKING/ADMIN CITATION 15,670.63 032022902 11-001941 PARKING/ADMIN CITATION 350.00 Total : 16,020.63 204616 5/17/2022 013540 PICHARDO, CHARLES 2022-063 REFUND-BUILDING PERMIT 1,915.58 Total: 1,915.58 204617 5/17/2022 006281 PROFESSIONAL SECURITY, IN000118319 08-004901 SECURITY SERVICES 613.44 IN000118759 08-004700 SECURITY SERVICES 10,425.76 IN000119128 08-004700 SECURITY SERVICES 10,234.43 -- Page: 10 City Council Regular Meeting - Page 171 of 473 vchlist 05/11/2022 Bank code: Voucher 204617 204618 204619 204620 204621 204622 204623 204624 204625 204626 204627 4:02:19PM apbank Date Vendor 5/17/2022 006281 PROFESSIONAL SECURITY, 5/17/2022 012135 RAMBOLL US CONSULTING INC 5/17/2022 005067 ROADLINE 5/17/2022 005566 RODRIGUEZ GONZALEZ, YOLANDA 5/17/2022 007205 SANCHEZ AWARDS 5/17/2022 006772 SEA CLEAR POOL, I NC. 5/17/2022 009297 SIGN CRE8TIONS 5/17/2022 011394 SULLY-MILLER CONTRACTING CO. 5/17/2022 010946 SUNFIRE 5/17/2022 002938 TAJ OFFICE SUPPLY 5/17/2022 013215 THE HOME DEPOT PRO SUPPLY WORK Check List City of Lynwood Invoice (Continued) IN000119129 1690081783 17432 005566-040622 2005 22-3159 22-3202 22-3218 2219 08-112021 1031522 01203 678550856 679350983 679592451 679647255 679868935 PO# 06-009232 06-009495 06-009226 11-002093 08-004871 06-009171 06-009171 06-009171 08-004890 06-009053 06-009459 06-009218 06-009140 06-009140 06-009297 06-009128 06-009140 Page: 11 Description/Account Amount SECURITY SERVICES 2,018.51 Total : 23,292.14 WELL NO. 11 INVESTIGATION 633.20 Total : 633.20 SUPPLIES, PARTS & PAINT 1,620.68 Total : 1,620.68 CDBG ADVISORY BOARD MEMBER 50.00 Total: 50.00 LYNWOOD RECREATION SPORTS 121.20 Total : 121.20 POOL MAINTENANCE 1,139.30 POOL MAINTENANCE 329.67 POOL MAINTENANCE 1,895.00 Total: 3,363.97 VARIOUS PRINTED SIGNS 1,719.90 Total: 1,719.90 ALBERTA, FIRST, FRANKLIN, LINDBERGH, 48,212.50 Total: 48,212.50 WINDOW TINT FOR CITY ANNEX 1,375.00 Total : 1,375.00 OFFICE & OPERATING SUPPLIES 158.76 Total: 158.76 MATERIALS & SUPPLIES 217.44 MATERIALS & SUPPLIES 59.94 MATERIALS & SUPPLIES 70.37 PAINT & SUPPLIES FOR NES 1,342.18 MATERIALS & SUPPLIES 50.50 Page: 11 City Council Regular Meeting - Page 172 of 473 vchlist 05/11/2022 Bank code: Voucher 204627 204628 204629 204630 204631 204632 204633 204634 4:02:19PM apbank Date Vendor Check List City of Lynwood Invoice 5/17/2022 013215 THE HOME DEPOT PRO SUPPLY WORK (Continued) 680905817 681132270 681146833 681678900 682145180 682476197 5/17/2022 013215 THE HOME DEPOT PRO SUPPLY WORK 682105457 5/17/2022 010066 TRI-WEST MECHANICAL, INC. TWM11545 5/17/2022 013539 TRUJILLO, LUPE 5/17/2022 007742 ULINE, INC. 5/17/2022 010575 ULTRA-PRESS 5/17/2022 000166 UNDERGROUND SERVICE ALERT/SC 5/17/2022 009742 UNIFIRST CORPORATION 48028575 148117212 148426571 60894 60994 dsb20211095 3242712727 3242712728 3242712729 3242712730 3242712731 3242712732 3242716124 3242716125 3242716126 PO# 06-009297 06-009297 06-009297 06-009140 06-009140 06-009140 08-004743 06-009175 08-004902 08-004902 08-004904 08-004903 06-009176 06-009153 06-009153 06-009153 06-009153 06-009153 06-009153 06-009153 06-009153 06-009153 Page: 12 Description/Account Amount MATERIALS & SUPPLIES 39.55 MATERIALS & SUPPLIES 62.28 MATERIALS & SUPPLIES 11 .16 MATERIALS & SUPPLIES 165.62 MATERIALS & SUPPLIES 158.36 MATERIALS & SUPPLIES 494.45 Total: 2,671.85 SUPPLIES AND EQUIPMENT 162.65 Total: 162.65 HVAC MAINTENANCE/REPAIR 7,110.00 Total: 7,110.00 REFUND-CANCELLED HIP HOP 37.50 Total: 37.50 COMMUNITY GARDEN AND PARK SUPPLIES 1,596.70 COMMUNITY GARDEN AND PARK SUPPLIES 262.84 Total: YOUTH CAMP 2022 SHIRTS NATATORIUM STAFF UNIFORM Total: UNDERGROUND SERVICE ALERT Total : UNIFORM SERVICE AND SUPPLIES UNIFORM SERVICE AND SUPPLIES UNIFORM SERVICE AND SUPPLIES UNIFORM SERVICE AND SUPPLIES UNIFORM SERVICE AND SUPPLIES UNIFORM SERVICE AND SUPPLIES UNIFORM SERVICE AND SUPPLIES UNIFORM SERVICE AND SUPPLIES UNIFORM SERVICE AND SUPPLIES Page: 1,859.54 489.30 1,980.00 2,469.30 73.91 73.91 10.72 52.68 48.73 69.42 79.17 78.14 10.72 52.68 48.73 -- 12 City Council Regular Meeting - Page 173 of 473 vchlist Check List Page: 13 05/11/2022 4:02:19PM City of Lynwood Bank code: apbank Voucher Date Vendor Invoice PO# Description/Account Amount 204634 5/17/2022 009742 UNIFIRST CORPORATION (Continued) 3242716127 06-009153 UNIFORM SERVICE AND SUPPLIES 69.42 3242716128 06-009153 UNIFORM SERVICE AND SUPPLIES 79,17 3242716129 06-009153 UNIFORM SERVICE AND SUPPLIES 78.14 Total: 677.72 204635 5/17/2022 000461 UNITED RENTALS, INC. 205278961-001 08-004888 EASTER PROGRAM 2022 338.02 Total : 338.02 204636 5/17/2022 002912 WATERLINE TECHNOLOGIES.INC 5577281 06-009154 OPERATING SUPPLIES 300.98 5577282 06-009154 OPERATING SUPPLIES 277.83 5577284 06-009154 OPERATING SUPPLIES 347.29 5578552 06-009154 OPERATING SUPPLIES 324.14 5578553 06-009154 OPERATING SUPPLIES 347.29 5578554 06-009154 OPERATING SUPPLIES 243.10 5578555 06-009154 OPERATING SUPPLIES 289.41 5578556 06-009154 OPERATING SUPPLIES 347.29 Total : 2,477.33 204637 5/17/2022 000040 WAXIE SANITARY SUPPLY 80848494 06-009222 JANITORIAL SUPPLIES 1,064.75 Total : 1,064.75 204638 5/17/2022 010312 WEBER WATER RESOURCES CA, LLC 1487R1 06-009408 WELL 19 REPAIR 30,000.00 Total : 30,000.00 204639 5/17/2022 000477 WEBSTER'S BEE REMOVAL SERVICES 1535 06-009255 REMOVAL AND EXTRACTION 235.00 1538 06-009255 REMOVAL AND EXTRACTION 285.00 Total : 520.00 204640 5/17/2022 001522 WECK LABORATORIES, INC. W2D1981-colynwood 06-009152 ANALYZE WATER SAMPLES AND BACTERIA 504 00 W2D1982-colynwood 06-009152 ANALYZE WATER SAMPLES AND BACTERIA 504.00 W2D 1983-colynwood 06-009152 ANALYZE WATER SAMPLES AND BACTERIA 182.00 W2D 1983-colynwood-A 06-009498 ANALYZE WATER SAMPLES AND BACTERIA 70.00 W2 D 1984-co lynwood 06-009498 ANALYZE WATER SAMPLES AND BACTERIA 252.00 W2D1985-colynwood 06-009498 ANALYZE WATER SAMPLES AND BACTERIA 252.00 W2D1986-colynwood 06-009498 ANALYZE WATER SAMPLES AND BACTERIA 252.00 Total : 2,016.00 Page: 13 City Council Regular Meeting - Page 174 of 473 vchlist 05/11/2022 Bank code : Voucher 204641 204642 204643 4:02:19PM apbank Date Vendor 5/17/2022 000057 WILLDAN ENGINEERING 5/17/2022 007609 WILLDAN FINANCIAL SERVICES 5/17/2022 012137 XIO INC. 87 Vouchers for bank code : apbank Check List City of Lynwood Invoice 00417215 010-51182 201208863 201208863-A Page: 14 PO# Description/Account Amount 06-009451 HAM PARK PLAYGROUND 1,985.00 Total : 1,985.00 02-002593 PREPARATION AND DISSEMINATION 1,000.00 Total: 1,000.00 06-009144 SCADA SYSTEM MONITORING/ NETWORK 520.00 06-009409 SCADA SYSTEM MONITORING/ NETWORK 240.00 Total: 760.00 Bank total : 909,289.67 Page: 14 City Council Regular Meeting - Page 175 of 473 RESOLUTION NO. 2022.XXX Warrant Register Dated 05-17-2022 PASSED, APPROVED and ADOPTED this _17_th day of _May_, 2022. Jorge Casanova, Mayor ATTEST: __________________________ Maria Quiňonez, Ernie Hernandez, City Clerk City Manager APPROVED AS TO FORM: APPROVED AS TO CONTENT: ________ Noel Tapia, Harry Wong, City Attorney Director of Finance and Administration Svcs City Council Regular Meeting - Page 176 of 473 STATE OF CALIFORNIA ) ) § COUNTY OF LOS ANGELES ) I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a meeting held on the __17_th day of __May_, 2022. AYES: COUNCIL MEMBERS FLORES, SANTANA, SOTO, MAYOR PRO TEM SOLACHE AND MAYOR CASANOVA NOES: NONE ABSENT: NONE ABSTAIN: NONE ________________________ Maria Quiňonez, City Clerk STATE OF CALIFORNIA ) ) § COUNTY OF LOS ANGELES ) I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, and the Clerk of the City Council of said City, do hereby certify that the above foregoing is a full, true and correct copy of Resolution No. 2022.XXX on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this _17_th day of _May__, 2022. ___________________________ Maria Quiňonez, City Clerk City Council Regular Meeting - Page 177 of 473 Agenda Item # 10. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Gabriela Camacho, City Treasurer Sheila Harding, Deputy City Treasurer SUBJECT: TREASURER'S MONTHLY INVESTMENT REPORT Recommendation: It is recommended that the City Council for the City of Lynwood receive and file the attached Monthly Investment Report. The following information is provided to ensure City Council is informed of the investment activities for the City. Background: Government Code Section 53607, last amended 1996, with reference to the reporting of investment transactions states that the Treasurer shall make a monthly report of those transaction to the legislative body. Government Code Section 53646 (b) (1), last amended 2004, with reference to discussion related to establishment of an Investment Policy and investment reporting states that “the Treasurer may render a quarterly report”. To determine the applicable code inasmuch as reference to Government Code Section 53607 or non-compliance thereof has never been included in past audit findings. While Government Code Section 53646 (b) (1) which is the most current version related to Investment Reporting utilizes the word “may” indicating the reporting mechanism is optional, to err on the side of caution, and in order to ensure that we are in compliance with all Government Codes, a new procedure of submitting monthly reports to the Council/Agency agenda was implemented. Attached for Council/Agency review is the City’s/Agency’s Monthly Treasurer’s Report. Subsequent reports will be provided on a monthly basis at the second meeting of each month. Discussion and Analysis: The investment transactions were executed in accordance with the City's Investment Policy and the California State Government Code Section 53646(b)(3) that requires the general fund is able to meet its expenditure requirements for the next six months. City Council Regular Meeting - Page 178 of 473 Fiscal Impact: The action recommended in this report will not have a fiscal impact on the City. Coordinated With: FHN Financial Main Street Advisors currently monitors the City’s investment activities. ATTACHMENTS: Description ACTIVITY & PERFORMANCE - APRIL 2022 FHN REPORT - APRIL 2022 ECONOMIC REPORT - APRIL 2022 City Council Regular Meeting - Page 179 of 473 The following is the City’s cash flow and the monthly investment report. The monthly report includes a summary of the City’s investment portfolio, a monthly review of the investment market as prepared by the investment managers and detailed information on monthly transactions, cash flows and investments by issuer. FHN Investment Advisors manage the portion of investments not invested by LAIF (State Local Agency Investment Fund). The table below provide key statistics regarding the City’s cash flow and investment portfolio as of April 30, 2022. Type Balances Held Cash - US Bank $ 54,147,849.66 Cash - JPMorgan Chase Bank $ 7,518,250.93 Local Agency Investment Fund $ 9,537,751.55 FHN Investment Advisors/BNY $ 16,027,753.18 TOTAL $ 87,231,605.32 ACCOUNT SUMMARY 30-Apr-22 31-Mar-22 Market Value $25,573,021 $25,697,469 Book Value $26,227,898 $26,207,517 Variance ($654,878) ($510,048) Par Value $26,181,918 $26,159,477 Net Asset Value $97.50 $98.05 Book Yield 1.03% 0.96% Market Yield 1.80% 1.49% Years to Maturity 1.49 1.5 Effective Duration 1.44 1.45 INVESTMENT COMPLIANCE % % Company Book Value of Portfolio of Total US Treasuries 6,502,257.27 25% 100% US Federal Agencies 3,223,961.53 12% 100% Supranational Obligations 0.00 0% 30% LAIF 9,545,267.55 36% 100% Commercial Paper 349,786.09 1% 25% Money Market Funds 618,649.97 2% 20% Negotiable Certificates of Deposit 3,966,959.31 15% 30% Corporate Obligations 2,021,016.67 8% 30% State and Local Governments 0.00 0% 100% All of the City’s rated investments are rated “A” or higher by at least two rating agencies on April 30, 2022. The City’s investments comply with its current investment policy, which emphasizes the safety, liquidity, and return of its investments, allowing the city to meet its expenditures for the next six months. City Council Regular Meeting - Page 180 of 473 Run Date: 5/10/2022 - 10:36 AM Amortizing Page 2 Portfolio Summary City of Lynwood 4/30/2022 SECTOR ALLOCATION MATURITY DISTRIBUTION CREDIT QUALITY (MOODY'S) ACCOUNT SUMMARY MONTH-END PORTFOLIO BOOK YIELD TOP ISSUERS 4/30/22 3/31/22 Issuer % Portfolio Market Value $25,573,021 $25,697,469 LAIF 36.4% Book Value $26,227,898 $26,207,517 U.S. Treasury 24.8% Variance -$654,878 -$510,048 FHLB 3.9% FNMA 3.8% Par Value $26,181,918 $26,159,477 FFCB 2.7% Goldman Sachs Govt MMF 2.4% Net Asset Value $97.50 $98.05 JPMorgan 1.9% FHLMC 1.9% Book Yield 1.03%0.96%Royal Bank of Canada 1.3% Exxon Mobil 1.0% Market Yield 1.80%1.49%Toyota 1.0% US Bancorp 1.0% Years to Maturity 1.49 1.50 Jackson National Life 1.0% New York Life 1.0% Effective Duration 1.44 1.45 Charles Schwab 1.0% Ma y - 2 1 Ju n - 2 1 Ju l - 2 1 Au g - 2 1 Se p - 2 1 Oc t - 2 1 No v - 2 1 De c - 2 1 Ja n - 2 2 Fe b - 2 2 Ma r - 2 2 Ap r - 2 2 0.60% 0.65% 0.70% 0.75% 0.80% 0.85% 0.90% 0.95% 1.00% 1.05% 1.10% 1.3% 2.4% 7.7% 12.3% 15.1% 24.8% 36.4% CP MMF CORP AGY CD TSY LAIF 100%75%50%25%0% 50.5% 12.3%13.4%13.2%10.5% 0-1Y 1-2Y 2-3Y 3-4Y 4-5Y+ 0% 10% 20% 30% 40% 50% 60% 70% 51.5% 3.8% 1.9% 1.0% 40.4% 1.3% NR A3 A2 A1 Aa3 Aa2 Aa1 Aaa P-1 100%75%50%25%0% 2City Council Regular Meeting - Page 181 of 473 Run Date: 5/10/2022 - 10:36 AM Amortizing Page 3 Investment Policy Compliance City of Lynwood 4/30/2022 Category Book Value % of Portfolio % Allowed by Policy In ComplianceReserved row US Treasuries 6,502,257.27 24.79%100%Yes US Federal Agencies 3,223,961.53 12.29%100%Yes Supranational Obligations 0.00 0.00%30%Yes LAIF 9,545,267.55 36.39%100%Yes Commercial Paper 349,786.09 1.33%25%Yes Money Market Funds 618,649.97 2.36%20%Yes Negotiable Certificates of Deposit 3,966,959.31 15.12%30%Yes Corporate Obligations 2,021,016.67 7.71%30%Yes State and Local Governments 0.00 0.00%100%Yes Total 26,227,898.39 100.00% Other Metrics Portfolio Metric In Compliance Weighted Average Maturity 1.49 Less than 3.0 Years Yes Liquidity 50.53%30% Under 365 Days Yes Ratings Yes 3City Council Regular Meeting - Page 182 of 473 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining Certificates of Deposit 27002YEM4 248,000.00EagleBank 05/10/2019 248,000.00 100.06 248,141.60 0.95% NR/NR 0.0305/10/2022 141.60 NR 0.03 370.98 2.60% 248,000.00 0.56%2.600% 33847E2J5 248,000.00Flagstar Bank 06/12/2019 248,000.00 100.22 248,546.05 0.95% NR/NR 0.1206/13/2022 546.05 NR 0.12 2,378.08 2.50% 248,000.00 0.67%2.500% 1404203Z1 248,000.00Capital One Bank USA 08/03/2017 247,417.20 100.31 248,759.37 0.95% NR/NR 0.2608/02/2022 789.39 NR 0.26 1,375.21 2.35% 247,969.98 1.11%2.300% 795450D36 248,000.00Sallie Mae Bank 08/24/2017 247,417.20 100.39 248,967.56 0.95% NR/NR 0.3208/23/2022 1,004.29 NR 0.31 1,069.80 2.40% 247,963.28 1.11%2.350% 61747MF63 248,000.00Morgan Stanley Bank 01/12/2018 247,417.20 100.39 248,959.16 0.95% NR/NR 0.7001/11/2023 1,040.91 NR 0.68 1,980.60 2.70% 247,918.25 2.09%2.650% 59013J5Z8 248,000.00Merrick Bank 12/19/2018 247,516.40 100.89 250,214.53 0.95% NR/NR 0.8102/21/2023 2,308.71 NR 0.79 295.90 3.41% 247,905.82 2.24%3.350% 20033AZK5 248,000.00Comenity Capital Bank 06/29/2018 247,427.12 100.71 249,748.40 0.95% NR/NR 1.1606/29/2023 1,881.74 NR 1.12 44.84 3.40% 247,866.66 2.68%3.300% 38148PR33 248,000.00Goldman Sachs Bank 07/09/2018 247,432.08 100.71 249,754.97 0.95% NR/NR 1.1807/06/2023 1,889.55 NR 1.14 2,578.52 3.35% 247,865.42 2.69%3.300% 949763TF3 248,000.00Wells Fargo Bank NA 08/31/2018 247,429.60 100.68 249,677.19 0.94% NR/NR 1.3308/30/2023 1,829.40 NR 1.29 717.50 3.35% 247,847.79 2.78%3.300% 29278TLY4 248,000.00EnerBank 09/30/2019 247,523.84 98.93 245,357.61 0.94% NR/NR 1.4109/27/2023 -2,474.19 NR 1.38 54.36 2.05% 247,831.81 2.77%2.000% 17312Q3B3 248,000.00Citibank 02/28/2019 247,427.12 100.14 248,335.38 0.94% NR/NR 1.8302/27/2024 545.07 NR 1.76 1,284.16 3.05% 247,790.31 2.92%3.000% 32100LCB9 248,000.00First Missouri State Bank 09/13/2019 248,000.00 97.26 241,203.07 0.95% NR/NR 2.3809/13/2024 -6,796.93 NR 2.31 615.92 1.85% 248,000.00 3.06%1.850% 05580AXF6 248,000.00BMW Bank 09/25/2020 248,000.00 91.66 227,312.58 0.95% NR/NR 3.4109/25/2025 -20,687.42 NR 3.37 125.70 0.50% 248,000.00 3.10%0.500% 856283S98 248,000.00State Bank of India 04/27/2021 248,000.00 92.26 228,793.19 0.95% NR/NR 3.9904/27/2026 -19,206.81 NR 3.91 27.18 1.00% 248,000.00 3.08%1.000% 89235MLC3 248,000.00Toyota Financial Savings Bank 07/15/2021 248,000.00 91.69 227,383.13 0.95% NR/NR 4.2107/15/2026 -20,616.87 NR 4.11 684.21 0.95% 248,000.00 3.07%0.950% 90348JR93 248,000.00UBS Bank USA 08/11/2021 248,000.00 91.51 226,956.55 0.95% NR/NR 4.2808/11/2026 -21,043.45 NR 4.18 129.10 0.95% 248,000.00 3.07%0.950% 3,963,007.76 3,888,110.34 15.12% 1.71 3,966,959.31 2.28% 3,968,000.00 2.31% 13,732.06 -78,848.96 1.67Total Certificates of Deposit Commercial Paper Run Date: 5/10/2022 - 10:37 AM Amortizing 16City Council Regular Meeting - Page 183 of 473 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining Commercial Paper 78015DG61 350,000.00Royal Bank of Canada, NY 12/20/2021 349,364.75 99.82 349,374.38 1.33% P-1/A-1+ 0.1807/06/2022 -411.71 F1+ 0.19 0.00 0.33% 349,786.09 0.98%0.000% 349,364.75 349,374.38 1.33% 0.18 349,786.09 0.33% 350,000.00 0.98% 0.00 -411.71 0.19Total Commercial Paper Corporate Bonds 46849LSW2 250,000.00Jackson National Life 07/12/2017 247,795.00 100.13 250,322.50 0.95% A2/A 0.1606/27/2022 392.91 A 0.15 2,152.78 2.69% 249,929.59 1.67%2.500% 90331HNV1 250,000.00US Bank 03/01/2019 253,307.50 100.84 252,097.50 0.96% A1/AA- 1.2307/24/2023 1,169.81 AA- 1.15 2,290.28 3.08% 250,927.69 2.70%3.400%06/23/2023 89236TFS9 250,000.00Toyota Motor Credit 02/28/2019 253,545.00 100.58 251,455.00 0.96% A1/A+ 1.6901/08/2024 223.37 A+ 1.62 2,628.82 3.03% 251,231.63 2.99%3.350% 46625HJX9 500,000.00JPMorgan Chase & Co 05/13/2019 515,115.00 100.86 504,315.00 1.93% A2/A- 2.0405/13/2024 -1,840.16 AA- 1.92 8,458.33 2.97% 506,155.16 3.18%3.625% 64952WDL4 250,000.00New York Life 01/22/2020 249,102.50 96.09 240,217.50 0.95% Aaa/AA+ 2.7301/22/2025 -9,292.86 AAA 2.62 1,375.00 2.08% 249,510.36 3.52%2.000% 30231GBH4 250,000.00Exxon Mobil 06/22/2020 272,752.50 99.09 247,725.00 1.01% Aa2/AA- 2.8903/19/2025 -16,123.77 NR 2.72 872.67 0.99% 263,848.77 3.32%2.992%02/19/2025 808513BW4 250,000.00Charles Schwab 04/12/2022 249,407.50 98.21 245,520.00 0.95% A2/NR 4.9204/01/2027 -3,893.46 NR 4.43 687.50 3.35% 249,413.46 3.70%3.300% 2,041,025.00 1,991,652.50 7.71% 2.22 2,021,016.67 2.63% 2,000,000.00 3.04% 18,465.38 -29,364.16 2.07Total Corporate Bonds LAIF 9819499 9,545,267.55LAIF 04/15/2022 9,545,267.55 1.00 9,545,267.55 36.39% NR/NR 0.0005/01/2022 0.00 NR 0.00 0.00 0.52% 9,545,267.55 0.52%0.520% 9,545,267.55 9,545,267.55 36.39% 0.00 9,545,267.55 0.52% 9,545,267.55 0.52% 0.00 0.00 0.00Total LAIF Money Market Funds FGTXX 618,649.97Goldman Sachs Govt MMF 618,649.97 1.00 618,649.97 2.36% Aaa/AAA 0.0005/01/2022 0.00 NR 0.00 98.76 0.31% 618,649.97 0.31%0.308% Run Date: 5/10/2022 - 10:37 AM Amortizing 17City Council Regular Meeting - Page 184 of 473 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining 618,649.97 618,649.97 2.36% 0.00 618,649.97 0.31% 618,649.97 0.31% 98.76 0.00 0.00Total Money Market Funds U.S. Agencies 3135G0T78 500,000.00FNMA 11/30/2017 497,400.00 100.28 501,415.00 1.91% Aaa/AA+ 0.4310/05/2022 1,645.95 AAA 0.42 722.22 2.11% 499,769.05 1.34%2.000% 3133EKTV8 500,000.00FFCB 07/02/2019 499,900.00 98.48 492,420.00 1.91% Aaa/AA+ 2.1707/01/2024 -7,536.59 AAA 2.10 3,166.67 1.90% 499,956.59 2.62%1.900% 3133EK3B0 200,000.00FFCB 10/17/2019 198,370.00 97.09 194,176.00 0.76% Aaa/AA+ 2.4710/16/2024 -5,021.23 AAA 2.40 125.00 1.67% 199,197.23 2.73%1.500% 3130A4CH3 500,000.00FHLB 10/07/2020 541,330.00 98.61 493,065.00 2.01% Aaa/AA+ 2.8703/14/2025 -33,694.69 AAA 2.75 1,550.35 0.49% 526,759.69 2.88%2.375% 3136G4H71 500,000.00FNMA 08/18/2020 500,000.00 92.52 462,580.00 1.91% Aaa/AA+ 3.2908/12/2025 -37,420.00 AAA 3.24 506.94 0.50% 500,000.00 2.91%0.500%02/18/2022 3137EAEX3 500,000.00FHLMC 10/20/2020 497,505.00 91.80 458,975.00 1.90% Aaa/AA+ 3.4009/23/2025 -39,303.97 AAA 3.34 197.92 0.48% 498,278.97 2.93%0.375% 3130AQEC3 500,000.00FHLB 12/30/2021 500,000.00 93.96 469,775.00 1.91% Aaa/AA+ 4.6712/30/2026 -30,225.00 AAA 4.31 2,302.36 1.37% 500,000.00 2.76%1.370%06/30/2022 3,234,505.00 3,072,406.00 12.29% 2.79 3,223,961.53 1.17% 3,200,000.00 2.58% 8,571.46 -151,555.53 2.68Total U.S. Agencies U.S. Treasuries 912828ZD5 500,000.00U.S. Treasury 12/16/2020 504,140.63 98.72 493,615.00 1.91% Aaa/AA+ 0.8703/15/2023 -7,997.77 AAA 0.86 319.29 0.13% 501,612.77 1.98%0.500% 91282CAW1 1,000,000.00U.S. Treasury 07/22/2021 999,960.94 96.58 965,820.00 3.81% Aaa/AA+ 1.5511/15/2023 -34,153.96 AAA 1.52 1,153.31 0.25% 999,973.96 2.52%0.250% 91282CBV2 500,000.00U.S. Treasury 11/22/2021 496,308.59 95.60 478,010.00 1.89% Aaa/AA+ 1.9604/15/2024 -18,969.37 AAA 1.93 81.97 0.69% 496,979.37 2.69%0.375% 912828YV6 1,000,000.00U.S. Treasury 07/22/2021 1,035,742.19 96.68 966,840.00 3.92% Aaa/AA+ 2.5911/30/2024 -60,687.60 AAA 2.50 6,263.74 0.43% 1,027,527.60 2.84%1.500% 912828ZT0 500,000.00U.S. Treasury 06/29/2021 491,542.97 92.25 461,270.00 1.88% Aaa/AA+ 3.0905/31/2025 -32,074.22 AAA 3.04 521.98 0.69% 493,344.22 2.89%0.250% 91282CAZ4 1,000,000.00U.S. Treasury 07/22/2021 989,492.19 91.36 913,590.00 3.78% Aaa/AA+ 3.5911/30/2025 -77,763.50 AAA 3.52 1,565.93 0.62% 991,353.50 2.93%0.375% 91282CBH3 500,000.00U.S. Treasury 02/25/2021 494,433.59 90.96 454,805.00 1.89% Aaa/AA+ 3.7601/31/2026 -40,954.51 AAA 3.68 466.16 0.60% 495,759.51 2.94%0.375% Run Date: 5/10/2022 - 10:37 AM Amortizing 18City Council Regular Meeting - Page 185 of 473 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining U.S. Treasuries 91282CCF6 1,000,000.00U.S. Treasury 07/22/2021 1,002,382.81 91.61 916,130.00 3.82% Aaa/AA+ 4.0905/31/2026 -85,874.03 AAA 3.97 3,131.87 0.70% 1,002,004.03 2.94%0.750% 91282CCZ2 500,000.00U.S. Treasury 10/19/2021 492,949.22 91.50 457,480.00 1.88% Aaa/AA+ 4.4209/30/2026 -36,222.29 AAA 4.28 370.56 1.17% 493,702.29 2.94%0.875% 6,506,953.13 6,107,560.00 24.79% 2.90 6,502,257.27 0.56% 6,500,000.00 2.76% 13,874.81 -394,697.25 2.83Total U.S. Treasuries 26,258,773.16 25,573,020.73 100.00% 1.49 54,742.47 -654,877.61 1.45 1.80% 26,227,898.39 1.03% 26,181,917.52TOTAL PORTFOLIO TOTAL MARKET VALUE PLUS ACCRUED INTEREST 25,627,763.20 Run Date: 5/10/2022 - 10:37 AM Amortizing 19City Council Regular Meeting - Page 186 of 473 Maturity Report City of Lynwood April 30, 2022 CUSIP Date Purchase Value Book Rate Coupon Date Maturity Par Remaining Term Value Market YTMIssuer Days to Maturity Book FGTXX 0.308% 1Goldman Sachs Govt MMF 618,649.97 05/01/2022 1 0.31% 618,649.97 618,649.97 9819499 0.520% 1LAIF05/18/2020 9,545,267.55 05/01/2022 1 0.52% 9,545,267.55 9,545,267.55 27002YEM4 2.600% 1,086EagleBank05/10/2019 248,000.00 05/10/2022 10 2.60% 248,000.00 248,141.60 33847E2J5 2.500% 1,053Flagstar Bank 06/12/2019 248,000.00 06/13/2022 44 2.50% 248,000.00 248,546.05 46849LSW2 2.500% 1,753Jackson National Life 07/12/2017 249,929.59 06/27/2022 58 2.69% 250,000.00 250,322.50 78015DG61 0.000% 131Royal Bank of Canada, NY 12/20/2021 349,786.09 07/06/2022 67 0.33% 350,000.00 349,374.38 1404203Z1 2.300% 1,731Capital One Bank USA 08/03/2017 247,969.98 08/02/2022 94 2.35% 248,000.00 248,759.37 795450D36 2.350% 1,710Sallie Mae Bank 08/24/2017 247,963.28 08/23/2022 115 2.40% 248,000.00 248,967.56 3135G0T78 2.000% 1,612FNMA11/30/2017 499,769.05 10/05/2022 158 2.11% 500,000.00 501,415.00 61747MF63 2.650% 1,569Morgan Stanley Bank 01/12/2018 247,918.25 01/11/2023 256 2.70% 248,000.00 248,959.16 59013J5Z8 3.350% 1,228Merrick Bank 12/19/2018 247,905.82 02/21/2023 297 3.41% 248,000.00 250,214.53 912828ZD5 0.500% 500U.S. Treasury 12/16/2020 501,612.77 03/15/2023 319 0.13% 500,000.00 493,615.00 20033AZK5 3.300% 1,401Comenity Capital Bank 06/29/2018 247,866.66 06/29/2023 425 3.40% 248,000.00 249,748.40 38148PR33 3.300% 1,391Goldman Sachs Bank 07/09/2018 247,865.42 07/06/2023 432 3.35% 248,000.00 249,754.97 90331HNV1 3.400% 1,156US Bank 03/01/2019 250,927.69 07/24/2023 450 3.08% 250,000.00 252,097.50 949763TF3 3.300% 1,338Wells Fargo Bank NA 08/31/2018 247,847.79 08/30/2023 487 3.35% 248,000.00 249,677.19 29278TLY4 2.000% 943EnerBank09/30/2019 247,831.81 09/27/2023 515 2.05% 248,000.00 245,357.61 91282CAW1 0.250% 282U.S. Treasury 07/22/2021 999,973.96 11/15/2023 564 0.25% 1,000,000.00 965,820.00 89236TFS9 3.350% 1,157Toyota Motor Credit 02/28/2019 251,231.63 01/08/2024 618 3.03% 250,000.00 251,455.00 17312Q3B3 3.000% 1,157Citibank02/28/2019 247,790.31 02/27/2024 668 3.05% 248,000.00 248,335.38 91282CBV2 0.375% 159U.S. Treasury 11/22/2021 496,979.37 04/15/2024 716 0.69% 500,000.00 478,010.00 46625HJX9 3.625% 1,083JPMorgan Chase & Co 05/13/2019 506,155.16 05/13/2024 744 2.97% 500,000.00 504,315.00 3133EKTV8 1.900% 1,033FFCB07/02/2019 499,956.59 07/01/2024 793 1.90% 500,000.00 492,420.00 32100LCB9 1.850% 960First Missouri State Bank 09/13/2019 248,000.00 09/13/2024 867 1.85% 248,000.00 241,203.07 3133EK3B0 1.500% 926FFCB10/17/2019 199,197.23 10/16/2024 900 1.67% 200,000.00 194,176.00 912828YV6 1.500% 282U.S. Treasury 07/22/2021 1,027,527.60 11/30/2024 945 0.43% 1,000,000.00 966,840.00 64952WDL4 2.000% 829New York Life 01/22/2020 249,510.36 01/22/2025 998 2.08% 250,000.00 240,217.50 3130A4CH3 2.375% 570FHLB10/07/2020 526,759.69 03/14/2025 1,049 0.49% 500,000.00 493,065.00 30231GBH4 2.992% 677Exxon Mobil 06/22/2020 263,848.77 03/19/2025 1,054 0.99% 250,000.00 247,725.00 912828ZT0 0.250% 305U.S. Treasury 06/29/2021 493,344.22 05/31/2025 1,127 0.69% 500,000.00 461,270.00 3136G4H71 0.500% 620FNMA08/18/2020 500,000.00 08/12/2025 1,200 0.50% 500,000.00 462,580.00 3137EAEX3 0.375% 557FHLMC10/20/2020 498,278.97 09/23/2025 1,242 0.48% 500,000.00 458,975.00 05580AXF6 0.500% 582BMW Bank 09/25/2020 248,000.00 09/25/2025 1,244 0.50% 248,000.00 227,312.58 91282CAZ4 0.375% 282U.S. Treasury 07/22/2021 991,353.50 11/30/2025 1,310 0.62% 1,000,000.00 913,590.00 91282CBH3 0.375% 429U.S. Treasury 02/25/2021 495,759.51 01/31/2026 1,372 0.60% 500,000.00 454,805.00 856283S98 1.000% 368State Bank of India 04/27/2021 248,000.00 04/27/2026 1,458 1.00% 248,000.00 228,793.19 Run Date: 5/10/2022 - 10:37 AM Amortizing 20City Council Regular Meeting - Page 187 of 473 Maturity Report City of Lynwood April 30, 2022 CUSIP Date Purchase Value Book Rate Coupon Date Maturity Par Remaining Term Value Market YTMIssuer Days to Maturity Book 91282CCF6 0.750% 282U.S. Treasury 07/22/2021 1,002,004.03 05/31/2026 1,492 0.70% 1,000,000.00 916,130.00 89235MLC3 0.950% 289Toyota Financial Savings Bank 07/15/2021 248,000.00 07/15/2026 1,537 0.95% 248,000.00 227,383.13 90348JR93 0.950% 262UBS Bank USA 08/11/2021 248,000.00 08/11/2026 1,564 0.95% 248,000.00 226,956.55 91282CCZ2 0.875% 193U.S. Treasury 10/19/2021 493,702.29 09/30/2026 1,614 1.17% 500,000.00 457,480.00 3130AQEC3 1.370% 121FHLB12/30/2021 500,000.00 12/30/2026 1,705 1.37% 500,000.00 469,775.00 808513BW4 3.300% 18Charles Schwab 04/12/2022 249,413.46 04/01/2027 1,797 3.35% 250,000.00 245,520.00 Net Maturities and Averages 26,227,898.39 545 1.03% 25,573,020.73 26,181,917.52 Run Date: 5/10/2022 - 10:37 AM Amortizing 21City Council Regular Meeting - Page 188 of 473 Income Earned City of Lynwood April 01, 2022 - April 30, 2022 CUSIP Value Ending Par Date Maturity Book Value Beginning Value Ending Book Accrued Beginning /Purchased Int.Received Accrued Ending Issuer Earned Interest Amortization/ Accretion Earned Net Income Certificates of Deposit 27002YEM4 05/10/2022 248,000.00EagleBank 248,000.00 248,000.00 388.65 547.64 370.98 529.97 0.00 529.97 33847E2J5 06/13/2022 248,000.00Flagstar Bank 248,000.00 248,000.00 1,868.49 0.00 2,378.08 509.59 0.00 509.59 1404203Z1 08/02/2022 248,000.00Capital One Bank USA 247,960.40 247,969.98 906.39 0.00 1,375.21 468.82 9.58 478.40 795450D36 08/23/2022 248,000.00Sallie Mae Bank 247,953.70 247,963.28 590.78 0.00 1,069.80 479.02 9.58 488.60 61747MF63 01/11/2023 248,000.00Morgan Stanley Bank 247,908.67 247,918.25 1,440.44 0.00 1,980.60 540.16 9.58 549.74 59013J5Z8 02/21/2023 248,000.00Merrick Bank 247,896.30 247,905.82 318.66 705.61 295.90 682.85 9.51 692.36 20033AZK5 06/29/2023 248,000.00Comenity Capital Bank 247,857.25 247,866.66 67.27 695.08 44.84 672.65 9.41 682.06 38148PR33 07/06/2023 248,000.00Goldman Sachs Bank 247,856.07 247,865.42 1,905.86 0.00 2,578.52 672.66 9.35 682.01 949763TF3 08/30/2023 248,000.00Wells Fargo Bank NA 247,838.41 247,847.79 44.84 0.00 717.50 672.66 9.38 682.04 29278TLY4 09/27/2023 248,000.00EnerBank 247,822.01 247,831.81 67.95 421.26 54.36 407.67 9.80 417.47 17312Q3B3 02/27/2024 248,000.00Citibank 247,780.89 247,790.31 672.66 0.00 1,284.16 611.50 9.42 620.92 32100LCB9 09/13/2024 248,000.00First Missouri State Bank 248,000.00 248,000.00 238.83 0.00 615.92 377.09 0.00 377.09 05580AXF6 09/25/2025 248,000.00BMW Bank 248,000.00 248,000.00 23.78 0.00 125.70 101.92 0.00 101.92 856283S98 04/27/2026 248,000.00State Bank of India 248,000.00 248,000.00 1,059.95 1,236.60 27.18 203.83 0.00 203.83 89235MLC3 07/15/2026 248,000.00Toyota Financial Savings Bank 248,000.00 248,000.00 490.56 0.00 684.21 193.65 0.00 193.65 90348JR93 08/11/2026 248,000.00UBS Bank USA 248,000.00 248,000.00 135.55 200.10 129.10 193.65 0.00 193.65 Certificates of Deposit - Sub Total 3,968,000.00 3,966,873.71 3,966,959.31 10,220.66 3,806.29 13,732.06 7,317.69 85.60 7,403.29 Commercial Paper 4497W1DM5 04/21/2022 0.00ING US Funding LLC 349,952.95 0.00 0.00 0.00 0.00 0.00 47.06 47.06 78015DG61 07/06/2022 350,000.00Royal Bank of Canada, NY 349,692.10 349,786.09 0.00 0.00 0.00 0.00 93.99 93.99 Commercial Paper - Sub Total 350,000.00 699,645.04 349,786.09 0.00 0.00 0.00 0.00 141.05 141.05 Corporate Bonds 59217GCD9 04/08/2022 0.00MetLife 250,008.78 0.00 3,183.68 3,312.50 0.00 128.82 -8.78 120.04 46849LSW2 06/27/2022 250,000.00Jackson National Life 249,893.76 249,929.59 1,631.94 0.00 2,152.78 520.84 35.82 556.66 90331HNV1 07/24/2023 250,000.00US Bank 250,988.28 250,927.69 1,581.94 0.00 2,290.28 708.34 -60.59 647.75 89236TFS9 01/08/2024 250,000.00Toyota Motor Credit 251,292.41 251,231.63 1,930.90 0.00 2,628.82 697.92 -60.77 637.15 46625HJX9 05/13/2024 500,000.00JPMorgan Chase & Co 506,398.68 506,155.16 6,947.92 0.00 8,458.33 1,510.41 -243.52 1,266.89 64952WDL4 01/22/2025 250,000.00New York Life 249,495.90 249,510.36 958.33 0.00 1,375.00 416.67 14.46 431.13 30231GBH4 03/19/2025 250,000.00Exxon Mobil 264,235.31 263,848.77 249.33 0.00 872.67 623.34 -386.54 236.80 808513BW4 04/01/2027 250,000.00Charles Schwab 0.00 249,413.46 0.00 -252.08 687.50 435.42 5.96 441.38 Corporate Bonds - Sub Total 2,000,000.00 2,022,313.13 2,021,016.67 16,484.04 3,060.42 18,465.38 5,041.76 -703.96 4,337.80 Run Date: 5/10/2022 - 10:37 AM Amortizing 24City Council Regular Meeting - Page 189 of 473 Income Earned City of Lynwood April 01, 2022 - April 30, 2022 CUSIP Value Ending Par Date Maturity Book Value Beginning Value Ending Book Accrued Beginning /Purchased Int.Received Accrued Ending Issuer Earned Interest Amortization/ Accretion Earned Net Income LAIF 9819499 05/01/2022 9,545,267.55LAIF 9,537,751.55 9,545,267.55 7,516.00 7,516.00 0.00 0.00 0.00 0.00 LAIF - Sub Total 9,545,267.55 9,537,751.55 9,545,267.55 7,516.00 7,516.00 0.00 0.00 0.00 0.00 Money Market Funds FGTXX 05/01/2022 618,649.97Goldman Sachs Govt MMF 253,724.99 618,649.97 28.27 28.27 98.76 98.76 0.00 98.76 Money Market Funds - Sub Total 618,649.97 253,724.99 618,649.97 28.27 28.27 98.76 98.76 0.00 98.76 U.S. Agencies 3135G0T78 10/05/2022 500,000.00FNMA 499,724.36 499,769.05 4,888.89 5,000.00 722.22 833.33 44.70 878.03 3133EKTV8 07/01/2024 500,000.00FFCB 499,954.97 499,956.59 2,375.00 0.00 3,166.67 791.67 1.61 793.28 3133EK3B0 10/16/2024 200,000.00FFCB 199,170.96 199,197.23 1,375.00 1,500.00 125.00 250.00 26.28 276.28 3130A4CH3 03/14/2025 500,000.00FHLB 527,510.20 526,759.69 560.76 0.00 1,550.35 989.59 -750.51 239.08 3136G4H71 08/12/2025 500,000.00FNMA 500,000.00 500,000.00 298.61 0.00 506.94 208.33 0.00 208.33 3137EAEX3 09/23/2025 500,000.00FHLMC 498,238.16 498,278.97 41.67 0.00 197.92 156.25 40.81 197.06 3130AQEC3 12/30/2026 500,000.00FHLB 500,000.00 500,000.00 1,731.53 0.00 2,302.36 570.83 0.00 570.83 U.S. Agencies - Sub Total 3,200,000.00 3,224,598.65 3,223,961.53 11,271.46 6,500.00 8,571.46 3,800.00 -637.12 3,162.88 U.S. Treasuries 912828ZD5 03/15/2023 500,000.00U.S. Treasury 501,764.44 501,612.77 115.49 0.00 319.29 203.80 -151.67 52.13 91282CAW1 11/15/2023 1,000,000.00U.S. Treasury 999,972.57 999,973.96 946.13 0.00 1,153.31 207.18 1.39 208.57 91282CBV2 04/15/2024 500,000.00U.S. Treasury 496,852.81 496,979.37 865.38 937.50 81.97 154.09 126.56 280.65 912828YV6 11/30/2024 1,000,000.00U.S. Treasury 1,028,401.50 1,027,527.60 5,027.47 0.00 6,263.74 1,236.27 -873.89 362.38 912828ZT0 05/31/2025 500,000.00U.S. Treasury 493,167.05 493,344.22 418.96 0.00 521.98 103.02 177.17 280.19 91282CAZ4 11/30/2025 1,000,000.00U.S. Treasury 991,155.49 991,353.50 1,256.87 0.00 1,565.93 309.06 198.01 507.07 91282CBH3 01/31/2026 500,000.00U.S. Treasury 495,666.79 495,759.51 310.77 0.00 466.16 155.39 92.72 248.11 91282CCF6 05/31/2026 1,000,000.00U.S. Treasury 1,002,044.33 1,002,004.03 2,513.74 0.00 3,131.87 618.13 -40.30 577.83 91282CCZ2 09/30/2026 500,000.00U.S. Treasury 493,585.23 493,702.29 11.95 0.00 370.56 358.61 117.06 475.67 U.S. Treasuries - Sub Total 6,500,000.00 6,502,610.22 6,502,257.27 11,466.76 937.50 13,874.81 3,345.55 -352.95 2,992.60 26,181,917.52Grand Total 26,207,517.28 26,227,898.39 56,987.19 21,848.48 54,742.47 19,603.76 -1,467.38 18,136.38 Run Date: 5/10/2022 - 10:37 AM Amortizing 25City Council Regular Meeting - Page 190 of 473 Realized Gains and Losses City of Lynwood April 01, 2022 - April 30, 2022 Par Value Sale Date Days Held Maturity/Sales RealizedCUSIP Coupon Rate Maturity Date Book Value Proceeds Gain/LossPurchase Date TermIssuer Commercial Paper 4497W1DM5 350,000.0012/21/2021 04/21/2022 121 350,000.00 0.00 350,000.00 04/21/2022 121ING US Funding LLC 0.000% Total Commercial Paper 0.00 350,000.00 350,000.00 Corporate Bonds 59217GCD9 250,000.0011/02/2017 04/08/2022 1,618 250,000.00 0.00 250,000.00 04/08/2022 1,618MetLife 2.650% Total Corporate Bonds 0.00 250,000.00 250,000.00 Grand Total 0.00 600,000.00 600,000.00 Run Date: 5/10/2022 - 10:37 AM Amortizing 26City Council Regular Meeting - Page 191 of 473 Transaction Report City of Lynwood April 01, 2022 - April 30, 2022 Transaction Transaction Security Security Maturity Date Type ID Description Date Purchases Redemptions Interest Deposits Withdrawals 04/04/2022 Interest FGTXX GSGF - - 28.27 - - 04/05/2022 Interest 3135G0T78 FNMA 2 10/05/22 10/05/2022 - - 5,000.00 - - 04/08/2022 Interest 59217GCD9 MET 2.65 04/08/22 04/08/2022 - - 3,312.50 - - 04/08/2022 Maturity 59217GCD9 MET 2.65 04/08/22 04/08/2022 - 250,000.00 - - - 04/11/2022 Interest 27002YEM4 EGBN 2.6 05/10/22 05/10/2022 - - 547.64 - - 04/11/2022 Interest 90348JR93 UBS 0.95 08/11/26 08/11/2026 - - 200.10 - - 04/12/2022 Purchase 808513BW4 SCHW 3.3 04/01/27 04/01/2027 -249,407.50 - -252.08 - - 04/15/2022 Interest 9819499 LAIF - - 7,516.00 - - 04/18/2022 Interest 91282CBV2 T 0 3/8 04/15/24 04/15/2024 - - 937.50 - - 04/18/2022 Interest 59013J5Z8 MERICK 3.35 02/21/23 02/21/2023 - - 705.61 - - 04/18/2022 Interest 3133EK3B0 FFCB 1 1/2 10/16/24 10/16/2024 - - 1,500.00 - - 04/21/2022 Maturity 4497W1DM5 ING (US) FUNDING 04/21/2022 - 350,000.00 - - - 04/27/2022 Interest 856283S98 SBIIN 1 04/27/26 04/27/2026 - - 1,236.60 - - 04/27/2022 Interest 29278TLY4 CMS 2 09/27/23 09/27/2023 - - 421.26 - - 04/29/2022 Interest 20033AZK5 ADS 3.3 06/29/23 06/29/2023 - - 695.08 - - Grand Total:-249,407.50 600,000.00 21,848.48 0.00 0.00 Run Date: 5/10/2022 - 10:37 AM Amortizing 27City Council Regular Meeting - Page 192 of 473 Consumer Prices Although U.S. consumer prices rose less than expected in March, inflation remained elevated at a 40-year high. The Consumer Price Index (CPI) was up 8.5% year-over-year in March, versus up 7.9% year-over-year in February. Core CPI (CPI less food and energy) was up 6.5% year-over-year in March, versus up 6.4% year-over-year in February. Gasoline costs drove half of the monthly increase, while food was also a sizable contributor. Used vehicle prices declined, resulting in lower than forecast core increases for the month. The Personal Consumption Expenditures (PCE) index was up 6.4% year-over-year in February, up from 6.0% in January. Core PCE was up 5.4% year-over-year in February, versus up 5.2% in January. Current inflation readings continue to run well above the Fed’s longer-run target of around 2.0%. While gas prices have started to decline in recent weeks in part due to COVID lockdowns in China, we believe pricing pressures may remain elevated longer than anticipated because of the conflict in Europe. Retail Sales Retail sales edged higher in February, but there are signs that higher gas prices are affecting discretionary spending. On a year-over-year basis, retail sales were up 17.6% in February versus 14% in January. On a month-over-month basis, retail sales moderated, rising 0.3% in February versus an upwardly revised increase of 4.9% in January. Excluding vehicles and gas, retail sales were down 0.4% month-over-month. Although inflation threatens to put a dent in expected growth, we believe high levels of consumer savings along with improvement in the health situation and continued improvement in the labor market should provide a healthy tailwind for consumer spending. The Consumer Confidence Index rebounded to 107.2 in March following declines in January and February, primarily driven by positive assessments of employment. However, while consumers’ evaluations of the present situation were strong, future expectations have been deteriorating. Labor Market The U.S. economy added 431,000 jobs in March, with upward revisions from the prior months totaling 95,000. Trends in employment remain strong, with the three-month moving average payrolls at 561,000 and the six-month moving average at 600,000. Job gains were broad based in March, led by leisure, hospitality, professional, and business services. The unemployment rate fell to 3.6% from 3.8%, the lowest level since February 2020. The labor participation rate increased marginally to 62.4% in March from 62.3% in February but remains lower than the pre-pandemic level of 63.4%. The U-6 underemployment rate, which includes those who are marginally attached to the labor force and employed part time for economic reasons, fell to 6.9% in March from 7.2% in February, declining below its pre-pandemic level of 7.0% in February 2020. Wage growth accelerated in March, with average hourly earnings rising 5.6% from 5.2% year-over-year. As more participants enter the labor force, wage inflation dynamics should start to moderate, helping to lower the current elevated inflation readings. Housing Starts Total housing starts rebounded 6.8% to an annual rate of 1,769,000 in February. Single-family starts increased 5.7%, and multi-family starts increased 9.3%, month-over-month. On a year-over-year basis, total housing starts were up 22.3% in February driven by multi-family starts. According to the Case-Shiller 20-City home price index, home prices were up 19.1% year-over-year in January versus up 18.6% year- over-year in December, suggesting tight supply may be continuing to support prices. Rising mortgage rates and affordability could be headwinds to further price growth. City Council Regular Meeting - Page 193 of 473 Agenda Item # 11. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Harry Wong, Director of Finance & Administration SUBJECT: FINANCIAL STATUS REPORT – APRIL 2022 Recommendation: Staff recommends that the City Council receive and file this report. Background: The Finance & Administration Department has prepared the attached monthly financial status report for the General Fund for the City of Lynwood. It is the objective of the Department to prepare a monthly status report on a monthly basis. Discussion and Analysis: The monthly report provides a brief overview of the City finances as it pertains to the General Fund for ten months ending April 30, 2022. A brief explanation is included along with Revenue and Expenditures actual activity. The information is unaudited; however, the information presented does represent the cash activity for the General Fund for the periods indicated. Fiscal Impact: The action recommended in the report does not have a fiscal impact on the City; the report is solely informational. Coordinated With: City Manager's Office City Attorney City Council Regular Meeting - Page 194 of 473 ATTACHMENTS: Description Financial Status Report - April 2022 City Council Regular Meeting - Page 195 of 473 CITY OF LYNWOOD  FINANCIAL STATUS REPORT  Fiscal Year 2021‐22  Ten months ending April 30, 2022  (Unaudited)    This report summarizes the activities of the General Fund and is not meant to be inclusive of all finance and accounting  transactions and excludes encumbrances.  It is intended only to provide the City Council and the public with an overview  of the state of the City’s general fiscal condition.  This report is for the ten months ending April 30, 2022.     GENERAL FUND BUDGET POSITION    The City Council adopted the FY 2021‐22 budgets on July 20, 2021 with approved General Fund estimated revenue of  $38,044,359 and expenditures of $39,403,060 with these amounts including transfers with other city funds.  Adjustments  to the budget have increased the revenue budget to $39,875,629 and expenditures to $40,304,472.    GENERAL FUND REVENUES    Table 1 highlights the amount and percentage of revenues received in each of the major classifications as of April 30, 2022.   The first ten months results for fiscal year 2021‐22 show General Fund revenues coming in at 71% of budget.  The cash  receipts are typical at this time of the year due to the cyclical nature of when revenue receipts are received; however, the  City had a one‐time receipt of additional monies in the month of March. More of the revenues are received in the second  half of the year.  In the case of Sales Tax, the majority is received later in the year.    Table 1  GENERAL FUND REVENUES  As of April 30, 2022  2021-22 Adopted Budget 2021-22 Amended Budget 2021-22 Year-To-Date Actuals YTD % of Amended Budget Revenue Type Sales Tax 11,985,000$ 13,185,000$ 8,826,408$ 67% Property Tax 11,749,426 12,279,012 7,468,256 61% Utility User Tax 5,270,000 5,270,000 4,275,471 81% Other Taxes & Assessments 1,584,964$ 1,584,964$ 1,541,509$ 97% Licenses & Permits 805,100 906,784$ 861,914 95% Fines, Forfeitures, Penalties 913,500 913,500 1,033,250 113% Use of Money & Property 382,997 382,997 2,226,492 581% Intergovernmental 149,929 149,929 120,734 81% Charges for Services 1,239,445 1,239,445 1,299,560 105% Administrative support 1,118,674 1,118,674 125,000 11% Miscellaneous 747,850 747,850 354,307 47% Transfer in 2,097,474 2,097,474 37,858 2% Total Revenues 38,044,359$ 39,875,629$ 28,170,760$ 71%    City Council Regular Meeting - Page 196 of 473 Property Taxes including the in‐lieu payments comprises 30.9% of the total General Fund annual revenues and are  primarily received in December/January and April/May timeframes.  Property tax revenues through April are at 61% of  the annual budget.  This percentage is about what is expected since the first half of property taxes have been paid to the  County.      Sales Tax including Measure PS comprises 31.5% of the total annual General Fund revenues.  Revenues received through  April came in at 67% of the budgeted amount as the state was still paying sales tax related to the prior fiscal year in July  and August.  The amount of sales tax revenue collected, so far, is exceeding the budgeted projection.  It is still too early  to determine the extent of the amount expected sales tax revenue for the fiscal year.     Utility User Tax comprises 13.9% of the total annual General Fund revenues.  These funds are paid to the City one month  after collection.  Collections of 81% have been made to date.    All other taxes includes Transfer tax, Franchise tax, Cannabis tax and other small miscellaneous collections.  These  comprises 4.1% of the total General Fund annual revenues.  Revenues received through April came in at 97% of the  adopted budgeted amount.  Much of this revenue is received in the April‐May‐June time period.    Licenses and Permits comprises 2.1% of the total General Fund annual revenues.  Revenues received through April came  in at 95% of the adopted budgeted amount.    Charges for Services comprises 3.1% of the total General Fund annual revenues.  Revenues received through April came  in at 105% of the adopted budgeted amount.  While this is very encouraging, this category is variable so the City is still  being conservative and keeping the same budgeted amount.    Use of money and Property is comprised of interest earned on investments and on the sale of City properties.  In the  month of March the City sold the property designated for the Atlantic Housing Project for $2,000,000.  This is reflected  above and was not budgeted as revenue in the current budget.                                                      City Council Regular Meeting - Page 197 of 473 GENERAL FUND EXPENDITURES    Table 2 highlights the amount and percentage expended by each department.  As of April 30th, the General Fund  departments combined have expended 44% of the budget. This percentage decreased from last month's report due to a  one‐time reclassification of a portion of public safety costs to a special revenue fund.     Table 2  GENERAL FUND EXPENDITURES  As of April 30, 2022    Department Expenditures 2021-22 Adopted Budget 2021-22 Amended Budget 2021-22 Year-To- Date Actuals YTD % of Amended Budget General Government City Council 308,090$ 338,410$ 210,717$ 62% City Manager 1,603,422 1,698,422 979,109 58% City Attorney 315,560 315,560 212,804 67% Information Technology 548,823 548,823 366,276 67% Human Resources 919,285 919,285 394,215 43% City Treasurer 223,382 227,782 159,851 70% Public Safety 20,541,020 20,541,020 7,278,189 35% City Clerk 330,858 330,858 191,143 58% Finance &Administration 522,791 522,791 383,558 73% Community Development 4,464,656 4,744,303 3,165,726 67% Public Works 2,787,617 2,971,412 1,894,703 64% Community Services 3,419,876 3,648,126 2,289,074 63% Successor Agency Admin 279,068 279,068 233,553 84% Transfers 3,138,612 3,218,612 - 0% Total Expenditures 39,403,060$ 40,304,472$ 17,758,920$ 44%        As discussed above the overall expenditures are at a level that is expected for the first ten months of the new fiscal year.   This is the result of vendors and contractors invoicing in the month after the work is performed.  This means that salaries  are current but operating expenses can be one to two months behind in being invoiced to the city.  Currently, it appears  that the city is spending less than was budgeted.                    City Council Regular Meeting - Page 198 of 473 Agenda Item # 12. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Harry Wong, Director of Finance & Administration SUBJECT: APPROVING PENSION UNFUNDED ACCRUED LIABILITY (“UAL”) REFINANCE WITH THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY IN MAXIMUM AMOUNT OF $50,000,000 (FEDERALLY TAXABLE); APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS Recommendation: 1. Staff recommends that the City Council consider adoption of the attached Resolution No. ______ entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY, APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS” 2. Staff recommends that the Lynwood Public Financing Authority consider adoption of the attached Resolution No. ______ entitled, “A RESOLUTION OF THE LYNWOOD PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF LEASE REVENUE BONDS, AUTHORIZING AND DIRECTING EXECUTION OF AN INDENTURE, A LEASE, A SITE LEASE, AND CERTAIN OTHER DOCUMENTS, AUTHORIZING THE NEGOTIATION FOR THE SALE OF BONDS, AND AUTHORIZING OTHER RELATED ACTIONS” Background: The City Council previously directed staff to evaluate the potential financial benefits of refinancing the City of Lynwood's (“City”) Pension Unfunded Accrued Liability (“UAL”) with the California Public Employees’ Retirement System (“CalPERS”). Based on analysis done to date, it appears savings to the City’s General Fund may be achieved from a refinancing; however, the municipal bond market is experiencing high levels of volatility and ultimate expected savings will not be known until interest rates can be locked. Staff recommends the City Council approve the resolutions and related lease documents so that the Lynwood Public Financing Authority (“Financing Authority”) is in a position to issue Lease Revenue Bonds to refinance the City’s pension obligation with CalPERS. Staff will work with its financial consultants to closely monitor the market in the coming months. City Council Regular Meeting - Page 199 of 473 The City’s pension plans are managed under contract with CalPERS. The City’s annual pension payments to CalPERS consist of two components which include the Normal Cost, and UAL. The normal cost is the amount CalPERS charges the City, as a percentage of its payroll, that is estimated to annually fully fund a share of all future pension obligations. The UAL repayment portion is the amount that is charged to the City to repay the City’s estimated long-term UAL that is owed to CalPERS for past changes in benefits, underperforming CalPERS investment returns, and changes in the discount rate. The UAL represents the difference between the amount necessary to pay actuarially determined future benefits already earned by current and former employees and the market value of the assets currently on deposit with CalPERS. The City’s UAL constitutes a debt that must be repaid to CalPERS and it is listed as a liability on the City’s Balance Sheet in accordance with the Governmental Accounting Standards Board requirements. CalPERS currently charges the City 7.00% interest on this debt (scheduled to change to 6.80% for Fiscal Year ending June 30, 2024), and has a repayment structure that will result in a significant increase in annual pension costs over the coming years. As in many other cities in California, the growing obligations related to employee retirements represent a significant financial burden to the City. CalPERS calculates the actuarial value of benefits owed to plan members and the market value of plan assets annually, but it takes them one year to publish results. Furthermore, CalPERS determines the UAL amortization schedules based on the projected future UAL balance at the end of the year in which results are published. This means that results based on a June 30, 2020 valuation date, which are released in July of 2021, project the UAL balance at June 30, 2022 to determined UAL amortization payments for Fiscal Year Ending June 30, 2023. Therefore, UAL amortization payments for the Fiscal Year Ending June 30, 2023 (the upcoming Fiscal Year) are based on the City’s projected unfunded liabilities to CalPERS of $35,582,515 for the Miscellaneous Plan and $7,516,349 for the Safety Plan. CalPERS’ investment returns for 2021-22 and demographic and other changes that are currently being calculated by CalPERS could further increase this amount. Current taxable municipal bond rates are currently lower than the 7.00% (soon to be 6.80%) CalPERS is currently charging the City. By issuing its own obligations to finance the UAL (instead of continuing to make payments to CalPERS on its terms), the City may be able to realize substantial budgetary savings and better manage future pension costs. Under IRS regulations, obligations that are issued to finance a UAL must be issued at taxable (as opposed to tax-exempt) interest rates. The financing team is recommending that the City authorize the Financing Authority to issue Lease Revenue Bonds secured by lease payments to be made by the City for the lease of certain City assets, which are anticipated to consist of City streets, but which may instead consist of other City facilities such as Police Stations, Fire Stations, City maintenance facilities, or combinations thereof, to refinance some or all of the UAL. Similar financings have been done in various other cities in the State over the past several years to similarly refinance UAL amounts owed to CalPERS. Discussion and Analysis: Overview of Bond Financing. The proposed financing is in the form of Lease Revenue Bonds (“Bonds”) to be issued by the Lynwood Public Financing Authority, similar to financings undertaken by Lynwood in 2019 and 2020. Pursuant to the documents to be approved, the City and Financing Authority would enter into (1) a Site Lease, pursuant to which the Financing Authority leases City property in exchange for an upfront site lease payment used for the UAL pay-off, and (2) a Lease Agreement, pursuant to which the City leases back the property from the Financing Authority in exchange for semi-annual lease payments. The lease payments would be assigned under the Assignment Agreement to the trustee, which would administer the Bonds under the Indenture of Trust. The lease payments would be payable from any legally available funds of the City, and are anticipated to be further secured by a pledge of the pension tax override approved by the voters of the City in 1946. The pension tax override is accounted for in a special fund, apart from the General Fund, and may only be used for pension costs in accordance with applicable law. City Council Regular Meeting - Page 200 of 473 The property to be leased under the leases will be determined to have adequate value and other characteristics necessary to satisfy legal and marketing requirements. Valuation of the leased properties will be performed by Kosmont Realty. The resolutions contain a provision that allows City staff to determine the appropriate combination of City assets for use as the leased property. Preliminary Official Statement; Continuing Disclosure. The resolutions also approve the form of Preliminary Official Statement (POS) for the Bonds. The POS is the document pursuant to which material information concerning the City and the Bonds is conveyed to prospective purchasers of the Bonds. It also includes various risk factors for Bond holders to consider. Included as an exhibit to the POS is a Continuing Disclosure Certificate, pursuant to which the City will agree to provide its audited financial statements and certain other financial and operating information to Bondholders on an annual basis, as well as notification of certain enumerated events. Bond Purchase Agreement. The final document approved by the resolutions is the Bond Purchase Agreement, pursuant to which the Bonds would be sold by the Financing Authority to the underwriter, for further resale and distribution to ultimate investors. The agreement contains customary representations, warranties and covenants of the City and Financing Authority and closing conditions. Financing Team. Transaction support is being provided to the City and the Financing Authority by Kosmont Transactions Services as the City’s municipal advisor. Additional transaction team members include Jones Hall (Bond Counsel); U.S. Bank Trust Company, National Association (Trustee), and Cabrera Capital Markets (Underwriter). Fiscal Impact: Current projections indicate that refinancing the CalPERS UAL and thereby restructuring the currently front-loaded UAL amortization schedule to level payments could produce significant budget savings that average approximately $462,000 per year over the next 10 fiscal years, with the greatest savings of approximately $714,000 to occur in the upcoming 2023 Fiscal Year. Net Present Value savings over the remaining life of the Bonds would be approximately $2.25 million, for an NPV% savings of 5.21%. It is generally considered advisable to proceed with a refinancing transaction when NPV savings amounts are greater than 3%. In accordance with Government Code Section 5852.1, the following information has been obtained and disclosed to the City Council and Financing Authority prior to the issuance of the Bonds: (i) the estimated true interest cost of the Bonds (being the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds) is 5.5457%; (ii) the estimated finance charge of the Bonds (being the sum of all fees and charges paid to third parties) is $769,641; (iii) the estimated proceeds of the Bonds expected to be received, net of proceeds for finance charges in (ii) above to paid from the principal amount of the Bonds and any reserves or capitalized interest paid or funded with Bonds is $43,098,864, and (iv) the estimated total payment amount of the Bonds (being the sum of debt service plus finance to be paid to final maturity, plus any financing costs not paid from proceeds of the Bonds) is $75,410,107. This information is based on good-faith estimates provided by the City’s municipal advisor. The foregoing is based on analysis done to date; however, the municipal bond market is experiencing high levels of volatility and ultimate expected savings will not be known until interest rates can be locked. Staff will work with its financial consultants to closely monitor the market in the coming months. Coordinated With: City Manager's Office City Attorney Kosmont Transactions Services, as Municipal Advisor Jones Hall, as Bond Counsel City Council Regular Meeting - Page 201 of 473 ATTACHMENTS: Description Attach A - City Reso Attach B -JPA Reso Attach C - Indenture Attach D - Site Lease Attach E - Lease Agmt Attach F - Assignment Agmt Attach G - Lynwood LRBs POS Attach H - LynwoodBPA City Council Regular Meeting - Page 202 of 473 RESOLUTION NO. ____________________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY, APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS WHEREAS, the City of Lynwood (the “City”) and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Lynwood Public Financing Authority (the “Authority”) for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs; and WHEREAS, the City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City; and WHEREAS, the City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”); and WHEREAS, the CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”); and WHEREAS, on April 9, 1946, the voters in the City approved a retirement tax to support amounts owed by the City to CalPERS pursuant to the CalPERS Contract (the “Pension Tax Override”), which Pension Tax Override is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes; and WHEREAS, the City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit; and WHEREAS, the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members; and City Council Regular Meeting - Page 203 of 473 2 WHEREAS, the Authority proposes to issue lease revenue bonds under the Bond Law for the purpose of refunding all or a portion of the CalPERS Obligation, including paying all costs of issuing the lease revenue bonds; and WHEREAS, pursuant to a Site Lease (the “Site Lease”), the City proposes to lease to the Authority certain real property (as described more fully in the Site Lease, as executed, the “Leased Property”); and WHEREAS, pursuant to a Lease Agreement, between the City and the Authority (the “Lease”), the City proposes to lease the Leased Property from the Authority, and the Authority will use the lease payments paid by the City to the Authority under the Lease to pay debt service on the lease revenue bonds; WHEREAS, the Authority proposes to sell the lease revenue bonds to Cabrera Capital Markets, LLC, as underwriter (the “Underwriter”), pursuant to a bond purchase agreement (the “Bond Purchase Agreement”); and WHEREAS, in order to assist the Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission, the City will undertake certain continuing disclosure obligations with respect to the lease revenue bonds pursuant to a continuing disclosure certificate to be executed by the City (the “Continuing Disclosure Certificate”); and WHEREAS, in order to comply with Government Code Section 5852.1, certain information relating to the proposed lease revenue bonds is set forth in the staff report accompanying this Resolution, and such information is hereby disclosed and made public; and WHEREAS, the City has duly considered such transactions and wishes at this time to approve the transactions as being in the public interest of the City; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER AND RESOLVE AS FOLLOWS: Section 1. The City Council hereby finds and determines that the foregoing recitals are true and correct. Section 2. The City Council hereby approves the issuance of the lease revenue bonds (the “Bonds”) by the Authority under the Bond Law in the maximum principal amount of $50,000,000. The Bonds shall be issued pursuant to an Indenture of Trust between the Authority and a corporate trustee (the “Indenture”). Section 3. The City Council hereby approves the forms of the Site Lease and the Lease on file with the City Clerk, with such additions thereto and changes therein as the City Manager, the Finance Director, the Treasurer or the designee of any of them (each, an “Authorized Officer”) deem necessary, desirable or appropriate upon consultation with the bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. In furtherance of the foregoing, the Leased Property is anticipated to consist of the City’s interest in City streets; however, other real property of the City may be leased instead. In addition, City Council Regular Meeting - Page 204 of 473 3 as described more fully in the Lease, the Pension Tax Override shall be pledged by the City to the payment of the lease payments. The Authorized Officers and all other appropriate officials of the City are hereby authorized and directed to execute, and the City Clerk is hereby authorized to attest, as appropriate, the Site Lease and the Lease and such other agreements, documents and certificates as may be necessary or desirable to effectuate the purposes of this resolution and the financing herein authorized, including, without limitation, such other agreements, documents and certificates as may be required by the Site Lease, and the Lease. The City Council hereby authorizes the performance by the City of its obligations under the Site Lease and the Lease. Section 4. The City Council hereby approves the preliminary Official Statement describing the Bonds, and Continuing Disclosure Certificate included therein in substantially the form on file with the City Clerk. Each of the Authorized Officers 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 and the Continuing Disclosure Certificate shall be executed on behalf of the City by an Authorized Officer. Section 5. The City Council hereby approves the form of the Bond Purchase Agreement on file with the City Clerk, with such additions thereto and changes therein as the Authorized Officers deem necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions or changes; provided that no such addition or change shall increase the aggregate principal amount of the Bonds in excess of the maximum principal amount set forth in Section 2, or shall provide for a true interest cost in excess of 5.95% or an Underwriter’s discount (exclusive of any original issue discount) of greater than 0.8%. The Authorized Officers, each acting alone, are hereby authorized and directed to execute the Bond Purchase Agreement and to take all actions necessary to fulfill the City’s obligations thereunder. Section 6. Notwithstanding the foregoing references to the Bonds, the Indenture, the preliminary Official Statement and the Bond Purchase Agreement, if an Authorized Officer determines that a private placement lease financing is more advantageous to the City and the Authority, the lease payments payable by the City to the Authority may be assigned by the Authority to a private placement bank without further action of the City Council so long as the parameters included in this Resolution are met. City Council Regular Meeting - Page 205 of 473 4 Section 7. The City Council hereby approves the appointment of (a) Jones Hall, A Professional Law Corporation, as bond counsel and disclosure counsel; (b) Kosmont Transactions Services, Inc., as municipal advisor; and (c) Cabrera Capital Markets, LLC, as underwriter/private placement agent. The Authorized Officers, each acting alone, are hereby authorized to execute new or amended services agreements with these financing team members in connection with the issuance of the Bonds, as deemed necessary by such Authorized Officer executing the same. Section 8. The Authorized Officers, the City Clerk and any and all other officers of the City are hereby authorized and directed, for and in the name of and on behalf of the City, to do any and all things and take any and all actions, including execution and delivery of any and all documents, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and documents, which they, or any of them, may deem necessary or advisable in order to consummate the transactions described herein. The City Council hereby authorizes the Authorized Officers, each acting alone, to provide for a debt service reserve fund and debt service and reserve fund insurance policies. Section 9. This Resolution shall take effect immediately upon its passage and adoption. Adoption of this Resolution is intended to start the 60 day period provided for in California Code of Civil Procedure Section 863 for an interested person to bring an action to determine the validity of the matters approved herein, including, but not limited to, the validity of the Bonds, the Indenture, the Site Lease (including the property proposed to be leased to the Authority by the City therein), and the Lease, and the legality and validity of this Resolution, the use of the proceeds of the Bonds, and the payment of the lease payments and the Bonds. City Council Regular Meeting - Page 206 of 473 5 PASSED, APPROVED AND ADOPTED THIS 17th day of May 2022. Jorge Casanova, Mayor ATTEST: Maria Quinonez, City Clerk Ernie Hernandez, City Manager APPROVED AS TO FORM: Noel Tapia, City Attorney APPROVED AS TO CONTENT: Ernie Hernandez, City Manager [Insert City Clerk certification page] City Council Regular Meeting - Page 207 of 473 RESOLUTION NO. ___________ A RESOLUTION OF THE LYNWOOD PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF LEASE REVENUE BONDS, AUTHORIZING AND DIRECTING EXECUTION OF AN INDENTURE, A LEASE, A SITE LEASE, AND CERTAIN OTHER DOCUMENTS, AUTHORIZING THE NEGOTIATION FOR THE SALE OF BONDS, AND AUTHORIZING OTHER RELATED ACTIONS WHEREAS, the City of Lynwood (the “City”) and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Lynwood Public Financing Authority (the “Authority”) for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs; and WHEREAS, the City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City; and WHEREAS, the City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”); and WHEREAS, the CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”); and WHEREAS, on April 9, 1946, the voters in the City approved a retirement tax to support the City’s contributions owed to CalPERS pursuant to the CalPERS Contract (the “Pension Tax Override”), which Pension Tax Override is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes; and WHEREAS, the City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit; and WHEREAS, the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members; and City Council Regular Meeting - Page 208 of 473 2 WHEREAS, the Authority proposes to issue lease revenue bonds under the Bond Law for the purpose of refunding all or a portion of the CalPERS Obligation, including paying all costs of issuing the lease revenue bonds; and WHEREAS, pursuant to a Site Lease (the “Site Lease”), the City proposes to lease to the Authority certain real property (as described more fully in the Site Lease, as executed, the “Leased Property”); and WHEREAS, pursuant to a Lease Agreement, between the City and the Authority (the “Lease”), the City proposes to lease the Leased Property from the Authority, and the Authority will use the lease payments paid by the City to the Authority under the Lease to pay debt service on the lease revenue bonds; WHEREAS, the Authority proposes to sell the lease revenue bonds to Cabrera Capital Markets, LLC, as underwriter (the “Underwriter”), pursuant to a bond purchase agreement (the “Bond Purchase Agreement”); and WHEREAS, in order to comply with Government Code Section 5852.1, certain information relating to the proposed lease revenue bonds is set forth in the staff report accompanying this Resolution, and such information is hereby disclosed and made public; and WHEREAS, the Authority has duly considered these transactions and wishes at this time to approve these transactions and make certain findings regarding significant public benefits to the Authority’s members with respect to these transactions; NOW, THEREFORE, THE LYNWOOD PUBLIC FINANCING AUTHORITY DOES HEREBY FIND, PROCLAIM, ORDER AND RESOLVE AS FOLLOWS: Section 1. The Authority hereby finds and determines that the issuance of the lease revenue bonds and the transactions related thereto will result in significant public benefits to the City. Section 2. The Authority hereby authorizes the issuance of the lease revenue bonds (the “Bonds”) under the Bond Law in the maximum principal amount of not to exceed $50,000,000. The Bonds shall be issued pursuant to an Indenture of Trust between the Authority and a corporate trustee (the “Indenture”). The Authority hereby approves the Indenture in the form on file with the Secretary of the Authority (the “Secretary”), together with such additions thereto and changes therein as the Chief Administrative Officer, the Authority Finance Director, the Authority Treasurer or the designee of any of them (each, a “Authorized Officer”), deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. The Leased Property is anticipated to consist of the City’s interest in City streets; however, other real property of the City may be leased instead. The Authorized Officers, each acting alone, are hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final form of the Indenture for and in the name and City Council Regular Meeting - Page 209 of 473 3 on behalf of the Authority. The Authority hereby authorizes the performance by the Authority of its obligations under the Indenture. Section 3. The Authority hereby approves the form of the Lease and the Site Lease by and between the Authority and the City in the form on file with the Secretary together with such additions thereto and changes therein as the Authorized Officers deem necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. The Authorized Officers, each acting alone, are hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final forms of the Lease and the Site Lease for and in the name of and on behalf of the Authority. The Authority hereby authorizes the performance by the Authority of its obligations under the Lease and the Site Lease. Section 4. The Authority shall assign to the Trustee its right to receive the lease payments from the City under an Assignment Agreement. The Authority hereby approves the Assignment Agreement in the form on file with the Secretary, together with such additions thereto and changes therein as a Authorized Officer deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. The Authorized Officers, each acting alone, are hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final form of the Assignment Agreement for and in the name and on behalf of the Authority. The Authority hereby authorizes the performance by the Authority of its obligations under the Assignment Agreement. Section 5. The Authority hereby approves the preliminary Official Statement describing the Bonds in substantially the form on file with the Secretary. Each of the Authorized Officers 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 Authority’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 Authority hereby authorizes the distribution of the final Official Statement by the Underwriter. The final Official Statement shall be executed on behalf of the Authority by an Authorized Officer. Section 6. The Authority hereby authorizes and directs an Authorized Officer to authorize the sale of the Bonds pursuant to a negotiated sale to the Underwriter. The Authority hereby approves the form of the Bond Purchase Agreement on file with the Secretary, with such additions thereto and changes therein as Authorized Officers deem necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by City Council Regular Meeting - Page 210 of 473 4 the Authority shall be conclusive evidence of the approval of any such additions or changes, provided that no such addition or change may increase the aggregate principal amount of Bonds to be in excess of the amount specified in Section 2, or shall provide for a true interest cost in excess of 5.95% or an Underwriter’s discount (exclusive of any original issue discount) of greater than 0.8%. The Authorized Officers, each acting alone, are hereby authorized and directed to execute the Bond Purchase Agreement and to take all actions necessary to fulfill the Authority’s obligations thereunder. Section 7. Notwithstanding the foregoing references to the Bonds, the Indenture, the preliminary Official Statement and the Bond Purchase Agreement, if an Authorized Officer determines that a private placement lease financing is more advantageous to the City and the Authority, the lease payments payable by the City to the Authority may be assigned by the Authority to a private placement bank without further action of the Authority so long as the parameters included in this Resolution are met. Section 8. The Authority hereby approves the appointment of (a) Jones Hall, A Professional Law Corporation, as bond counsel and disclosure counsel; (b) Kosmont Transactions Services, Inc., as municipal advisor; and (c) Cabrera Capital Markets, LLC, as underwriter/private placement agent. The Authorized Officers, each acting alone, are hereby authorized to execute new or amended services agreements with these financing team members in connection with the issuance of the Bonds, as deemed necessary by such Authorized Officer executing the same. Section 9. The Authorized Officers, the Secretary and any and all other officers of the Authority are hereby authorized and directed, for and in the name of and on behalf of the Authority, to do any and all things and take any and all actions, including execution and delivery of any and all documents, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and documents, which they, or any of them, may deem necessary or advisable in order to consummate the transactions described herein. The Authority hereby authorizes the Authorized Officers, each acting alone, to provide for a debt service reserve fund and debt service and reserve fund insurance policies. Section 10. This Resolution shall take effect immediately upon its passage and adoption. Adoption of this Resolution is intended to start the 60 day period provided for in California Code of Civil Procedure Section 863 for an interested person to bring an action to determine the validity of the matters approved herein, including, but not limited to, the validity of the Bonds, the Indenture, the Site Lease (including the property proposed to be leased to the Authority by the City therein), and the Lease, and the legality and validity of this Resolution, the use of the proceeds of the Bonds, and the payment of the lease payments and the Bonds. City Council Regular Meeting - Page 211 of 473 5 PASSED, APPROVED AND ADOPTED THIS 17th day of May 2022. Jorge Casanova, President ATTEST: Maria Quinonez, City Clerk/Secretary Ernie Hernandez, Chief Administrative Officer APPROVED AS TO FORM: Noel Tapia, City Attorney APPROVED AS TO CONTENT: Ernie Hernandez, Chief Administrative Officer [Insert City Clerk certification page] City Council Regular Meeting - Page 212 of 473 Jones Hall Draft of May 11, 2022 INDENTURE OF TRUST Dated as of July 1, 2022 between U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee and the LYNWOOD PUBLIC FINANCING AUTHORITY Authorizing the Issuance of $__________ Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) City Council Regular Meeting - Page 213 of 473 -i- TABLE OF CONTENTS ARTICLE I .................................................................................................................................. 3 DEFINITIONS; RULES OF CONSTRUCTION ...................................................................................... 3 SECTION 1.01. Definitions ........................................................................................................... 3 SECTION 1.02. Authorization ....................................................................................................... 3 SECTION 1.03. Interpretation ....................................................................................................... 3 ARTICLE II ................................................................................................................................. 3 The Bonds ................................................................................................................................. 3 SECTION 2.01. Authorization of Bonds ........................................................................................ 3 SECTION 2.02. Terms of the Bonds ............................................................................................. 4 SECTION 2.03. Transfer and Exchange of Bonds ........................................................................ 5 SECTION 2.04. Book-Entry System ............................................................................................. 6 SECTION 2.05. Registration Books .............................................................................................. 7 SECTION 2.06. Form and Execution of Bonds ............................................................................. 8 SECTION 2.07. Bonds Mutilated, Lost, Destroyed or Stolen ........................................................ 8 ARTICLE III ................................................................................................................................ 9 Issuance of Bonds; Application of Proceeds .............................................................................. 9 SECTION 3.01. Issuance of the Bonds......................................................................................... 9 SECTION 3.02. Application of Proceeds of Sale of Bonds............................................................ 9 SECTION 3.03. Establishment and Application of Costs of Issuance Fund .................................. 9 SECTION 3.04. Validity of Bonds ................................................................................................. 9 ARTICLE IV ..............................................................................................................................10 Redemption of Bonds................................................................................................................10 SECTION 4.01. Terms of Redemption........................................................................................ 10 SECTION 4.02. Selection of Bonds for Redemption ................................................................... 11 SECTION 4.03. Notice of Redemption; Rescission..................................................................... 12 SECTION 4.04. Partial Redemption of Bonds ............................................................................. 12 SECTION 4.05. Effect of Redemption ........................................................................................ 12 ARTICLE V ...............................................................................................................................13 Revenues; Funds and Accounts; Payment of Principal and Interest ..........................................13 SECTION 5.01. Security for the Bonds; Bond Fund.................................................................... 13 SECTION 5.02. Allocation of Revenues ..................................................................................... 13 SECTION 5.03. Application of Interest Account .......................................................................... 14 SECTION 5.04. Application of Principal Account ........................................................................ 14 SECTION 5.05. No Reserve Account ......................................................................................... 14 SECTION 5.06. Application of Redemption Fund ....................................................................... 14 SECTION 5.07. Insurance and Condemnation Fund .................................................................. 14 SECTION 5.08. Investments ...................................................................................................... 16 SECTION 5.09. Valuation and Disposition of Investments .......................................................... 17 ARTICLE VI ..............................................................................................................................18 Covenants of the Authority ........................................................................................................18 SECTION 6.01. Punctual Payment ............................................................................................. 18 SECTION 6.02. Extension of Payment of Bonds ........................................................................ 18 SECTION 6.03. Against Encumbrances ..................................................................................... 18 SECTION 6.04. Power to Issue Bonds and Make Pledge and Assignment ................................ 18 SECTION 6.05. Accounting Records .......................................................................................... 18 SECTION 6.06. Limitation on Additional Obligations .................................................................. 19 SECTION 6.07. Federal Tax Law ............................................................................................... 19 City Council Regular Meeting - Page 214 of 473 -ii- SECTION 6.08. Enforcement of Lease ....................................................................................... 19 SECTION 6.09. Waiver of Laws ................................................................................................. 19 SECTION 6.10. Further Assurances ........................................................................................... 19 ARTICLE VII .............................................................................................................................19 Events of Default and Remedies ...............................................................................................19 SECTION 7.01. Events of Default ............................................................................................... 19 SECTION 7.02. Remedies Upon Event of Default ...................................................................... 20 SECTION 7.03. Application of Revenues and Other Funds After Default ................................... 21 SECTION 7.04. Trustee to Represent Bond Owners .................................................................. 21 SECTION 7.05. Limitation on Bond Owners' Right to Sue .......................................................... 22 SECTION 7.06. Absolute Obligation of Authority ........................................................................ 22 SECTION 7.07. Termination of Proceedings .............................................................................. 22 SECTION 7.08. Remedies Not Exclusive ................................................................................... 22 SECTION 7.09. No Waiver of Default ......................................................................................... 23 SECTION 7.10. Notice to Bond Owners of Default ..................................................................... 23 ARTICLE VIII ............................................................................................................................23 The Trustee ..............................................................................................................................23 SECTION 8.01. Appointment of Trustee ..................................................................................... 23 SECTION 8.02. Acceptance of Trusts; Removal and Resignation of Trustee ............................. 23 SECTION 8.03. Merger or Consolidation .................................................................................... 25 SECTION 8.04. Liability of Trustee ............................................................................................. 25 SECTION 8.05. Right to Rely on Documents.............................................................................. 28 SECTION 8.06. Preservation and Inspection of Documents ....................................................... 29 SECTION 8.07. Compensation and Indemnification ................................................................... 29 ARTICLE IX ..............................................................................................................................30 Modification or Amendment Hereof ...........................................................................................30 SECTION 9.01. Amendments Permitted ..................................................................................... 30 SECTION 9.02. Effect of Supplemental Indenture ...................................................................... 31 SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds .......................................... 31 SECTION 9.04. Amendment of Particular Bonds ........................................................................ 31 ARTICLE X ...............................................................................................................................32 Defeasance ...............................................................................................................................32 SECTION 10.01. Discharge of Indenture .................................................................................... 32 SECTION 10.02. Discharge of Liability on Bonds ....................................................................... 32 SECTION 10.03. Deposit of Money or Securities with Trustee ................................................... 33 SECTION 10.04. Unclaimed Funds ............................................................................................ 33 ARTICLE XI ..............................................................................................................................34 Miscellaneous ...........................................................................................................................34 SECTION 11.01. Liability of Authority Limited to Revenues ........................................................ 34 SECTION 11.02. Limitation of Rights to Parties and Bond Owners ............................................ 34 SECTION 11.03. Funds and Accounts ....................................................................................... 34 SECTION 11.04. Waiver of Notice; Requirement of Mailed Notice ............................................. 34 SECTION 11.05. Destruction of Bonds ....................................................................................... 35 SECTION 11.06. Severability of Invalid Provisions ..................................................................... 35 SECTION 11.07. Notices ............................................................................................................ 35 SECTION 11.08. Evidence of Rights of Bond Owners ................................................................ 35 SECTION 11.09. Disqualified Bonds .......................................................................................... 36 SECTION 11.10. Money Held for Particular Bonds ..................................................................... 36 SECTION 11.11. Waiver of Personal Liability ............................................................................. 36 SECTION 11.12. Successor Is Deemed Included in All References to Predecessor .................. 37 SECTION 11.13. Execution in Several Counterparts .................................................................. 37 City Council Regular Meeting - Page 215 of 473 -iii- SECTION 11.14. Payment on Non-Business Day ...................................................................... 37 SECTION 11.15. Governing Law ................................................................................................ 37 APPENDIX A DEFINITIONS APPENDIX B FORM OF BOND City Council Regular Meeting - Page 216 of 473 INDENTURE OF TRUST This INDENTURE OF TRUST (this “Indenture”), dated for convenience as of July 1, 2022, is between the LYNWOOD PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under the laws of the State of California (the “Authority”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, being qualified to accept and administer the trusts hereby created (the “Trustee”). R E C I T A L S : 1. The City of Lynwood (the “City”) and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Authority for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs. 2. The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City. 3. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”). 4. The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”). 5. The City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit, and the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members. 6. The Authority proposes to issue lease revenue bonds under the Bond Law and this Indenture for the purpose of refunding all or a portion of the City’s obligations under the CalPERS Contract, including paying all costs of issuing the lease revenue bonds and of refunding the CalPERS Contract. 7. To that end, the City has proposed to lease to the Authority certain real property (the “Leased Property”), under a Site Lease, dated as of the date hereof, by and City Council Regular Meeting - Page 217 of 473 -2- between the City and the Authority (the “Site Lease”) in consideration of the payment by the Authority of an upfront rental payment (the “Site Lease Payment”) which is sufficient to provide funds for the refunding of the CalPERS Contract. 8. The Authority wishes to issue its Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) in the aggregate principal amount of $__________ (the “Bonds”) under this Indenture 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. 9. The Authority has leased the Leased Property back to the City under a Lease Agreement dated the date hereof (the “Lease”), under which the City has agreed to pay semiannual Lease Payments as the rental for the Leased Property thereunder. 10. The lease payments made by the City under the Lease have been assigned by the Authority to the Trustee for the security of the Bonds under an Assignment Agreement, dated the date hereof, between the Authority as assignor and the Trustee as assignee. 11. In order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and to secure the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) thereof, premium (if any) and interest thereon, the Authority has authorized the execution and delivery of this Indenture. 12. The Authority has found and determined, and hereby affirms, that all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute this Indenture 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 Indenture have been in all respects duly authorized. A G R E E M E N T : In order to secure the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and the interest and redemption premium (if any) on all the Outstanding Bonds under this Indenture according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable considerations, the receipt of which is hereby acknowledged, the Authority and the Trustee do hereby covenant and agree with one another, for the benefit of the respective Owners from time to time of the Bonds, as follows: City Council Regular Meeting - Page 218 of 473 -3- ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION SECTION 1.01. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms defined in Appendix A attached to this Indenture have the respective meanings specified in that Appendix when used in this Indenture. SECTION 1.02. Authorization. Each of the parties hereby represents and warrants that it has full legal authority and is duly empowered to enter into this Indenture, and has taken all actions necessary to authorize the execution hereof by the officers and persons signing it. SECTION 1.03. Interpretation. (a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to include 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 shall 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 Indenture; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. ARTICLE II THE BONDS SECTION 2.01. Authorization of Bonds. The Authority has reviewed all proceedings heretofore taken and has found, as a result of such review, and hereby finds and determines that all things, conditions and acts required by law to exist, happen or be performed precedent to and in connection with the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Authority is now duly empowered, under each and every requirement of law, to issue the Bonds in the manner and form provided in this Indenture. The Authority hereby authorizes the issuance of Bonds in the aggregate principal amount of $__________ under the Bond Law for the purposes of providing funds to pay the Site Lease Payment to the City and thereby provide funds to refund all or a portion of the CalPERS Contract. The Bonds are authorized and issued under, and are subject to the terms of, this Indenture and the Bond Law. The Bonds are designated the “Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable).” City Council Regular Meeting - Page 219 of 473 -4- SECTION 2.02. Terms of the Bonds. (a) Payment Provisions. The Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof, so long as no Bond has more than one maturity date. The Bonds shall mature on October 1 in each of the years and in the amounts, and bear interest (calculated on the basis of a 360-day year of twelve 30-day months) at the rates, as follows: Maturity Date (October 1) Principal Amount Interest Rate Issue Price (T): Term Bond Interest on the Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless: (a) 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, (b) a Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date, or (c) 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 payable on each Interest Payment Date to the persons in whose names the ownership of the Bonds 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 City Council Regular Meeting - Page 220 of 473 -5- 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. The Trustee will pay principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of the Bonds in lawful money of the United States of America by check of the Trustee or by wire upon presentation and surrender thereof at the Office of the Trustee. SECTION 2.03. Transfer and Exchange of Bonds. (a) Transfer. 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 shall 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 or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and deliver to the transferee a new Bond or Bonds of like series, interest rate, maturity and aggregate principal amount. The Authority shall pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer of Bonds. Prior to any transfer of the Bonds outside the book-entry system (including, but not limited to, the initial transfer outside the book-entry system) the transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045, as amended. The Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information. (b) Exchange. The Bonds 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 shall 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 shall pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any exchange of Bonds. (c) Limitations. The Trustee may refuse to transfer or exchange, under the provisions of this Section 2.03, any Bonds selected by the Trustee for redemption under Article IV, or any Bonds during the period established by the Trustee for the selection of Bonds for redemption. City Council Regular Meeting - Page 221 of 473 -6- SECTION 2.04. Book-Entry System. (a) Original Delivery. The Bonds will be initially delivered in the form of a separate single fully registered bond (which may be typewritten) for each maturity of the Bonds. Upon initial delivery, the Trustee shall register the ownership of each Bond on the Registration Books in the name of the Nominee. Except as provided in subsection (c), the ownership of all of the Outstanding Bonds shall be registered in the name of the Nominee on the Registration Books. With respect to Bonds the ownership of which shall be registered in the name of the Nominee, the Authority and the Trustee has no responsibility or obligation to any Depository System Participant or to any person on behalf of which the Nominee holds an interest in the Bonds. Without limiting the generality of the immediately preceding sentence, the Authority and the Trustee has no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Depository System Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Depository System Participant or any other person, other than a Bond Owner as shown in the Registration Books, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed if the Authority elects to redeem the Bonds in part, (iv) the payment to any Depository System Participant or any other person, other than a Bond Owner as shown in the Registration Books, of any amount with respect to principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption), premium, if any, or interest on the Bonds or (v) any consent given or other action taken by the Depository as Owner of the Bonds. The Authority and the Trustee may treat and consider the person in whose name each Bond is registered as the absolute owner of such Bond for the purpose of payment of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers of ownership of such Bond, and for all other purposes whatsoever. The Trustee shall pay the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and the interest and premium, if any, on the Bonds only to the respective Owners or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to payment of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium, if any, on the Bonds to the extent of the sum or sums so paid. No person other than a Bond Owner shall receive a Bond evidencing the obligation of the Authority to make payments of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption), interest and premium, if any, under this Indenture. Upon delivery by the Depository to the Authority of written notice to the effect that the Depository has determined to substitute a new Nominee in its place, and subject to the provisions herein with respect to Record Dates, such new nominee shall become the Nominee hereunder for all purposes; and upon receipt of such a notice the Authority shall promptly deliver a copy of the same to the Trustee. (b) Representation Letter. In order to qualify the Bonds for the Depository’s book-entry system, the Authority shall execute and deliver to such Depository a letter in which the Authority will agree to the Depository’s operational arrangements. To the extent City Council Regular Meeting - Page 222 of 473 -7- required to do so by the Depository, the Trustee shall also execute such representation letter and agree to the Depository’s operational arrangements. The execution and delivery of such letter shall not in any way limit the provisions of subsection (a) above or in any other way impose upon the Authority or the Trustee any obligation whatsoever with respect to persons having interests in the Bonds other than the Bond Owners. In addition to the execution and delivery of such letter, the Authority may take any other actions, not inconsistent with this Indenture, to qualify the Bonds for the Depository’s book-entry program. (c) Transfers Outside Book-Entry System. If either (i) the Depository determines not to continue to act as Depository for the Bonds, or (ii) the Authority determines to terminate the Depository as such, then the Authority shall thereupon discontinue the book- entry system with such Depository. In such event, the Depository shall cooperate with the Authority and the Trustee in the issuance of replacement Bonds by providing the Trustee with a list showing the interests of the Depository System Participants in the Bonds, and by surrendering the Bonds, registered in the name of the Nominee, to the Trustee on or before the date such replacement Bonds are to be issued. The Depository, by accepting delivery of the Bonds, agrees to be bound by the provisions of this subsection (c). If, prior to the termination of the Depository acting as such, the Authority fails to identify another Securities Depository to replace the Depository, then the Bonds shall no longer be required to be registered in the Registration Books in the name of the Nominee, and, upon transfer or exchange, shall be registered in whatever name or names the Owners transferring or exchanging Bonds shall designate, in accordance with the provisions hereof. If the Authority determines that it is in the best interests of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the Authority may notify the Depository System Participants of the availability of such certificated Bonds through the Depository. In such event, the Trustee will issue, transfer and exchange Bonds as required by the Depository and others in appropriate amounts; and whenever the Depository requests, the Trustee and the Authority shall cooperate with the Depository in taking appropriate action (y) to make available one or more separate certificates evidencing the Bonds to any Depository System Participant having Bonds credited to its account with the Depository, or (z) to arrange for another Securities Depository to maintain custody of a single certificate evidencing such Bonds, all at the Authority’s expense. (d) Payments to the Nominee. Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium, if any, on such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the letter described in subsection (b) of this Section or as otherwise instructed by the Depository. SECTION 2.05. Registration Books. 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 Bonds, which shall 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 shall, 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 hereinbefore provided. City Council Regular Meeting - Page 223 of 473 -8- SECTION 2.06. Form and Execution of Bonds. The Bonds, the form of Trustee’s certificate of authentication, and the form of assignment to appear thereon, are set forth in Appendix B attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture. The Chief Administrative Officer of the Authority shall execute, and the Secretary of the Authority shall attest each Bond. Either or both of such signatures may be made manually or may be affixed by facsimile thereof. If any officer whose signature appears on any Bond ceases to be such officer before the Closing Date, such signature will nevertheless be as effective as if the officer had remained in office until the Closing Date. Any Bond may be signed and attested on behalf of the Authority by such persons as at the actual date of the execution of such Bond are the proper officers of the Authority, duly authorized to execute debt instruments on behalf of the Authority, although on the date of such Bond any such person was not an officer of the Authority. Only those Bonds bearing a certificate of authentication in the form set forth in Appendix B, manually or electronically executed and dated by the Trustee, are valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee is conclusive evidence that such Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture. SECTION 2.07. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond is mutilated, the Authority, at the expense of the Owner of such Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. The Trustee shall cancel every mutilated Bond surrendered to it and deliver such mutilated Bond to, or upon the order of, the Authority. If any Bond is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is satisfactory and if indemnity satisfactory to the Trustee and the Authority is given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen. The Trustee may require payment of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses which may be incurred by the Trustee in connection therewith. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen will constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds issued under this Indenture. Notwithstanding any other provision of this Section 2.07, in lieu of delivering a new Bond for which principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) has become due for a Bond which has been mutilated, lost, destroyed or stolen, the Trustee may make payment of such Bond in accordance with its terms upon receipt of indemnity satisfactory to the Trustee. City Council Regular Meeting - Page 224 of 473 -9- ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS SECTION 3.01. Issuance of the Bonds. At any time after the execution of this Indenture, the Authority may execute and the Trustee shall authenticate and, upon the Written Request of the Authority, deliver the Bonds to the Original Purchaser. SECTION 3.02. Application of Proceeds of Sale of Bonds. On the Closing Date, the Original Purchaser will pay a purchase price for the Bonds in the amount of $___________, which is equal to the original principal amount of the Bonds ($__________), less an underwriter’s discount of $___________. On the Closing Date, the Original Purchaser will wire the purchase price as follows: (a) the Original Purchaser will wire to the Trustee the amount of $_________, and the Trustee shall deposit such amount into the Costs of Issuance Fund, and (b) the Original Purchaser will wire to the City the amount of $___________, and the City will apply such amount to refund a portion of the City’s obligations under the CalPERS Contract. The Trustee may establish a temporary fund or account in its records to facilitate such deposits or transfers. The deposits described in paragraphs (a) and (b) represent the full amount of the Site Lease Payments under Section 3 of the Site Lease. SECTION 3.03. Establishment and Application of Costs of Issuance Fund. The Trustee shall establish, maintain and hold in trust a separate fund designated as the “Costs of Issuance Fund” into which the Trustee shall deposit a portion of the proceeds of sale of the Bonds under Section 3.02(c). The Trustee shall disburse amounts in the Costs of Issuance Fund from time to time to pay the Costs of Issuance upon submission of a Written Requisition of the Authority stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund. Each such Written Requisition of the Authority shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. The Trustee may conclusively rely on such Written Requisitions and shall be fully protected in relying thereon. On the date that is 3 months after the Closing Date, or upon the earlier Written Request of the Authority, the Trustee shall transfer all amounts remaining in the Costs of Issuance Fund to the Interest Account and shall thereupon close the Costs of Issuance Fund. SECTION 3.04. Validity of Bonds. The recital contained in the Bonds that the same are issued under the Constitution and laws of the State of California shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance. City Council Regular Meeting - Page 225 of 473 -10- ARTICLE IV REDEMPTION OF BONDS SECTION 4.01. Terms of Redemption. (a) Optional Redemption. The Bonds maturing on or after October 1, 20__ are subject to redemption, as a whole or in part, at the option of the Authority, on October 1, 20___, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. The Authority must give the Trustee at least 10 days’ written notice of its intention to redeem Bonds under this subsection (a), and the manner of selecting such Bonds for redemption from among the maturities thereof, in sufficient time for the Trustee to give notice of such redemption in accordance with Section 4.03. (b) Special Mandatory Redemption From Insurance or Condemnation Proceeds. The Bonds are subject to redemption as a whole, or in part , on any date, from any Net Proceeds required to be used for such purpose as provided in Section 5.07, at a redemption price equal to 100% of the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium. (c) Mandatory Sinking Fund Redemption of Term Bonds. The Term Bonds are subject to mandatory redemption in whole, from sinking fund payments made under Section 5.02(b), at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on October 1 in the years as set forth in the following tables: Term Bonds Maturing October 1, 20___ Payment Date (October 1) Payment Amount City Council Regular Meeting - Page 226 of 473 -11- Term Bonds Maturing October 1, 20___ Payment Date (October 1) Payment Amount If some but not all of the Term Bonds have been redeemed under subsections (a) or (b) of this Section, the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of the Term Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis as determined by the Authority, which shall notify the Trustee in writing of such determination (and such writing shall include a revised sinking fund payment schedule). SECTION 4.02. Selection of Bonds for Redemption. If less than all of the Bonds are to be redeemed, the particular maturities of Bonds to be redeemed at the option of the Authority will be determined by the Authority in its sole discretion. If the Bonds are registered in book-entry only form and so long as DTC or a successor securities depository is the sole registered owner of such Bonds, if less than all of the Bonds of a maturity are called for prior redemption, the particular Bonds or portions thereof to be redeemed shall be allocated on a pro rata pass-through distribution of principal basis in accordance with DTC procedures, provided that, so long as the Bonds are held in book-entry form, the selection for redemption of such Bonds shall be made in accordance with the operational arrangements of DTC then in effect, and, if the DTC operational arrangements do not allow for redemption on a pro rata pass-through distribution of principal basis, the Bonds will be selected for redemption, in accordance with DTC procedures, by lot. In connection with any repayment of principal, including payments of scheduled mandatory sinking fund payments, the Trustee will direct DTC to make a pass-through distribution of principal to the holders of the Bonds. For purposes of calculation of the “pro rata pass-through distribution of principal,” “pro rata” means, for any amount of principal to be paid, the application of a fraction to each denomination of the respective Bonds where (a) the numerator of which is equal to the amount due to the respective bondholders on a payment date, and (b) the denominator of which is equal to the total original par amount of the respective Bonds. If the Bonds are no longer registered in book-entry-only form, each owner will receive an amount of Bonds equal to the original face amount then beneficially held by that owner, registered in such investor’s name. Thereafter, any redemption of less than all of the Bonds of any maturity will continue to be paid to the registered owners of such Bonds on a pro-rata basis, based on the portion of the original face amount of any such Bonds to be redeemed. City Council Regular Meeting - Page 227 of 473 -12- SECTION 4.03. Notice of Redemption; Rescission. The Trustee shall mail notice of redemption of the Bonds by first class mail, postage prepaid, not less than 20 nor more than 60 days before any redemption date, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Registration Books and to one or more Securities Depositories and to the Municipal Securities Rulemaking Board. Each notice of redemption shall state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the Bonds (or all Bonds of a single maturity) are to be redeemed, the CUSIP numbers and (in the event that not all Bonds within a maturity are called for redemption) Bond numbers of the Bonds to be redeemed and the maturity or maturities of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on the redemption date there will become due and payable on each of said Bonds the redemption price thereof, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered to the Trustee. Neither the failure to receive any notice nor any defect therein shall affect the sufficiency of the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date. Notice of redemption of Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority. Redemption notices may be conditional. The Authority has the right to rescind any notice of the redemption of Bonds under Section 4.01(a) by written notice to the Trustee on or prior to the dated fixed for redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default. The Authority and the Trustee have no liability to the Bond Owners or any other party related to or arising from such rescission of redemption. The Trustee shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under this Section. SECTION 4.04. Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered. SECTION 4.05. Effect of Redemption. Notice of redemption having been duly given as aforesaid, 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 shall become due and payable, interest on the Bonds so called for redemption shall cease to accrue, said Bonds (or portions thereof) shall cease to be entitled to any benefit or security under this Indenture, and the Owners of said Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. All Bonds redeemed under the provisions of this Article shall be canceled by the Trustee upon surrender thereof and destroyed in accordance with the retention policy of the Trustee then in effect. City Council Regular Meeting - Page 228 of 473 -13- ARTICLE V REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST SECTION 5.01. Security for the Bonds; Bond Fund. (a) Pledge of Revenues and Other Amounts. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Revenues and all amounts (including proceeds of the sale of the Bonds) held in any fund or account established under this Indenture other than the Costs of Issuance Fund are hereby pledged to secure the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds in accordance with their terms and the provisions of this Indenture. Said pledge constitutes a lien on and security interest in the Revenues and such amounts and shall attach, be perfected and be valid and binding from and after the Closing Date, without the need for any physical delivery thereof or further act. (b) Assignment to Trustee. Under the Assignment Agreement, the Authority has transferred to the Trustee all of the rights of the Authority in the Lease (other than the rights of the Authority under Sections 4.5, 5.10, 7.3 and 8.4 thereof and its rights to give approvals and consents thereunder). The Trustee is entitled to collect and receive all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. The Trustee is also entitled to and may, subject to the provisions of Article VIII, 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. (c) Deposit of Revenues in Bond Fund. All Revenues shall be promptly deposited by the Trustee upon receipt thereof in a special fund designated as the “Bond Fund” which the Trustee shall establish, maintain and hold in trust; except that all moneys received by the Trustee and required hereunder 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 this Indenture. Any surplus remaining in the Bond Fund, after payment in full of (i) the principal of and interest on the Bonds or provision therefore under Article X, and (ii) any applicable fees and expenses to the Trustee, shall be withdrawn by the Trustee and remitted to the City. SECTION 5.02. Allocation of Revenues. On or before each Interest Payment Date, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts and subaccount (each of which the Trustee shall establish and maintain within the Bond Fund), the following amounts in the following order of priority: (a) Deposit to Interest Account. The Trustee shall deposit in the Interest Account an amount required to cause the aggregate amount on City Council Regular Meeting - Page 229 of 473 -14- 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. (b) Deposit to Principal Account. The Trustee shall 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 (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption). SECTION 5.03. Application of Interest Account. All amounts in the Interest Account shall 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). SECTION 5.04. Application of Principal Account. All amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal amount of the Bonds at their respective maturity dates (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption). SECTION 5.05. No Reserve Account. The Authority has not established a debt service reserve fund for the Bonds. SECTION 5.06. 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 (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) and premium (if any) of the Bonds to be redeemed under Section 4.01; provided, however, that at any time prior to the selection of Bonds for redemption, the Trustee may apply such amounts to the purchase of Bonds at public or private sale, when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as shall be directed under a Written Request of the Authority, except that the purchase price (exclusive of accrued interest) may not exceed the redemption price then applicable to the Bonds. The Trustee shall be entitled to conclusively rely on any Written Request of the Authority received under this Section 5.06, and shall be fully protected in relying thereon. SECTION 5.07. Insurance and Condemnation Fund. (a) Establishment of Fund. Upon the receipt of proceeds of insurance or eminent domain with respect to the Leased Property, the Trustee shall establish and maintain an Insurance and Condemnation Fund, to be held and applied as hereinafter set forth in this Section 5.07. (b) Application of Insurance Proceeds. Any Net Proceeds of insurance against accident to or destruction of the Leased Property collected by the City or the Authority in the event of any such accident or destruction shall be paid to the Trustee under Section 6.3 of the Lease and deposited by the Trustee promptly upon receipt thereof in the City Council Regular Meeting - Page 230 of 473 -15- Insurance and Condemnation Fund. If the City fails to determine and notify the Trustee in writing of its determination, within 90 days following the date of such deposit, to replace, repair, restore, modify or improve the Leased Property which has been damaged or destroyed, then such Net Proceeds shall be promptly transferred by the Trustee to the Redemption Fund and applied to the redemption of Bonds under Section 4.01(b). Notwithstanding the foregoing sentence, however, if the Leased Property is damaged or destroyed in full, the Net Proceeds of such insurance shall be used by the City to rebuild or replace the Leased Property if such proceeds are not sufficient to redeem Outstanding Bonds equal in aggregate principal amount to the unpaid Lease Payments allocable to the Leased Property. All proceeds deposited in the Insurance and Condemnation Fund and not so transferred to the Redemption Fund shall be applied to the prompt replacement, repair, restoration, modification or improvement of the damaged or destroyed portions of the Leased Property by the City, upon receipt of a Written Request of the City which: (i) states with respect to each payment to be made (A) the requisition number, (B) the name and address of the person to whom payment is due, (C) the amount to be paid and (D) that each obligation mentioned therein has been properly incurred, is a proper charge against the Insurance and Condemnation Fund and has not been the basis of any previous withdrawal; and (ii) specifies in reasonable detail the nature of the obligation. Any balance of the proceeds remaining after such work has been completed as certified by the City under a Written Certificate to the Trustee shall be paid to the City. The Trustee shall be entitled to conclusively rely on any Written Request or Written Certificate received under this subsection (b) of this Section 5.07 and in each case, shall be fully protected in relying thereon. (c) Application of Eminent Domain Proceeds. If all or any part of the Leased Property is taken by eminent domain proceedings (or sold to a government threatening to exercise the power of eminent domain) the Authority shall deposit or cause to be deposited with the Trustee the Net Proceeds therefrom, which the Trustee shall deposit in the Insurance and Condemnation Fund under Section 6.2(b) of the Lease and which shall be applied and disbursed by the Trustee as follows: (i) If the City has not given written notice to the Trustee, within 90 days following the date on which such Net Proceeds are deposited with the Trustee, of its determination that such Net Proceeds are needed for the replacement of the Leased Property or such portion thereof, the Trustee shall transfer such Net Proceeds to the Redemption Fund to be applied towards the redemption of the Bonds under Section 4.01(b). (ii) If the City has given written notice to the Trustee, within 90 days following the date on which such Net Proceeds are deposited with the Trustee, of its determination that such Net Proceeds are needed for replacement of the Leased Property or such portion thereof, the Trustee shall pay to the City, or to its order, from said proceeds such amounts as the City may expend for such replacement, upon the filing of Written Requisitions of the City as agent for the Authority. In each case, the Trustee may conclusively rely upon any notice received under this subsection (c)(ii) of this Section and is protected in relying thereon. City Council Regular Meeting - Page 231 of 473 -16- (d) Reliance on Independent Advice. In making any such determination whether to repair, replace or rehabilitate the Leased Property under this Section 5.07, the City may obtain, but is not required to obtain, at its expense, the report of an independent engineer or other independent professional consultant, a copy of which must be filed with the Trustee. The Trustee shall have no duty to review or examine such report. Any such determination by the City is final. (e) Effect of Substitution or Release. Notwithstanding any other provision of this Section 5.07 or the Lease, the Trustee shall pay to the City all moneys in the Insurance and Condemnation Fund upon the Trustee’s receipt of a written notice executed by a City Representative which states that, pursuant to the Lease, the City has substituted other real property for the Leased Property that was damaged, destroyed or condemned and that there will be no abatement of the Lease Payments as a result of such damage, destruction or condemnation. SECTION 5.08. Investments. All moneys in any of the funds or accounts established with the Trustee under this Indenture shall be invested by the Trustee solely in Permitted Investments. Such investments shall be directed by the Authority in a Written Request of the Authority filed with the Trustee at least 2 Business Days in advance of the making of such investments. In the absence of any such directions from the Authority, the Trustee shall invest any such moneys in Permitted Investments which constitute money market funds; provided, however, that any such investment shall be made by the Trustee only if, prior to the date on which such investment is to be made, the Trustee shall have received a Written Request of the Authority specifying a specific money market fund and, if no such Written Request of the Authority is so received, the Trustee shall hold such moneys uninvested. Permitted Investments purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. To the extent Permitted Investments are registrable, such Permitted Investments must be registered in the name of the Trustee. All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in the Bond Fund. For purposes of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder. The Trustee or any of its affiliates may act as principal or agent in the acquisition or disposition of any investment and may impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made under this Section 5.08. Subject to applicable law, the Trustee may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or any affiliate. The Trustee or any of its affiliates may act as sponsor, advisor or manager to the investment provider in connection with any investments made by the Trustee hereunder. The Trustee is hereby authorized, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or is dealing as a principal for its own account. The Trustee may, from time to time, provide the City and the Authority with a list of investments that are available on the Trustee’s investment platform, but the Trustee will not give investment advice to the City or the Authority, and the City or the Authority may direct the Trustee to purchase investments that are not included on the list provided by the Trustee. The City Council Regular Meeting - Page 232 of 473 -17- Trustee shall be entitled to rely conclusively on the Authority’s investment direction as to the suitability and legality of the directed investments. The Trustee shall furnish the Authority periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the Authority. Upon the Authority’s election, such statements will be delivered via the Trustee’s Online Trust and Custody service and upon electing such service, paper statements will be provided only upon request. The Authority waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by law. The Authority further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker. SECTION 5.09. Valuation and Disposition of Investments. (a) Except as otherwise provided in subsection (b) of this Section, the Authority covenants that all investments of amounts deposited in any fund or account created by or under this Indenture, or otherwise containing gross proceeds of the Bonds shall be acquired, disposed of and valued at the fair market value thereof, as determined by the Authority. The Trustee shall have no duty in connection with the determination of fair market value other than to follow the investment directions of the Authority in any Written Request of the Authority. (b) For the purpose of determining the amount in any fund or account established hereunder, the value of Permitted Investments credited to such fund shall be valued by the Trustee at least annually on or before July 15. The Trustee may sell or present for redemption, any Permitted Investment so purchased by the Trustee whenever it is necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from any such Permitted Investment. (c) To the extent of any valuations made by the Trustee hereunder, the Trustee may utilize and rely upon computerized or generally recognized securities pricing services that may be available to it, including those available through its regular accounting system (including brokers and dealers). City Council Regular Meeting - Page 233 of 473 -18- ARTICLE VI COVENANTS OF THE AUTHORITY SECTION 6.01. Punctual Payment. The Authority shall punctually pay or cause to be paid the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on all the Bonds in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of the Revenues and other amounts pledged for such payment as provided in this Indenture. SECTION 6.02. Extension of Payment of Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon which have not been so extended. Nothing in this Section 6.02 limits the right of the Authority to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance does not constitute an extension of maturity of the Bonds. SECTION 6.03. Against Encumbrances. The Authority shall not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by this Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, and reserves the right to issue other obligations for such purposes. SECTION 6.04. Power to Issue Bonds and Make Pledge and Assignment. The Authority is duly authorized under law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues and other amounts purported to be pledged and assigned, respectively, under this Indenture and under the Assignment Agreement in the manner and to the extent provided in this Indenture and the Assignment Agreement. The Bonds and the provisions of this Indenture are and will be the legal, valid and binding special obligations of the Authority in accordance with their terms, and the Authority and the Trustee shall at all times, subject to the provisions of Article VIII and to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all the rights of the Bond Owners under this Indenture against all claims and demands of all persons whomsoever. SECTION 6.05. Accounting Records. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of Bonds and all funds and accounts established under this Indenture. The Trustee shall make such books of record and account available for inspection by the Authority and the City, during business hours, upon reasonable notice, and under reasonable circumstances. City Council Regular Meeting - Page 234 of 473 -19- SECTION 6.06. Limitation on Additional Obligations. The Authority covenants that no additional bonds, notes or other indebtedness shall be issued or incurred which are payable out of the Revenues in whole or in part. SECTION 6.07. Federal Tax Law. The Authority does not intend the interest on the Bonds to be excluded from gross income for federal income tax purposes. SECTION 6.08. Enforcement of Lease. The Trustee shall promptly collect all amounts (to the extent any such amounts are available for collection) due from the City under the Lease. Subject to the provisions of Article VIII, the Trustee may enforce, and take all steps, actions and proceedings which are determined to be reasonably necessary for the enforcement of all of its rights thereunder as assignee of the Authority and for the enforcement of all of the obligations of the City under the Lease. SECTION 6.09. Waiver of Laws. The Authority shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in this Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law. SECTION 6.10. Further Assurances. The Authority will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES SECTION 7.01. Events of Default. The following events constitute Events of Default hereunder: (a) Failure to pay any installment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of any Bonds when due, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise. (b) Failure to pay any installment of interest on the Bonds when due. (c) Failure by the Authority to observe and perform any of the other covenants, agreements or conditions on its part contained in this Indenture or in the Bonds, if such failure has continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, has been given to the Authority by the Trustee; provided, however, if in the reasonable opinion of the Authority the failure stated in the notice can be corrected, but not City Council Regular Meeting - Page 235 of 473 -20- within such 30-day period, such failure shall not constitute an Event of Default if the Authority institutes corrective action within such 30- day period and thereafter diligently and in good faith cures the failure in a reasonable period of time, which period shall end 180 days after the delivery of such default notice. (d) The commencement by the Authority of a voluntary case under Title 11 of the United States Code or any substitute or successor statute. (e) The occurrence and continuation of an event of default under and as defined in the Lease. SECTION 7.02. Remedies Upon Event of Default. If any Event of Default occurs, then, and in each and every such case during the continuance of such Event of Default, the Trustee may, and at the written direction of the Owners of a majority in aggregate principal amount of the Bonds at the time Outstanding shall, in each case, upon receipt of indemnification satisfactory to Trustee against the costs, expenses and liabilities to be incurred in connection with such action, upon notice in writing to the Authority, declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding; provided, however, that no such acceleration will have the effect of accelerating the City’s obligations under the Lease Agreement. Any such declaration is subject to the condition that if, at any time after such declaration and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the Authority deposits with the Trustee a sum sufficient to pay all the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and installments of interest on the Bonds payment of which is overdue, with interest on such overdue principal at the rate borne by the respective Bonds to the extent permitted by law, and the reasonable fees, charges and expenses (including those of its legal counsel, including the allocated costs of internal attorneys) of the Trustee, and any and all other Events of Default actually known to the Trustee (other than in the payment of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest on the Bonds due and payable solely by reason of such declaration) have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate has been made therefor, then, and in every such case, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Authority, the City and the Trustee, may, on behalf of the Owners of all of the Bonds, rescind and annul such declaration and its consequences and waive such Event of Default; but no such rescission and annulment shall extend to or shall affect any subsequent Event of Default, or shall impair or exhaust any right or power consequent thereon. Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Bondholder any plan of reorganization, arrangement, adjustment, or composition affecting the Bonds or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Bondholder in any such proceeding without the approval of the Bondholders so affected. City Council Regular Meeting - Page 236 of 473 -21- SECTION 7.03. Application of Revenues and Other Funds After Default. If an Event of Default occurs and is continuing, all Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of this Indenture shall be applied by the Trustee in the following order of priority: (a) To the payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its legal counsel including outside counsel and the allocated costs of internal attorneys) incurred in and about the performance of its powers and duties under this Indenture; (b) To the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest then due on the Bonds (upon presentation of the Bonds to be paid, and stamping or otherwise noting thereon of the payment if only partially paid, or surrender thereof if fully paid) in accordance with the provisions of this Indenture, as follows: First: To the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference; Second: To the payment to the persons entitled thereto of the unpaid principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of any Bonds which shall have become due, whether at maturity or by acceleration or redemption, with interest on the overdue principal at the rate borne by the respective Bonds (to the extent permitted by law), and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the persons entitled thereto, without any discrimination or preference; and SECTION 7.04. Trustee to Represent Bond Owners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the Bonds, this Indenture and applicable provisions of any law. All rights of action under this Indenture or the Bonds may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such Bonds, subject to the provisions of this Indenture. City Council Regular Meeting - Page 237 of 473 -22- SECTION 7.05. Limitation on Bond Owners’ Right to Sue. Notwithstanding any other provision hereof, no Owner of any Bonds has the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Lease or any other applicable law with respect to such Bonds, unless (a) such Owner has given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of the Bonds then Outstanding have requested the Trustee in writing to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) such Owner or Owners have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee has failed to comply with such request for a period of 60 days after such written request has been received by, and said tender of indemnity has been made to, the Trustee; and (e) no direction inconsistent with such written request has been given to the Trustee during such 60 day period by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding. Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right under the Bonds, this Indenture, the Lease or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of this Indenture. SECTION 7.06. Absolute Obligation of Authority. Nothing herein or in the Bonds contained affects or impairs the obligation of the Authority, which is absolute and unconditional, to pay the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds to the respective Owners of the Bonds at their respective dates of maturity, or upon acceleration or call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds. SECTION 7.07. Termination of Proceedings. In case any proceedings taken by the Trustee or by any one or more Bond Owners on account of any Event of Default have been discontinued or abandoned for any reason or have been determined adversely to the Trustee or the Bond Owners, then in every such case the Authority, the Trustee and the Bond Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the Authority, the Trustee and the Bond Owners shall continue as though no such proceedings had been taken. SECTION 7.08. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee, to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise. City Council Regular Meeting - Page 238 of 473 -23- SECTION 7.09. No Waiver of Default. No delay or omission of the Trustee or any Owner of the Bonds to exercise any right or power arising upon the occurrence of any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein; and every power and remedy given by this Indenture to the Trustee or to the Owners of the Bonds may be exercised from time to time and as often as may be deemed expedient by the Trustee or the Bond Owners. SECTION 7.10. Notice to Bond Owners of Default. Immediately upon becoming aware of the occurrence of an Event of Default, but in no event later than five Business Days following becoming aware of such occurrence, the Trustee shall promptly give written notice thereof by first class mail, postage prepaid, to the Owner of each Outstanding Bond, unless such Event of Default has been cured before the giving of such notice; provided, however that except in the case of an Event of Default described in Sections 7.01(a) or 7.01(b), the Trustee may elect not to give such notice to the Bond Owners if and so long as the Trustee in good faith determines that it is in the best interests of the Bond Owners not to give such notice. ARTICLE VIII THE TRUSTEE SECTION 8.01. Appointment of Trustee. U.S. Bank Trust Company, National Association is hereby appointed Trustee by the Authority for the purpose of receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Authority will maintain a Trustee which is qualified under the provisions of the foregoing provisions of this Article VIII, so long as any Bonds are Outstanding. SECTION 8.02. Acceptance of Trusts; Removal and Resignation of Trustee. The Trustee hereby accepts the express trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions: (a) The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture and no implied duties or covenants shall be read into this Indenture against the Trustee. If an Event of Default has occurred (which has not been cured), the Trustee shall exercise such of the rights and powers vested in it by hereunder, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) The Authority may remove the Trustee upon 30 days’ prior notice, unless an Event of Default has occurred and is then continuing, and shall remove the Trustee (a) if at any time requested to do so by the City Council Regular Meeting - Page 239 of 473 -24- Owners of a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or (b) if at any time the Trustee ceases to be eligible in accordance with Section 8.02, or becomes incapable of acting, or is adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property is appointed, or any public officer takes control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation. (c) The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City, and by giving the Bond Owners notice of such resignation by mail at the addresses shown on the Registration Books. (d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. In the event of the removal or resignation of the Trustee under subsections (b) or (c), respectively, the Authority shall promptly appoint a successor Trustee. If no successor Trustee has been appointed and accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the retiring Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture, must signify its acceptance of such appointment by executing and delivering to the Authority, to its predecessor Trustee a written acceptance thereof, and after payment by the Authority of all unpaid fees and expenses of the predecessor Trustee, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the Authority or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to the Leased Property held by such predecessor Trustee under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Authority shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in City Council Regular Meeting - Page 240 of 473 -25- this subsection, the Authority shall promptly mail or cause the successor trustee to mail a notice of the succession of such Trustee to the trusts hereunder to each rating agency which is then rating the Bonds and to the Bond Owners at the addresses shown on the Registration Books. If the Authority fails to mail such notice within 15 days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Authority. (e) Any Trustee appointed under this Indenture shall be a corporation or association organized and doing business under the laws of any state or the United States of America or the District of Columbia, shall be authorized under such laws to exercise corporate trust powers, shall have (or, in the case of a corporation or association that is a member of a bank holding company system, the related bank holding company has) a combined capital and surplus of at least $50,000,000, and shall be subject to supervision or examination by a federal or state agency, so long as any Bonds are Outstanding. If such corporation or association publishes a report of condition at least annually under law or to the requirements of any supervising or examining agency above referred to, then for the purpose of this subsection (e), the combined capital and surplus of such corporation or association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If the Trustee at any time ceases to be eligible in accordance with the provisions of this subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section. SECTION 8.03. Merger or Consolidation. Any bank, national banking association, federal savings association, or trust company into which the Trustee may be merged or converted or with which it may be consolidated or any bank, national banking association, federal savings association, or trust company resulting from any merger, conversion or consolidation to which it shall be a party or any bank, national banking association, federal savings association, or trust company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such bank, national banking association, federal savings association, or trust company shall be eligible under subsection (e) of Section 8.02 shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. SECTION 8.04. Liability of Trustee. (a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee shall not assume responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of this Indenture, the Bonds or the Lease (including any right to receive moneys thereunder or the value of or title to the premises upon which the Leased Property is located), nor shall the Trustee incur any responsibility in respect thereof, other than as expressly stated herein in connection with the respective duties or obligations of Trustee herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee City Council Regular Meeting - Page 241 of 473 -26- shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee, and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bond Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. (b) The Trustee is not liable for any error of judgment made by a responsible officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts. (c) The Trustee is not liable with respect to any action taken or omitted to be taken by it in accordance with the direction of the Owners of a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture or assigned to it under the Assignment Agreement. (d) The Trustee is not liable for any action taken by it and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. (e) The Trustee shall not be deemed to have knowledge of any Event of Default hereunder, or any other event which, with the passage of time, the giving of notice, or both, would constitute an Event of Default hereunder unless and until it shall have actual knowledge thereof, or a corporate trust officer shall have received written notice thereof at its Office from the City, the Authority or the Owners of at least 25% in aggregate principal amount of the Outstanding Bonds. Except as otherwise expressly provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance by the Authority or the City of any of the terms, conditions, covenants or agreements herein, under the Lease or the Bonds or of any of the documents executed in connection with the Bonds, or as to the existence of a default or an Event of Default or an event which would, with the giving of notice, the passage of time, or both, constitute an Event of Default. The Trustee is not responsible for the validity, effectiveness or priority of any collateral given to or held by it. Without limiting the generality of the foregoing, the Trustee shall not be required to ascertain or inquire as to the performance or observance by the City or the Authority of the terms, conditions, covenants or agreements set forth in the Lease, other than the covenants of the City to make Lease Payments to the Trustee when due and to file with the Trustee when due, such reports and certifications as the City is required to file with the Trustee thereunder. (f) No provision of this Indenture requires the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. (g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or through agents, receivers or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, receiver or attorney appointed with due care by it hereunder. (h) The Trustee has no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of the Bond Owners under this Indenture, City Council Regular Meeting - Page 242 of 473 -27- unless such Owners have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities (including but not limited to fees and expenses of its attorneys), including, without limitations, any liability arising under federal, state or local environmental laws which might be incurred by it in compliance with such request or direction. No permissive power, right or remedy conferred upon the Trustee hereunder shall be construed to impose a duty to exercise such power, right or remedy. (i) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to the provisions of Section 8.02(a), this Section 8.04 and Section 8.05, and shall be applicable to the assignment of any rights under the Lease to the Trustee under the Assignment Agreement. (j) The Trustee is not accountable to anyone for the subsequent use or application of any moneys (including the proceeds of the Bonds) which are released or withdrawn in accordance with the provisions hereof. (k) The Trustee makes no representation or warranty, expressed or implied as to the title, value, design, compliance with specifications or legal requirements, quality, durability, operation, condition, merchantability or fitness for any particular purpose for the use contemplated by the Authority or the City of the Leased Property. In no event shall the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising from the Lease or this Indenture for the existence, furnishing or use of the Leased Property. (l) The Trustee has no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds. (m) The Trustee is authorized and directed to execute the Assignment Agreement in its capacity as Trustee hereunder. (n) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Indenture and delivered using Electronic Means ("Electronic Means" shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the Authority and/or City shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Authority and/or the City whenever a person is to be added or deleted from the listing. If the Authority and/or City elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s reasonable understanding of such Instructions shall be deemed controlling. The Authority and City understand and agree that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Authority and City shall be responsible for ensuring that only Authorized Officers transmit such City Council Regular Meeting - Page 243 of 473 -28- Instructions to the Trustee and that the Authority, City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Authority and/or City. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Authority and City agree: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Authority and City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures. (o) In acting or omitting to act pursuant to the Assignment Agreement, the Lease or the Site Lease, the Trustee shall be entitled to all of the rights, immunities and indemnities accorded to it under this Indenture, including, but not limited to, this Article VIII. Notwithstanding the effective date of this Indenture or anything to the contrary in this Indenture, the Trustee shall have no liability or responsibility for any act or event relating to this Indenture which occurs prior to the date the Trustee formally executes this Indenture and commences acting as Trustee hereunder. (p) The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care. Force majeure shall include, but not be limited to, acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar occurrences. SECTION 8.05. Right to Rely on Documents. The Trustee shall be protected and shall incur no liability in acting or refraining from acting in reliance upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds or other paper or document believed by them to be genuine and to have been signed or presented by the proper party or parties. The Trustee is under no duty to make any investigation or inquiry as to any statements contained or matter referred to in any paper or document but may accept and conclusively rely upon the same as conclusive evidence of the truth and accuracy of any such statement or matter and shall be fully protected in relying thereon. The Trustee may consult with counsel, who may be counsel of or to the Authority, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. The Trustee may treat the Owners of the Bonds appearing in the Registration Books as the absolute owners of the Bonds for all purposes and the Trustee shall not be affected by any notice to the contrary. Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee deems it necessary or desirable that a matter be proved or established prior to City Council Regular Meeting - Page 244 of 473 -29- taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate, Written Request or Written Requisition of the Authority or the City, and such Written Certificate, Written Request or Written Requisition shall be full warrant to the Trustee for any action taken or suffered under the provisions of this Indenture in reliance upon such Written Certificate, Written Request or Written Requisition, and the Trustee shall be fully protected in relying thereon, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. The Trustee shall have no duty to review, verify or analyze any financial statements furnished to it by the City, and shall hold such financial statements solely as a repository for Bond Owners. The Trustee shall not be deemed to have notice of any information contained therein or any Event of Default that may be disclosed therein in any manner. SECTION 8.06. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its respective possession and in accordance with its retention policy then in effect and shall, upon reasonable notice to Trustee, be subject to the inspection of the Authority, the City and any Bond Owner, and their agents and representatives duly authorized in writing, during business hours and under reasonable conditions as agreed to by the Trustee. SECTION 8.07. Compensation and Indemnification. The Authority shall pay to the Trustee from time to time, on demand, the compensation for all services rendered under this Indenture and also all reasonable expenses, advances (including any interest on advances), charges, legal (including outside counsel and the allocated costs of internal attorneys) and consulting fees and other disbursements, incurred in and about the performance of its powers and duties under this Indenture. The Authority shall indemnify the Trustee, its officers, directors, employees and agents against any cost, loss, liability, suit, claim, damages, judgment or expense whatsoever (including but not limited to fees and expenses of its attorneys) incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of this trust and this Indenture, the Assignment Agreement, the Site Lease and the Lease, including costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers hereunder or under the Assignment Agreement or the Lease. As security for the performance of the obligations of the Authority under this Section 8.07 and the obligation of the Authority to make Additional Rental Payments to the Trustee, the Trustee shall have a lien prior to the lien of the Bonds upon all property and funds held or collected by the Trustee as such. The rights of the Trustee and the obligations of the Authority under this Section 8.07 shall survive the resignation or removal of the Trustee or the discharge of the Bonds and this Indenture and the Lease. When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law. City Council Regular Meeting - Page 245 of 473 -30- ARTICLE IX MODIFICATION OR AMENDMENT HEREOF SECTION 9.01. Amendments Permitted. (a) Amendments With Bond Owner Consent. This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time by Supplemental Indenture, which the Authority and the Trustee may enter into when the written consents of the Owners of a majority in aggregate principal amount of all Bonds then Outstanding are filed with the Trustee. No such modification or amendment may (i) extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture except as permitted herein, or deprive the Owners of the Bonds of the lien created by this Indenture on such Revenues and other assets (except as expressly provided in this Indenture), without the consent of the Owners of all of the Bonds then Outstanding. It is not necessary for the consent of the Bond Owners to approve the particular form of any Supplemental Indenture, but it is sufficient if such consent approves the substance thereof. (b) Amendments Without Owner Consent. This Indenture and the rights and obligations of the Authority, of the Trustee and the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority and the Trustee may enter into without the consent of any Bond Owners, if the Trustee has been furnished an opinion of counsel that the provisions of such Supplemental Indenture shall not materially adversely affect the interests of the Owners of the Bonds, including, without limitation, for any one or more of the following purposes: (i) to add to the covenants and agreements of the Authority in this Indenture contained, other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority; (ii) to cure any ambiguity, inconsistency or omission, or to cure or correct any defective provision, contained in this Indenture, or in regard to matters or questions arising under this Indenture, as the Authority deems necessary or desirable, provided that such modification or amendment does not materially adversely affect the interests of the Bond Owners, in the opinion of Bond Counsel filed with the Trustee; (iii) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to City Council Regular Meeting - Page 246 of 473 -31- add such other terms, conditions and provisions as may be permitted by said act or similar federal statute; or (iv) to facilitate the issuance of additional obligations of the City under the Lease Agreement as provided in Section 7.5(b)(iv) thereof. (c) Limitation. The Trustee is not obligated to enter into any Supplemental Indenture authorized by subsections (a) or (b) of this Section 9.01 which materially adversely affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise. (d) Bond Counsel Opinion Requirement. Prior to the Trustee entering into any Supplemental Indenture hereunder, the Authority shall deliver to the Trustee an opinion of Bond Counsel stating, in substance, that such Supplemental Indenture has been adopted in compliance with the requirements of this Indenture. (e) Notice of Amendments. The Authority shall deliver or cause to be delivered a draft of any Supplemental Indenture to each rating agency which then maintains a rating on the Bonds, at least 10 days prior to the effective date of such Supplemental Indenture under this Section 9.01. SECTION 9.02. Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture under this Article IX, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the Trustee and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the execution of any Supplemental Indenture under this Article may, and if the Authority so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand on the Owner of any Bonds Outstanding at the time of such execution and presentation of his Bonds for the purpose at the Office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand on the Owners of any Bonds then Outstanding shall be exchanged at the Office of the Trustee, without cost to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amount of the same maturity. SECTION 9.04. Amendment of Particular Bonds. The provisions of this Article IX do not prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such Owner. City Council Regular Meeting - Page 247 of 473 -32- ARTICLE X DEFEASANCE SECTION 10.01. Discharge of Indenture. Any or all of the Outstanding Bonds may be paid by the Authority in any of the following ways, provided that the Authority also pays or causes to be paid any other sums payable hereunder by the Authority: (a) by paying or causing to be paid the principal of and interest and premium (if any) on such Bonds, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem such Bonds; or (c) by delivering all of such Bonds to the Trustee for cancellation. If the Authority also pays or causes to be paid all other sums payable hereunder by the Authority, then and in that case, at the election of the Authority (evidenced by a Written Certificate of the Authority, filed with the Trustee, signifying the intention of the Authority to discharge all such indebtedness and this Indenture), and notwithstanding that any of such Bonds shall not have been surrendered for payment, this Indenture and the pledge of Revenues and other assets made under this Indenture with respect to such Bonds and all covenants, agreements and other obligations of the Authority under this Indenture with respect to such Bonds shall cease, terminate, become void and be completely discharged and satisfied, subject to Section 10.02, and except for Section 8.07 hereof, which shall survive. In such event, upon the Written Request of the Authority, the Trustee shall execute and deliver to the Authority all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver to the City all moneys or securities or other property held by it under this Indenture which are not required for the payment or redemption of any of such Bonds not theretofore surrendered for such payment or redemption. The Trustee is entitled to conclusively rely on any such Written Certificate or Written Request and, in each case, is fully protected in relying thereon. SECTION 10.02. Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem any Outstanding Bonds (whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed prior to maturity, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the Authority in respect of such Bonds shall cease, terminate and be completely discharged, and the Owners thereof shall thereafter be entitled only to payment out of such money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 10.04. The Authority may at any time surrender to the Trustee, for cancellation by the Trustee, any Bonds previously issued and delivered, which the Authority may have City Council Regular Meeting - Page 248 of 473 -33- acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired. SECTION 10.03. Deposit of Money or Securities with Trustee. Whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any Bonds, the money or securities so to be deposited or held may include money or securities held by the Trustee in the funds and accounts established under this Indenture and shall be: (a) lawful money of the United States of America in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity, except that, in the case of Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be equal to the principal amount (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of such Bonds, premium, if any, and all unpaid interest thereon to the redemption date; or (b) non-callable Federal Securities, the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest on which when due will, in the written opinion of an Independent Accountant filed with the City, the Authority and the Trustee, provide money sufficient to pay the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds to be paid or redeemed, as such principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption), interest and premium become due, provided that in the case of Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee has been made for the giving of such notice; provided, in each case, that (i) the Trustee shall have been irrevocably instructed (by the terms of this Indenture or by Written Request of the Authority) to apply such money to the payment of such principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption), interest and premium (if any) with respect to such Bonds, and (ii) the Authority shall have delivered to the Trustee an opinion of Bond Counsel to the effect that such Bonds have been discharged in accordance with this Indenture (which opinion may rely upon and assume the accuracy of the Independent Accountant’s opinion referred to above). The Trustee shall be entitled to conclusively rely on such Written Request or opinion and shall be fully protected, in each case, in relying thereon. SECTION 10.04. Unclaimed Funds. Notwithstanding any provisions of this Indenture, any moneys held by the Trustee in trust for the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of, or interest on, any Bonds and remaining unclaimed for 2 years after City Council Regular Meeting - Page 249 of 473 -34- the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of all of the Bonds has become due and payable (whether at maturity or upon call for redemption or by acceleration as provided in this Indenture), if such moneys were so held at such date, or 2 years after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall be repaid (without liability for interest) to the Authority free from the trusts created by this Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee shall (at the cost of the Authority) first mail to the Owners of Bonds which have not yet been paid, at the addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof. ARTICLE XI MISCELLANEOUS SECTION 11.01. Liability of Authority Limited to Revenues. Notwithstanding anything in this Indenture or in the Bonds contained, the Authority is not required to advance any moneys derived from any source other than the Revenues, the Additional Rental Payments and other assets pledged under this Indenture for any of the purposes in this Indenture mentioned, whether for the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of or interest on the Bonds or for any other purpose of this Indenture. Nevertheless, the Authority may, but is not required to, advance for any of the purposes hereof any funds of the Authority which may be made available to it for such purposes. SECTION 11.02. Limitation of Rights to Parties and Bond Owners. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any person other than the Authority, the Trustee, the City and the Owners of the Bonds, any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Authority, the Trustee, the City and the Owners of the Bonds. SECTION 11.03. Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with corporate industry standards to the extent practicable, and with due regard for the requirements of Section 6.05 and for the protection of the security of the Bonds and the rights of every Owner thereof. The Trustee may establish such funds and accounts as it deems necessary or appropriate to perform its obligations under this Indenture. SECTION 11.04. Waiver of Notice; Requirement of Mailed Notice. Whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such notice City Council Regular Meeting - Page 250 of 473 -35- may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Whenever in this Indenture any notice is required to be given by mail, such requirement may be satisfied by the deposit of such notice in the United States mail, postage prepaid, by first class mail. SECTION 11.05. Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee, and the delivery to the Authority, of any Bonds, the Trustee shall destroy such Bonds as may be allowed by law and, upon the Authority’s request, deliver a certificate of such destruction to the Authority. SECTION 11.06. Severability of Invalid Provisions. If any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Authority hereby declares that it would have entered into this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable. SECTION 11.07. Notices. All notices or communications to be given under this Indenture shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective either (a) upon transmission by facsimile transmission or other form of telecommunication, confirmed by telephone, (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 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/Authority: City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attn: City Manager/Chief Administrative Officer If to the Trustee: U.S. Bank Trust Company, National Association U.S. Bank Tower 633 West 5th Street, 24th Floor Los Angeles, CA 90071 Attn: Corporate Trust Services SECTION 11.08. Evidence of Rights of Bond Owners. Any request, consent or other instrument required or permitted by this Indenture to be signed and executed by Bond Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bond Owners in person or by an agent or agents duly appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, or of the holding by any person of Bonds transferable by delivery, shall be sufficient for any purpose of this Indenture and City Council Regular Meeting - Page 251 of 473 -36- shall be conclusive in favor of the Trustee and the Authority if made in the manner provided in this Section 11.08. The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the person signing such request, consent or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer. The ownership of Bonds shall be proved by the Registration Books. Any request, consent, or other instrument or writing of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in accordance therewith or reliance thereon. SECTION 11.09. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are actually known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any other obligor on the Bonds, or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination unless all Bonds are so owned or held, in which case such Bonds shall be considered Outstanding for the purpose of such determination.. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City or any other obligor on the Bonds. In case of a dispute as to such right, the Trustee shall be entitled to rely upon the advice of counsel in any decision by Trustee and shall be fully protected in relying thereon. Upon request, the Authority and the City shall certify to the Trustee those Bonds disqualified under this Section 11.09, and the Trustee may conclusively rely on such certifications. SECTION 11.10. Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, premium, if any, or principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) due on any date with respect to particular Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.04 but without any liability for interest thereon. SECTION 11.11. Waiver of Personal Liability. No member, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of or interest or premium (if any) on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing herein City Council Regular Meeting - Page 252 of 473 -37- contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or by this Indenture. SECTION 11.12. Successor Is Deemed Included in All References to Predecessor. Whenever in this Indenture either the Authority, the City or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Authority, the City or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. SECTION 11.13. Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. SECTION 11.14. Payment on Non-Business Day. In the event any payment is required to be made hereunder on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and with the same effect as if made on such preceding non-Business Day. SECTION 11.15. Governing Law. This Indenture shall be governed by and construed in accordance with the laws of the State of California. City Council Regular Meeting - Page 253 of 473 -38- IN WITNESS WHEREOF, the LYNWOOD PUBLIC FINANCING AUTHORITY has caused this Indenture to be signed in its name by its Chief Administrative Officer and attested to by its Secretary, and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written. LYNWOOD PUBLIC FINANCING AUTHORITY By Ernie Hernandez Chief Administrative Officer Attest: Maria Quiñonez Secretary U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By Authorized Officer City Council Regular Meeting - Page 254 of 473 A-1 APPENDIX A DEFINITIONS “Additional Rental Payments” means the amounts of additional rental which are payable by the City under Section 4.5 of the Lease or which are otherwise identified as Additional Rental Payments under the Lease. “Assignment Agreement” means the Assignment Agreement dated as of July 1, 2022, between the Authority as assignor and the Trustee as assignee, as originally executed or as thereafter amended. “Authority” means the Lynwood Public Financing Authority, a joint exercise of powers authority duly organized and existing under the laws of the State of California. “Authorized Representative” means: (a) with respect to the Authority, its President, Chief Administrative Officer, Authority Finance Director, Treasurer, General Counsel or any other person designated as an Authorized Representative of the Authority by a Written Certificate of the Authority signed by its Chief Administrative Officer and filed with the City and the Trustee; and (b) with respect to the City, its Mayor, City Manager, Finance Director, Treasurer, City Attorney or any other person designated as an Authorized Representative of the City by a Written Certificate of the City signed by its City Manager and filed with the Authority and the Trustee. “Bond Counsel” means (a) Jones Hall, A Professional Law Corporation, or (b) any other attorney or firm of attorneys appointed by or acceptable to the Authority of nationally- recognized experience in the issuance of municipal bonds. “Bond Fund” means the fund by that name established and held by the Trustee under Section 5.01. “Bond Year” means each twelve-month period extending from October 2 in one calendar year to October 1 of the succeeding calendar year, both dates inclusive; except that the first Bond Year commences on the Closing Date and extends to and including October 1, 2022. “Bonds” means the $__________ aggregate principal amount of Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) authorized by and at any time Outstanding under this Indenture. “Business Day” means a day (other than a Saturday or a Sunday) on which banks are not required or authorized to remain closed in the City in which the Office of the Trustee is located. “City” means the Lynwood, a general law city and municipal corporation organized and existing under the Constitution and laws of the State of California. “Closing Date” means _________, 2022, the date of delivery of the Bonds to the Original Purchaser. City Council Regular Meeting - Page 255 of 473 A-2 “Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City relating to the authorization, issuance, sale and delivery of the Bonds, including but not limited to: printing expenses; rating agency fees; filing and recording fees; initial fees, expenses and charges of the Trustee and their respective counsel, including the Trustee’s first annual administrative fee; fees, charges and disbursements of attorneys, financial advisors, accounting firms, consultants and other professionals; fees and charges for preparation, execution and safekeeping of the Bonds; and any other cost, charge or fee in connection with the original issuance of the Bonds. “Costs of Issuance Fund” means the fund by that name established and held by the Trustee under Section 3.03. “Depository” means (a) initially, DTC, and (b) any other Securities Depositories acting as Depository under Section 2.04. “Depository System Participant” means any participant in the Depository’s book- entry system. “DTC” means The Depository Trust Company, and its successors and assigns. “Event of Default” means any of the events specified in Section 7.01. “Federal Securities” means: (a) any direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), for which the full faith and credit of the United States of America are pledged; (b) obligations of any agency, department or instrumentality of the United States of America, the timely payment of principal of and interest on which are directly or indirectly secured or guaranteed by the full faith and credit of the United States of America. “Fiscal Year” means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the Authority as its official fiscal year period. “Indenture” means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture under the provisions hereof. “Independent Accountant” means any certified public accountant or firm of certified public accountants appointed and paid by the Authority or the City, and who, or each of whom (a) is in fact independent and not under domination of the Authority or the City; (b) does not have any substantial interest, direct or indirect, in the Authority or the City; and (c) is not connected with the Authority or the City as an officer or employee of the Authority or the City but who may be regularly retained to make annual or other audits of the books of or reports to the Authority or the City. “Insurance and Condemnation Fund” means the fund by that name established and held by the Trustee under Section 5.07. City Council Regular Meeting - Page 256 of 473 A-3 “Interest Account” means the account by that name established and held by the Trustee in the Bond Fund under Section 5.02. “Interest Payment Date” means each April 1 and October 1, commencing October 1, 2022, so long as any Bonds remain unpaid. “Law” has the meaning given that term in the Recitals. “Lease” means the Lease Agreement dated as of July 1, 2022, between the Authority as lessor and the City as lessee of the Leased Property, as originally executed and as it may from time to time be supplemented, modified or amended in accordance with the terms thereof and of this Indenture. “Lease Payment Date” means, with respect to any Interest Payment Date, the Business Day immediately preceding such Interest Payment Date. “Lease Payments” means the amounts payable by the City under Section 4.3(a) of the Lease, including any prepayment thereof and including any amounts payable upon a delinquency in the payment thereof. “Leased Property” means the real property described in Appendix A to the Lease. “Net Proceeds” means amounts derived from any policy of casualty insurance with respect to the Leased Property, or the proceeds of any taking of the Leased Property or any portion thereof in eminent domain proceedings (including sale under threat of such proceedings), to the extent remaining after payment therefrom of all expenses incurred in the collection and administration thereof. “Nominee” means (a) initially, Cede & Co. as nominee of DTC, and (b) any other nominee of the Depository designated under Section 2.04(a). “Office” means the corporate trust office of the Trustee in Los Angeles, or such other or additional offices as the Trustee may designate in writing to the Authority from time to time as the corporate trust office for purposes of the Indenture; except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term means the office or agency of the Trustee at which, at any particular time, its corporate trust agency business is conducted. “Original Purchaser” means Cabrera Capital Markets, LLC, as original underwriter of the Bonds upon their delivery by the Trustee on the Closing Date. “Outstanding”, when used as of any particular time with reference to Bonds, means all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section 10.02, including Bonds (or portions thereof) described in Section 11.09; and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee under this Indenture. City Council Regular Meeting - Page 257 of 473 A-4 “Owner”, whenever used herein with respect to a Bond, means the person in whose name the ownership of such Bond is registered on the Registration Books. “Permitted Encumbrances” means, as of any time: (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may permit to remain unpaid under Article V of the Lease; (b) the Site Lease, the Lease and the Assignment Agreement; (c) any right or claim of any mechanic, laborer, material man, supplier or vendor not filed or perfected in the manner prescribed by law; and (d) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record and which the City certifies in writing will not materially impair the use of the Leased Property for its intended purposes. “Permitted Investments” means any of the following: (a) any direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), for which the full faith and credit of the United States of America are pledged. (b) obligations of any agency, department or instrumentality of the United States of America, the timely payment of principal and interest on which are directly or indirectly secured or guaranteed by the full faith and credit of the United States of America. (c) Any direct or indirect obligations of an agency or department of the United States of America whose obligations represent the full faith and credit of the United States of America, or which are rated A or better by S&P. (d) Interest-bearing deposit accounts (including certificates of deposit placed by a third party pursuant to a separate agreement between the Authority and the Trustee), time deposits, bank deposit products, trust funds, trust accounts, interest bearing deposits, overnight bank deposits or interest bearing money market accounts in federal or State chartered savings and loan associations or in federal or State of California banks (including the Trustee or any of its affiliates), provided that: (i) the unsecured obligations of such commercial bank or savings and loan association are rated A or better by S&P; or (ii) such deposits are fully insured by the Federal Deposit Insurance Corporation or secured at all times by collateral described in (a) or (b) above. (e) Commercial paper rated at the time of purchase “A-1+” or better by S&P. (f) Federal funds or bankers acceptances with a maximum term of one year of any bank (which may include the Trustee and its affliates) which an unsecured, uninsured and unguaranteed obligation rating of “A-1+” or better by S&P. City Council Regular Meeting - Page 258 of 473 A-5 (g) Money market mutual funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of at least AAAm-G, AAAm or AAm, which funds may include funds for which the Trustee, its affiliates, parent or subsidiaries provide investment advisory, custodial, transfer agency or other management services, and for which they receive and retain a fee for such services provided to the fund. Money market funds permitted under this paragraph shall not include funds with a floating net asset value. (h) Obligations the interest on which is excludable from gross income pursuant to Section 103 of the Tax Code and which are either (a) rated A or better by S&P, or (b) fully secured as to the payment of principal and interest by Permitted Investments described in clauses (a) or (b). (i) Obligations issued by any corporation organized and operating within the United States of America having assets in excess of $500,000,000, which obligations are rated A or better by S&P. (j) Bonds or notes issued by any state or municipality which are rated A or better by S&P. (k) Any investment agreement with, or guaranteed by, a financial institution the long-term unsecured obligations or the claims paying ability of which are rated A or better by S&P at the time of initial investment, by the terms of which all amounts invested thereunder are required to be withdrawn and paid to the Trustee in the event either of such ratings at any time falls below A. (l) The Local Agency Investment Fund of the State of California, created pursuant to Section 16429.1 of the California Government Code, to the extent the Trustee is authorized to register such investment in its name. “Principal Account” means the account by that name established and held by the Trustee in the Bond Fund under Section 5.02. “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. “Redemption Fund” means the fund by that name established and held by the Trustee under Section 5.06. “Registration Books” means the records maintained by the Trustee under Section 2.05 for the registration and transfer of ownership of the Bonds. “Revenues” means: (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, City Council Regular Meeting - Page 259 of 473 A-6 and whether paid from any source), but excluding (i) any amounts described in Section 7.5(b)(iv) of the Lease, and (ii) any Additional Rental Payments; and (b) all interest, profits or other income derived from the investment of amounts in any fund or account established under this Indenture. “Securities Depositories” means DTC; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other securities depositories as the Authority designates in written notice filed with the Trustee. “Site Lease” means the Site Lease dated as of July 1, 2022, between the City as lessor and the Authority as lessee, as amended from time to time in accordance with its terms. “Site Lease Payment” means the amount payable by the Authority to the City on the Closing Date under Section 3 of the Site Lease. “S&P” means S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC business, its successors and assigns. “Supplemental Indenture” means any indenture hereafter duly authorized and entered into between the Authority and the Trustee, supplementing, modifying or amending this Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. “Term” means, with reference to the Lease, the time during which the Lease is in effect, as provided in Section 4.2 thereof. “Term Bonds” means the Bonds maturing on October 1 in each of the years 20___ and 20___. “Trustee” means U.S. Bank Trust Company, National Association, a national banking association organized and existing under the laws of United States of America, or its successor or successors, as Trustee hereunder as provided in Article VIII. “Written Certificate,” “Written Request” and “Written Requisition” of the Authority or the City mean, respectively, a written certificate, request or requisition signed in the name of the Authority or the City by its Authorized Representative. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. City Council Regular Meeting - Page 260 of 473 B-1 APPENDIX B BOND FORM NO. R- ***$ *** UNITED STATES OF AMERICA STATE OF CALIFORNIA Lynwood Public Financing Authority LEASE REVENUE BONDS, SERIES 2022 (FEDERALLY TAXABLE) INTEREST RATE: MATURITY DATE: ORIGINAL ISSUE DATE: CUSIP: ______% October 1, ____ _______, 2022 _______ REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: *** *** The LYNWOOD PUBLIC FINANCING AUTHORITY, a public body corporate and politic duly organized and existing under the laws of the State of California (the “Authority”), for value received, hereby promises to pay to the Registered Owner specified above or registered assigns (the “Registered Owner”), on the Maturity Date specified above (subject to any right of prior redemption hereinafter provided for), the Principal Amount specified above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond unless (i) this Bond is authenticated on or before an Interest Payment Date and after the close of business on the 15th day of the month preceding such interest payment date, in which event it shall bear interest from such Interest Payment Date, or (ii) this Bond is authenticated on or before September 15, 2022, in which event it shall bear interest from the Original Issue Date specified above; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on this Bond, at the Interest Rate per annum specified above, payable semiannually on April 1 and October 1 in each year, commencing October 1, 2022 (the “Interest Payment Dates”), calculated on the basis of a 360-day year composed of twelve 30-day months. Principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) hereof and premium, if any, upon early redemption hereof are payable upon presentation and surrender hereof at the designated corporate trust office of U.S. Bank Trust Company, National Association (the “Trust Office”), as City Council Regular Meeting - Page 261 of 473 B-2 trustee (the “Trustee”). Interest hereon is payable by check of the Trustee mailed to the Registered Owner hereof at the Registered Owner’s address as it appears on the registration books of the Trustee as of the close of business on the fifteenth day of the month preceding each Interest Payment Date (a “Record Date”), or, upon written request filed with the Trustee as of such Record Date by a registered owner of at least $1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available funds to an account in the United States designated by such registered owner in such written request. This Bond is not a debt of the City of Lynwood (the “City”), the County of Los Angeles, the State of California, or any of its political subdivisions, and neither the City, said County, said State, nor any of its political subdivisions, is liable hereon nor in any event shall this Bond be payable out of any funds or properties of the Authority other than the Revenues. This Bond is one of a duly authorized issue of bonds of the Authority designated as the “Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable)” (the “Bonds”), in an aggregate principal amount of $__________, all of like tenor and date (except for such variation, if any, as may be required to designate varying numbers, maturities, interest rates or redemption provisions) and all issued under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, and under an Indenture, dated as of July 1, 2022, between the Authority and the Trustee (the “Indenture”) and a resolution of the Authority adopted on _____________, 2022, authorizing the issuance of the Bonds. Reference is hereby made to the Indenture (copies of which are on file at the office of the Authority) and all supplements thereto for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues, and the rights thereunder of the owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Authority thereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees. The Bonds have been issued by the Authority for the purpose of refunding all or a portion of the City’s obligations under the CalPERS Contract (as defined in the Indenture), including paying all costs of issuing the Bonds and of refunding the CalPERS Contract. This Bond and the interest and premium, if any, hereon are special obligations of the Authority, payable from the Revenues, and secured by a charge and lien on the Revenues as defined in the Indenture, consisting principally of lease payments made by the City under a Lease Agreement dated as of July 1, 2022, between the Authority as lessor and the City as lessee (the “Lease”). As and to the extent set forth in the Indenture, all of the Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds. The rights and obligations of the Authority and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the owner of each Bond so affected. City Council Regular Meeting - Page 262 of 473 B-3 The Bonds maturing on or after October 1, 20___ are subject to redemption, as a whole or in part, at the option of the Authority, on October 1, 20___, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. The Bonds are subject to redemption as a whole, or in part, on any date, to the extent of any net proceeds of hazard insurance with respect to the property which has been leased under the Lease (the “Leased Property”) or any portion thereof which are not used to repair or replace the Leased Property pursuant to the Lease, or to the extent of any net proceeds arising from the disposition of the Leased Property or any portion thereof in eminent domain proceedings which the City elects to be used for such purpose pursuant to the Lease, at a redemption price equal to the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium. The Bonds maturing on October 1 in each of the years 20___ and 20___ are subject to mandatory redemption, in part, from sinking fund payments made under the Indenture, at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on October 1 in the respective years as set forth in the following tables: Term Bonds Maturing October 1, 20___ Payment Date (October 1) Payment Amount Term Bonds Maturing October 1, 20___ Payment Date (October 1) Payment Amount As provided in the Indenture, notice of redemption will be mailed by the Trustee by first class mail not less than 20 nor more than 60 days prior to the redemption date to the respective owners of any Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, but neither failure to receive such notice nor any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption City Council Regular Meeting - Page 263 of 473 B-4 or the cessation of accrual of interest thereon from and after the date fixed for redemption. Notice of any optional redemption of the Bonds may be conditional and may be rescinded under the circumstances set forth in the Indenture, upon notice to the owners of such Bonds. If this Bond is called for redemption and payment is duly provided therefor as specified in the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption. This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Trust Office, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon registration of such transfer, a new Bond or Bonds, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. This Bond may be exchanged at the Trust Office for Bonds of the same tenor, aggregate principal amount, interest rate and maturity, of other authorized denominations. The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Authority or the Trustee for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. It is hereby certified by the Authority that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due and regular time, form and manner as required by the Ordinance and the laws of the State of California and that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Ordinance or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture. The Bonds are legally and validly issued under the Constitution and laws of the State of California. This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been manually signed by the Trustee. City Council Regular Meeting - Page 264 of 473 B-5 IN WITNESS WHEREOF, the Lynwood Public Financing Authority has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Chief Administrative Officer and attested to by the facsimile signature of its Secretary, all as of the Original Issue Date specified above. Lynwood Public Financing Authority By Chief Administrative Officer Attest: Secretary FORM OF CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within-mentioned Indenture. Dated: U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By Authorized Signatory City Council Regular Meeting - Page 265 of 473 B-6 FORM OF ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto __________________________________ whose address and social security or other tax identifying number is ____________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) ________________________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises. Dated: Signature Guaranteed: Note: Signature(s) must be guaranteed by an eligible guarantor institution. Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. City Council Regular Meeting - Page 266 of 473 Jones Hall Draft of May 11, 2022 SITE LEASE This SITE LEASE (this “Site Lease”), dated for convenience as of July 1, 2022, is between the CITY OF LYNWOOD, a general law city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, as lessor (the “City”), and the LYNWOOD PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under the laws of the State of California, as lessee (the “Authority”). B A C K G R O U N D : 1. The City and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Authority for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs. 2. The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City. 3. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”). 4. The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”). 5. The City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit, and the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members. 6. The Authority proposes to issue lease revenue bonds under the Bond Law and an Indenture, dated as of July 1, 2022 (the “Indenture”), for the purpose of refunding all or a portion of the City’s obligations under the CalPERS Contract, including paying all costs of issuing the lease revenue bonds and of refunding the CalPERS Contract. City Council Regular Meeting - Page 267 of 473 -2- 7. To that end, the City has proposed to lease to the Authority certain real property described in Appendix A attached hereto and by this reference incorporated herein (the “Leased Property”), under this Site Lease, in consideration of the payment by the Authority of an upfront rental payment (the “Site Lease Payment”) which is sufficient to provide funds for refunding of the CalPERS Contract. 8. The Authority has authorized the issuance of its Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) (the “Bonds”) under the Indenture 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. 9. 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 a Lease Agreement dated as of July 1, 2022 (the “Lease”), under which the City has agreed to pay semiannual Lease Payments as the rental for the Leased Property thereunder. 10. The lease payments made by the City under the Lease have been assigned by the Authority to the Trustee for the security of the Bonds under an Assignment Agreement dated as of July 1, 2022, between the Authority as assignor and the Trustee as assignee. A G R E E M E N T : 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 (as defined in the Indenture) and ends on the date on which the Indenture is discharged in accordance with Section 10.03 thereof, but under any circumstances not later than October 1, 20__. 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. City Council Regular Meeting - Page 268 of 473 -3- 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. SECTION 6. Substitution or Release of Property. If the City exercises its option under Section 3.2 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 3.3 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. City Council Regular Meeting - Page 269 of 473 -4- 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 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 City/Authority: City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attn: City Manager/Chief Administrative Officer If to the Trustee: U.S. Bank Trust Company, National Association U.S. Bank Tower 633 West 5th Street, 24th Floor Los Angeles, CA 90071 Attn: Corporate Trust Services 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; City Council Regular Meeting - Page 270 of 473 -5- (ii) to conform to any amendment of the Indenture which is made thereto in accordance with Section 9.01 of the Indenture; or (iii) 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 Constitution and 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. City Council Regular Meeting - Page 271 of 473 -6- 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. CITY OF LYNWOOD, as lessor By Ernie Hernandez City Manager Attest: Maria Quiñonez City Clerk LYNWOOD PUBLIC FINANCING AUTHORITY, as lessee By Ernie Hernandez Chief Administrative Officer Attest: Maria Quiñonez Secretary City Council Regular Meeting - Page 272 of 473 A-1 APPENDIX A DESCRIPTION OF THE LEASED PROPERTY The Leased Property consists of the City’s interest in the roadway portion of the City’s public streets, whether fee simple or easement, including arterial/collector streets, local streets and alleys, as described in the attached list. [List of City streets to come] City Council Regular Meeting - Page 273 of 473 Jones Hall Draft of May 11, 2022 LEASE AGREEMENT Dated as of July 1, 2022 between the Lynwood Public Financing Authority, as lessor and the City of Lynwood, as lessee Relating to $___________ Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) City Council Regular Meeting - Page 274 of 473 -i- TABLE OF CONTENTS ARTICLE I ................................................................................................................. 2 Definitions; Rules of Interpretation ............................................................................. 2 SECTION 1.1. Definitions ............................................................................................................ 2 SECTION 1.2. Interpretation ....................................................................................................... 2 ARTICLE II ................................................................................................................ 3 Covenants, Representations and Warranties ............................................................ 3 SECTION 2.1. Covenants, Representations and Warranties of the City .................................... 3 SECTION 2.2. Covenants, Representations and Warranties of the Authority ............................ 4 ARTICLE III ............................................................................................................... 6 Deposit and Application of Funds; Acquisition and Construction of the Project; Substitution and Release of Property ........................................................... 6 SECTION 3.1. Deposit of Moneys; Refunding of CalPERS Contract ......................................... 6 SECTION 3.2. Substitution of Property ....................................................................................... 6 SECTION 3.3. Release of Property ............................................................................................. 7 ARTICLE IV .............................................................................................................. 8 Lease of Leased Property; Term of This Lease; Lease Payments: ............................ 8 SECTION 4.1. Lease of Leased Property ................................................................................... 8 SECTION 4.2. Term .................................................................................................................... 8 SECTION 4.3. Lease Payments .................................................................................................. 8 SECTION 4.4. Source of Payments; Covenant to Budget and Appropriate; Pledge of Pension Tax Override ................................................................................................................ 9 SECTION 4.5. Additional Rental Payments .............................................................................. 10 SECTION 4.6. Quiet Enjoyment ................................................................................................ 10 SECTION 4.7. Title .................................................................................................................... 10 ARTICLE V ............................................................................................................. 11 Maintenance; Taxes; Insurance; and Other Matters ................................................ 11 SECTION 5.1. Maintenance, Utilities, Taxes and Assessments ............................................... 11 SECTION 5.2. Modification of Leased Property ........................................................................ 11 SECTION 5.3. Liability Insurance .............................................................................................. 12 SECTION 5.4. Property Insurance ............................................................................................ 12 SECTION 5.5. Reserved ........................................................................................................... 12 SECTION 5.6. Reserved ........................................................................................................... 12 SECTION 5.7. Insurance Net Proceeds; Form of Policies ........................................................ 12 SECTION 5.8. Installation of City’s Personal Property ............................................................. 13 SECTION 5.9. Liens .................................................................................................................. 13 SECTION 5.10. Advances ......................................................................................................... 13 ARTICLE VI ............................................................................................................ 14 Damage, Destruction and Eminent Domain; Use of Net Proceeds .......................... 14 SECTION 6.1. Application of Net Proceeds .............................................................................. 14 SECTION 6.2. Termination or Abatement Due to Eminent Domain ......................................... 14 SECTION 6.3. Abatement Due to Damage or Destruction ....................................................... 14 SECTION 6.3. Reserved ........................................................................................................... 15 ARTICLE VII ........................................................................................................... 15 Other Covenants of the City .................................................................................... 15 SECTION 7.1. Disclaimer of Warranties ................................................................................... 15 SECTION 7.2. Access to the Leased Property ......................................................................... 15 SECTION 7.3. Release and Indemnification Covenants ........................................................... 15 SECTION 7.4. Assignment and Subleasing by the City ............................................................ 16 SECTION 7.5. Amendment Hereof ........................................................................................... 16 SECTION 7.6. Federal Tax Law ............................................................................................... 17 SECTION 7.7. Continuing Disclosure ....................................................................................... 17 ARTICLE VIII........................................................................................................... 18 City Council Regular Meeting - Page 275 of 473 -ii- Events of Default and Remedies ............................................................................. 18 SECTION 8.1. Events of Default Defined .................................................................................. 18 SECTION 8.2. Remedies on Default ......................................................................................... 18 SECTION 8.3. No Remedy Exclusive ....................................................................................... 18 SECTION 8.4. Agreement to Pay Attorneys' Fees and Expenses ............................................ 19 SECTION 8.5. No Additional Waiver Implied by One Waiver ................................................... 19 SECTION 8.6. Application of Proceeds ..................................................................................... 19 SECTION 8.7. Trustee and Bond Owners to Exercise Rights .................................................. 19 ARTICLE IX ............................................................................................................ 19 Prepayment of Lease Payments.............................................................................. 19 SECTION 9.1. Security Deposit ................................................................................................ 19 SECTION 9.2. Optional Prepayment ......................................................................................... 20 SECTION 9.3. Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain .................................................................................................................................... 20 SECTION 9.4. Credit for Amounts on Deposit .......................................................................... 20 ARTICLE X ............................................................................................................. 21 Miscellaneous ......................................................................................................... 21 SECTION 10.1. Notices ............................................................................................................. 21 SECTION 10.2. Binding Effect .................................................................................................. 21 SECTION 10.3. Severability ...................................................................................................... 21 SECTION 10.4. Net-net-net Lease ............................................................................................ 21 SECTION 10.5. Third Party Beneficiary .................................................................................... 21 SECTION 10.6. Further Assurances and Corrective Instruments ............................................. 21 SECTION 10.7. Execution in Counterparts. .............................................................................. 21 SECTION 10.8. Applicable Law ................................................................................................ 22 SECTION 10.9. Authority and City Representatives ................................................................. 22 SECTION 10.10. Captions ........................................................................................................ 22 APPENDIX A DESCRIPTION OF THE LEASED PROPERTY APPENDIX B SCHEDULE OF LEASE PAYMENTS City Council Regular Meeting - Page 276 of 473 LEASE AGREEMENT This LEASE AGREEMENT (this “Lease”), dated for convenience as of July 1, 2022, is between the LYNWOOD PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under the laws of the State of California, as lessor (the “Authority”), and the CITY OF LYNWOOD, a general law city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, as lessee (the “City”). B A C K G R O U N D : 1. The City and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Authority for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs. 2. The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City. 3. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”). 4. The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”). 5. The City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit, and the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members. 6. The Authority proposes to issue lease revenue bonds under the Bond Law and an Indenture, dated as of July 1, 2022 (the “Indenture”), for the purpose of refunding all or a portion of the City’s obligations under the CalPERS Contract, including paying all costs of issuing the lease revenue bonds and of refunding the CalPERS Contract. 7. To that end, the City has proposed to lease to the Authority certain real property described in Appendix A attached hereto and by this reference incorporated herein (the “Leased Property”), under a Site Lease, dated the date hereof (the “Site City Council Regular Meeting - Page 277 of 473 -2- Lease”), in consideration of the payment by the Authority of an upfront rental payment (the “Site Lease Payment”) which is sufficient to provide funds for refunding of the CalPERS Contract. 8. The Authority has authorized the issuance of its Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) (the “Bonds”) under the Indenture 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. 9. 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 has agreed to pay semiannual Lease Payments as the rental for the Leased Property thereunder. 10. 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 July 1, 2022, between the Authority as assignor and the Trustee as assignee. 11. 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. A G R E E M E N T : 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. City Council Regular Meeting - Page 278 of 473 -3- (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, the Trustee as of the date of the execution and delivery of this Lease: (a) Due Organization and Existence. The City is a general law city and municipal corporation duly organized and validly existing under the Constitution and 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. (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 City Council Regular Meeting - Page 279 of 473 -4- 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. SECTION 2.2. Covenants, Representations and Warranties of the Authority. The Authority makes the following covenants, representations and warranties to the City, the Trustee as of the date of the execution and delivery of this Lease: (a) Due Organization and Existence. The Authority is a joint exercise of powers authority duly organized and existing under a joint powers agreement and 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. City Council Regular Meeting - Page 280 of 473 -5- (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. (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 City Council Regular Meeting - Page 281 of 473 -6- 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; Refunding of CalPERS Contract. (a) Deposit of Bond Proceeds. 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 such proceeds in accordance with Section 3.02 of the Indenture. (b) Refunding of CalPERS Contract. Pursuant to Section 3.02 of the Indenture, the Authority will transfer a portion of the proceeds of the Bonds to the City. The City hereby agrees to apply such proceeds to refund the CalPERS Contract. SECTION 3.2. 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, as certified in writing by the City. (b) The City has filed with the Authority and the Trustee, and if the Substitute Property is property other than the City’s streets, caused to be recorded in the office of the Los Angeles County Recorder sufficient memorialization of an amendment hereof that adds the legal description of the Substitute Property to Appendix A and deletes therefrom the legal description of the Former Property, and, if applicable, has filed and caused to be recorded corresponding amendments to the Site Lease and Assignment Agreement. (c) If the Substitute Property is property other than the City’s streets, 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 essential to the proper, efficient and economic operation of the City and to serve an essential governmental function of the City. City Council Regular Meeting - Page 282 of 473 -7- (e) The Substitute Property does not cause the City to violate any of its covenants, representations and warranties made herein, as certified in writing by the City. (g) The City has filed with the Authority and the Trustee a written certificate of the City or other written evidence stating that the useful life of the Substitute Property at least extends to the final maturity of the Bonds, that the estimated value of the Leased Property, after substitution of the Substitute Property and release of the Former Property, is at least equal to the aggregate Outstanding principal amount of the Bonds, and the fair rental value of the Leased Property, after substitution of the Substitute Property and release of the Former Property, 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 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. If applicable, 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 3.3. 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, as certified in writing by the City. (b) The City has filed with the Authority and the Trustee, and if the Substitute Property is property other than the City’s streets, caused to be recorded in the office of the Los Angeles County Recorder sufficient memorialization of an amendment hereof, the Site Lease and the Assignment Agreement which removes the Released Property from the Site Lease, the Assignment Agreement and this Lease. (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 aggregate Outstanding principal amount of the 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. City Council Regular Meeting - Page 283 of 473 -8- 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. If applicable, 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 10.03 thereof, but under any circumstances not later than October 1, 20__. The provisions of this Section are subject to the provisions of Sections 6.2 through 6.4 relating to the taking in eminent domain, damage and destruction of the Leased Property in whole or in part and interference with completion of construction of the Project. SECTION 4.3. Lease Payments. (a) Obligation to Pay. Subject to the provisions of Sections 6.2 through 6.4 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 (including the Capitalized Interest Subaccount) 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 (including the Capitalized Interest Subaccount) 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 Sections 9.2 or 9.3, 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 Sections 9.2 or 9.3, the principal components of the remaining Lease Payments will be reduced in integral 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 City Council Regular Meeting - Page 284 of 473 -9- 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; Pledge of Pension Tax Override. The Lease Payments are payable from any source of available funds of the City, subject to the provisions of Sections 6.2 through 6.4. Subject to the provisions of Sections 6.2 through 6.4, 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. On April 9, 1946, the voters in the City approved a retirement tax to support amounts owed by the City to CalPERS pursuant to the CalPERS Contract (the “Pension Tax Override”), which Pension Tax Override is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes. In furtherance of its authorized purposes, the City hereby pledges the Pension Tax Override to the payment of the Lease Payments. The obligation of the City to make Lease Payments or 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 other City Council Regular Meeting - Page 285 of 473 -10- than the Pension Tax Override. Neither the Bonds nor the obligation of the City to make Lease Payments or Additional Rental Payments constitutes an indebtedness of the City, the State or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction. 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, (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, and (d) 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. If applicable, 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. City Council Regular Meeting - Page 286 of 473 -11- 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 intention to do so, the City may in good faith contest any lien filed or established against the Leased Property, City Council Regular Meeting - Page 287 of 473 -12- 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 Insurance. The City shall maintain or cause to be maintained throughout the Term of this 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. 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. Property Insurance. Solely to the extent the Leased Property is property other than the City’s streets, the City shall procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease, property insurance against loss or damage to all improvements situated on the Leased Property, in an amount at least equal to the lesser of (a) 100% of the replacement value of the improvements, 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; provided, that such coverage shall include earthquake insurance only 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. Reserved. SECTION 5.6. Reserved. SECTION 5.7. Insurance Net Proceeds; Form of Policies. Each policy of insurance maintained under Section 5.4 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. 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 City Council Regular Meeting - Page 288 of 473 -13- 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 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). City Council Regular Meeting - Page 289 of 473 -14- 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. 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. 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) this Lease shall 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. The abatement of Lease Payments hereunder in accordance with the terms hereof shall not constitute an Event of Default (as defined in Section 8.1) hereunder. 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 (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. Notwithstanding the foregoing, there shall be no abatement of Lease Payments to the extent that the proceeds of property insurance, rental interruption insurance or capitalized interest are available to pay Lease Payments which would otherwise be abated under this Section, it being hereby declared that such proceeds and amounts constitute a special fund for the payment of the Lease Payments. The abatement of Lease Payments hereunder in accordance with the terms hereof shall not constitute an Event of Default (as defined in Section 8.1) hereunder. City Council Regular Meeting - Page 290 of 473 -15- SECTION 6.4. Reserved. ARTICLE VII OTHER COVENANTS OF THE CITY SECTION 7.1. Disclaimer of Warranties. THE AUTHORITY AND THE TRUSTEE MAKE 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 and its assigns have 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 Authority 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, (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, City Council Regular Meeting - Page 291 of 473 -16- (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, the Assignment Agreement 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. 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, as certified in writing by 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; and (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, as certified in writing by the City. 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 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 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 3.2 or 3.3; City Council Regular Meeting - Page 292 of 473 -17- (iv) 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 amounts of rental are pledged or assigned for the payment of any bonds, notes, leases or other obligations the proceeds of which are applied to finance authorized expenditures of the City for the common benefit, and (B) the City has obtained and filed with the Trustee an appraisal or other evidence of value satisfactory to the City showing that the estimated value of the Leased Property is at least equal to the aggregate principal amount of the Outstanding Bonds and all such other bonds, notes, leases or other obligations; or (v) 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. If the Trustee’s consent to such modification or amendment is required, the Trustee shall be entitled to the same documents as it would be entitled to under Article IX of the Indenture for such type of modification or amendment. SECTION 7.6. Federal Tax Law. The City and the Authority do not intend the interest on the Bonds to be excluded from gross income for federal income tax purposes. 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. City Council Regular Meeting - Page 293 of 473 -18- 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, such period of time not to be longer than 180 days after the delivery of such default notice. (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 to collect the amounts then due and thereafter to become due hereunder or to enforce any other of its rights hereunder, except as provided herein. Notwithstanding anything herein or in the Indenture to the contrary, (a) 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 (the Authority hereby expressly waives the right to receive any amount from the City pursuant to Section 1951.2 of the California Civil Code to accelerate payment of the Lease Payments) and (b) neither the Authority nor the Trustee shall have the right to re-lease any portion of the Leased Property that constitutes a City street. 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. 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 City Council Regular Meeting - Page 294 of 473 -19- 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; provided, however, that the Trustee shall not be required to expend its own funds for any payment described in this Section. 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 the breach, 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. 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, (which opinion must be addressed and delivered to the City Council Regular Meeting - Page 295 of 473 -20- Trustee), 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. Optional Prepayment. The City has the option to prepay the principal components of the Lease Payments in whole, or in part in any integral multiple of $5,000, from any source of legally available funds, on any date on or after October 1, 20__, at a prepayment price equal to the aggregate principal components of the Lease Payments to be prepaid, together with the interest component of the Lease Payment required to be paid on such Interest Payment Date, and together with a prepayment premium equal to the premium (if any) required to be paid on the resulting redemption of Bonds 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 10 days’ written notice to the Trustee of its intention to prepay the Lease Payments under this Section. 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(b) of the Indenture. 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. City Council Regular Meeting - Page 296 of 473 -21- 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/Authority: City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attn: City Manager/Chief Administrative Officer If to the Trustee: U.S. Bank Trust Company, National Association U.S. Bank Tower 633 West 5th Street, 24th Floor Los Angeles, CA 90071 Attn: Corporate Trust Services 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 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. City Council Regular Meeting - Page 297 of 473 -22- 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. Authority 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. City Council Regular Meeting - Page 298 of 473 -23- 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. LYNWOOD PUBLIC FINANCING AUTHORITY, as lessor By Ernie Hernandez Chief Administrative Officer Attest: Maria Quiñonez Secretary CITY OF LYNWOOD, as lessee By Ernie Hernandez City Manager Attest: Maria Quiñonez City Clerk City Council Regular Meeting - Page 299 of 473 A-1 APPENDIX A DESCRIPTION OF THE LEASED PROPERTY The Leased Property consists of the City’s interest in the roadway portion of the City’s public streets, whether fee simple or easement, including arterial/collector streets, local streets and alleys, as described in the attached list. [List of City streets to come] City Council Regular Meeting - Page 300 of 473 B-1 APPENDIX B SCHEDULE OF LEASE PAYMENTS Lease Payment Date* Principal Component Interest Component Aggregate Lease Payment * Lease Payment Dates are the Business Day immediately preceding each date listed in the schedule City Council Regular Meeting - Page 301 of 473 Jones Hall Draft of May 11, 2022 ASSIGNMENT AGREEMENT This ASSIGNMENT AGREEMENT (this “Agreement”), dated for convenience as of July 1, 2022, is between the LYNWOOD PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under the laws of the State of California (the “Authority”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as trustee (the “Trustee”). B A C K G R O U N D : 1. The City of Lynwood (the “City”) and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Authority for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs. 2. The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City. 3. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”). 4. The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”). 5. The City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit, and the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members. 6. The Authority proposes to issue lease revenue bonds under the Bond Law and an Indenture, dated as of July 1, 2022 (the “Indenture”), for the purpose of refunding City Council Regular Meeting - Page 302 of 473 -2- all or a portion of the City’s obligations under the CalPERS Contract, including paying all costs of issuing the lease revenue bonds and of refunding the CalPERS Contract. 7. To that end, the City has proposed to lease to the Authority certain real property described in Appendix A attached hereto and by this reference incorporated herein (the “Leased Property”), under a Site Lease, dated the date hereof (the “Site Lease”), in consideration of the payment by the Authority of an upfront rental payment (the “Site Lease Payment”) which is sufficient to provide funds for refunding of the CalPERS Contract. 8. The Authority has authorized the issuance of its Lynwood Joint Powers Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) (the “Bonds”) under the Indenture 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. 9. 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 a Property Lease, dated the date hereof (the “Lease”), under which the City has agreed to pay semiannual Lease Payments as the rental for the Leased Property thereunder. 10. The Authority has requested the Trustee to enter into this Agreement for the purpose of assigning certain of its rights under the Lease to the Trustee for the benefit of the Bond owners. A G R E E M E N T : In consideration of the material covenants contained in this Agreement, the parties hereto hereby formally covenant, agree and bind themselves as follows: SECTION 1. Defined Terms. All capitalized terms not otherwise defined herein have the respective meanings given those terms in the Indenture. SECTION 2. Assignment. The Authority hereby assigns to the Trustee, for the benefit of the Owners of all Bonds which are issued and Outstanding under the Indenture, all of the Authority’s rights under the Lease (excepting only the Authority’s rights under Sections 4.5, 5.10, 7.3 and 8.4 of the Lease and its rights to give consents and approvals under the Lease), including but not limited to: (a) the right to receive and collect all of the Lease Payments from the City under the Lease; (b) the right to receive and collect any proceeds of any insurance maintained thereunder with respect to the Leased Property, or any eminent domain award (or proceeds of sale under threat of eminent domain) paid with respect to the Leased Property; and (c) the right to exercise such rights and remedies conferred on the Authority under the Lease as may be necessary or convenient (i) to enforce payment of the Lease Payments and any amounts required City Council Regular Meeting - Page 303 of 473 -3- to be deposited in the Insurance and Condemnation Fund established under Section 5.07 of the Indenture, or (ii) otherwise to protect the interests of the Bond Owners in the event of a default by the City under the Lease. The Trustee shall administer all of the rights assigned to it by the Authority under this Agreement in accordance with the provisions of the Indenture, for the benefit of the Owners of Bonds. The assignment made under this Section 2 is absolute and irrevocable, and without recourse to the Authority. SECTION 3. Acceptance. The Trustee hereby accepts the assignments made herein for the purpose of securing the payments due under the Lease and Indenture to, and the rights under the Lease and Indenture of, the Owners of the Bonds, all subject to the provisions of the Indenture. The recitals contained herein are those of the Authority and not of the Trustee, and the Trustee assumes no responsibility for the correctness thereof. SECTION 4. Conditions. This Agreement confers no rights and imposes no duties upon the Trustee beyond those expressly provided in the Indenture. The assignment hereunder to the Trustee is solely in its capacity as Trustee under the Indenture, and the Trustee shall have the same rights, protections, immunities and indemnities hereunder as afforded to it under the Indenture. SECTION 5. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which is an original and all together constitute one and the same agreement. Separate counterparts of this Agreement may be separately executed by the Trustee and the Authority, both with the same force and effect as though the same counterpart had been executed by the Trustee and the Authority. SECTION 6. Binding Effect. This Agreement inures to the benefit of and binds the Authority and the Trustee, and their respective successors and assigns, subject, however, to the limitations contained herein. SECTION 7. Governing Law. This Agreement is governed by the Constitution and laws of the State of California. City Council Regular Meeting - Page 304 of 473 -4- IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized officers as of the day and year first written above. LYNWOOD PUBLIC FINANCING AUTHORITY By Ernie Hernandez Chief Administrative Officer Attest: Maria Quiñonez Secretary U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By Authorized Representative City Council Regular Meeting - Page 305 of 473 A-1 APPENDIX A DESCRIPTION OF THE LEASED PROPERTY The Leased Property consists of the City’s interest in the roadway portion of the City’s public streets, whether fee simple or easement, including arterial/collector streets, local streets and alleys, as described in the attached list. [List of City streets to come] City Council Regular Meeting - Page 306 of 473 Th i s P r e l i m i n a r y O f f i c i a l S t a t e m e n t a n d t h e i n f o r m a t i o n c o n t a i n e d h e r e i n a r e s u b j e c t t o c o m p l e t i o n o r a m e n d m e n t . Un d e r n o c i r c u m s t a n c e s s h a l l t h i s P r e l i m i n a r y O f f i c i a l St a t e m e n t c o n s t i t u t e a n o f f e r t o s e l l o r a s o l i c i t a t i o n o f a n o f f e r t o b u y n o r s h a l l t h e r e b e a n y s a l e o f t h e s e s e c u r i t i e s i n an y j u r i s d i c t i o n i n w h i c h s u c h o f f e r s o l i c i t a t i o n o r s a l e w o u l d b e un l a w f u l p r i o r t o r e g i s t r a t i o n o r q u a l i f i c a t i o n u n d e r t h e s e c u r i t i e s l a w s o f s u c h j u r i s d i c t i o n . Jones Hall Draft of May 11, 2022 PRELIMINARY OFFICIAL STATEMENT DATED ________, 2022 NEW ISSUE – FULL BOOK-ENTRY S&P [(Insured)]: “__” [(Underlying)]: “__” See “RATING[S]” herein. 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, interest on the Bonds is exempt from State of California personal income taxes. Bond counsel observes that interest on the Bonds is not excluded from gross income for federal income tax purposes. See “TAX MATTERS” herein.” $______________* LYNWOOD PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2022 (FEDERALLY TAXABLE) Dated: Date of Delivery Due: October 1, as shown on inside cover Authority for Issuance. The bonds captioned above (the “Bonds”) are being issued by the Lynwood Public Financing Authority (the “Authority”) pursuant to resolutions adopted by the governing body of the Authority and the City Council of the City of Lynwood (the “City”) on [May 17], 2022, and an Indenture of Trust dated as of July 1, 2022 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). See “THE BONDS – Authority for Issuance.” Purpose. The proceeds of the Bonds will be used to (i) refund a portion of the City’s obligations under the CalPERS Contract, 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” consisting primarily of lease payments (the “Lease Payments”) made by the City for the lease of property under a Lease Agreement dated as of July 1, 2022, between the Authority, as lessor, and the City, as lessee, concerning the leaseback of certain real property, as described in this Official Statement. The Bonds are also secured by certain funds held under the Indenture. See “SECURITY 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 April 1 and October 1 of each year, commencing on October 1, 2022, and will be issued in fully-registered form without coupons in integral multiples 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.” [Bond Insurance. To come, if applicable] The Bonds are special obligations of the Authority, payable solely from and secured by a pledge of the Revenues as specified therein and in the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds. The obligation of the City to pay Lease Payments does not constitute an 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, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation, except for the pension tax override levied and collected by the City as described herein. The Authority has no power to tax. MATURITY SCHEDULE (see inside cover) This cover page contains certain information for general reference only. It is not a summary of all the provisions of the Bonds. Prospective investors must read the entire Official Statement to obtain information essential to making an informed investment decision. The Bonds are offered when, as and if issued, subject to approval as to their legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, and subject to certain other conditions. 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 Authority and the City by the City Attorney of the City. Certain legal matters will be passed on for the Underwriter by Quint & Thimmig LLP, as Underwriter’s Counsel. It is anticipated that the Bonds will be delivered in book-entry form through the facilities of DTC on or about ______, 2022. [Underwriter Logo] The date of this Official Statement is: _____ __, 2022 * Preliminary; subject to change. City Council Regular Meeting - Page 307 of 473 LYNWOOD PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2022 (FEDERALLY TAXABLE) MATURITY SCHEDULE (Base CUSIP:† ________) $_____ Serial Bonds Maturity Date (October 1) Principal Amount Interest Rate Yield Price CUSIP† $______ - ____% Term Bonds due October 1, 20__; Yield ____%; Price ___; CUSIP†: ___ $______ - ____% Term Bonds due October 1, 20__; Yield ____%; Price ___; CUSIP†: ___ C: Yield to the first optional redemption date of October 1, 20__, at par. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright (c) 2022 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the Authority, the Underwriter or their agents or counsel take any responsibility for the accuracy of such numbers. City Council Regular Meeting - Page 308 of 473 LYNWOOD PUBLIC FINANCING AUTHORITY CITY OF LYNWOOD, CALIFORNIA AUTHORITY BOARD/CITY COUNCIL Jorge Casanova, Mayor and President José Luis Solache, Mayor Pro Tem and Vice President Oscar Flores, Councilmember and Authority Member Marisela Santana, Councilmember and Authority Member Rita Soto, Councilmember and Authority Member AUTHORITY/CITY OFFICIALS Ernie Hernandez, City Manager and Chief Administrative Officer Harry Wong, City and Authority Finance Director Gabriela Camacho, City and Authority Treasurer Noel Tapia, City Attorney and Authority Counsel Maria Quiñonez, City Clerk and Authority Secretary PROFESSIONAL SERVICES MUNICIPAL ADVISOR Kosmont Transactions Services, Inc. Manhattan Beach, California BOND AND DISCLOSURE COUNSEL Jones Hall, A Professional Law Corporation San Francisco, California Trustee U.S. Bank Trust Company, National Association Los Angeles, California City Council Regular Meeting - Page 309 of 473 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 a contract between any bond owner and the Authority or the Underwriter. No Offering Except by This Official Statement. No dealer, broker, salesperson or other person has been authorized by the Authority or the Underwriter to give any information or to make any representations other than those contained in this Official Statement and, if given or made, such other information or representation must not be relied upon as having been authorized by the Authority or the Underwriter. No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor may 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. Preparation of Official Statement. The information set forth in this Official Statement has been furnished by the Authority and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness. 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, their 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. Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the Authority in any press release and in any oral statement made with the approval of an authorized officer of the City or the Authority or any other entity described or referenced herein, 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, Authority or any other entity described or referenced herein since the date hereof. 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 securities dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the inside cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter. Document Summaries. All summaries of the Indenture or other documents referred to in this Official Statement are made subject to the provisions of such documents and qualified in their entirety to reference to such documents, and do not purport to be complete statements of any or all of such provisions. No Securities Laws Registration. The Bonds have not been registered under the Securities Act of 1933, as amended, in reliance upon exceptions therein for the issuance and sale of municipal securities. The Bonds have not been registered or qualified under the securities laws of any state. Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, give rise to any implication that there has been no change in the affairs of the City, the Authority, the other parties described in this Official Statement, or the condition of the property within the City since the date of this Official Statement. Website. The City maintains a website. However, the information presented on the website is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds. City Council Regular Meeting - Page 310 of 473 -i- TABLE OF CONTENTS INTRODUCTION ................................................ 1 REFINANCING PLAN ........................................ 4 Refinancing of CalPERS Contract ................. 4 Estimated Sources and Uses of Funds .......... 4 THE LEASED PROPERTY ................................ 5 Description and Location ................................ 5 Modification of Leased Property ..................... 5 Substitution ..................................................... 6 Release of Leased Property ........................... 7 THE BONDS ...................................................... 7 Authority for Issuance .................................... 7 General Provisions ......................................... 8 Redemption .................................................... 9 Book-Entry Only System .............................. 11 Transfer, Registration and Exchange .......... 11 DEBT SERVICE SCHEDULE .......................... 13 SECURITY FOR THE BONDS ........................ 14 Revenues; Pledge of Revenues ................... 14 Allocation of Revenues by Trustee; Application of Funds................................. 15 Lease Payments; Covenant to Appropriate . 15 Limited Obligation......................................... 16 Abatement .................................................... 17 Default; Remedies ........................................ 17 Insurance ...................................................... 18 Additional Lease Payments and Additional Bonds ....................................................... 19 THE AUTHORITY ............................................ 20 THE CITY ......................................................... 20 General ......................................................... 20 City Government .......................................... 20 Labor Relations ............................................ 21 CITY FINANCIAL INFORMATION ................... 21 Accounting and Financial Reporting ............ 21 Pension Tax Override; Bartel Report ........... 23 General Fund Overview and Budget ............ 23 Sales and Use Taxes ................................... 28 Property Taxes ............................................. 31 Other Sources of Revenues ......................... 35 Financial Statements .................................... 36 General Fund Historical Financial Data ....... 36 Relevant Fiscal Policies ............................... 38 Risk Management ........................................ 39 Employee Retirement System; CalPERS .... 39 Other Post-Employment Benefits (OPEB) ... 44 General Fund Long-Term Indebtedness ...... 45 Direct and Overlapping Bonded Debt .......... 46 CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS ..................................... 48 Limitations on Revenues.............................. 48 Statutory Revenue Limitations - Proposition 62 .......................................... 51 Proposition 1A .............................................. 51 Proposition 22 .............................................. 52 Unitary Property ........................................... 52 Possible Future Initiatives ............................ 53 BOND OWNERS’ RISKS ................................. 53 Abatement of Lease Payments .................... 53 Limitation on Remedies ............................... 54 No Acceleration Upon Default ..................... 54 Early Prepayment Risk ................................ 54 Limitations on Taxes and Fees .................... 56 Additional Obligations of the City ................. 57 Property Taxes ............................................. 57 Public Health Emergencies .......................... 59 Certain Risks Associated with Sales Tax and Other Local Tax Revenues ............... 59 Natural Calamities ........................................ 60 Hazardous Substances ................................ 61 Potential Impact of Climate Change ............ 61 COVID-19 Pandemic ................................... 61 Cyber Security ............................................. 62 Litigation ....................................................... 62 Secondary Market for Bonds ....................... 62 TAX MATTERS ................................................ 63 CERTAIN LEGAL MATTERS .......................... 63 NO LITIGATION ............................................... 63 RATING[S] ....................................................... 64 CONTINUING DISCLOSURE .......................... 64 UNDERWRITING ............................................. 64 MUNICIPAL ADVISOR .................................... 65 EXECUTION .................................................... 65 APPENDIX A - GENERAL INFORMATION ABOUT THE CITY OF LYNWOOD AND THE COUNTY OF LOS ANGELES APPENDIX B - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS APPENDIX C - AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR ENDED JUNE 30, 2021 APPENDIX D - PROPOSED FORM OF OPINION OF BOND COUNSEL APPENDIX E - FORM OF CONTINUING DISCLOSURE CERTIFICATE APPENDIX F - DTC AND THE BOOK-ENTRY ONLY SYSTEM [APPENDIX G - FORM OF MUNICIPAL BOND INSURANCE POLICY] City Council Regular Meeting - Page 311 of 473 -1- __________________________________ OFFICIAL STATEMENT __________________________________ $_____________* LYNWOOD PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2022 (FEDERALLY TAXABLE) The purpose of this Official Statement, which includes the cover page, inside cover page and attached appendices, is to set forth certain information concerning the sale and delivery of the bonds captioned above (the “Bonds”) by the Lynwood Public Financing Authority (the “Authority”). All capitalized terms used in this Official Statement, unless noted otherwise, have the meanings set forth in the Indenture (as defined below). 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 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. Authority for Issuance. The Authority is issuing the Bonds pursuant to (a) the Marks- Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”), (b) resolutions adopted by the governing body of the Authority on [May 17], 2022 (the “Authority Resolution”), and by the City Council of the City of Lynwood (the “City”) on [May 17], 2022 (the “City Resolution”), and (c) an Indenture of Trust (the “Indenture”) dated as of July 1, 2022, by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Authority. The Authority was formed pursuant to the provisions of Articles 1 through 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”) and the Join Exercise of Powers Agreement, dated as of December 1, 1992, by and between the City and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency), to assist in financings for either member. The City Council of the City serves as the governing body of the Authority. The City. The City was incorporated in 1921 under the general laws of the State of California (the “State”). The City is situated approximately 13 miles south of downtown Los Angeles at the intersection of two major freeways. The local economy represents a diverse blend of industrial, commercial, agricultural and residential development. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY.” * Preliminary; subject to change. City Council Regular Meeting - Page 312 of 473 -2- Purpose of the Bonds. The Bonds are being issued to provide funds to refund a portion of the City’s obligations under the CalPERS Contract (as hereinafter defined), and to pay the costs of issuing the Bonds. See “REFINANCING PLAN.” Security for the Bonds and Pledge of Revenues. Under the Indenture, the Bonds are payable from and secured by a pledge of and lien on “Revenues,” consisting principally of lease payments (the “Lease Payments”) made by the City for the lease of property under a Lease Agreement dated as of July 1, 2022 (the “Lease Agreement”), between the Authority, as lessor, and the City, as lessee, concerning the leaseback of the City’s interest in the City’s streets (as more particularly described herein, the “Leased Property”). The Bonds are also secured by certain funds on deposit under the Indenture. Under an Assignment Agreement dated as of _______ 1, 2022 (the “Assignment Agreement”), between the Authority and the Trustee, the Authority has transferred to the Trustee all of the rights of the Authority in the Lease Agreement (other than the rights of the Authority under the provisions of the Lease Agreement regarding Additional Rental Payments, advances, release and indemnification covenants, and agreement to pay attorneys’ fees). To provide an upfront site lease payment to facilitate the financing plan, the City and the Authority will enter into a Site Lease dated as of _______ 1, 2022 (the “Site Lease”), under which the City will lease the Leased Property to the Authority. Concurrently, the City and the Authority will enter into the Lease Agreement, under which the Authority will lease the Leased Property back to the City. See SECURITY FOR THE BONDS” and “THE LEASED PROPERTY.” [No Reserve Fund. The Authority will not establish a debt service reserve fund for the Bonds.] [Bond Insurance. To come, if applicable.] Covenant to Budget and Appropriate Lease Payments. The Lease Payments are payable from any source of available funds of the City, subject to the provisions of the Lease Agreement regarding abatement. See “– Abatement” below. The City covenants in the Lease Agreement to take all actions required to include the Lease Payments in each of its budgets during the Term of the Lease Agreement and to make the necessary appropriations for all Lease Payments and Additional Rental Payments, subject to the provisions of the Lease Agreement regarding abatement. Such covenant 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 agreed to be carried out and performed by the City under the Lease Agreement. Pledge of Pension Tax Override. On April 9, 1946, the voters in the City approved a retirement tax to support amounts owed by the City to CalPERS pursuant to the CalPERS Contract (the “Pension Tax Override”), which Pension Tax Override is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes. In furtherance of its authorized purposes, under the Lease Agreement, the City pledges the Pension Tax Override to the payment of the Lease Payments. Form of Bonds; Book-Entry Only. The Bonds 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 Bonds will not receive certificates City Council Regular Meeting - Page 313 of 473 -3- representing the Bonds that are purchased. See “THE BONDS – Book-Entry Only System” and “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.” Other General Fund Obligations. The Lease Agreement may be amended to obligate the City to pay additional amounts of rental for the use and occupancy of the Leased Property if certain conditions are met. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” The Lease Agreement does not limit the City’s right to incur additional obligations payable from its General Fund. The City has existing obligations payable from its General Fund. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY” for more information. Redemption. The Bonds are subject to optional redemption, mandatory sinking fund redemption, and special mandatory redemption from the proceeds of insurance or condemnation proceeds 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 Agreement, the Bond Owners would receive less than the full amount of principal of and interest on the Bonds. To the extent proceeds of property insurance (as described in this Official Statement), Lease Payments (or a portion thereof) may be made from those proceeds during periods of abatement. The City is neither required nor will it maintain rental interruption insurance with respect to the Leased Property. See “SECURITY FOR THE BONDS – Abatement” and “BOND OWNERS’ RISKS.” Legal Opinion. Upon delivery of the Bonds, Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel (“Bond Counsel”) will release its final approving legal opinion with respect to the Bonds, regarding the validity of the Bonds, in the form attached hereto as Appendix D. See “APPENDIX D – PROPOSED FORM OF OPINION OF BOND COUNSEL.” Risks of Investment; COVID-19 Pandemic. Debt service on the Bonds is payable only from Lease Payments and other amounts payable by the City to the Authority under the Lease Agreement. While the City’s General Fund has not experienced a material adverse impact due to the COVID-19 pandemic to date, continued and/or renewed outbreaks could lead to additional or modified public health restrictions and have an adverse effect on the City’s operations and financial condition in the future, and the effect could be material. For a discussion of some of the risks associated with the purchase of the Bonds, including the potential impact of the COVID-19 pandemic on the City’s operations, see “BOND OWNERS’ RISKS,” and in particular “– Public Health Emergencies” and “– COVID-19 Pandemic.” The Bonds are special obligations of the Authority, payable solely from and secured by a pledge of the Revenues as specified therein and in the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State, or any political subdivision thereof, is pledged to the payment of the Bonds. The obligation of the City to pay Lease Payments does not constitute an indebtedness of the City, the State, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation, except for the City Council Regular Meeting - Page 314 of 473 -4- pension tax override levied and collected by the City as described herein. The Authority has no power to tax. REFINANCING PLAN Refinancing of CalPERS Contract The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State, as amended (the “Retirement Law”) to make payments relating to pension benefits accruing to the California Public employees’ Retirement System’s (“CalPERS”) members, including the City. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”). The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”). According to the most recent actuarial valuations performed by CalPERS, dated June 30, 2021, the City’s unfunded accrued liability (the “UAL”) with respect to the City’s pension plans totaled approximately $_____ million. Upon the issuance of the Bonds, the City will apply proceeds thereof in the amount of $_____ million* to refund a portion of the CalPERS Contract. The City projects that, immediately after the refunding of the CalPERS Contract with such proceeds, the funding level of the City’s pension plans will be raised to an estimated ___%, saving the City approximately $____ million in fiscal year 2022-23, and an additional $___ million after fiscal year 2022-23 (across all City funds, including the General Fund).* The City anticipates using such savings, commencing in fiscal year 2022-23, to mitigate projected decreases in General Fund revenues, establish and fund a trust under Section 115 of the Internal Revenue Code for the purpose of paying costs associated with its pension plans, and rebuild reserves. Estimated Sources and Uses of Funds The estimated sources and uses of funds relating to the Bonds are as follows: SOURCES: Amount Principal Amount of Bonds $ Plus/Less: [Net] Original Issue [Premium/Discount] TOTAL SOURCES $ USES: Refund Portion of CalPERS Contract $ Costs of Issuance (2) TOTAL USES $ (1) Includes, among other things, Underwriter’s discount, the fees and expenses of Bond Counsel and Disclosure Counsel, the Trustee, the Municipal Advisor, rating agency fees, and printing Official Statement. * Preliminary; subject to change. City Council Regular Meeting - Page 315 of 473 -5- THE LEASED PROPERTY Description and Location Lease Payments will be made by the City under the Lease Agreement for the use and occupancy of the Leased Property. The Leased Property consists of the City’s interest in the roadway portion of the City’s public streets, whether fee simple or easement, including arterial/collector streets, local streets and alleys. According to the City’s Pavement Management Program Final Report, dated June 29, 2020 (the “2020 PMP Report”), the City’s pavement management network consists of approximately 24.4 section miles of arterial/collector streets (approximately 7,267,122 square feet of pavement), 60.2 section miles of local streets (approximately 10,976,318 square feet of pavement), and 10.6 section miles of alleys (approximately 975,467 square feet of pavement). According to the 2020 PMP Report, the City estimates the total replacement value of the Leased Property is approximately $288,283,600. As stated in the 2020 PMP Report, “This value clearly indicates that the City’s pavement network is the most valuable and essential asset to Lynwood.” Simultaneously with the delivery of the Bonds, the Authority will acquire a leasehold interest in the Leased Property from the City. The Authority will sublease the Leased Property to the City pursuant to the Lease Agreement. While the City is in possession of the Leased Property, all maintenance and repair of the Leased Property is the responsibility of the City. The City has determined that the replacement value of the Leased Property is in excess of the principal amount of the Bonds and the fair rental value of the Leased Property is commensurate with the Lease Payments. Under the Lease Agreement, remedies available to the Authority and the Trustee to collect amounts due from the City do not include (i) the right to accelerate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable or (ii) right to re-lease any portion of the Leased Property that constitutes a City street. See “SECURITY FOR THE BONDS – Default; Remedies” below and “BOND OWNERS’ RISKS – Limitation on Remedies.” Modification of Leased Property Under the Lease Agreement, 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 the Lease Agreement. 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, 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 the City Council Regular Meeting - Page 316 of 473 -6- Lease Agreement; except that if any such lien is established and the City first notifies or causes to be notified the Authority of the City’s 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. Substitution Under the Lease Agreement, 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 requirements set forth in the Lease Agreement, which includes (among others) the following: • The City has filed with the Authority and the Trustee, and, if the Substitute Property is property other than the City’s streets, caused to be recorded in the office of the Los Angeles County Recorder sufficient memorialization of an amendment of the Lease Agreement that adds the legal description of the Substitute Property to the Lease Agreement and deletes therefrom the legal description of the Former Property, and, if applicable, has filed and caused to be recorded corresponding amendments to the Site Lease and Assignment Agreement. • If the Substitute Property is property other than the City’s streets, the City has obtained a CLTA policy of title insurance insuring the City’s leasehold estate under the Lease Agreement in the Substitute Property, subject only to Permitted Encumbrances, in an amount at least equal to the estimated value thereof. • 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, and has been determined to be essential to the proper, efficient and economic operation of the City and to serve an essential governmental function of the City. • The Substitute Property does not cause the City to violate any of its covenants, representations and warranties made in the Lease Agreement, as certified in writing by the City. • The City has filed with the Authority and the Trustee a written certificate of the City or other written evidence stating that the useful life of the Substitute Property at least extends to the final maturity of the Bonds, that the estimated value of the Leased Property, after substitution of the Substitute Property and release of the Former Property, is at least equal to the aggregate Outstanding principal amount of the Bonds, and the fair rental value of the Leased Property, after substitution of the Substitute Property and release of the Former Property, is at least equal to the Lease Payments thereafter coming due and payable under the Lease Agreement. Upon the satisfaction of all such conditions precedent, the Term of the Lease Agreement 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 City Council Regular Meeting - Page 317 of 473 -7- Payments whatsoever as a result of any substitution of property under the Lease Agreement. If applicable, the Authority and the City will execute, deliver and cause to be recorded all documents required to discharge the Site Lease, the Lease Agreement 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, the Lease Agreement and the Assignment Agreement. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” Release of Leased Property Under the Lease Agreement, the City has the option at any time and from time to time to release any portion of the Leased Property from the Lease Agreement (the “Released Property”) provided that the City has satisfied all of the requirements under the Lease Agreement that are conditions precedent to such release, which include (among others) the following: • The City has filed with the Authority and the Trustee, and, if applicable, caused to be recorded in the office of the Los Angeles County Recorder sufficient memorialization of an amendment of the Lease Agreement, the Site Lease and the Assignment Agreement which removes the Released Property from the Site Lease, the Assignment Agreement and the Lease Agreement. • The City has certified in writing to the Authority and the Trustee that the value of the property which remains subject to the Lease Agreement following such release is at least equal to the aggregate Outstanding principal amount of the Bonds, and the fair rental value of the property which remains subject to the Lease Agreement following such release is at least equal to the Lease Payments thereafter coming due and payable under the Lease Agreement. Upon the satisfaction of all such conditions precedent, the Term of the Lease Agreement 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. If applicable, the Authority and the City shall execute, deliver and cause to be recorded all documents required to discharge the Site Lease, the Lease Agreement and the Assignment Agreement of record against the Released Property. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” THE BONDS This section provides summaries of the Bonds and certain provisions of the Indenture. See APPENDIX B for a more complete summary of the Indenture. Capitalized terms used but not defined in this section have the meanings given in APPENDIX B. Authority for Issuance The Bonds are being issued under the Bond Law, the Authority Resolution, the City Resolution, and the Indenture. Under Section 863 of the California Code of Civil Procedure, any interested person may bring an action within 60 days from the date the City Resolution and City Council Regular Meeting - Page 318 of 473 -8- Authority Resolution were adopted to determine the validity of the Bonds and related lease documents. The period for bringing such action will expire on [July 16], 2022. General Provisions Bond Terms. The Bonds will be dated their date of delivery and issued in fully registered form without coupons in integral multiples of $5,000, so long as no Bond has more than one maturity date. The Bonds will mature on October 1 in each of the years and in the amounts, and bear interest at the rates, set forth on the inside cover page of this Official Statement. Calculation of Interest. Interest on the Bonds will be payable on April 1 and October 1 in each year, commencing October 1, 2022 (each an “Interest Payment Date”). Interest on the Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless: (a) 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, (b) a Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date, or (c) 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 with respect to the Bonds will be computed on the basis of a 360-day year composed of 12 months of 30 days each. 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. Payments of Principal and Interest. Interest is payable on each Interest Payment Date to the persons in whose names the ownership of the Bonds 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 City Council Regular Meeting - Page 319 of 473 -9- United States of America as specified in such written request, which will remain in effect until rescinded in writing by the Owner. The Trustee will pay principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of the Bonds in lawful money of the United States of America by check of the Trustee upon presentation and surrender thereof at the Office of the Trustee. 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 subsequent disbursement to beneficial owners of the Bonds. See “– Book-Entry Only System” below. Redemption* Optional Redemption. The Bonds maturing on or after October 1, 20__, will be subject to redemption, as a whole or in part at the option of the Authority, on October 1, 20__, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. Special Mandatory Redemption From Insurance or Condemnation Proceeds. The Bonds are subject to redemption as a whole, or in part among maturities, on any date, from any Net Proceeds required to be used for such purpose as provided in the Indenture, at a redemption price equal to 100% of the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium. Mandatory Sinking Fund Redemption. The Bonds maturing on October 1, 20__ and October 1, 20__ (collectively, the “Term Bonds”) are subject to mandatory redemption in whole, from sinking fund payments made under the Indenture, at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on October 1 in the years as set forth in the following tables: Term Bonds Maturing October 1, _____ Payment Date (October 1) Payment Amount (Maturity) * Preliminary; subject to change. City Council Regular Meeting - Page 320 of 473 -10- Term Bonds Maturing October 1, _____ Payment Date (October 1) Payment Amount (Maturity) If some but not all of the Term Bonds have been redeemed under optional or special mandatory redemption from insurance or condemnation proceeds provisions of the Indenture as described above, the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of the Term Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis as determined by the Authority, which shall notify the Trustee in writing of such determination. Selection of Bonds for Redemption. If less than all of the Bonds are to be redeemed, the particular maturities of Bonds to be redeemed at the option of the Authority will be determined by the Authority in its sole discretion. If the Bonds are registered in book-entry only form and so long as DTC or a successor securities depository is the sole registered owner of such Bonds, if less than all of the Bonds of a maturity are called for prior redemption, the particular Bonds or portions thereof to be redeemed shall be allocated on a pro rata pass-through distribution of principal basis in accordance with DTC procedures, provided that, so long as the Bonds are held in book-entry form, the selection for redemption of such Bonds shall be made in accordance with the operational arrangements of DTC then in effect, and, if the DTC operational arrangements do not allow for redemption on a pro rata pass-through distribution of principal basis, the Bonds will be selected for redemption, in accordance with DTC procedures, by lot. Notice of Redemption. The Trustee shall mail notice of redemption of the Bonds by first class mail, postage prepaid, not less than 20 nor more than 60 days before any redemption date, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Registration Books and to one or more Securities Depositories and to the Municipal Securities Rulemaking Board. 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. Conditional Redemption Notices; Rescission of Redemption. Redemption notices may be conditional. The Authority has the right to rescind any notice of redemption of the Bonds by written notice to the Trustee on or prior to the date 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 under the Indenture. 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 City Council Regular Meeting - Page 321 of 473 -11- rescission of redemption in the same manner as the original notice of redemption was sent under the Indenture. Effect of Redemption. If notice of redemption has been duly given as provided 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, said Bonds (or portions thereof) will cease to be entitled to any benefit or security under the Indenture, and the Owners of said 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. 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 Bonds, which shall 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 shall, 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 of Bonds. 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 or Bonds are surrendered for transfer, the Authority will execute and the Trustee will authenticate and deliver to the transferee a new Bond or Bonds of like series, interest rate, maturity and aggregate principal amount. The Authority will pay the cost of printing Bonds and City Council Regular Meeting - Page 322 of 473 -12- any services rendered or expenses incurred by the Trustee in connection with any transfer of Bonds. Exchange of Bonds. The Bonds 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. Limitations on Transfer and Exchange. The Trustee may refuse to transfer or exchange, under these provisions of the Indenture, any Bonds selected by the Trustee for redemption under the Indenture, or any Bonds during the period established by the Trustee for the selection of Bonds for redemption. City Council Regular Meeting - Page 323 of 473 -13- DEBT SERVICE SCHEDULE The table below shows annualized debt service payments on the Bonds, assuming no optional redemption or special mandatory redemption from insurance or condemnation proceeds. Year Ending June 30 Principal Interest Total Debt Service Total: City Council Regular Meeting - Page 324 of 473 -14- 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 Agreement and the Site Lease. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS” for a more complete summary of the Indenture, the Lease Agreement and the Site Lease. Revenues; Pledge of Revenues Pledge of Revenues and Other Amounts. 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 other than the Costs of Issuance Fund are pledged to secure the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds in accordance with their terms and the provisions of the Indenture. Said 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 Agreement, 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 additional amounts of rental paid by the City for the use and occupancy of the Leased Property that are pledged to other bonds, notes or other obligations in accordance with the terms of the Lease Agreement, and (ii) any Additional Rental Payments (consisting of certain administrative costs due to the Authority and the Trustee under the Lease Agreement), 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 has transferred to the Trustee all of the rights of the Authority in the Lease Agreement (other than the rights of the Authority under the provisions of the Lease Agreement regarding Additional Rental Payments, advances, release and indemnification covenants, and agreement to pay 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 forthwith be paid by the Authority to the Trustee. The Trustee is also entitled to and required to, subject to the provisions of the Indenture regarding rights of the Trustee, take all steps, actions and proceedings which the Trustee City Council Regular Meeting - Page 325 of 473 -15- 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 Agreement. Allocation of Revenues by Trustee; Application of Funds Deposit of Revenues in Bond Fund. All Revenues will be promptly deposited by the Trustee upon receipt thereof in a special fund designated as the “Bond Fund” which the Trustee will establish, maintain and hold in trust; except that all moneys received by the Trustee and required under the Indenture or under the Lease Agreement to be deposited in the Redemption Fund or the Insurance and Condemnation Fund will be promptly deposited in such funds. All Revenues deposited with the Trustee will 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 the principal of and interest on the Bonds or provision therefore under Indenture, and any applicable fees and expenses to the Trustee, will be withdrawn by the Trustee and remitted to the City. Allocation of Revenues. On or before each Interest Payment Date, the Trustee will transfer from the Bond Fund and deposit into the following respective accounts and subaccounts (each of which the Trustee will establish and maintain within the Bond Fund), the following amounts in the following order of priority: (a) 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. (b) 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 (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption). Application of Interest Account. All amounts in the Interest Account shall 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 shall be used and withdrawn by the Trustee solely to pay the principal amount of the Bonds at their respective maturity dates (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption). No Reserve Account. The Authority will not establish a debt service reserve fund for the Bonds. Lease Payments; Covenant to Appropriate Obligation to Pay. Under the Lease Agreement, subject to the provisions of the Lease Agreement regarding abatement and prepayment, the City agrees to pay to the Authority, its successors and assigns, the Lease Payments in the amounts specified in the Lease Agreement, City Council Regular Meeting - Page 326 of 473 -16- 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 Agreement, and to be deposited by the City with the Trustee on each of the Lease Payment Dates specified in the Lease Agreement. 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 Agreement, 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 thereunder. 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. 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 City and the Authority 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 Agreement, 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. Source of Payments; Covenant to Budget and Appropriate; Pledge of Pension Tax Override. Under the Lease Agreement, the Lease Payments are payable from any source of available funds of the City, subject to the provisions of the Lease Agreement regarding abatement. See “– Abatement” below. The City covenants in the Lease Agreement to take all actions required to include the Lease Payments in each of its budgets during the Term of the Lease Agreement and to make the necessary appropriations for all Lease Payments and Additional Rental Payments, subject to the provisions of the Lease Agreement regarding abatement. Such covenant 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 agreed to be carried out and performed by the City under the Lease Agreement. In addition, in furtherance of its authorized purposes, the City pledges the Pension Tax Override under the Lease Agreement to the payment of the Lease Payments. Limited Obligation The Bonds are special obligations of the Authority, payable solely from and secured by a pledge of the Revenues as specified therein and in the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State, or any political subdivision thereof, is pledged to the payment of the Bonds. City Council Regular Meeting - Page 327 of 473 -17- The obligation of the City to pay Lease Payments does not constitute an indebtedness of the City, the State, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation, except for the pension tax override levied and collected by the City as described herein. The Authority has no power to tax. Abatement Termination or Abatement Due to Eminent Domain. Under the Lease Agreement, 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 Agreement 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 Agreement 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. Under the Lease Agreement, 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. In the event of any such damage or destruction, the Lease Agreement continues in full force and effect and the City waives any right to terminate the Lease Agreement by virtue of any such damage and destruction. Notwithstanding the foregoing, there will be no abatement of Lease Payments under the Lease Agreement to the extent that the proceeds of property insurance are available to pay Lease Payments that would otherwise be abated, it being declared that such proceeds and amounts constitute a special fund for the payment of the Lease Payments. Default; Remedies The occurrence of any one or more of the certain events constitute an Event of Default under the Lease Agreement, including: (a) Failure by the City to pay any Lease Payment or other payment required to be paid under the Lease Agreement at the time specified therein. City Council Regular Meeting - Page 328 of 473 -18- (b) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed Agreement (subject to a cure period as described in the Lease Agreement). Whenever any Event of Default has happened and is continuing, the Authority may exercise any and all remedies available under law or granted under the Lease Agreement to collect the amounts then due and thereafter to become due thereunder or to enforce any other of its rights thereunder, except as provided therein. Notwithstanding anything in the Lease Agreement or in the Indenture to the contrary, (a) 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 (the Authority expressly waives the right to receive any amount from the City pursuant to Section 1951.2 of the California Civil Code to accelerate payment of the Lease Payments under the Lease Agreement) and (b) the Authority shall have no right to re-lease any portion of the Leased Property that constitutes a City street. Each covenant in the Lease Agreement 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 under the Lease Agreement; except that no termination of the Lease Agreement may be effected either by operation of law or acts of the parties hereto, except only in the manner therein expressly provided. Insurance Liability Insurance. Under the Lease Agreement, the City is required to maintain or cause to be maintained throughout the Term of the Lease Agreement, 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. 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 the Lease Agreement, 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. Property Insurance. Solely to the extent the Leased Property is property other than the City’s streets, the City shall procure and maintain, or cause to be procured and maintained, throughout the Term of the Lease Agreement, property insurance against loss or damage to all improvements situated on the Leased Property, in an amount at least equal to the lesser of (a) 100% of the replacement value of the improvements, 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; provided, that such coverage shall include City Council Regular Meeting - Page 329 of 473 -19- earthquake insurance only 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 Agreement and described below. No Rental Interruption Insurance. The City is neither required nor will it maintain rental interruption insurance with respect to the Leased Property. 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 to the redemption of Bonds as set forth in the Indenture. Additional Lease Payments and Additional Bonds The City may amend or supplement the Lease Agreement to obligate itself to pay additional amounts of rental for the use and occupancy of the Leased Property, subject to the following: (A) such additional amounts of rental are pledged or assigned for the payment of any bonds, notes, leases or other obligations the proceeds of which are applied to finance authorized expenditures of the City for the common benefit, and (B) the City has obtained and filed with the Trustee an appraisal or other evidence of value satisfactory to the City showing that the estimated value of the Leased Property is at least equal to the aggregate principal amount of the Outstanding Bonds and all such other bonds, notes, leases or other obligations. Accordingly, the City and the Authority have the ability to enter into other long-term obligations secured by the payment of lease payments on the Leased Property without the prior consent of the Trustee or the Owners of the Bonds. [Remainder of page intentionally left blank] City Council Regular Meeting - Page 330 of 473 -20- THE AUTHORITY The Authority was formed pursuant to the provisions of Articles 1 through Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”) and the Join Exercise of Powers Agreement, dated as of December 1, 1992, by and between the City and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency), to assist in financings undertaken by either member. The City Council of the City serves as the governing body of the Authority. THE CITY General The City of Lynwood (the “City”) was incorporated in 1921 under the general laws of the State of California (the “State”). The City is situated approximately 13 miles south of downtown Los Angeles at the intersection of two major freeways. The local economy represents a diverse blend of industrial, commercial, agricultural and residential development. The City covers 4.9 square miles and serves a population of 69,880. The City provides the full range of municipal services contemplated by statute, including those functions delegated to cities under State law. These services including public safety (which are contracted to Los Angeles County), public works, recreational and cultural activities, public improvements, planning, zoning, and general administrative services. Other services-such as sanitation, flood control and transportation are provides by special districts with the City being a member. City Government The City has a Council-Manager form of government made up of five council members elected to four-year, overlapping terms. The Mayor and the Council appoint a City Manager who is responsible for daily administration of City affairs, including preparation and submission of the annual budget, which is done under the direction of the Mayor and the City Council for the Mayor’s submission to the City Council. The City Treasurer, an elected position, invests public funds in a prudent manner that provides maximum security while meeting daily cash flow demands and conforming to all statutes governing the investment of public funds. The City Attorney, directly appointed by the City Council, and the deputy city attorney are responsible for administration of all legal affairs of the city, including the City Council, the various city commissions, as well as all city departments and officers. Member Position Term Expires Jorge Casanova Mayor December 20__ José Luis Solache Mayor Pro Tem December 20__ Oscar Flores Council Member December 20__ Marisela Santana Council Member December 20__ Rita Soto Council Member December 20__ City Council Regular Meeting - Page 331 of 473 -21- Following are short biographies of the City Manager and Finance Director: Ernie, Hernandez, City Manager. Mr. Hernandez was City Manager in neighboring Hawaiian Gardens where he served in that position for four years. Prior to that he was Deputy City Manager in Norwalk for nearly a decade. He has extensive experience in leading and directing municipal administrative and operational functions. Mr. Hernandez, who also worked for the cities of Santa Ana, Long Beach and South El Monte, holds a Master’s Degree in Public Administration from Long Beach State University, and a Bachelor of Arts Degree from the California State University Dominguez Hills. Harry Wong, Finance Director. Mr. Wong has more than 10 years of financial management experience in municipalities, together with more than 3 years of audit experience with PWC and a Big-4 Accounting firm. Mr. Wong also has a bachelor’s in accountancy from California State University Northridge, an MBA from University of Irvine and has been a CPA since 2004. Labor Relations As of May 3, 2022, the City employed 100 full-time equivalent (FTE) employees and 21 part-time employees. Two unions represent 109.5 of the FTEs. The following table identifies the number of employees covered and the current status of the contracts with the bargaining units. Labor Organization Employees Current Contract Expiration Date LEA Association 93.5 June 30, 2023 LEA Management Group 16.0 June 30, 2023 CITY FINANCIAL INFORMATION Accounting and Financial Reporting The City maintains its accounting records in accordance with Generally Accepted Accounting Principles (“GAAP”) and the standards established by the Governmental Accounting Standards Board (“GASB”). The Governmental Accounting Standards Board published its Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments, on June 30, 1999 (“GASB Statement No. 34”). GASB Statement No. 34 provides guidelines to auditors, state and local governments and special purpose governments such as school districts and public utilities, on new requirements for financial reporting for all governmental agencies in the United States. Generally, the basic financial statements and required supplementary information should include (i) Management’s Discussion and Analysis; (ii) government-wide financial statements prepared using the economic measurement focus and the accrual basis of accounting and fund financial statements prepared using both the current financial resources measurement focus and the modified accrual method of accounting (governmental funds) and funds using the economic measurement focus and the accrual basis of accounting (proprietary funds) and (iii) required supplementary information. The City’s financial statements are prepared in conformance with the requirements of GASB Statement No. 34. City Council Regular Meeting - Page 332 of 473 -22- In the government-wide Statement of Net Position and Statement of Activities in the City’s audited financial statements for the Fiscal Year ending June 30, 2021, both governmental and proprietary activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset is used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when “measurable and available.” Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. The City defines available to be within 60 days of year- end. Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for principal and interest on long-term liabilities, claims and judgments, and compensated absences, which are reported when due. Governmental capital asset acquisitions are reported as expenditures in governmental funds. Proceeds for governmental long-term liabilities and acquisitions under capital leases are reported as other financing sources. Those revenues susceptible to accrual include taxes and intergovernmental revenues. All other revenue items are considered to be measurable and available only when cash is received by the government. Impact fees are received and recognized as revenue upon project completion and inspection. Certain indirect costs are included in program expenses reported for individual functions and activities. Grant revenues are recognized in the Fiscal Year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position are available to finance program expenditures. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary. All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset is used. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary funds’ principal operations. The principal operating revenues of the enterprise and internal service funds are charges for services. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. The City’s fiduciary funds consist of a private-purpose trust fund, which is reported using the economic resources measurement focus, and agency funds, which have no measurement focus, but utilizes the accrual basis for reporting assets and liabilities. The City Council employs, at the beginning of each Fiscal Year, an independent certified public accounting firm which, at such time or times as specified by the City Council, at least City Council Regular Meeting - Page 333 of 473 -23- annually, at such other times as such firm shall determine, examines the books, records, inventories and reports of all officers and employees who receive, control, handle or disburse public funds and of all such other officers, employees or departments as the City Council may direct. As soon as practicable after the end of the Fiscal Year, a final audit and report is submitted by such firm to the City Council and a copy of the financial statements as of the close of the Fiscal Year is published. Pension Tax Override; Bartel Report Overview. On April 9, 1946, the voters in the City approved the Pension Tax Override, which is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes. The Pension Tax Override is accounted for in the Retirement Special Revenue Fund maintained by the City. Pension Tax Override revenues for the fiscal year ended June 30, 2021 were $___________. AB 377 Limitation. Although the 1946 ballot measure approving the Pension Tax Override authorizes the City to levy the Pension Tax Override in an amount sufficient to provide revenues to meet all of the City’s obligations for contributions to CalPERS under the Retirement Law, the maximum tax rate for the Pension Tax Override was capped by Assembly Bill 377 (“AB 377”), enacted in July 1983 as Chapter 491 of Statutes of 1983, now codified as Section 96.31 of the California Revenue and Taxation Code. AB 377 prohibits the levying of a retirement tax to pay for pension system costs in excess of the rate imposed in Fiscal Year 1982-83 or 1983-84, whichever is higher. The Fiscal Year ________ rates were $_____ per $100 of assessed valuation, which established the maximum rate of the Pension Override Tax per AB 377. In addition, the City was previously involved in litigation regarding the amount of the Pension Tax Override. In accordance with a settlement of the lawsuit relating to the Pension Tax Override, the City fixed the rate of tax at $0.125 per $100 of assessed valuation. California courts have held that Proposition 13, discussed further herein, permits additional property taxation to pay for pension plans with special tax authority approved by the voters prior to July 1, 1978; provided, the imposition of such tax is limited to the funding of employee retirement benefits at a level not in excess of the retirement benefits in existence prior to July 1, 1978. Bartel Report. In order to ascertain the amount or revenues that may be pledged to the payment of Lease Payments in accordance with applicable limitations, the City commissioned Bartel Associates, LLC to prepare a report, dated __________, 2022 (the “Bartel Report”). General Fund Overview and Budget Overview. The City’s General Fund is its primary operating fund, and is where the City accounts for all its general-purpose revenues. It is distinguished from the City’s other governmental funds that are used to account for special purpose revenues, capital projects, debt service activities, and monies held for the benefit of others. The City operates on a Fiscal Year basis that begins on the first day of July of each year and ends on the thirtieth day of June the following year. The annual budget adopted by the City Council provides for the general operation of the City. Development of the City’s annual budget is a process which generally begins in February and March and continues until the budget is adopted by the City Council in June. The General City Budget includes programs which are provided on a largely city-wide basis. The programs and services are financed primarily by the City Council Regular Meeting - Page 334 of 473 -24- City’s share of sales tax, property tax, revenues from the State and/or federal government, and charges for services provided. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the Fiscal Year. Appropriations lapse at Fiscal Year-end. The City Council generally reauthorizes appropriations for continuing projects and activities. The City Council has the legal authority to amend the budget of any fund at any time during the Fiscal Year. The budgetary level of control (the level on which expenditures may not legally exceed appropriations) is generally at the fund level. The City Manager is authorized to transfer budgeted amounts within departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. Long-Term Financial Planning. The City continues to explore additional sources of revenue to meet expectations for community services. The City utilizes a combination of expenditure spending limits, budget cuts, some increases in fees and the prudent use of reserves to balance each year’s budget. The City must continue to be conservative and manage its fiscal affairs in a prudent manner. Budgetary Control Policy. The City maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the general fund, special revenue funds, debt service funds, capital projects funds, enterprise funds, and internal service funds are included in the annual appropriated budget. The level of budgetary control (the level at which expenditures cannot legally exceed the appropriated amount) is established by function and activity within an individual fund. The City’s budgetary records are maintained on a modified accrual basis. Revenues are recorded when measurable and available and expenditures are recorded when goods or services are received and the liability incurred. Based on the City’s financial management policies, the City is required to maintain a balanced operating budget, which is adopted by resolution on or before June 30th for the ensuing Fiscal Year. Following the adoption of the budget, it is sometimes necessary to amend the budget. Appropriations in the budget may be adjusted by recommendation of the Finance Director and approval by the City Manager when the budget is not increased in total amount. Savings from appropriations in one section of a department budget may be used to fund another section of a department budget. Any increase in appropriations that increases the total adopted budget must be approved by the City Council. The City Council formally reviews the City’s fiscal condition and amends appropriations, if necessary, six months after the beginning of each fiscal year. COVID-19 Pandemic. The City continues to monitor the spread of COVID-19 and has been working with local, state, and national agencies to address the potential impact of the pandemic upon the City since its outbreak in the United States in 2020. 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. See the references to COVID-19 in the following subsection in connection with the unknown impacts on the City’s budgeting process. City Council Regular Meeting - Page 335 of 473 -25- Most Recently Adopted Budget. The adopted biannual budget for fiscal years 2021-22 and 2022-23 was approved on July 20, 2021 (the “Adopted Budget”). The Fiscal Year 2021-22 and Fiscal Year 2022-23 Proposed Budgets were developed in the context of the City gradually recovering from the impact of the Covid-19 pandemic. The adopted Fiscal Year 2021-22 operating revenues for all funds, excluding the Successor Agency, is $97.77M and $42.24M for adopted transfers in, for a total of $140.01M. The approved Fiscal Year 2022-23 operating revenues for all funds, excluding the Successor Agency, is $91.03M and $18.38M for approved transfers in, for a total of $109.42M. The adopted Fiscal Year 2021-22 operating expenditures for all funds, excluding the Successor Agency, is $110.27M and $42.24M for adopted transfers out, for a total of $152.51M. The approved Fiscal Year 2022-23 operating expenditures for all funds, excluding the Successor Agency, is $89.57M and $18.38M for approved transfers out, for a total of $107.96M. The adopted General Fund operating revenue budget for Fiscal Year 2021-22 is $35.95M with an additional $2.09M for non-operating transfers in for a total of $38.04M. The approved General Fund operating revenue budget for Fiscal Year 2022-23 is $36.56M with an additional $2.21M for non- operating transfers in for a total of $38.77M. The adopted General Fund operating expenditure budget for Fiscal Year 2021-22 is $36.26M with an additional $3.14M for non-operating transfers out for a total of $39.40M. The approved operating expenditure budget for Fiscal Year 2022-23 is $37.65M with an additional $2.42M for non-operating transfers out for a total of $40.07M. Current Budget and Historical Budget Information. Set forth in Table 1 are the General Fund budgets that were adopted for Fiscal Years 2020-21 through 2022-23, as well as the audited actuals for Fiscal Year 2020-21. The budget may be amended and revised as necessary by the City Council. City Council Regular Meeting - Page 336 of 473 -26- TABLE 1 City of Lynwood General Fund Budget Summary Fiscal Years 2020-21 through 2022-23 2020-21 Revised Budget 2020-21 Audited 2021-22 Adopted Budget 2022-23 Approved Budget Revenues Property taxes $11,646,501 $12,237,047 $11,844,069 $11,749,505 Sales taxes 9,228,862 12,886,776 12,173,400 12,558,100 Utility users tax 5,270,000 5,225,838 5,270,000 5,270,000 Franchise fees 833,144 1,103,890 973,144 973,144 Licenses and permits 786,000 1,038,026 594,820 614,600 Revenues from other agencies 124,229 144,666 149,929 159,929 Charges for current services 1,210,064 953,382 1,604,025 1,933,450 Other revenue 1,128,650 2,412,879 2,036,001 1,885,474 Fines and Forfeitures 1,210,000 2,323,943 906,000 1,016,000 Use of money and property 442,997 246,191 395,497 395,497 Transfers in - - - Total Revenues 34,922,283 38,572,647 35,946,885 36,555,699 Expenditures Current: General Government 4,609,215 3,951,512 4,772,211 5,037,430 Public safety 19,660,906 19,042,384 20,541,020 21,544,072 Public works 6,764,664 6,201,299 7,063,923 7,289,390 Community development 229,467 88,181 467,414 307,644 Parks and recreation 3,188,630 2,334,105 3,419,876 3,472,725 Capital outlay - - - - Debt Service: - - - - Principal retirement - - - - Interest and fiscal charges - - - - Total expenditures 34,452,882 31,617,481 36,264,444 37,651,261 Excess (deficiency) of revenues over (under) expenditures 469,401 6,955,166 (317,559) (1,095,562) Other financing sources(uses) Transfers in 3,446,240 2,725,050 2,097,474 2,218,674 Transfers out (5,417,574) (4,505,549) (3,138,612) (2,421,931) Proceeds from sale of land 2,000,000 - - - Total other financing sources 28,666 (1,780,499) (1,041,138) (203,257) Net Change in fund balances 498,067 5,174,667 (1,358,697) (1,298,819) Beginning of year 5,529,106 5,529,106 6,253,309 4,894,611 End of year 6,027,173 10,703,773 4,894,611 3,595,793 ____________________ Source: City of Lynwood Finance Department. City Council Regular Meeting - Page 337 of 473 -27- General Fund Key Revenue Sources. The three major general fund revenue sources of the City for Fiscal Year 2020-21 (collectively, the “Key Revenue Sources”), are Sales Tax (approximately 39.6% of total general fund revenue), Property Tax (approximately 36.3% of total general fund revenue) and Utility User’s Taxes (approximately 16.1% of total general fund revenue). Also see “APPENDIX A – AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR 2020-21” herein. The following Table 2 sets forth the audited revenues received by the City for each of the Key Revenue Sources for Fiscal Years 2016-17 through 2020-21, which have been totaled and compared to the prior Fiscal Year to illustrate the amount and percent of change. Table 2 CITY OF LYNWOOD Fiscal Years 2016-17 through 2020-21 General Fund Key Revenue Sources and Change From Prior Year(1) Fiscal Year Property Taxes Utility User’s Taxes Sales Taxes Franchise Taxes Business License Taxes Other Taxes Total of Key Tax Sources Taxes % Change From Prior Year 2016-17 $9,265,676 $5,169,598 $4,814,034 $577,959 $876,656 $185,814 $20,889,737 --% 2017-18 9,795,477 5,196,640 9,176,594 671,343 885,191 143,648 25,868,893 23.8 2018-19 10,683,709 5,014,483 10,236,088 673,766 896,212 192,692 27,696,950 7.1 2019-20 10,877,603 4,736,649 10,107,253 702,844 800,001 201,617 27,425,967 (1.0) 2020-21 11,807,523 5,225,838 12,886,776 652,305 764,016 410,021 31,746,479 15.8 (1) Includes transfers in from other funds. Source: City of Lynwood - audited financial statements 2018-19 through 2020-21. [Remainder of page intentionally left blank] City Council Regular Meeting - Page 338 of 473 -28- The following Table 3 sets forth the audited revenues received by the City for the total of Key Revenue Sources and total of Other General Fund Revenue Sources for Fiscal Years 2018- 19 through 2020-21. TABLE 3 City of Lynwood General Fund Revenues by Revenue Source Fiscal Years 2018-19 through 2020-21 2018-19 2019-20 2020-21 Category Revenues % of Total Revenues % of Total Revenues % of Total Taxes: Property tax $10,683,709 32.2% $10,877,603 32.3% $11,807,523 36.3% Utility users 5,014,483 15.1 4,736,649 14.1 5,225,838 16.1 Sales Tax 10,236,088 30.8 10,107,253 30.1 12,886,776 39.6 Franchise taxes 673,766 2.0 702,844 2.1 652,305 2.0 Business license tax 896,212 2.7 800,001 2.4 764,016 2.3 Other taxes 192,692 0.6 201,617 0.6 410,021 1.3 Use of money and property 4,371,883 13.2 6,076,939 18.1 (11,930) 0.0 Miscellaneous 1,158,007 3.5 127,625 0.4 823,915 2.5 Total Revenues(1) $33,226,840 100% $33,630,531 100% $32,558,464 100% ________________ (1) Totals may not add due to rounding. Source: City of Lynwood - audited financial statements 2018-19 through 2020-21. Sales and Use Taxes Sales & Use Taxes represented the largest source of tax revenues to the City’s General Fund for the most recent fiscal year, accounting for approximately 39.6% of total General Fund revenues for Fiscal Year 2020-21. 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. [Remainder of page intentionally left blank] City Council Regular Meeting - Page 339 of 473 -29- Historic Taxable Transactions. The following table shows historical taxable transactions in the City for the most recent five years available. TABLE 4 City of Lynwood Taxable Transactions Fiscal Years 2017 through 2021 (In Thousands) 2017 2018 2019 2020 2021 Motor Vehicle and Parts Dealers $23,702 $23,316 $26,389 $24,852 $28,014 Home Furnishings and Appliances 6,776 11,044 18,895 16,012 21,848 Building Materials 32,762 37,310 35,596 38,410 46,570 Food and beverage stores 41,736 42,863 43,481 46,957 47,257 Gasoline stations 51,543 63,082 69,490 53,414 73,906 Apparel stores 26,020 26,990 26,025 22,780 37,981 General merchandise stores 17,089 14,057 5,670 5,586 7,566 Food services and drinking places 85,634 88,206 94,000 86,974 102,747 Other retail stores 22,323 24,146 24,819 31,344 41,606 All other outlets 43,605 40,403 49,275 57,571 97,330 Total All Outlets $351,191 $371,417 $393,641 $383,880 $504,825 ____________________ Source: California Department of Tax and Fee Administration (as of January 11, 2022). State-Wide Sales Tax Law. 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 5 City of Lynwood Sales Tax Rate Effective April 1, 2022 Statewide Rate 6.00% Los Angeles County Sales Tax 0.25 Los Angeles County Special Tax 3.00 City of Lynwood Transactions and Use Tax 1.00 Total 10.25% ____________ Source: City of Lynwood Finance Department. 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 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. City Council Regular Meeting - Page 340 of 473 -30- 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. City Council Regular Meeting - Page 341 of 473 -31- Property Taxes Property Taxes represents the second-largest sources of taxes to the City’s General Fund, after sales/use taxes. 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. 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 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 City Council Regular Meeting - Page 342 of 473 -32- 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. Historical Assessed Valuations. The table below presents the assessed valuation of taxable property in the City from fiscal year 2012-13 through fiscal year 2021-22. TABLE 6 City of Lynwood Assessed Valuations of All Taxable Property Fiscal Years 2012-13 through 2021-22 Fiscal Year Local Secured Utility Unsecured Total % Change 2012-13 $2,683,399,346 $977 $87,408,507 $2,770,808,830 --% 2013-14 2,589,115,897 191 90,514,780 2,679,630,868 (3.3) 2014-15 2,694,961,056 182 89,872,751 2,784,833,989 3.9 2015-16 2,831,887,191 177 91,500,901 2,923,388,269 5.0 2016-17 2,960,766,716 159 87,435,655 3,048,202,530 4.3 2017-18 3,112,901,366 153 86,372,576 3,199,274,095 5.0 2018-19 3,388,317,977 0 125,816,908 3,514,134,885 9.8 2019-20 3,475,747,092 0 131,942,448 3,607,689,540 2.7 2020-21 3,761,035,322 0 98,013,824 3,859,049,146 7.0 2021-22 4,017,350,210 0 102,846,558 4,120,196,768 6.8 Source: California Municipal Statistics Inc. City Council Regular Meeting - Page 343 of 473 -33- Historical Secured Property Tax Levies and Collections. The table below presents secured property tax collections and delinquencies in the City for the for fiscal years shown. TABLE 7 City of Lynwood Secured Property Tax Levies and Collections Fiscal Years 2016-17 through 2020-21 Fiscal Year Secured Tax Charge(1) Amount Delinquent June 30 % Delinquent June 30 2016-17 $3,504,433.67 $41,620.71 1.19% 2017-18 3,694,410.57 45,896.21 1.24 2018-19 4,035,343.98 55,151.38 1.37 2019-20 4,157,736.12 93,766.39 2.26 2020-21 4,440,356.83 75,698.69 1.70 (1) 1% General Fund apportionment. Excludes redevelopment agency impounds. Source: California Municipal Statistics Inc. Assessed Valuations and Parcels by Land Use. The following table shows secured assessed valuations and parcels by land use for fiscal year 2021-22. As shown in the table, approximately 89.15% of the parcels in the City, representing almost 70.87% of the assessed valuation in the City, has residential uses. Table 8 City of Lynwood Secured Assessed Valuation and Parcels by Land Use Fiscal Year 2021-22 2021-22 % of No. of % of Non-Residential: Assessed Valuation (1) Total Parcels Total Commercial $502,075,052 12.50% 564 5.40% Vacant Commercial 13,232,592 0.33 83 0.80 Industrial 407,752,814 10.15 206 1.97 Vacant Industrial 16,359,725 0.41 31 0.30 Recreational 4,097,904 0.10 3 0.03 Government/Social/Institutional 217,602,947 5.42 174 1.67 Miscellaneous 9,272,788 0.23 72 0.69 Subtotal Non-Residential $1,170,393,822 29.13% 1,133 10.85% Residential: Single Family Residence $1,936,833,150 48.21% 7,187 68.85% Condominium/Townhouse 16,768,067 0.42 59 0.57 Mobile Home 928,203 0.02 35 0.34 Mobile Home Park 1,671,868 0.04 1 0.01 2-4 Residential Units 567,853,557 14.14 1,543 14.78 5+ Residential Units/Apartments 312,520,698 7.78 373 3.57 Vacant Residential 10,380,845 0.26 108 1.03 Subtotal Residential $2,846,956,388 70.87% 9,306 89.15% Total $4,017,350,210 100.00% 10,439 100.00% _________________ (1) Local Secured Assessed Valuation, excluding tax exempt property. Source: California Municipal Statistics, Inc. City Council Regular Meeting - Page 344 of 473 -34- Per Parcel Assessed Valuation of Single-Family Homes. Table 8 below shows the per parcel assessed valuation for improved single-family homes (according to 2021-22 assessed valuation) in the City. The average assessed valuation is $269,491, and the median assessed valuation is $252,366. Table 9 CITY OF LYNWOOD Fiscal Year 2021-22 Per Parcel Assessed Valuation of Single-Family Homes No. of 2021-22 Average Median Parcels Assessed Valuation Assessed Valuation Assessed Valuation Single Family Residential 7,187 $1,936,833,150 $269,491 $252,366 2021-22 No. of % of Cumulative Total % of Cumulative Assessed Valuation Parcels (1) Total % of Total Valuation Total % of Total $0 - $24,999 17 0.237% 0.237% $340,684 0.018% 0.018% $25,000 -$49,999 275 3.826 4.063 11,200,788 0.578 0.596 $50,000 - $74,999 310 4.313 8.376 18,971,861 0.980 1.575 $75,000 - $99,999 194 2.699 11.076 16,818,626 0.868 2.444 $100,000 - $124,999 201 2.797 13.872 22,578,936 1.166 3.610 $125,000 - $149,999 250 3.479 17.351 34,428,099 1.778 5.387 $150,000 - $174,999 384 5.343 22.694 62,715,499 3.238 8.625 $175,000 - $199,999 524 7.291 29.985 98,646,645 5.093 13.718 $200,000 - $224,999 703 9.782 39.766 149,957,684 7.742 21.461 $225,000 - $249,999 686 9.545 49.311 162,746,521 8.403 29.863 $250,000 - $274,999 537 7.472 56.783 140,765,197 7.268 37.131 $275,000 - $299,999 471 6.553 63.337 135,507,953 6.996 44.128 $300,000 - $324,999 405 5.635 68.972 126,414,420 6.527 50.654 $325,000 - $349,999 323 4.494 73.466 108,616,571 5.608 56.262 $350,000 - $374,999 291 4.049 77.515 105,375,216 5.441 61.703 $375,000 - $399,999 284 3.952 81.467 110,108,037 5.685 67.388 $400,000 - $424,999 267 3.715 85.182 110,040,568 5.681 73.069 $425,000 - $449,999 254 3.534 88.716 111,082,076 5.735 78.805 $450,000 - $474,999 235 3.270 91.986 108,453,204 5.600 84.404 $475,000 - $499,999 160 2.226 94.212 77,833,212 4.019 88.423 $500,000 and greater 416 5.788 100.000 224,231,353 11.577 100.000 7,187 100.000% $1,936,833,150 100.000% (1) Improved single-family residential parcels. Excludes condominiums and parcels with multiple family units. Source: California Municipal Statistics, Inc. [Remainder of Page Intentionally Left Blank] City Council Regular Meeting - Page 345 of 473 -35- 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 10.60% of the total City fiscal year 2021-22 assessed valuation of $425,931,536. TABLE 10 City of Lynwood Principal Property Taxpayers (Secured Roll) Fiscal Year 2021-22 2021-22 % of Property Owner Primary Land Use Assessed Valuation Total (1) 1. Duke Lynwood LP Industrial $72,417,502 1.80% 2. Terreno Lynwood LLC Industrial 64,887,602 1.62 3. Plamex Investment LLC Shopping Center 48,220,864 1.20 4. Rexford Industrial Industry Way Industrial 24,427,126 0.61 5. Prime Desert Properties LLC Professional Building 24,336,813 0.61 6. Primrose 19 LP Office Building 21,641,910 0.54 7. Earl M. Jorgensen Co. Industrial 20,682,478 0.51 8. EK Lynwood LLC Shopping Center 16,640,575 0.41 9. Lee Riviera Enterprises LLC Professional Building 15,282,705 0.38 10. Albi Lynwood Investments LLC Commercial 14,937,452 0.37 11. 805 Property LLC Shopping Center 14,816,150 0.37 12. Shapco Partnership Industrial 11,864,476 0.30 13. Lynwood MFT LLC Professional Building 11,232,643 0.28 14. Jones Holdings I, II & III LLC Industrial 11,101,937 0.28 15. El Segundo Boulevard Property Apartments 10,742,115 0.27 16. Yousuf H. Haroon Industrial 8,840,650 0.22 17. Deborah Drooz Commercial 8,712,380 0.22 18. Tony Trinh Trust Commercial 8,639,796 0.22 19. Nova Storage Lynwood LP Industrial 8,316,163 0.21 20. NP Wright LLC Industrial 8,190,199 0.20 $425,931,536 10.60% _________________________________ (1) The total City secured assessed valuation for fiscal year 2021-22 is $4,017,350,210. Source: California Municipal Statistics, Inc. Other Sources of Revenues Utility Tax. It is the third largest, which comprises about 14% of the City’s total annual General Fund revenues. Currently, a 9% utility users tax is imposed on the City’s water, telephone, gas, electricity and cable television services. Business License Tax and Permit Fee. The City collects fees for licenses and permits provided by the City, including, but not limited to, regulatory permits, development permits, plan check and permitting, building permits and inspections and other development fees. The business license tax is an annual charge that is applied to either gross receipts of payroll for each business or more commonly, the number of employees per business depending on the type of business. There are some exceptions and additional fees that may apply to certain specialty or professional businesses. The permit fee is project based. Franchise Tax. The City levies a franchise tax on its pipelines, cable, towing, and utility services franchises. A franchise tax of 5% is imposed on any franchise holder operating within the boundaries of the City. City Council Regular Meeting - Page 346 of 473 -36- Financial Statements General. The City’s accounting policies conform to generally accepted accounting principles and reporting standards set forth by the State Controller. The audited financial statements also conform to the principles and standards for public financial reporting established by GASB. Basis of Accounting and Financial Statement Presentation. The government-wide financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due. Most Recent Audited Financial Statements. Set forth in the following tables is the City’s General Fund balance sheets and statements of revenues, expenditures and changes in General Fund Balance for fiscal years 2016-17 through 2020-21, 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 Annual Comprehensive Financial Report (“ACFR”) for Fiscal Year 2020-21, including the City’s audited financial statements, is set forth in Appendix A. General Fund Historical Financial Data The following Tables 11 and 12 provide a five-year history of (i) the City’s General Fund revenues, expenditures, and changes in fund balances for Fiscal Years 2016-17 through 2020- 21 and (ii) the City’s Comparative Balance Sheet for Fiscal Years 2016-17 through 2020-21. City Council Regular Meeting - Page 347 of 473 -37- TABLE 11 City of Lynwood Statements of Revenues, Expenditures and Changes in General Fund Balance Fiscal Years 2016-17 through 2020-21 2016-17 2017-18 2018-19 2019-20 2020-21 Revenues Taxes and assessments $20,005,982 $24,941,479 $28,505,748 $26,806,601 $31,453,560 Licenses and permits 943,700 815,194 945,896 942,376 1,038,026 Fines, penalties and forfeitures 1,601,620 1,751,217 2,344,777 1,654,693 2,323,943 Use of money and property 298,652 346,348 588,774 618,797 246,191 Intergovernmental 131,653 118,915 119,595 137,311 144,666 Charges for service 1,720,903 1,546,418 1,872,551 1,907,408 953,382 Administrative support 1,118,246 1,118,246 1,118,246 1,118,674 1,118,674 Miscellaneous 1,086,943 1,924,946 1,192,765 370,148 1,294,205 Total Revenues 26,907,699 32,562,763 36,688,352 33,556,008 38,572,647 Expenditures Current: General Government 4,306,522 5,330,570 4,433,873 5,100,825 3,951,512 Public safety 16,326,446 17,437,065 17,729,040 18,742,412 19,042,384 Public works 4,293,658 5,495,132 6,841,748 6,822,296 6,201,299 Community development 113,187 48,519 138,816 -- 88,181 Parks and recreation 2,935,450 3,377,729 3,453,952 3,393,928 2,334,105 Capital outlay 1,191 7,893 138,883 83,100 -- Total expenditures 27,976,454 31,696,908 32,736,312 34,142,561 31,617,481 Excess (deficiency) of revenues over (under) expenditures (1,068,755) 865,855 3,952,040 (586,553) 6,955,166 Other financing sources(uses) Transfers in 2,635,588 3,094,178 2,677,967 1,105,160 2,725,050 Transfers out (1,457,756) (1,650,331) (4,446,163) (2,052,818) (4,505,549) Total other financing sources 1,177,832 1,443,847 (1,768,196) (947,658) (1,780,499) Net Change in fund balances 109,077 2,309,702 2,183,844 (1,534,211) 5,174,667 Beginning of year 2,460,694 2,569,771 4,879,473 7,063,317 5,529,106 End of year $2,569,771 $4,879,473 $7,063,317 $5,529,106 $10,703,773 ____________ Source: City Finance Department and City of Lynwood - audited financial statements for fiscal years 2016-17 through 2020-21. City Council Regular Meeting - Page 348 of 473 -38- TABLE 12 City of Lynwood General Fund Balance Sheets Fiscal Years 2016-17 through 2020-21 2016-17 2017-18 2018-19 2019-20 2020-21 Assets Cash and investments $4,454,157 $4,644,238 $9,177,157 $5,516,506 $8,633,865 Receivables: Accounts 1,161,134 1,329,982 1,374,808 1,170,756 2,763,310 Interest 8,160 12,927 97,159 40,433 5,813 Intergovernmental 1,299,671 2,076,734 1,936,313 2,289,577 2,873,421 Due from other funds 3,604,714 5,021,046 3,125,668 4,681,451 4,998,943 Other assets 19,161 -- -- -- -- Restricted cash and investments: Cash and investments 7,329 7,330 7,330 7,331 7,331 Cash and investments with fiscal agents -- -- -- -- -- Total Assets 10,554,326 13,092,257 15,718,435 13,706,054 19,282,683 Deferred Inflow of Resources Unavailable revenues 627,166 687,255 515,820 505,722 1,078,424 Total Deferred Outflow of Resources 627,166 687,255 515,820 505,722 1,078,424 Liabilities Accounts payable and accrued liability 3,074,338 3,171,269 3,755,016 3,513,809 3,420,166 Deposits 1,242,826 1,314,035 1,344,057 1,117,192 1,040,095 Advances from successor agency 3,040,225 3,040,225 3,040,225 3,040,225 3,040,225 Total Liabilities 7,357,389 7,525,529 8,139,298 7,671,226 7,500,486 Fund Balances Restricted 7,329 7,330 7,330 7,331 7,331 Committed 75,372 561,594 1,621,084 3,159,083 4,828,977 Unassigned 2,487,070 4,310,549 5,434,903 2,362,692 5,867,465 Total Fund Balance 2,569,771 4,879,473 7,063,317 5,529,106 10,703,773 Total Liabilities & Fund Balance $10,554,326 $13,092,257 $15,718,435 $13,706,054 $19,282,683 _____________ Source: City of Lynwood - Audited Financial Statements for fiscal years 2016-17 through 2020-21. Relevant Fiscal Policies Reserve Policy. Pursuant to the City’s adopted fiscal and budget policies, the City maintain General Operating Reserves at a level equal to at least 10% of the total General Fund budgeted revenue. These reserves are created and maintained to provide sufficient cash flow to meet daily financial needs and sustain City services in the event of a catastrophic event such as a natural/manmade disaster (for example, earthquake, windstorm, flood, terrorist attack) or a major downturn in the economy. In general, the City endeavors to support ongoing operations with ongoing revenue but uses reserves on a one-time basis to support City services pending the development of a longer- term financial solution. However, in no event will reserves be used longer than one biennium to support City operation. If reserves are used, the City will begin to replenish these reserves at the end of biennium if a surplus exists, but no later than biennium following their use. Surplus balances in the General Fund are used to fund one-time operations and capital expenditures, dedicated to the Capital Improvement Program or places in an economic City Council Regular Meeting - Page 349 of 473 -39- contingency account if there are surplus balances remaining after all current expenditure obligations and reserve requirements are met and if the City has made a determination that revenues for the ensuing biennium are sufficient to support budgeted General Fund operations. Debt Policy. The City has adopted Debt Management Policies in compliance with California Government Code Section 8855. The Debt Management Policies sets forth the purposes for which long-term debt financings may be undertaken (i.e., for projects that will provide benefit to constituents over multiple years). The Debt Management Policies provide that short- term financings may be undertaken for operational cash flow purposes and for short-lived capital projects (i.e. equipment leases). City Investment Policy. To maximize interest income and maintain liquidity, the City pools operating cash for its various funds and invests the monies in securities of various maturities. City and Agency funds are invested pursuant to the City’s Investment Policy in compliance with Section 53601 of the California Government Code. The investment types authorized for investment by the City include the Local Agency Investment Fund (State Pool), U.S. Treasury Obligations, U.S. Government Agency Issues, Certificates of Deposit, Commercial Paper, as well as Mutual Funds and Money Market Funds comprised of eligible securities. The objectives of the Investment Policy are to preserve capital, provide adequate liquidity to meet cash disbursements of the City, and to achieve market- average rates of return. Investments are secured by collateral as required under law, with maturity dates staggered to ensure that cash is available as needed. The City Council receives regular reports from the City Treasurer on the performance of the City’s pooled investment program. Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s Investment Policy. The City manages its exposure to interest rate risk by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Risk Management The City is a member of Independent Cities Risk Management Authority (“ICRMA”). ICRMA was established in 1980 to provide excess insurance coverage, risk management and self-insurance services for California cities. ICRMA is a Joint Powers Authority (“JPA”) directed by a Governing Board consisting of one representative from each Member City. ICRMA offers members excess liability, excess workers’ compensation, property and special events coverage. Currently there are 22 member cities. ICRMA maintains a management services agreement with Bickmore Risk Services to provide staff services to the Authority. See APPENDIX A Note 12 for additional details regarding the City’s Risk Management. Employee Retirement System; CalPERS 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 City Council Regular Meeting - Page 350 of 473 -40- the information provided by CalPERS and makes no representations and expresses no opinion as to the accuracy of the information provided by CalPERS. The annual comprehensive 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 be changed in the future. Actuarial assessments will change with the future experience of the pension plans. General Information about the Pension Plans. The City contributes to two defined benefit pension plans: Employees Retirement Plan (“Miscellaneous Plan”) and Fire Retirement Plan (“Safety Plan”). Each plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The Miscellaneous Plan is part of the Public Agency portion of the California Public Employees Retirement System (“CalPERS”), an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for the participating public employers within the State of California. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS’ audited financial statements can be obtained at CalPERS’ website under Forms and Publications Effective November 1, 2000, the City’s fire department was transferred to the County. As a result, certain safety members (employees of the fire department) of CalPERS have ceased to be employed by the fire department of the City and have been employed by the County, and upon such transfer, these safety members have become members of Los Angeles County Employees Retirement Association (“LACERA”). This transfer did not apply to safety members who have retired on or before the effective date of the transfer. Those retirees will continue to receive their pension benefits from the City’s Safety Plan with CalPERS. The City’s Safety Plan is currently part of the CalPERS Inactive Agency Risk Pool, a cost-sharing multiple-employer defined benefit plan. Employees Covered. At the June 30, 2019 Valuation date, the following employees were covered by the benefit terms for each Plan: Miscellaneous Safety Active employees 120 0 Transferred and terminated employees 191 5 Retired employees and beneficiaries 255 111 Total 566 116 Source: City of Lynwood. 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 City Council Regular Meeting - Page 351 of 473 -41- 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 retirement and disability benefits, annual cost-of- living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions under both plans are established by the State statute and City resolution as follows: Miscellaneous Plan Hire Date Prior to January 1, 2013 On or after January 1, 2013 Benefit Formula 2.0% @ 55 2.0% @ 60 Benefit Vesting Schedule 5 years of service 5 years of service Benefit Payments Monthly for life Monthly for life Retirement Age 50-55 52-67 Monthly Benefits, As a % of Eligible Compensation 2.0% to 2.7% 1.0% to 2.5% Required Employee Contribution Rates 8.000% 5.250% Required Employer Contributions Rates 27.244% 27.244% Safety Plan Hire Date Prior to January 1, 2013 On or after January 1, 2013 Benefit Formula 2.0% @ 50 2.0% @ 57 Benefit Vesting Schedule 5 years of service 5 years of service Benefit Payments Monthly for life Monthly for life Retirement Age 50 50-57 Monthly Benefits, As a % of Eligible Compensation 3.0% 2.0% to 2.7% Required Employee Contribution Rates 0.000% 0.000% Required Employer Contributions Rates 0.000% 0.000% _____________ Source: City of Lynwood Audit Fiscal Year ended June 30, 2021. See APPENDIX A Note 9 for additional details regarding the City’s pension and other employee benefits. Contributions. Section 20814(c) of the California Public Employees’ Retirement Law (“PERL”) 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. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. 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 employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. The City is required to contribute at an actuarially determined rate of annual covered payroll, plus a fixed payment of unfunded liability. The actuarially determined normal cost rates City Council Regular Meeting - Page 352 of 473 -42- and UAL contribution amounts for each Plan for the Fiscal Years ended June 30, 2022, through June 30, 2023, are as follows: CITY’S REQUIRED EMPLOYER CONTRIBUTION RATES & PAYMENTS Fiscal Year 2021-22 Fiscal Year 2022-23 Pension Plan Employer Normal Cost Rate Employer Normal Cost Payment Employer Normal Cost Rate Employer Normal Cost Payment Miscellaneous 10.940% $3,530,648 10.81% $3,887,362 Safety 11.003 2,642,352 0.00 797,804 Source: CalPERS Annual Valuation Report as of June 2019 and 2020. Projected Employer Contributions. The following tables show the City’s actuarially- determined required employer contribution for Fiscal Year 2022-23 and projected employer contributions (before cost sharing) for Fiscal Years 2023-24 through 2027-28 for each Plan by normal cost (expressed as a percentage of total active payroll) and amortization of the unfunded accrued liability (expressed as a dollar amount). Miscellaneous Required Contribution Projected Future Employer Contributions (Assumes 7.00% Return for Fiscal Year 2020-21) Fiscal Year 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Normal Cost % 10.81% 10.6% 10.5% 10.3% 10.2% 10.0% UAL Payment $3,887,362 $3,373,000 $3,567,000 $3,415,000 $3,549,000 $3,617,000 Safety Required Contribution Projected Future Employer Contributions (Assumes 7.00% Return for Fiscal Year 2020-21) Fiscal Year 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Normal Cost % 0.00% 0.0% 0.0% 0.0% 0.0% 0.0% UAL Payment $797,804 $798,000 $798,000 $798,000 $798,000 $798,000 Source: CalPERS Annual Valuation Report as of June 30, 2020. Funding History. The funding history for the Miscellaneous Pension Plan and the Safety Pension Plan is shown in the tables below, listing for each plan the actuarial accrued liability, share of the pool’s market value of assets, share of the pool’s unfunded liability, funded ratio, and annual covered payroll. MISCELLANEOUS PLAN Valuation Date Accrued Liability (AL) Market Value of Assets (MVA) Unfunded Liability Funded Ratio Annual Covered Payroll 6/30/2018 $98,338,645 $70,958,787 $27,379,858 72.2% $5,143,023 6/30/2019 108,448,698 74,444,764 34,003,934 68.6 8,089,873 6/30/2020 113,717,205 76,893,685 36,823,520 67.6 8,484,551 Source: CalPERS Annual Valuation Report as of June 30, 2020. City Council Regular Meeting - Page 353 of 473 -43- SAFETY PLAN Valuation Date Accrued Liability (AL) Market Value of Assets (MVA) Unfunded Liability Funded Ratio Annual Covered Payroll 06/30/2018 $20,965,985 $13,130,338 $7,835,647 62.6% $0 06/30/2019 19,787,845 11,982,990 7,804,855 60.6 0 06/30/2020 19,193,302 11,225,642 7,967,660 58.5 0 Source: CalPERS Annual Valuation Report as of June 30, 2020. Payable to the Pension Plan. At June 30, 2021, the City reported a payable of $51,444 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2021. Actions Taken by CalPERS Related to Discount Rate and Other Assumptions. In 2013, the CalPERS’ Board of Administration (the “Board of Administration”) approved a recommendation to change the CalPERS amortization and smoothing policies. In 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. In 2014, the Board of Administration approved new demographic actuarial assumptions based on a 2013 study of recent experience. The largest impact, applying to all benefit groups, is a new 20-year mortality projection reflecting longer life expectancies and that longevity will continue to increase. Because retirement benefits will be paid out for more years, the cost of those benefits will increase as a result. In 2015, the Board of Administration adopted a funding risk mitigation policy intended to incrementally lower its discount rate – its assumed rate of investment return – in years of good investment returns, help pay down the pension fund’s unfunded liability, and provide greater predictability and less volatility in contribution rates for employers. In 2016, the Board of Administration voted to lower its discount rate for local agencies per the following schedule: Fiscal Year Discount Rate 2018-19 7.375% 2019-20 7.250 2020-21 7.000 On July 12, 2021, CalPERS announced it had achieved a preliminary investment return of 21.3% for the 12-month period ending June 30, 2021. Under the Funding Risk Mitigation Policy approved by the CalPERS Board of Administration in 2015, the double-digit return triggered a November 2021 reduction in the discount rate from 7.00% to 6.80%. 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, under PEPRA will also see their contribution rates rise. PEPRA included certain other provisions to try to minimize pension costs for covered employees. 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. City Council Regular Meeting - Page 354 of 473 -44- Fiscal Year 2020-21 investment returns and changes to the discount rate and other assumptions, including demographic changes, will be reported on the June 30, 2021 CalPERS actuarial reports. These changes, including the newly determined discount rate, will be reflected in contribution levels for cities, counties, and special districts in Fiscal Year 2023-24. Asset Volatility Ratio (AVR). Plans that have higher asset-to-payroll ratios experience more volatile employer contributions (as a percentage of payroll) due to investment return. For example, a plan with an asset-to-payroll ratio of 8 may experience twice the contribution volatility due to investment return volatility, than a plan with an asset-to-payroll ratio of 4. Shown below is the asset volatility ratio for the Miscellaneous Plan which measure the plan’s current contribution volatility. It should be noted that this ratio is a measure of the current situation. It increases over time but generally tends to stabilize as the plan matures. Liability Volatility Ratio (LVR). Plans that have higher liability-to-payroll ratios experience more volatile employer contributions (as a percentage of payroll) due to investment return and changes in liability. For example, a plan that has a higher LVR experience more volatile employer contribution (as a percentage of payroll) due to changes in liability. For example, a plan with LVR of 8 is expected to have twice the contribution volatility of a plan with LVR of 4 when there is a change in accrued liability, such as when there is a change in actuarial assumptions. It should be noted that this ratio indicates a longer-term potential for contribution volatility, since the AVR, described above, will tend to move closer to the LVR as the funded status approaches 100%. Rate Volatility Miscellaneous Plan* Safety Plan* Market Value of Assets $76,461,330 $11,225,642 Payroll 8,484,551 -- Asset Volatility Ratio (AVR) 9.0 N/A Accrued Liability 113,717,205 19,193,302 Liability Volatility Ratio (LVR) 13.4 N/A * As of June 30, 2020 Source: CalPERS Annual Valuation Report as of June 30, 2020. Deferred Compensation Plan. The City offers a deferred compensation plan (the “Plan”), created in accordance with the Internal Revenue Code Section 457, to its employees. Amounts deferred may not be paid to the employee during employment with the City, except for a catastrophic circumstance creating an undue financial hardship for the employee. The Plan is administered by an independent financial institution that has fiduciary responsibilities over the Plan assets. Consistent with the amended IRC Section 457, which took effect on January 1, 1997, the City no longer reports the Plan assets and liabilities on its financial statements. Other Post-Employment Benefits (OPEB) Plan Description. In addition to the retirement plan described in Note 10, the City provides healthcare and life insurance benefits, in accordance with memorandum of understandings, to eligible retired employees. The City joined and contributed to CalPERS California Employers’ Retiree Benefit Trust (“CERBT”) Fund. As of June 2018, there is no separate audited financial report available for the said plan. Employees Covered. At the June 30, 2020 measurement date, the following employees were covered by the benefit terms for each Plan: City Council Regular Meeting - Page 355 of 473 -45- Active employees 113 Transferred and terminated employees 30 Retired employees and beneficiaries 111 Total 254 Source: City of Lynwood. Contributions. The City contributed $1,170,498 during the measurement period and $1,245,311 during the fiscal year ended June 30, 2021. Changes in OPEB Liability of the District. The changes in OPEB liability of the City as of June 30, 2019 measurement date, is shown in the following table: CHANGES IN TOTAL OPEB LIABILITY City of Lynwood Total OPEB Liability Balance at June 30, 2018 $27,299,477 Service Cost 509,557 Interest 1,837,851 Changes of assumptions or other inputs (503,935) Benefit payments (1,163,219) Net changes 680,254 Balance at June 30, 2019 $27,979,731 Source: City of Lynwood - 2020-21 Audit Report. OPEB Expense. For the year ended June 30, 2021, the City recognized OPEB expenses of $1,671,742. See Note 10 to the City’s audited financial statements for the fiscal year ending June 30, 2021 attached hereto as Appendix A for more information. General Fund Long-Term Indebtedness The following table shows the outstanding long-term obligations of the City and the Authority payable from the City’s general fund. Governmental Activities Final Maturity Original Par Amount Par Amount Outstanding 2017 Lease Revenue Bonds September 1, 2035 7,685,000 6,015,567 2019A PFA Lease Revenue Bonds October 1, 2040 8,465,000 8,013,703 2019B PFA Lease Revenue Bonds October 1, 2040 13,955,000 13,643,666 2020A PFA Lease Revenue Bonds October 1, 2040 13,500,000 13,388,185 Total $85,615,000 $78,086,901 2017 Lease Revenue Bonds. In April 2017, the City issued $7,685,000 Lease Revenue Bonds to current refund Lynwood Public Financing Authority 2003 Lease Revenue Refunding Bonds Series A and B, to finance the costs of the 2017 capital improvements projects (“2017 Project”), and to pay for the cost of issuance. Interest on the bonds is payable semi-annually each March 1 and September 1, beginning September 1, 2017 at a rate of 3.72% annum. Principals matures each September 1 beginning 2017 and maturing in 2035. The refunding resulted in economic gain in the amount of $60,285 and the saving in debt service in the amount of $74,625. The principal balance outstanding at June 30, 2021 was $6,015,567. City Council Regular Meeting - Page 356 of 473 -46- 2019 Lease Revenue Bonds. On November 26, 2019, the Lynwood Public Financing Authority issued $8,465,000 Lynwood Public Financing Authority Lease Revenue Refunding Bonds, Series 2019A (federally taxable) to provide funds to refund Lease Revenue Bonds, 2010 Series A (Civic Center Improvement Project), and to pay cost of issuance of the bonds. Interest will be payable on April 1, and October 1 of each year commencing April 1, 2020. Interest rate on the bonds will be payable on June 1 and October 1 of each year commencing October 1, 2020 to 2040. Interest rates on the bonds vary between 2.153% and 3.961%. The principal balance outstanding at June 30, 2021, including unamortized discount of $11,297 was $8,013,703. On November 26, 2019, the Lynwood Public Financing Authority issued $13,955,000 Lynwood Public Financing Authority Lease Revenue Refunding Bonds, Series 2019B (tax- exempt) to provide funds to finance a portion of the costs associated with certain park improvements within the City limits and to pay cost of issuance of the bonds. Interest will be payable on April 1, and October 1 of each year commencing April 1, 2020. Interest rate on the bonds will be payable on June 1 and October 1 of each year commencing October 1, 2020. Interest rates on the bonds vary between 2.750% and 3.150%. The principal balance outstanding at June 30, 2021, including unamortized discount of $311,334 was $13,643,666. 2020 Lease Revenue Bonds. On December 10, 2020, the City issued the $13,500,000 Lynwood Public Financing Authority Lease Revenue Bonds Series 2020A to provide funds to finance working capital for the City’s General Fund or such other purposes as the City may determine including public capital improvements and to fund a debt service reserve fund for the bonds, and to pay costs of issuance of the bonds. Interest on the bonds is payable semiannually on April 1, and October 1 of each year commencing April 1, 2021. Interest rates on the bonds vary between 1.793% and 4.195%. The principal balance outstanding at June 30, 2021, including unamortized discount of $111,815 was $13,388,185. See Note 8 to the City’s audited financial statements for the fiscal year ending June 30, 2021 attached hereto as Appendix A for more information. Direct and Overlapping Bonded 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. and dated as of May 1, 2022. 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. The total 2021-22 assessed valuation of $4,120,196,768 reflected in the Debt Report is provided by California Municipal Statistics, Inc. Neither the City, the Authority nor the Underwriter has verified this information. City Council Regular Meeting - Page 357 of 473 -47- TABLE 13 City of Lynwood Direct and Overlapping Debt Statement (as of May 1, 2022) 2021-22 Assessed Valuation: $4,120,196,768 OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 5/1/22 Metropolitan Water District 0.121% $24,412 Compton Community College District 16.181 17,679,496 Los Angeles Community College District 0.006 248,791 Compton Unified School District 0.722 1,745,823 Los Angeles Unified School District 0.007 753,904 Lynwood Unified School District 98.242 120,801,783 TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT $141,254,209 Less: Los Angeles Unified School District General Obligation Bonds, Election of 2005, Series J (2010) Qualified School Construction Bonds: Election of 2005, Series H (2009) Qualified School Construction Bonds: Amount accumulated in Interest and Sinking Fund and Set Asides for Repayment 10,841 TOTAL NET OVERLAPPING TAX AND ASSESSMENT DEBT $141,243,368 DIRECT AND OVERLAPPING GENERAL FUND DEBT: Los Angeles County General Fund Obligations 0.233% $6,614,118 Los Angeles County Superintendent of Schools Certificates of Participation 0.233 9,255 Compton Unified School District Certificates of Participation 0.722 210,066 Los Angeles Unified School District Certificates of Participation 0.007 8,450 Lynwood Unified School District Certificates of Participation 98.242 15,988,886 City of Lynwood General Fund Obligations 100.000 40,861,044 (1) Los Angeles County Sanitation District No. 1 Authority 11.307 111,154 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $63,802,973 OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 100.000% $38,300,000 GROSS COMBINED TOTAL DEBT $243,357,182 (2) NET COMBINED TOTAL DEBT $243,346,341 Ratios to 2021-22 Assessed Valuation: Total Gross Overlapping Tax and Assessment Debt ............. 3.43% Total Net Overlapping Tax and Assessment Debt ................. 3.43% Total Direct Debt ($40,861,044) .......................................... 0.99% Gross Combined Total Debt ................................................... 5.91% Net Combined Total Debt ....................................................... 5.91% Ratios to Redevelopment Successor Agency Incremental Valuation ($1,236,716,919) Overlapping Tax Increment Debt ........................................... 3.10% ____________________________________ (1) Excludes issue to be sold. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations. Source: California Municipal Statistics, Inc. City Council Regular Meeting - Page 358 of 473 -48- 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. Limitations on Revenues Article XIIIA of the California Constitution. Article XIIIA of the State Constitution, adopted and known as Proposition 13, was approved by the voters in June 1978 and has been amended on occasions, including most recently on November 7, 2000 to reduce the voting percentage required for the passage of school bonds. Section 1(a) of Article XIIIA limits the maximum ad valorem tax on real property to one percent of “full cash value,” and provides that such tax shall be collected by the counties and apportioned according to State statutes. Section 1(b) of Article XIIIA provides that the one-percent limitation does not apply to ad valorem taxes levied to pay interest and redemption charges on (i) indebtedness approved by the voters prior to July 1, 1978, or (ii) bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition, or (iii) bonded indebtedness incurred by a school district or community college district or county office of education for the construction, reconstruction, rehabilitation or replacement of school facilities, including the furnishing and equipping of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters voting on the proposition. The tax for payment of the City’s general obligation bonds falls within the exception for bonds approved by a two-thirds vote. 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 Fiscal Year tax bill, or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred. The full cash value may be adjusted annually to reflect inflation at a rate not to exceed two percent per year, or to reflect a reduction in the consumer price index or comparable data for the area under taxing jurisdiction, or may be reduced in the event of declining property value caused by substantial damage, destruction or other factors. See “Litigation Relating to Two Percent Limitation” below. Legislation implementing Article XIIIA provides that, notwithstanding any other law, local agencies may not levy any ad valorem property tax except the 1% base tax levied by each County and taxes to pay debt service on indebtedness approved by the voters as described above. Such legislation further provides that each county will levy the maximum tax permitted by Article XIIIA, which is $1.00 per $100 of assessed market value. Since its adoption, Article XIIIA has been amended a number of times. These amendments have created a number of exceptions to the requirement that property be reassessed when it is purchased, newly constructed or undergoes a change in ownership has occurred. These exceptions include certain transfers of real property between family members, certain purchases of replacement dwellings for persons over age 55 and by property owners whose original property has been destroyed in a declared disaster, and certain improvements to accommodate disabled persons and for seismic upgrades to property. These amendments have resulted in marginal reductions in the property tax revenues of the City. Both the California State Supreme Court and the United States Supreme Court have upheld the validity of Article XIIIA. City Council Regular Meeting - Page 359 of 473 -49- Articles XIIIC and XIIID of the California 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. 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 into the City’s General Fund, require a two-thirds vote. The voter approval requirements of Article XIIIC 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 such taxes in the future to meet increased expenditure needs. Property-Related Fees, Charges and Assessments. 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, 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.” City Council Regular Meeting - Page 360 of 473 -50- 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. Impact on City’s General Fund. 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. The City does not believe that any material source of General Fund revenue is subject to challenge under Proposition 218 or Proposition 26. Judicial Interpretation. The interpretation and application of Articles XIIIC and XIIID will ultimately be determined by the courts with respect to a number of the matters discussed below, and it is not possible at this time to predict with certainty the outcome of such determination. Expenditures and Appropriations In addition to the limits Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and local governments are subject to an annual “appropriations limit” or “Gann Limit” imposed by Article XIIIB of the State Constitution, which effectively limits the amount of such revenues that government entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes” exclude tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees, and certain other non-tax funds. Article XIIIB also does not limit appropriation of local revenues to pay debt service on bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990, levels. The appropriations limit may also be exceeded in cases of emergency; however, the appropriations limit for the three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two-thirds of the legislative body of the local government. The State and each local government entity has its own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Each school district is required to establish an appropriations limit each year. In the event that a school district’s revenues exceed its spending limit, the district may increase its appropriations limit to equal its spending by taking appropriations limit from the State. Proposition 111 requires that each agency’s actual appropriations be tested against its limit every two years. If the aggregate “proceeds of taxes” for the preceding two-year period City Council Regular Meeting - Page 361 of 473 -51- exceed the aggregate limit, the excess must be returned to the agency’s taxpayers through tax rate or fee reductions over the following two years. Statutory Revenue Limitations - Proposition 62 Proposition 62 was adopted by the voters at the November 4, 1986, general election and (a) requires that any new or higher taxes for general governmental purposes imposed by local governmental entities such as the City be approved by a two-thirds vote of the governmental entity’s legislative body and by a majority vote of the voters of the governmental entity voting in an election on the tax, (b) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two- thirds vote of the voters of the governmental entity voting in an election on the tax, (c) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax was imposed, (d) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA, (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities, and (f) requires that any tax imposed by a local governmental entity on or after August 1, 1985, be ratified by a majority vote of the voters voting in an election on the tax within two years of the adoption of the initiative or be terminated by November 15, 1988. Following its adoption by the voters, various provisions of Proposition 62 were declared unconstitutional at the appellate court level. On September 28, 1995, however, the California Supreme Court, in Santa Clara City Local Transportation Authority v. Guardino, upheld the constitutionality of the portion of Proposition 62 requiring a two–thirds vote in order for a local government or district to impose a special tax and, by implication, upheld a parallel provision requiring a majority vote in order for a local government or district to impose any general tax. The Guardino decision did not address whether it should be applied retroactively. In response to Guardino, the California Legislature adopted Assembly Bill 1362, which provided that Guardino should apply only prospectively to any tax that was imposed or increased by an ordinance or resolution adopted after December 14, 1995. Assembly Bill 1362 was vetoed by the Governor; hence the application of the Guardino decision on a retroactive basis remains unclear. Proposition 62, as an initiative statute, does not have the same level of authority as a constitutional initiative. It is analogous to legislation adopted by the State Legislature, except that it may be amended only by a vote of the State’s electorate. However, Proposition 218, as a constitutional amendment, is applicable to charter cities and supersedes many of the provisions of Proposition 62. Proposition 1A Proposition 1A, proposed by the Legislature in connection with the State’s Fiscal Year 2004-2005 Budget, approved by the voters in November 2004 and generally effective in fiscal year 2006-2007, provides that the State may not reduce any local sales tax rate, 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 prohibits 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 must be approved by two-thirds of both houses of the Legislature. Proposition 1A provides, City Council Regular Meeting - Page 362 of 473 -52- however, that beginning in fiscal year 2008-2009, the State may shift to schools and community colleges up to 8% of local government property tax revenues, which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state financial hardship, the shift is approved by two-thirds of both houses and certain other conditions are met. The State may also approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county. Proposition 1A also provides that if the State reduces the motor vehicle license fee rate currently in effect, 0.65 percent of vehicle value, the State must provide local governments with equal replacement revenues. Further, Proposition 1A requires the State, beginning July 1, 2005, to suspend State mandates affecting cities, counties and special districts, excepting mandates relating to employee rights, schools or community colleges, in any year that the State does not fully reimburse local governments for their costs to comply with such mandates. Proposition 1A may result in increased and more stable City revenues. The magnitude of such increase and stability is unknown and would depend on future actions by the State. However, Proposition 1A could also result in decreased resources being available for State programs. This reduction, in turn, could affect actions taken by the State to resolve budget difficulties. Such actions could include increasing State taxes, decreasing spending on other State programs or other action, some of which could be adverse to the City. 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 amended the state Constitution to eliminate or reduce 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. This Proposition was intended to, among other things, stabilize local government revenue sources by restricting the State’s control over local property taxes. 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 Fiscal Year 1988-89, 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 constitute neither 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. City Council Regular Meeting - Page 363 of 473 -53- Possible Future Initiatives Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 62, 111, 218 and 1A 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 revenues of the City or the City’s ability to expend revenues. There is no assurance that the California electorate or Legislature will not at some future time approve additional limitations. 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. The Bonds are limited obligations of the Authority payable solely from and secured solely by the Revenues pledged therefor under the Indenture, together with amounts on deposit from time to time in certain funds and accounts held by the Trustee. Revenues consist primarily of Lease Payments. If for any of the reasons described below, or for any other reason, the Authority does not receive sufficient Lease Payments to pay debt service on the Bonds, the Authority will not be obligated to utilize any other of its funds, other than amounts on deposit in certain funds and accounts established under the Indenture, to pay debt service on the Bonds. The Lease Payments are payable from all funds lawfully available to the City, which includes is the Pension Override Tax. The City has the capacity to enter into other obligations that may constitute additional obligations against its revenues. In the event the City’s revenue sources are less than its total obligations, the City could choose to fund other obligations before making Lease Payments; in that case, the failure to pay Lease Payments in full would constitute a default under the Lease Agreement. The same result could occur if, because of State constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues; in that case, the failure to pay Lease Payments in full would constitute a default under the Lease Agreement. The City must adopt a balanced Budget each year, and has covenanted in the Lease Agreement to budget for, appropriate and make the Lease Payments in each year that it has possession and use of the Leased Property. Abatement of Lease Payments Under California law, the obligation of the City to make Lease Payments is contingent upon the availability of the Leased Property for use and occupancy by the City. The Lease Payments will be abated proportionately during any period in which by reason of material damage or destruction, there is substantial interference with the use and occupancy of any portion of the Leased Property by the City, and such abatement will continue until substantial completion of the work of repair or replacement of the portion of the Leased Property damaged or destroyed; provided that, in determining the amount of abatement. Any abatement of Lease Payments could affect the Authority’s ability to pay debt service on the Bonds. In the event Lease Payments are abated, no assurances can be given that moneys on deposit in the Revenue Fund or the proceeds of property insurance (which is not expected to be City Council Regular Meeting - Page 364 of 473 -54- available to cover earthquake damage) will be sufficient to pay the debt service on the Bonds during the period of such abatement. The City is neither required nor will it maintain rental interruption insurance with respect to the Leased Property. Notwithstanding the provisions of the Lease Agreement specifying the extent of abatement in the event of the City’s failure to have full use and occupancy of the Leased Property, such provisions may be superseded by operation of law, and, in such event, the resulting Lease Payments of the City may not be sufficient to pay all of the remaining principal and interest with respect to the Bonds. Limitation on Remedies The enforcement of any remedies provided for in the Lease Agreement and in the Indenture could prove to be both expensive and time-consuming. The Lease Agreement provides that upon the occurrence and during the continuance of the City’s failure to deposit with the Trustee any Lease Payments when due, the bankruptcy of the City, or if the City breaches any other terms, covenants, conditions or agreements contained in the Lease Agreement (subject to a cure period as described in the Lease Agreement), 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, and the Authority shall have no right to re-lease any portion of the Leased Property that constitutes a City street. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” In addition to the limitations on remedies contained in the Lease Agreement and the Indenture, the rights and remedies provided in those documents may be limited by and are subject to provisions of federal bankruptcy laws, as now or hereafter enacted, and to other laws or equitable principles that may affect creditors’ rights generally. The various legal opinions to be delivered concurrently with the issuance of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by State and federal laws, rulings and decisions affecting remedies, and by bankruptcy, reorganization or other laws of general application affecting the enforcement of creditors’ rights, including equitable principles. See “– Bankruptcy Risks” below. No Acceleration Upon Default In the event of a default, there is no remedy of acceleration of the total Lease Payments for the term of the Lease. Any suit for money damages would be subject to the legal limitations on remedies against cities and counties in the State, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” Early Prepayment Risk Early payment of the Lease Payments and early prepayment of the Bonds may occur in whole or in part, without premium, from the proceeds of title insurance, on any date, if the Leased Property, or a portion thereof, is lost, destroyed or damaged beyond repair or taken by eminent domain and if the City exercises it right to prepay the Lease Payments in whole or in part pursuant to the provisions of the Lease Agreement and the Indenture. City Council Regular Meeting - Page 365 of 473 -55- Bankruptcy Risks The rights of the owners of the Bonds and the enforceability of the Authority’s obligation to make payments on the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights under currently existing law or laws enacted in the future, and may also be subject to the exercise of judicial discretion under certain circumstances. Under existing law, the City is eligible to file for bankruptcy. Should the City file for bankruptcy, there could be adverse effects on the holders of the Bonds. In a bankruptcy of the City, the Authority or the Trustee as its assignee and the owners of the Bonds may be prohibited from taking any action against the City, any official of the City, or any property of the City (including the Leased Property) to enforce the terms of the Lease Agreement, unless the consent of the bankruptcy court is first obtained. The bankruptcy court is not required to give its consent. This prohibition on action may even prohibit the Trustee from using funds in its possession to make payments on the Bonds. As a result, Owners may experience temporary or permanent delays in the payment of the Bonds. In a bankruptcy case, a plan of adjustment for the City could be confirmed that would allow for enforcement of the Lease Agreement, but the priority, interest rate, payment terms, collateral, maturity dates, payment sources, covenants and other terms or provisions of the Lease Agreement and the Bonds may be altered by the bankruptcy court. Such a plan could be confirmed even over the objections of the Authority or the Trustee as its assignee and the owners of the Bonds, and without their consent. Additionally, the resulting plan could adjust some or all of the City’s financial obligations, which include the City’s lease payment obligations under the Lease Agreement and the City’s obligation to fund certain retirement benefits. The adjustment plans approved by the Bankruptcy Courts in connection with the bankruptcies of the cities of Vallejo, San Bernardino and Stockton resulted in significant reductions in the amounts payable by the cities under lease revenue obligations substantially identical or similar to the Bonds. The City can provide no assurance about the outcome of the bankruptcy cases of other California municipalities of the nature of any adjustment plan it if were to file for bankruptcy. In addition, if the Lease Agreement is determined to constitute a “true lease” by the bankruptcy court (rather than a financing lease providing for the extension of credit), the City could choose not to perform under the Lease Agreement and the claim of the owners of the Bonds could be substantially limited. An allowable claim could be substantially less than the amount of the Bonds outstanding, resulting in the owners of the Bonds suffering a substantial loss. The opinions of counsel, including Bond Counsel, delivered in connection with the issuance and delivery of the Bonds will be so qualified. Bankruptcy proceedings, or the exercising of powers by the federal or state government, if initiated, could subject the owners of the Bonds 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. City Council Regular Meeting - Page 366 of 473 -56- State Audits Pursuant to the California State Auditor’s “high-risk local government agency audit program,” the California State Auditor released its audit report 2018-803 regarding the City (the “State Audit Report”) in December 2018. According to the State Audit Report, the audit alleged that the City was a “high-risk city” due to its financial and organizational risks. Specifically, the State Audit Report alleged that the City’s general fund operating revenues were projected to exceed its operating expenditures in Fiscal Year 2018-19, that the City had violated State law by using restricted funds to pay for certain personnel costs, and that organizational inefficiencies (for example, high turnover in key leadership positions and an inability to effectively measure staffing needs) limited the City’s ability to provide public services. The State Audit Report also included several recommendations for improvements. A follow-on report for the City, Report 2021-808, was released by the California State Auditor in September 2021, and concluded the City remained high-risk. It acknowledged that the City had taken actions to address risk areas identified in the State Audit Report, but there was uncertainty regarding the City’s long-term fiscal outlook. It further alleged the City had violated State law by subsidizing the General Fund with restricted revenue from water and sewer fees. The City also failed to develop a strategic plan or other efforts to provide meaningful guidance to its departments on aligning resources with Citywide goals and priorities. Certain recommendations were proposed by the California State Auditor in the follow-up report. The City has reviewed the State Audit Report and follow-on report, and taken certain actions to address the alleged deficiencies included therein. More specifically, in response to the State Audit, the City Manager submitted a Corrective Action Plan on November 22, 2021, which outlined and itemized corrective actions towards the State Audit findings. These corrective actions include updating the City’s policies to beef up the City’s internal controls and preparing a new cost allocation to properly substantiate all inter-fund charges/transfers. Moreover, both the City Manager and the Finance Director of the City have been recently hired and were not employees of the City during the time periods described in the reports. State Law Limitations on Appropriations Article XIIIB of the California Constitution limits the amount that local governments can appropriate annually. The ability of the City to make Lease Payments may be affected if the City should exceed its appropriations limit. The State may increase the appropriation limit of cities in the State by decreasing the State’s own appropriation limit. The City does not anticipate exceeding its appropriations limit in the foreseeable future. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS – Limitations on Revenues – Expenditures and Appropriations.” Limitations on Taxes and Fees General. 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 City Council Regular Meeting - Page 367 of 473 -57- 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.” Pension Tax Override. On April 9, 1946, the voters in the City approved the Pension Tax Override, which is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes. In furtherance of its authorized purposes, under the Lease Agreement, the City pledges the Pension Tax Override to the payment of the Lease Payments. In accordance with a settlement of a lawsuit relating to the Pension Tax Override, the City fixed the rate of tax at $0.125 per $100 of assessed valuation. See “CITY FINANCIAL INFORMATION – Pension Tax Override” for additional information regarding the City’s ability to levy and collect the Pension Tax Override. Additional Obligations of the City The City has existing obligations payable from its General Fund. See “APPENDIX A – “FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – Outstanding General Fund Lease Obligations.” The City is permitted to enter into other obligations which constitute additional charges against its revenues without the consent of Owners of the Bonds. To the extent that additional obligations are incurred by the City, the funds available to pay Lease Payments may decline. The Lease Payments and other payments due under the Lease Agreement (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, 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. Property Taxes Levy and Collection. 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 City Council Regular Meeting - Page 368 of 473 -58- 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, in form prescribed by the State Board of Equalization, 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, 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. City Council Regular Meeting - Page 369 of 473 -59- Public Health Emergencies In recent years, public health authorities have warned of threats posed by outbreaks of disease and other public health threats. The spread of the novel strain of coronavirus called COVID-19 is having significant negative impacts throughout the world, including within the City. The COVID-19 pandemic has negatively affected travel, commerce, and is widely expected to continue to negatively affect economic output worldwide and within the City. See “BOND OWNERS’ RISK – U.S. Economic Recession.” While federal and state governments (including California) have enacted legislation and taken executive actions seeking to mitigate the negative public health and economic impacts of the COVID-19 pandemic, the City offers no assurances that these interventions will have the intended effects. These negative economic impacts may reduce or otherwise negatively affect revenues to the City’s General Fund and result in unexpected increases in expenditures. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – CITY FINANCES – Management Discussion Regarding COVID-19 Impacts.” The City cannot predict the magnitude of these impacts on such revenues, but such impacts could be materially adverse. The financial and operating data contained in this Official Statement are the latest available, but unless otherwise indicated are as of dates and for periods before the economic impact of the COVID-19 pandemic and measures instituted to slow it. Accordingly, they are not necessarily indicative of the current financial condition or future prospects of the City and the region. While the overall potential impact of the COVID-19 pandemic on the City cannot be fully quantified at this time, the continued outbreak of COVID-19 could lead to additional or modified public health restrictions and have an adverse effect on the City’s operations and financial condition, and the effect could be material. Prospective investors should assume that the restrictions and limitations related to COVID-19, and the current disruption to the national and global economies, will increase at least over the near term, recovery may be prolonged and, therefore, may have an adverse impact on the City’s finances. Certain Risks Associated with Sales Tax and Other Local Tax Revenues For fiscal year 2020-21, sales tax revenues were the second largest source of revenue to the City. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – Sales 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. For example, 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. As described further below, there has been volatility in the United States and global financial markets associated with the COVID-19 outbreak, resulting in significant declines and a national and global recession. In addition, changes or amendments in the laws applicable to the City’s receipt of sales tax revenues or other local taxes, whether implemented by State legislative action or voter initiative, could have an adverse effect on sales tax revenues received by the City. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS – Proposition 218 – Article XIIIC and Article XIIID.” City Council Regular Meeting - Page 370 of 473 -60- 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 California Department of Tax and Fee Administration for administering the City’s sales tax could also be changed. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – CITY FINANCES – Management Discussion Regarding COVID-19 Impacts.” Natural Calamities The City, like all California communities, may be subject to unpredictable seismic activity, wildfires, flood, or other natural disasters. Seismic activity, wildfires, floods and other natural disasters represent a potential risk for damage to buildings, roads, bridges and other property within the City. Such natural calamities may adversely affect economic activity in the City, which could have a negative impact on the City’s finances. Additionally, a natural calamity adversely affecting the Leased Property could have a negative impact on the City’s use of such property, which could result in abatement of Lease Payments. See “– Abatement” above. Fire Hazards. In recent years, wildfires have caused extensive damage throughout the State. Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes. In some instances, entire neighborhoods have been destroyed. Several fires which occurred in 2017 damaged or destroyed property in areas that were not previously considered to be at risk from such events. In November 2018, the Camp Fire occurred in Butte County, California. The Camp Fire is the deadliest and most destructive wildfire in the recorded history of the State burning more than 150,000 acres and destroying more than 11,500 structures, including most of the structures in the City of Paradise, California. Some commentators believe that climate change will lead to even more frequent and damaging wildfires in the future. In Los Angeles County, wildland fires historically have occurred in the brush-covered hills that frame many communities, including the Palos Verdes Hills, in the southern portion of the City, and south of the City, in what is now Rolling Hills, Rolling Hills Estates, and Palos Verdes Estates. Small vegetation fires occasionally still occur on these slopes, but the Fire Department is able to respond quickly and minimize threats to adjacent structures. To prevent fires in the City’s hillside areas, the City’s municipal code allows the Fire Chief broad authority to carry out preventive measures to minimize fire risks. Droughts. California is subject to droughts from time-to-time, including currently. 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%. After a few wet years which alleviated drought conditions, California is once again in a drought following a dry 2021-22 winter. The City cannot predict or make any representations regarding the effects that the recent (or future) droughts and related conditions had or may have on the value of taxable property within the City, or to what extent the effects the current (or future) droughts may have had or have on economic activity in the City. See also “– Potential Impact of Climate Change” below. City Council Regular Meeting - Page 371 of 473 -61- Hazardous Substances Owners and operators of real property may be required by law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances area also stringent and similar. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly and adversely affect assessed values of property in the City and the operations and finances of the City. Potential Impact of Climate Change The issue of climate change has become an important factor in water resources planning in the State. There is evidence that increasing concentrations of greenhouse gases have caused and will continue to cause a rise in temperatures around the world, which will result in a wide range of changes in climate patterns. Moreover, there is evidence that a warming trend occurred during the latter part of the 20th century and will likely continue through the 21st century. These changes will have a direct effect on water resources in the State, and numerous studies on climate and water in the State have been conducted to determine the potential impacts. Based on these studies, global warming could result in the following types of water resources impacts in the State, including impacts on the City: • Changes in the timing, intensity, and variability of precipitation, and an increased amount of precipitation falling as rain instead of as snow, • Long-term changes in watershed vegetation and increased incidence of wildfires that could affect water quality, • Sea level rise and an increase in saltwater intrusion, • Increased water temperatures with accompanying adverse effects on some fisheries, • Increases in evaporation and concomitant increased irrigation need, and • Changes in urban and agricultural water demand. However, other than the general trends listed above, there is no clear scientific consensus on exactly how global warming will quantitatively affect the State’s water supplies. The City is unable to predict timing or magnitude of the impacts of climate change, if any, or whether they will have a material adverse effect on the business operations or financial condition of the City and the local economy. COVID-19 Pandemic City Council Regular Meeting - Page 372 of 473 -62- The spread of COVID-19 has impacted governments, businesses and people in a manner that is having negative effects on global and local economies. In response to the pandemic, the City took actions to activate its emergency operations center, temporarily close all non-essential City services, introduced teleworking as and where appropriate, implemented daily screening of all employees, and abided by all state and federal guidelines and orders. The City actively monitors the COVID-19 situation in the community and acts swiftly to issue executive orders to mitigate the spread of the virus. Additionally, the City has forged a strong relationship with the Mendocino County Health Department and local medical clinics to ensure timely sharing of information and coordinated responses to issues. The City continues to monitor the spread of COVID-19 and is working with local, state, and national agencies to address the potential impact of the pandemic upon the City. 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. 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. 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 property taxes, and the Trustee. No assurance can be given that the City and the other entities the City relies on will not be affected by cyber threats and attacks in a manner that may affect the Bond owners. Litigation The City is and may become a party to litigation that has the potential to have an impact on the City’s General Fund. Although the City maintains certain insurance policies that provide coverage under certain circumstances and with respect to certain types of incidents, the City cannot predict what types of liabilities may arise in the future and whether these may adversely affect the ability of the City to pay Lease Payments under the Lease Agreement when due. Secondary Market for Bonds There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that any Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then-prevailing circumstances. Such prices could be substantially different from the original purchase price. City Council Regular Meeting - Page 373 of 473 -63- TAX MATTERS The interest on the Bonds is not intended by the Authority to be excluded from gross income for federal income tax purposes. However, in the opinion of Jones Hall, A Professional Law Corporation (“Bond Counsel”), San Francisco, California, interest on the Bonds is exempt from California personal income taxes. The proposed form of opinion of Bond Counsel with respect to the Bonds to be delivered on the date of issuance of the Bonds is set forth in “APPENDIX D – PROPOSED FORM OF OPINION OF BOND COUNSEL.” 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 D – PROPOSED FORM OF OPINION OF BOND COUNSEL.” Certain legal matters will also be passed upon for the City and the Authority by Jones Hall, A Professional Law Corporation, as Disclosure Counsel. Certain legal matters will be passed upon for the City and the Authority by the City Attorney. In addition, certain legal matters will be passed on by Quint & Thimmig LLP, as Underwriter’s Counsel. Payment of the fees and expenses of Special Counsel, Disclosure Counsel and Underwriter’s counsel is contingent upon execution and delivery of the Bonds. NO LITIGATION 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 Agreement, the Site Lease or the Indenture, or upon the financial condition, assets, properties or operations of the City. Neither the City nor the Authority is in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially adversely affect the consummation of the transactions contemplated by the Lease Agreement, the Site Lease or the City Council Regular Meeting - Page 374 of 473 -64- 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 Agreement. RATING[S] [Add Insured Rating, if applicable] S&P Global Ratings (“S&P”) has assigned a rating of “__” to the Bonds. The rating reflects only the views of S&P and any desired explanation of the significance of such 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 such rating will continue for any given period of time or that such 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 (on behalf of the Authority and itself) will covenant for the benefit of owners of the Bonds to provide certain financial information and operating data relating to the City (the “Annual Report”), by not later than nine months after the end of the City’s fiscal year (presently June 30) and commencing April 1, 2023 with the report for the fiscal year ending June 30, 2022, and to provide notices of the occurrence of certain listed events. These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5), as amended (the “Rule”). The specific nature of the information to be contained in the Annual Report or the notices of listed events is set forth in “APPENDIX E — FORM OF CONTINUING DISCLOSURE CERTIFICATE.” In the last five years, the City did not timely file audited financial statements in connection with various series of bonds and other long-term obligations for Fiscal Years 2015-16 and 2016- 17. The City also failed to timely file notices of a rating change and to timely file notices of late annual financial information in connection with certain of the bonds and other long-term obligations. In addition, the City has had continuing disclosure obligation in connection with certain bonds issued by the Lynwood Utility Authority, and within the past five years, the City failed to file in a timely manner its audited financial statements for Fiscal Year 2015-16, and timely notice of a rating change for these bonds. _________, serving as dissemination agent, will assist the City in timely filing the Annual Reports and notices of certain enumerated events in the future. UNDERWRITING The Bonds are being purchased pursuant a bond purchase agreement by and between the Authority, the City and Cabrera Capital Markets, LLC, as underwriter (the “Underwriter”). The City Council Regular Meeting - Page 375 of 473 -65- Underwriter has agreed to purchase the Bonds at a purchase price of $________________ (which is equal to the par amount of the Bonds, less a purchaser’s discount of $_____________, and [plus/less] a [net] original issue [premium/discount] of $____________). The Underwriter may offer the Bonds to the public at the offering prices set forth on the cover page of this Official Statement. The Underwriter may offer and sell to certain dealers and others at a price lower than the offering prices stated on the cover page hereof. The offering price may be changed from time to time by the Underwriter. MUNICIPAL ADVISOR The Authority has retained Kosmont Transactions Services, Inc., Manhattan Beach, California, as the Authority’s Municipal Advisor in connection with the preparation of this Official Statement and with respect to the issuance of the Bonds. Kosmont Transactions Services, Inc. is not obligated to undertake, and has not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. Kosmont Transactions Services, Inc. is an independent registered municipal advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. Kosmont Transactions Services, Inc.’s compensation is contingent upon the delivery of the Bonds. 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. LYNWOOD PUBLIC FINANCING AUTHORITY By: Ernie Hernandez Executive Director CITY OF LYNWOOD By: Ernie Hernandez City Manager City Council Regular Meeting - Page 376 of 473 A-66 APPENDIX A GENERAL INFORMATION ABOUT THE CITY OF LYNWOOD AND THE COUNTY OF LOS ANGELES The following information concerning the County of Los Angeles (the “County”) and the City of Lynwood (the “City”) is included only for the purpose of supplying general information regarding the area. The Bonds are not a debt of the County, the City, the State of California (the “State”) or any of its political subdivisions, and neither the County, the City, the State nor any of its political subdivisions is liable therefor. The City and the Underwriter take no responsibility for the accuracy or completeness of such information. General The City. The City of Lynwood (the “City”) was incorporated in 1921 under the general laws of the State of California (the “State”). The City is situated approximately 13 miles south of downtown Los Angeles at the intersection of two major freeways. The local economy represents a diverse blend of industrial, commercial, agricultural and residential development. The City covers 4.9 square miles and serves a population of 69,880. The County. The County of Los Angeles (the “County”) is located along the southern coast of California, Los Angeles County covers about 4,080 square miles. It measures approximately 75 miles from north to south and 70 miles from east to west. The county includes Santa Catalina and San Clemente Islands and is bordered by the Pacific Ocean and Ventura, San Bernardino and Orange Counties. Almost half of the county is mountainous and some 14 percent is a coastal plain known as the Los Angeles Basin. The low Santa Monica Mountains and Hollywood Hills run east and west and form the northern boundary of the Basin and the southern boundary of the San Fernando Valley. The San Fernando Valley terminates at the base of the San Gabriel Mountains whose highest peak is over 10,000 feet. Beyond this mountain range the rest of the county is a semi-dry plateau, the beginning of the vast Mojave Desert. According to the Los Angeles County Regional Planning Commission, the 86 incorporated cities in the county cover about 1,344 square miles or 27 percent of the total county. About 16 percent of the land in the County is devoted to residential use and over two thirds of the land is open space and vacant. City Council Regular Meeting - Page 377 of 473 A-67 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 LYNWOOD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA Population Estimates Years 2017 through 2021, as of January 1 Year City of Lynwood Los Angeles County State of California 2017 71,864 10,181,162 39,352,398 2018 71,972 10,192,593 39,519,535 2019 71,726 10,163,139 39,605,361 2020 71,399 10,135,614 39,648,938 2021 69,880 10,044,458 39,466,855 Source: California Department of Finance, Demographic Research Unit. [Remainder of page intentionally left blank] City Council Regular Meeting - Page 378 of 473 A-68 Industry and Employment The seasonally adjusted unemployment rate in Los Angeles County decreased over the month to 5.8 percent in March 2022, from a revised 6.3 percent in February 2022, and was below the rate of 10.5 percent one year ago. Civilian employment increased by 41,000 to 4,733,000 in March 2022, while unemployment decreased by 24,000 to 290,000. The civilian labor force increased by 16,000 over the month to 5,023,000 in March 2022. (All of the above figures are seasonally adjusted.) The unadjusted unemployment rate for the county was 4.9 percent in March 2022. The California seasonally adjusted unemployment rate was 4.9 percent in March 2022, 5.3 percent in February 2022, and 8.4 percent a year ago in March 2021. The comparable estimates for the nation were 3.6 percent in March 2022, 3.8 percent in February 2022, and 6.0 percent a year ago. The table below lists employment by industry group for the County for the past five years for which data is available. LOS ANGELES-LONG BEACH-GLENDALE MD (LOS ANGELES COUNTY) Annual Average Civilian Labor Force, Employment and Unemployment, Calendar Years 2017 through 2021 (March 2021 benchmark) 2017 2018 2019 2020 2021 Civilian Labor Force (1) 5,109,800 5,121,300 5,153,100 4,968,900 4,994,100 Employment 4,864,100 4,885,300 4,926,100 4,355,900 4,548,900 Unemployment 245,700 235,900 227,000 613,000 445,200 Unemployment Rate 4.8% 4.6% 4.4% 12.3% 8.9% Wage and Salary Employment:(2) Agriculture 5,700 4,600 4,400 4,400 4,600 Mining and Logging 2,000 1,900 1,900 1,700 1,600 Construction 138,700 146,300 149,800 146,500 149,800 Manufacturing 350,400 342,600 340,700 315,100 311,700 Wholesale Trade 221,500 223,200 220,500 200,000 202,000 Retail Trade 425,900 424,600 417,700 380,200 401,400 Transportation, Warehousing, Utilities 198,200 203,600 212,900 207,800 214,200 Information 214,000 214,700 215,300 191,000 213,200 Financial Activities 221,600 223,200 223,600 212,600 210,800 Professional and Business Services 613,200 632,300 647,000 599,800 629,500 Educational and Health Services 797,400 817,900 839,900 820,300 839,600 Leisure and Hospitality 524,600 536,500 547,200 393,500 429,300 Other Services 155,700 158,800 158,400 128,700 134,100 Federal Government 48,000 47,300 47,300 50,200 47,600 State Government 92,500 91,700 86,500 89,000 89,200 Local Government 445,600 451,600 453,000 431,000 421,400 Total all Industries (3) 4,455,000 4,520,700 4,566,100 4,171,700 4,300,000 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (3) Columns may not sum to totals due to rounding. Source: State of California Employment Development Department. City Council Regular Meeting - Page 379 of 473 A-69 Principal Employers The following table lists the principal employers within the City for fiscal year 2020-21. CITY OF LYNWOOD Principal Employers Fiscal Year 2020-21 Employer Name No. of Employees St. Francis Medical Center 1,853 Lynwood Unified School District 1,468 LA County Sheriff Department 263 City of Lynwood 202 PL Development 175 California Post-Acute Care 174 Granada Post-Acute 145 El Super 130 Superior Warehouse Grocers Inc. 127 Earle M. Jorgensen Company 120 Source: City of Lynwood. [Remainder of page intentionally left blank] City Council Regular Meeting - Page 380 of 473 A-70 The following table lists, in alphabetical order, the largest manufacturing and non- manufacturing employers within the County as of April 2022. COUNTY OF LOS ANGELES Major Employers As of April 2022 (In Alphabetical Order) Employer Name Location Industry AHMC Healthcare Inc Alhambra Health Care Management All Nations Church Sylmar Churches California State Univ NRTHRDG Northridge Schools-Universities & Colleges Academic Cedars-Sinai Health System West Hollywood Health Care Management Infineon Technologies Americas El Segundo Semiconductor Devices (mfrs) Kaiser Permanente Los Angeles Los Angeles Hospitals Live Nation Los Angeles Entertainment Bureaus Long Beach City Hall Long Beach City Hall Longshore Dispatch Wilmington Nonclassified Establishments Los Angeles County Sheriff Monterey Park Government Offices-County Los Angeles Intl Airport-Lax Los Angeles Airports Los Angeles Medical Ctr Los Angeles Pathologists Los Angeles Police Dept Los Angeles Police Departments National Institutes of Health Pasadena Physicians & Surgeons Security Industry Specialist Culver City Security Systems Consultants Six Flags Valencia Amusement & Theme Parks Sony Pictures Entrtn Inc Culver City Motion Picture Producers & Studios Space Exploration Tech Corp Hawthorne Aerospace Industries (mfrs) Twentieth Century Fox Los Angeles Motion Picture Producers & Studios UCLA Community Based Learning Los Angeles Junior-Community College-Tech Institutes University of Ca Los Angeles Los Angeles Schools-Universities & Colleges Academic University of Ca Los Angeles Los Angeles University-College Dept/Facility/Office Vision X Los Angeles Call Centers Walt Disney Co Burbank Water Parks Water Garden Management Santa Monica Office Buildings & Parks Source: State of California Employment Development Department, extracted from The America’s Labor Market Information System (ALMIS) Employer Database, 2022 2nd edition. [Remainder of page intentionally left blank] City Council Regular Meeting - Page 381 of 473 A-71 Effective Buying Income “Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the total effective buying income for the City, the County, the State, and the United States for the period 2018 through 2022. CITY OF LYNWOOD, LOS ANGELES COUNTY, STATE OF CALIFORNIA AND UNITED STATES EFFECTIVE BUYING INCOME As of January 1, 2018 through 2022 Year Area Total Effective Buying Income (000’s Omitted) Median Household Effective Buying Income 2018 City of Lynwood $773,863 $43,143 Los Angeles County 271,483,825 56,831 California 1,183,264,399 62,637 United States 9,017,967,563 52,841 2019 City of Lynwood $811,764 $44,123 Los Angeles County 271,483,825 56,831 California 1,183,264,399 62,637 United States 9,017,967,563 52,841 2020 City of Lynwood $854,790 $46,137 Los Angeles County 281,835,290 60,174 California 1,243,564,816 65,870 United States 9,487,165,436 55,303 2021 City of Lynwood $894,319 $48,821 Los Angeles County 289,720,470 62,353 California 1,290,894,604 67,956 United States 9,809,944,764 56,790 2022 City of Lynwood $1,035,105 $57,406 Los Angeles County 327,445,237 71,404 California 1,452,426,153 77,058 United States 11,208,582,541 64,448 Source: The Nielsen Company (US), Inc for year 2018; Claritas, LLC for 2019 through 2022. City Council Regular Meeting - Page 382 of 473 A-72 Commercial Activity A summary of historic taxable sales within the City and the County during the past five years in which data is available is shown in the following tables. Total taxable sales during the four quarters of calendar year 2021 in the City were reported to be $501,930,416, a 24.09% increase over the total taxable sales of $374,322,690 reported during the four quarters of calendar year 2020. CITY OF LYNWOOD 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 797 $288,480 1,159 $331,746 2017 837 307,586 1,199 351,191 2018 879 331,014 1,285 371,417 2019 925 342,942 1,384 387,448 2020 1,040 321,844 1,582 374,323 Source: State Department of Tax and Fee Administration. Total taxable sales during the four quarters of calendar year 2021 in the County were reported to be $191,825,807,206, a 21.61% increase over the total taxable sales of $157,737,984,456 reported during the four quarters of calendar year 2020. COUNTY OF LOS ANGELES 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 196,929 $109,997,043 311,295 $154,208,333 2017 197,452 113,280,347 313,226 159,259,356 2018 200,603 119,145,054 328,047 166,023,796 2019 206,732 122,137,664 342,359 171,776,327 2020 226,643 112,044,029 376,990 155,678,156 Source: State Department of Tax and Fee Administration. City Council Regular Meeting - Page 383 of 473 A-73 Construction Activity Construction activity in the City and the County for the past five years for which data is available is shown in the following tables. CITY OF LYNWOOD Building Permit Valuation For Calendar Years 2016 through 2020 (Dollars in Thousands)(1) 2016 2017 2018 2019 2020 Permit Valuation New Single-family $1,260.0 $2,806.0 $1,587.0 $1,458.8 $0.0 New Multi-family 0.0 565.0 0.0 0.0 0.0 Res. Alterations/Additions 0.0 0.0 4,468.0 906.3 240.0 Total Residential 1,260.0 3,371.0 6,055.0 2,365.1 240.0 New Commercial 0.0 0.0 0.0 3,900.0 0.0 New Industrial 0.0 0.0 0.0 0.0 0.0 New Other 0.0 0.0 1,035.4 259.1 55.0 Com. Alterations/Additions 135.0 0.0 12,238.0 751.0 190.0 Total Nonresidential 135.0 0.0 13,273.4 4,910.1 245.0 New Dwelling Units Single Family 4 14 8 10 0 Multiple Family 0 3 0 0 0 TOTAL 4 17 8 10 0 (1) Totals may not foot due to rounding. Source: Construction Industry Research Board, Building Permit Summary. LOS ANGELES COUNTY Building Permit Valuation For Calendar Years 2016 through 2020 (Dollars in Thousands)(1) 2016 2017 2018 2019 2020 Permit Valuation New Single-family $2,162,018.2 $2,352,614.8 $2,277,101.5 $1,967,219.3 $1,874,304.5 New Multi-family 2,774,294.3 3,257,833.4 3,222,530.3 2,61,257.4 2,789,673.9 Res. Alterations/Additions 1,639,294.3 1,757,904.1 1,941,369.5 1,625,839.3 1,014,422.1 Total Residential 6,575,607.5 7,368,352.3 7,441,001.3 6,554,316.0 5,678,400.5 New Commercial 1,728,443.4 2,196,089.2 2,844,173.0 2,675,678.8 1,885,027.0 New Industrial 138,408.6 134,534.3 101,201.3 63,727.8 32,196.2 New Other 791,078.1 563,679.3 952,347.7 446,182.7 354,758.2 Com. Alterations/Additions 2,880,916.6 3,143,200.2 2,796,375.3 3,404,012.3 1,241,068.1 Total Nonresidential 2,657,930.1 6,037,503.0 6,694,097.3 6,589,601.6 3,513,049.5 New Dwelling Units Single Family 4,780 5,456 6,070 5,738 6,198 Multiple Family 15,589 17,023 17,152 15,884 14,056 TOTAL 20,369 22,479 23,222 21,622 20,254 (1) Totals may not foot due to rounding. Source: Construction Industry Research Board, Building Permit Summary. City Council Regular Meeting - Page 384 of 473 B-1 APPENDIX B SUMMARY OF PRINCIPAL LEGAL DOCUMENTS City Council Regular Meeting - Page 385 of 473 C-1 APPENDIX C AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING JUNE 30, 2021 City Council Regular Meeting - Page 386 of 473 D-1 APPENDIX D PROPOSED FORM OF OPINION OF BOND COUNSEL _______, 2022 Lynwood Public Financing Authority 11330 Bullis Road Lynwood, CA 90262 OPINION: $___________ Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) Members of the Governing Body of the Authority: We have acted as bond counsel to the Lynwood Public Financing Authority (the “Authority”) in connection with the issuance by the Authority of the captioned bonds dated the date hereof (the “Bonds”). In such capacity, we have examined such law and such certified proceedings, certifications and other documents as we have deemed necessary to render this opinion. The Bonds are issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”), the Indenture of Trust, dated as of July 1, 2022 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), and a resolution (the “Resolution”) of the governing body of the Authority adopted [May 17], 2022. Under the Indenture, the Authority has pledged certain revenues (the “Revenues”) for the payment of principal, premium (if any), and interest on the Bonds when due, including lease payments made by the City of Lynwood (the “City”) under a Lease Agreement dated as of July 1, 2022 (the “Lease Agreement”) between the Authority and the City. Regarding questions of fact material to our opinion, we have relied on representations of the Authority contained in the Indenture and the City contained in the Lease Agreement, and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Authority is a duly created and validly existing joint exercise of powers authority with the power to adopt the Resolution, enter into the Indenture and perform the agreements on its part contained therein, and issue the Bonds. 2. The City is a duly created and validly existing general law city and municipal corporation with the power to enter into the Lease Agreement and perform the agreements on its part contained therein. City Council Regular Meeting - Page 387 of 473 D-2 3. The Indenture has been duly authorized, executed and delivered by the Authority, and constitutes a valid and binding obligation of the Authority, enforceable against the Authority. 4. The Lease Agreement has been duly authorized, executed and delivered by the Authority and the City, and constitutes a valid and binding obligation of the Authority and the City, enforceable against the Authority and the City. 5. The Indenture creates a valid lien on the Revenues and other funds pledged by the Indenture for the security of the Bonds, on a parity with other bonds (if any) issued or to be issued under the Indenture. 6. The Bonds have been duly authorized and executed by the Authority, and are valid and binding limited obligations of the Authority, payable solely from the Revenues and other funds provided therefor in the Indenture. 7. Interest on the Bonds is exempt from personal income taxation imposed by the State of California. We express no opinion regarding any other tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Bonds. The rights of the owners of the Bonds and the enforceability of the Bonds and the Indenture are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally, and by equitable principles, whether considered at law or in equity. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Our engagement with respect to this matter has terminated as of the date hereof. Respectfully submitted, A Professional Law Corporation City Council Regular Meeting - Page 388 of 473 E-1 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE $_________ LYNWOOD PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2022 (FEDERALLY TAXABLE) This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the City of Lynwood (the “City”) in connection with the issuance by the Lynwood Public Financing Authority (the “Authority”) of the bonds captioned above (the “Bonds”). The Bonds are being issued under an Indenture of Trust dated as of July 1, 2022 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, 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 on behalf of itself and the Authority 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 nine months after the end of the City’s fiscal year (currently April 1, based on the City’s fiscal year-end of June 30). “Dissemination Agent” means, initially, ______________, and 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 executed by the City and the Authority in connection with the issuance of the Bonds. “Participating Underwriter” means, Cabrera Capital Markets, LLC, the original purchaser 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. City Council Regular Meeting - Page 389 of 473 E-2 Section 3. Provision of Annual Reports. (a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing April 1, 2023, with the report for Fiscal Year 2021-22, 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 general fund 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) a notice to the MSRB, in an electronic format as prescribed by the MSRB. (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) Financial Statements. Audited financial statements of the City for the preceding fiscal year, prepared in accordance generally accepted accounting principles. If the City’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), 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) Other Annual Information. To the extent not included in the audited final statements of the City, the Annual Report shall also include financial and operating data with respect to the City for preceding fiscal year, substantially similar to that provided in the corresponding tables and charts in the Official Statement, as follows: City Council Regular Meeting - Page 390 of 473 E-3 1. City of Lynwood General Fund Budget Summary in substantially the form of Table 1; 2. Statements of Revenues, Expenditures and Changes in General Fund Balance in substantially the form of Table 11; 3. General Fund Balance Sheets Five Year Comparison shown in Table 12; 4. General Fund Revenues by Revenue Source in substantially the form of Table 3; 5. Assessed Valuation of All Taxable Property in substantially the form of Table 6; 6. Secured Property Levies and Collections in substantially the form of Table 7; and 7. Principal Property Taxpayers in substantially the form of Table 10 (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 through the MSRB. The City shall clearly identify each such other document so included by reference. If the document included by reference is a final official statement, it must be available from the MSRB. Section 5. Reporting of Listed 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 Bonds, or other material events affecting the tax status of the Bonds. City Council Regular Meeting - Page 391 of 473 E-4 (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 (without any obligation to provide any notices of changes in the outlook assigned to or associated with any rating). (12) Bankruptcy, insolvency, receivership or similar event of the City. (13) The consummation of a merger, consolidation, or acquisition involving the City, or the sale of all or substantially all of the assets of the City (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (14) Appointment of a successor or additional Trustee or the change of name of the 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. (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. (b) Upon 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. Upon 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. City Council Regular Meeting - Page 392 of 473 E-5 (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. 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©. 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. The initial Dissemination Agent will be the City. 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 City Council Regular Meeting - Page 393 of 473 E-6 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©. Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 11. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance. Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the City Council Regular Meeting - Page 394 of 473 E-7 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. Date: _______, 2022 CITY OF LYNWOOD By: City Manager [_____________________], as Dissemination Agent By: City Council Regular Meeting - Page 395 of 473 F-1 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 Authority (the “Issuer”) nor the Trustee (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 the holding City Council Regular Meeting - Page 396 of 473 F-2 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 AA+. 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 and www.dtc.org. 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 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 City Council Regular Meeting - Page 397 of 473 F-3 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. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to the Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book- entry credit of tendered Securities to the Agent’s DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to 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. 11. 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. 12. 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. City Council Regular Meeting - Page 398 of 473 Quint & Thimmig LLP 04/27/22 03095.06 $__________ LYNWOOD PUBLIC FINANCING AUTHORITY Lease Revenue Bonds, Series 2022 (Federally Taxable) BOND PURCHASE AGREEMENT __________, 2022 Lynwood Public Financing Authority 11330 Bullis Road Lynwood, CA 90262 City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Ladies and Gentlemen: Cabrera Capital Markets, LLC (the “Underwriter) hereby offers to enter into this bond purchase agreement (the “Bond Purchase Agreement”) with the Lynwood Public Financing Authority (the “Authority”) and the City of Lynwood (the “City”). Upon the acceptance hereof by the Authority and the City, this offer will be binding upon the Authority, the City and the Underwriter. This offer is made subject to (a) the written acceptance hereof by the Authority and the City and (b) withdrawal by the Underwriter upon written notice (by telecopy or otherwise) delivered to the Authority and the City at any time prior to each of their acceptance hereof by the Authority and the City. 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase on the Closing Date (as defined herein), and the Authority and the City hereby agree to sell and deliver to the Underwriter on the Closing Date, $__________ principal amount of Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) (the “Bonds). The Bonds are being issued pursuant to Article 4, Chapter 5, Division 7, Title 1 of the California Government Code, a resolution of the Authority authorizing the issuance of the Bonds, adopted on May 17, 2022 (the “Authority Resolution”), and an Indenture of Trust, dated as of June 1, 2022 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The City will lease certain real property to the Authority, consisting of various streets throughout the boundaries of the City (collectively, the “Leased Property”) to the Authority pursuant to a Site Lease, dated as of June 1, 2022 (the “Site Lease”). The Leased Property will be leased by the Authority to the City pursuant to the Lease Agreement, dated as of June 1, 2022 (the “Lease Agreement”), by and between the Authority and the City. Pursuant to an Assignment Agreement, dated as of June 1, 2022 (the “Assignment Agreement”), by and between the Authority and the Trustee, the Authority will assign, for the benefit of the owners of the Bonds, its right to receive Lease City Council Regular Meeting - Page 399 of 473 -2- Payments (the “Lease Payments”) made by the City under the Lease Agreement and its right to exercise rights and remedies of the Authority under the Lease Agreement. All capitalized terms not defined herein shall have the respective meaning specified in the Indenture. Under the Lease Agreement, the City is required to make Lease Payments and Additional Rental Payments from legally available funds in amounts calculated to be sufficient to pay principal of and interest on the Bonds when due. All of the Authority’s right, title and interest in and to the Lease Agreement (except for the right to receive Additional Rental Payments to the extent payable to the Authority and certain rights to indemnification), including the right to receive Lease Payments under the Lease Agreement, are assigned to the Trustee for the benefit of the Owners of the Bonds. The Bonds are being issued for the purposes of funding: (i) all or a portion of the City’s projected total unfunded accrued actuarial liability to the California Public Employees’ Retirement System for its Miscellaneous and Safety Plans; and (ii) the costs of issuing the Bonds. The purchase price to be paid by the Underwriter for the Bonds is hereby agreed to be $___________, which amount represents the principal amount of the Bonds of $__________.00, less $___________, representing the Underwriter’s discount (such payment and delivery of the Bonds and the other actions contemplated hereby to take place at the time of such payment and delivery being herein sometimes called the “Closing”). The Authority and the City acknowledge and agree that (i) the purchase and sale of the Bonds pursuant to this Bond Purchase Agreement is an arm’s-length commercial transaction between the Authority and the City and the Underwriter; (ii) in connection with such transaction, the Underwriter is acting solely as a principal and not as an agent or a fiduciary of the Authority or the City; (iii) the Underwriter has not assumed a fiduciary responsibility in favor of the Authority or the City with respect to the offering of the Bonds or the process leading thereto (whether or not the Underwriter, or any affiliates of the Underwriter, has advised or is currently advising the Authority or the City on other matters) nor has it assumed any other obligation to the Authority or the City except the obligations expressly set forth in this Bond Purchase Agreement, (iv) the Underwriter has financial and other interests that differ from those of the Authority and the City; and (v) the Authority and the City have consulted with their own legal and financial advisors to the extent they deemed appropriate in connection with the offering of the Bonds. The Authority and the City hereby acknowledge receipt from the Underwriter of disclosures required by the Municipal Securities Rulemaking Board (“MSRB”) Rule G-17 (as set forth in MSRB Notice 2012-25 (May 7, 2012), relating to disclosures concerning the Underwriter’s role in the transaction, disclosures concerning the Underwriter’s compensation, conflict disclosures, if any, and disclosures concerning complex municipal securities financing, if any. A Preliminary Official Statement of the City and the Authority, dated _______, 2022 (together with the Appendices thereto, any documents incorporated therein by reference and any supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially consistent with such physical form, the “Preliminary Official Statement”), has been prepared for use in marketing the Bonds, and a final Official Statement relating to the Bonds, to be dated the date hereof, as amended to conform to the terms of this Purchase Contract, and with such changes and amendments as are mutually agreed to by the Authority, the City and the Underwriter, including the cover page, inside cover City Council Regular Meeting - Page 400 of 473 -3- page, the appendices and all information incorporated therein by reference, is herein collectively referred to as the “Official Statement,” which shall be in substantially the form of the Preliminary Official Statement, with such changes and amendments thereto as may be mutually agreed upon by the Underwriter, the Authority and the City. The Bonds shall be dated their date of delivery, and shall have the maturities, bear interest at the rates, have reoffering yields, and be subject to redemption as shown on Exhibit A hereto. It shall be a condition to the Authority’s obligation to sell and to deliver the Bonds to the Underwriter and to the obligation of the Underwriter to purchase, to accept delivery of and to pay for the Bonds that the entire $__________ principal amount of the Bonds as authorized by the Indenture shall be sold and delivered by the Authority and accepted and paid for by the Underwriter at the Closing. The Underwriter may change the offering prices (or yields) of the Bonds from time to time at any time. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices. The obligation of the Authority to sell and deliver the Bonds to the Underwriter shall also be conditioned upon the delivery by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel (“Bond Counsel”), of its approving legal opinion with respect to the Bonds. The Authority and the City hereby authorize the Underwriter to use and distribute the Site Lease, the Lease Agreement, the Assignment Agreement, the Indenture and the Preliminary Official Statement, and the information contained in such documents in connection with the public offering and sale of the Bonds. The Authority and the City have authorized the use of the Preliminary Official Statement in connection with the public offering of the Bonds by the Underwriter prior to the date hereof. The obligation of the City to make Lease Payments under the Lease Agreement 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. Neither the Bonds nor the obligation of the City to make Lease Payments under the Lease Agreement constitutes a debt of the Authority, the City, the State of California or any of its political subdivisions in contravention of any constitutional or statutory debt limitation or restriction. The obligation of the City to make Lease Payments, as set forth in the Lease Agreement, shall be deemed to be and shall be construed to be a ministerial duty imposed by law and it shall be the ministerial duty of each and every public official of the City to take such actions and do such things as are required by law in the performance of such duty, subject to abatement in the event of damage or destruction to, or condemnation of, the Leased Property or a portion thereof. 2. Bona Fide Public Offering. The Underwriter agrees to make a bona fide public offering of all of the Bonds, at prices not in excess of the initial public offering yields or prices set forth on the cover page of the Official Statement. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices; provided, however, that the Underwriter may offer a portion of the Bonds for sale to selected dealers who are members of the Financial Industry Regulatory Authority, and the Underwriter reserves the right to change such offering prices or yields as the Underwriter shall deem necessary in connection with the marketing of the Bonds and to offer and sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the initial offering prices or at yields higher than the initial yields set forth on Exhibit A attached hereto. The Underwriter also reserves the right to over-allot or effect transactions that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market and to discontinue such stabilizing, if commenced, at any time. None of such activities City Council Regular Meeting - Page 401 of 473 -4- shall affect the principal amounts, maturity dates, interest rates, redemption or other provision of the Bonds or the amount to be paid by the Underwriter to the Authority for the Bonds. 3. The Bonds. The Bonds will be issued, executed and delivered pursuant to the Indenture. The City Council of the City has adopted a resolution on May 17, 2022, relating to the Bonds (the “City Resolution”). This Bond Purchase Agreement, the Site Lease, the Lease Agreement and the Continuing Disclosure Agreement (hereinafter defined) are collectively referred to as the “City Documents.” This Bond Purchase Agreement, the Indenture, the Site Lease, the Lease Agreement and the Assignment Agreement are collectively referred to as the “Authority Documents.” 4. Official Statement, Continuing Disclosure. (a) The Authority and the City represent that they have deemed the Preliminary Official Statement to be final as of its date, except for either revisions or additions to the offering price(s), interest rate(s), yield(s) to maturity, selling compensation, aggregate principal amount, principal amount per maturity, delivery date, rating(s) and other terms of the Bonds which depend upon the foregoing as provided in and pursuant to Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Rule”). (b) The Underwriter agrees that, prior to the time the final Official Statement is available, the Underwriter will send to any potential purchaser of the Bonds, upon the request of such potential purchaser, a copy of the most recent Preliminary Official Statement. Such Preliminary Official Statement shall be sent by first class mail (or other equally prompt means) not later than the second business day following the date upon which each such request is received. (c) The Authority agrees to deliver to the Underwriter, at such addresses as the Underwriter shall specify, as many copies of the final Official Statement relating to the Bonds as the Underwriter shall reasonably request as necessary to comply with paragraph (b)(4) of the Rule and with Rule G-32, Rule G-36 and all other applicable rules of the Municipal Securities Rulemaking Board. The Authority agrees to deliver such copies of the Official Statement within seven business days after the execution hereof. The Underwriter agrees to give notice to the Authority on the date after which the Underwriter shall no longer be obligated to deliver copies of the Official Statement pursuant to paragraph (b)(4) of the Rule, which date shall be no earlier than 25 days after the “end of the underwriting period,” as determined in accordance with Section 14 herein. (d) Prior to the earlier of (i) receipt of notice from the Underwriter that no participating underwriter, as such term is defined in the Rule, remains obligated to deliver Official Statements pursuant to paragraph (b)(4) of the Rule or (ii) 25 days after the date of the Closing (as defined below), the Authority and the City shall provide the Underwriter with such information regarding the Authority and the City, each of their current financial conditions and ongoing operations as the Underwriter may reasonably request. (e) The City hereby covenants and agrees that it will, on or prior to the Closing Date, execute a certificate for the benefit of the owners of the Bonds in which the City will undertake to provide financial information, operating data and notices of material events as required by paragraph (d)(2)(ii) of the Rule substantially in the form of Appendix D to the Official Statement (the “Continuing Disclosure Agreement”). City Council Regular Meeting - Page 402 of 473 -5- 5. Representations, Warranties and Agreements of the City. The City represents, warrants and agrees as follows: (a) The City is a municipal corporation and general law city duly organized and validly existing under the Constitution and laws of the State of California. (b) The City has full legal right, power and authority (i) to enter into, execute and deliver the City Documents; and (ii) to carry out and consummate the transactions on its part contemplated by the City Documents and the Official Statement. (c) By all necessary official action, the City has duly authorized and approved the City Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement and approved the distribution thereof (including in electronic form), has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations in connection with the execution and delivery of the Bonds on its part contained in the City Documents, and the consummation by it of all other transactions contemplated by the City Documents in connection with the execution and delivery of the Bonds, all pursuant to the City Resolution adopted at a meeting duly called and held in accordance with the requirements of all applicable laws and at which a quorum of the members of the City Council was continuously present. The City Resolution has not been modified, amended or rescinded since the date of its adoption. (d) The City is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of California or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the City Documents) or other instrument to which the City is a party which breach or default has or may have an adverse effect on the ability of the City 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 such a default or event of default under any such instrument; and the execution and delivery of the Bonds and the City Documents, and compliance with the provisions on the City’s part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the Leased Property or assets of the City or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the City Documents. (e) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations in connection with the execution and delivery of the Bonds under the City Documents or the consummation by it of all other transactions contemplated by the City Documents have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition City Council Regular Meeting - Page 403 of 473 -6- precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations under the City Documents have been duly obtained. (f) There is no action, suit, proceeding, inquiry or investigation, notice of which has been duly served on the City, at law or in equity before or by any court, government agency, public board or body, pending or to the best knowledge of the officer of the City executing this Bond Purchase Agreement, threatened against the City, affecting the existence of the City or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, execution or delivery of the Bonds pursuant to the Indenture, or contesting or affecting as to the City the validity or enforceability of the City Documents, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the City to cause the execution and delivery or adoption by the City of the City Documents, or in any way contesting or challenging the consummation of the transactions contemplated hereby or thereby; nor, to the best knowledge of the City, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the Bonds or the authorization, execution, delivery or performance by the City of the City Documents. (g) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (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 will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the City shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction, and the Underwriter shall bear all costs in connection with the foregoing. (h) As of the date thereof, the Preliminary Official Statement (other than information therein regarding DTC or its book-entry system or any information provided by the Underwriter) did not, except for the omission of certain information permitted to be omitted in accordance with the Rule, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) At the time of the City’s acceptance hereof, and (unless an event occurs of the nature described in paragraph (k) of this Section 5) at all times subsequent thereto up to and including the Closing Date, the Official Statement (other than information therein regarding DTC or its book-entry system or any information provided by the Underwriter) did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (j) If the Official Statement is supplemented or amended pursuant to paragraph (k) of this Section 5, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the Closing Date, the Official Statement (other than information therein provided by the Underwriter) as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. City Council Regular Meeting - Page 404 of 473 -7- (k) If between the date of this Bond Purchase Agreement and that date which is 25 days after the end of the underwriting period (as determined in accordance with Section 14 hereof) any event of which the officer of the City executing this Bond Purchase Agreement has knowledge shall occur affecting the City which might adversely affect the marketability of the Bonds or the market prices thereof, or which might cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City shall notify the Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will at its expense prepare and furnish to the Underwriter a reasonable number of copies of such supplement to, or amendment of, the Official Statement in a form and in a manner approved by the City, Bond Counsel, Disclosure Counsel and the Underwriter. (l) Any certificate signed by any officer of the City and delivered to the Underwriter pursuant to the City Documents or any document contemplated thereby or required for the valid execution and delivery of the Bonds shall be deemed a representation and warranty by the City to the Underwriter as to the statements made therein. (m) The City will cause the proceeds from the sale of the Bonds to be paid to the Trustee for the purposes specified in the Indenture and the Official Statement. So long as any of the Bonds are outstanding and except as may be authorized by the Indenture, the City will not issue or sell, or cause to be issued or sold, any bonds or other obligations, other than the Bonds delivered thereunder, the interest on and premium, if any, or principal of which will be payable from Lease Payments. 6. Representations, Warranties and Agreements of the Authority. The Authority represents, warrants and agrees as follows: (a) The Authority is a joint exercise of powers entity duly organized and validly existing under the laws of the State of California pursuant to a Joint Exercise of Powers Agreement between the City and the Lynwood Redevelopment Agency, dated March 16, 1993 (the “JPA Agreement”). (b) The Authority has full legal right, power and authority (i) to enter into, execute and deliver the Authority Documents and to sell and deliver the Bonds to the Underwriter as provided herein; and (ii) to carry out and consummate the transactions on its part contemplated by the Authority Documents and the Official Statement. (c) By all necessary official action, the Authority has duly authorized and approved the issuance of the Bonds and the Authority Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement and approved the distribution thereof (including in electronic form), has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations in connection with the execution and delivery of the Bonds on its part contained in the Bonds and the Authority Documents, and the consummation by it of all other transactions contemplated by the Authority Documents in connection with the execution and delivery of the Bonds, all pursuant to the Authority Resolution adopted at a meeting duly called and held in accordance with the requirements of all applicable laws and at which a quorum of the board members of the Authority was continuously present. The Authority Resolution has not been modified, amended or rescinded since the date of its adoption and each Authority Document is or will be, when delivered, as applicable, the valid and binding obligation of the Authority. City Council Regular Meeting - Page 405 of 473 -8- (d) The Authority is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of California or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or the JPA Agreement, or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the Authority Documents) or other instrument to which the Authority is a party which breach or default has or may have an adverse effect on the ability of the Authority to perform its obligations under the Bonds or 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 such a default or event of default under any such instrument; and the execution and delivery of the Bonds and the Authority Documents, and compliance with the provisions on the Authority’s part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, Bond, note, resolution, agreement or other instrument to which the Authority is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the Leased Property or assets of the Authority or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Authority Documents. (e) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations in connection with the issuance of the Bonds under the Authority Documents or the consummation by it of all other transactions contemplated by the Authority Documents, including all filings with the California Secretary of State, have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations under the Bonds and the Authority Documents have been duly obtained. (f) The Bonds, when executed, issued, authenticated and delivered in accordance with the Indenture, and sold to the Underwriter as provided herein, will be validly executed and outstanding obligations, entitled to the benefits of the Indenture, and upon such execution and delivery, the Indenture will provide, for the benefit of the Owners from time to time of the Bonds, the legally valid and binding security interest it purports to create. (g) There is no action, suit, proceeding, inquiry or investigation, notice of which has been duly served on the Authority, at law or in equity before or by any court, government agency, public board or body, pending or to the best knowledge of the officer of the Authority executing this Bond Purchase Agreement, threatened against the Authority, affecting the existence of the Authority or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance, execution or delivery of the Bonds pursuant to the Indenture, or contesting or affecting as to the Authority the validity or enforceability of the Bonds or the Authority Documents, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the Authority to cause the issuance of the Bonds, or the execution and delivery or adoption by the Authority of the Authority Documents, or in any way contesting or challenging the consummation of the transactions contemplated hereby or thereby; nor, to the best City Council Regular Meeting - Page 406 of 473 -9- knowledge of the Authority, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the Bonds or the authorization, execution, delivery or performance by the Authority of the Bonds or the Authority Documents. (h) 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 order (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 will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the Authority shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction, and the Underwriter shall bear all costs in connection with the foregoing. (i) As of the date thereof, the Preliminary Official Statement did not, except for the omission of certain information permitted to be omitted in accordance with the Rule, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (j) At the time of the Authority’s acceptance hereof, and (unless an event occurs of the nature described in paragraph (l) of this Section 6) at all times subsequent thereto up to and including the Closing Date, the information under the caption “THE AUTHORITY” in the Official Statement (other than information therein provided by the Underwriter) did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (k) If the Official Statement is supplemented or amended pursuant to paragraph (l) of this Section 6, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the Closing Date, the Official Statement (other than information therein provided by the Underwriter) as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (l) If between the date of this Bond Purchase Agreement and that date which is 25 days after the end of the underwriting period (as determined in accordance with Section 14 hereof) any event of which the officer of the Authority executing this Bond Purchase Agreement has knowledge shall occur affecting the Authority which might adversely affect the marketability of the Bonds or the market prices thereof, or which might cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Authority shall notify the Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Authority will at its expense prepare and furnish to the Underwriter a reasonable number of copies of such supplement to, or amendment of, the Official Statement in a form and in a manner approved by the City, Bond Counsel, Disclosure Counsel and the Underwriter. City Council Regular Meeting - Page 407 of 473 -10- (m) Any certificate signed by any officer of the Authority and delivered to the Underwriter pursuant to the Authority Documents or any document contemplated thereby or required for the valid execution and delivery of the Bonds shall be deemed a representation and warranty by the Authority to the Underwriter as to the statements made therein. (n) The Authority will cause the proceeds from the sale of the Bonds to be paid to the Trustee for the purposes specified in the Indenture and the Official Statement. So long as any of the Bonds are outstanding and except as may be authorized by the Indenture, the Authority will not issue or sell any bonds or other obligations, other than the Bonds delivered thereunder, the interest on and premium, if any, or principal of which will be payable from the Revenues. (o) The Authority shall honor all other covenants on its part contained in the Indenture and the Lease Agreement which are incorporated herein and made a part of this Bond Purchase Agreement. 7. Closing. At 8:00 A.M., Pacific Daylight time, on _________, 2022, or on such other date time, as may be mutually agreed upon by the Authority, the City and the Underwriter (the “Closing Date”), the Authority will, subject to the terms and conditions hereof, deliver to the Underwriter, through the facilities of The Depository Trust Company (“DTC”), or at such other place as the Authority, the City and the Underwriter may mutually agree, the Bonds in definitive, fully registered form (one Bond for each maturity), duly executed and registered in the name of Cede & Co. as nominee of DTC; and, subject to the terms and conditions hereof, the Underwriter shall wire to the Trustee immediately available funds in the amount of the purchase price of the Bonds. 8. Closing Conditions. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and warranties of the Authority and the City contained herein, and in reliance upon the representations and warranties to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Authority and the City of its obligations hereunder, both as of the date hereof and as of the Closing Date. Accordingly, the Underwriter’s obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the Authority and the City of their respective obligations to be performed hereunder and under such documents and instruments at or prior to the Closing Date, shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the statements the officers and other officials of the Authority and of the City, as the Underwriter, authorized representatives of Bond Counsel, the Trustee, and the City Attorney made in any certification or other documents furnished pursuant to the provisions hereof, and shall also be subject to the following additional conditions: (a) The respective representations and warranties of the Authority and the City contained herein shall be true, complete and correct on the date hereof and on and as of the Closing Date, as if made on the Closing Date; (b) At the time of Closing, the City Documents and the Authority Documents shall be in full force and effect in accordance with their terms and shall not have been amended, modified or supplemented and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Underwriter; (c) All necessary official action of the Authority, the City and of the other parties thereto relating to the City Documents and the Authority Documents shall have been taken and shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect; City Council Regular Meeting - Page 408 of 473 -11- (d) Subsequent to the date hereof, there shall not have occurred any change in or affecting particularly the Authority, the City or the Bonds, as the foregoing is described in the Official Statement, which in the reasonable opinion of the Underwriter materially impairs the investment quality of the Bonds; and (e) At or prior to the Closing Date, the Underwriter shall have received copies of each of the following documents: (i) The Official Statement and each supplement or amendment, if any, thereto, executed by authorized officers of the Authority and the City; (ii) A copy of the Indenture, executed by the parties thereto; (iii) A copy of the Lease Agreement, executed by the parties thereto; (iv) A copy of the Site Lease, executed by the parties thereto; (v) A copy of the Continuing Disclosure Agreement, executed by the City and ___________, as dissemination agent; (vi) A certified copy of the JPA Agreement; (vii) A certificate or certificates of the City, dated the Closing Date, to the effect that: (A) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date and the City has complied with all of the terms and conditions of this Purchase Agreement required to be complied with by the City at or prior to the Closing Date; (B) none of the proceedings or authority for (i) the authorization, sale, execution and delivery of the Bonds, (ii) the adoption of the City Resolution, or (iii) the execution and delivery of the City Documents and performance of its obligations thereunder, has been repealed, modified, amended, revoked or rescinded; (C) subsequent to June 30, 2019, and prior to Closing, other than as described in the Official Statement, there have been no material adverse changes in the financial position of the City; (D) no event affecting the City has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purposes for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (E) No consent is required for the inclusion of the City’s 2018-19 audited financial statements in the Official Statement. (viii) A certificate or certificates of the Authority, dated the Closing Date, to the effect that: City Council Regular Meeting - Page 409 of 473 -12- (A) the representations and warranties of the Authority contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date and the Authority has complied with all of the terms and conditions of this Purchase Agreement required to be complied with by the Authority at or prior to Closing Date; (B) none of the proceedings or authority for (i) the authorization, sale, execution and delivery of the Bonds, (ii) the adoption of the Authority Resolution, or (iii) the execution and delivery of the Authority Documents, has been repealed, modified, amended, revoked or rescinded; and (C) no event affecting the Authority has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purposes for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect. (ix) An opinion or opinions, dated the Closing Date and addressed to the Underwriter and the Trustee, of Jones & Mayer, the City Attorney, to the effect that: (A) The City is a municipal corporation and general law city duly organized and validly existing under the Constitution and laws of the State of California; (B) The City Documents have been duly approved by a resolution of the City adopted at a meeting duly called and held in accordance with the requirements of all applicable laws, with all public notice required by law, and at which a quorum of the members of the City Council was continuously present and such resolution has not been modified, amended or rescinded since the date of its adoption; (C) Except as described in the Official Statement, there is no litigation, inquiry, or investigation pending or to the best of such counsel’s knowledge after due inquiry, threatened, which: (1) challenges the right or title of any member or officer of the City to hold his or her office or exercise or perform the powers and duties pertaining thereto; (2) challenges the validity or enforceability of the Bonds or the City Documents; (3) seeks to restrain or enjoin the sale of the Bonds or the execution and delivery by the City of, or the performance by the City of its legal obligations under, the City Documents or in which a final adverse decision could materially adversely affect the operations of the City with respect to the Leased Property; or (4) contests in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, nor, to the best of such counsel’s knowledge, is there any basis therefor; (D) The execution and delivery by the City of, and the performance by the City of its obligations under, the City Documents, do not conflict with, violate or constitute a default under any provision of any law, court order or decree or any contract, instrument or agreement to which the City is a party or by which it is bound and of which such counsel has knowledge; (E) As of the date hereof, the statements and information relating to the City contained in the Preliminary Official Statement and Official Statement did City Council Regular Meeting - Page 410 of 473 -13- not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (F) The City Documents have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery of the City Documents by the parties thereto other than the City, the City Documents constitute legal, valid and binding agreements of the City, enforceable against the City in accordance with their respective terms except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights and remedies in general, or by the application of equitable principles if equitable remedies are sought. (G) Except as may be required under the “blue sky” or securities laws of the United States or any state, there is no authorization, approval, consent or other order of, or filing with, or certification by, the State or any other governmental authority or agency within the State having jurisdiction over the City required for the issuance of the Bonds or the consummation by the City of the other financial transactions contemplated by the Official Statement and the City Documents. (H) Based on the information made available to the City Attorney in its role as City Attorney to the City, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, nothing has come to its attention which would lead it to believe that the Official Statement as of its date and as of the date of Closing (excluding therefrom the financial and statistical data and forecasts included therein, as to which no opinion is expressed and information relating to the Authority and the Depository Trust Company and its book entry system) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (x) An opinion or opinions, dated the Closing Date and addressed to the Underwriter and the Trustee, of the City Attorney, as counsel for the Authority, to the effect that: (A) The Authority is a joint exercise of powers authority duly organized and validly existing under the laws of the State of California pursuant to the JPA Agreement; (B) The Authority Documents have been duly approved by the Authority Resolution adopted at a meeting duly called and held in accordance with the requirements of all applicable laws, with all public notice required by law, and at which a quorum of the members of the Board of the Authority was continuously present and such resolution has not been modified, amended or rescinded since the date of its adoption; (C) Except as described in the Official Statement, there is no litigation, inquiry, or investigation pending to the best of such counsel’s knowledge after due inquiry, or threatened, which: (1) challenges the right or title of any Board member or officer of the Authority to hold his or her office or exercise or perform City Council Regular Meeting - Page 411 of 473 -14- the powers and duties pertaining thereto; (2) challenges the validity or enforceability of the Bonds or the Authority Documents; (3) seeks to restrain or enjoin the sale of the Bonds or the execution and delivery by the Authority of, or the performance by the Authority of its legal obligations under, the Authority Documents or in which a final adverse decision could materially adversely affect the operations of the Authority with respect to the Leased Property; or (4) contests in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, nor, to the best of such counsel’s knowledge, is there any basis therefor; (D) The execution and delivery by the Authority of, and the performance by the Authority of its obligations under, the Authority Documents, do not conflict with, violate or constitute a default under any provision of any law, court order or decree or any contract, instrument or agreement to which the Authority is a party or by which it is bound and of which such counsel has knowledge; and (E) The Authority Documents have been duly authorized, executed and delivered by the Authority and, assuming due authorization, execution and delivery of the Authority Documents by the parties thereto other than the Authority, the Authority Documents constitute legal, valid and binding agreements of the Authority, enforceable against the Authority in accordance with their respective terms except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights and remedies in general, or by the application of equitable principles if equitable remedies are sought. (F) Except as may be required under the “blue sky” or securities laws of the United States or any state, there is no authorization, approval, consent or other order of, or filing with, or certification by, the State or any other governmental authority or agency having jurisdiction over the Authority required for the issuance of the Bonds or the consummation by the Authority of the other financial transactions contemplated by the Official Statement and the Authority Documents. (G) Based on the information made available to such City Attorney in its role as counsel to the Authority, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement under the captions entitled “THE AUTHORITY,” and “LITIGATION”, nothing has come to such City Attorney’s attention that would lead it to believe that the statements contained in the above-referenced captions as of the date of the Official Statement and as of the date of Closing (excluding therefrom the financial and statistical data and forecasts included therein, as to which no opinion is expressed) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (xi) An opinion, dated the Closing Date and addressed to the Authority, of Bond Counsel, substantially in the form set forth in Appendix E to the Official Statement, together with a letter or letters from such counsel, dated the Closing Date and addressed to the Underwriter and the Trustee, to the effect that the foregoing opinion may be relied upon by the Underwriter and the Trustee to the same extent as if such opinion was addressed to them; City Council Regular Meeting - Page 412 of 473 -15- (xii) A supplemental opinion, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, to the effect that: (A) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (B) the Bond Purchase Agreement has been duly executed and delivered by the Authority and the City and is a valid and binding agreement of the Authority and the City; and (C) the statements contained in the Official Statement under the captions “DESCRIPTION OF THE BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” and “TAX MATTERS” and in APPENDIX C–”SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS” and APPENDIX E—FORM OF OPINION OF BOND COUNSEL,” insofar as such statements expressly summarize certain provisions of the Indenture, the Lease Agreement, the Site Lease and the final opinion of Bond Counsel concerning certain tax matters relating to the Bonds, are accurate in all material respects; (xiii) A letter, dated the Closing Date and addressed to the Authority, the City and the Underwriter of Jones Hall, A Professional Law Corporation, San Francisco, California, as disclosure counsel (“Disclosure Counsel”), to the effect that, based on among other things, (i) inquiries and discussions of various legal matters, (ii) review of and reliance on certain documents, certificates, instructions, records and opinions of counsel, and (iii) participation in meetings and telephone conferences with representatives of the Authority and the City, Wolf & Company Inc. and NHA Advisors, as municipal advisors to the City, and others including the City Attorney and Underwriter’s counsel, during which the content of the Preliminary Official Statement and the Official Statement and related matters were discussed, no information has come to the attention of Disclosure Counsel with respect to the issuance of the Bonds which caused Disclosure Counsel to believe that (a) the Preliminary Official Statement as of its date (excluding therefrom financial, demographic and statistical data; forecasts, projections, estimates, assumptions and expressions of opinions; information relating to DTC and its book-entry only system; information under the captions “TAX MATTERS” and “UNDERWRITING”; and the Appendices to the Preliminary Official Statement (other than Appendices A and E) as to which we express no view) contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except for such information as is permitted to be excluded from the Preliminary Official Statement pursuant to Rule 15c2-12, including but not limited to information as to pricing, yields, interest rates, maturities, amortization, redemption provisions, ratings, debt service requirements, Underwriter’s discount and CUSIP numbers; or (b) the Official Statement as of its date and as of the Closing Date (excluding therefrom financial, demographic, statistical or economic or demographic data; forecasts, numbers, charts, tables, graphs, projections, estimates, assumptions and expressions of opinions; information relating to DTC and its book-entry only system or CUSIP numbers; information under the captions “TAX MATTERS” and “UNDERWRITING”; and the Appendices to the Official Statement (other than Appendices A and E) as to which we express no view) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were City Council Regular Meeting - Page 413 of 473 -16- made, not misleading. However, in providing advice and assistance as Disclosure Counsel, Disclosure Counsel provided no independent diligence on the MSRB’s Electronic Municipal Market Access website, and we express no view regarding the City’s or the City’s related entities’ compliance with any obligation to file annual reports or provide notice of events, each as described in Rule 15c2-12; (xiv) the opinion of Quint & Thimmig LLP, as counsel to the Underwriter, dated the Closing Date and addressed to the Underwriter, in form and substance acceptable to the Underwriter. (xv) A certificate of an authorized officer of the Trustee satisfactory to the Underwriter, certifying substantially as follows: (A) The Trustee is a national banking association duly organized and in good standing under the laws of the United States of America and has all necessary power and authority to enter into the Indenture and to perform its duties under the Indenture; (B) The Trustee is duly authorized to enter into the Indenture and to authenticate and deliver the Bonds to the Underwriter pursuant to the terms of the Indenture and, when executed by the other parties thereto, the Indenture will constitute a legal, valid and binding obligation of the Trustee enforceable in accordance with its terms; (C) The Bonds have been duly authenticated and delivered to the Underwriter pursuant to direction from the Authority; (D) The Trustee is not in breach of or default under any law or administrative rule or regulation of the State of California or of any department, division, agency or instrumentality thereof, of any applicable court or administrative decree or order, or any other material instrument to which the Trustee is a party or is otherwise subject or bound and which would materially impair the ability of the Trustee to perform its obligations under the Indenture; (E) To its knowledge, 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 or threatened in any way against the Trustee affecting the existence of the Trustee or the titles of its directors or officers to their respective offices, or seeking to restrain or enjoin the execution, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Indenture, or in any way contesting or affecting the validity or enforceability of the Bonds or the Indenture; (F) The execution and delivery of the Indenture will not conflict with or constitute a breach of or default under the Trustee’s duties under such documents, or any law, administrative regulation, court decree, resolution, articles of association, bylaws or other material agreement to which the Trustee is subject or by which it is bound; and (G) No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the authentication and delivery of the Bonds, the execution and delivery of the Indenture, the performance of the City Council Regular Meeting - Page 414 of 473 -17- Trustee’s duties under the Indenture or the consummation by the Trustee of the other transactions contemplated by the Indenture, except as such may be required under the state securities or blue sky laws in connection with the distribution of the Bonds by the Underwriter. (xvi) An opinion of counsel to the Trustee in form and substance acceptable to the Underwriter; (xvii) 15c2-12 certificates of City and the Authority; (xviii) Certified copies of the City Resolution and the Authority Resolution; (xix) Evidence, satisfactory to the Underwriter, that the Bonds have been assigned the rating of “___” by S&P Global Ratings, a Standard & Poor’s Financial Services LLC business; (xx) Transcripts of all proceedings relating to the authorization, issuance, execution and delivery of the Bonds certified by the City and the Authority as applicable; and (xxi) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the City’s representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the City and the Authority on or prior to the date of the Closing of all the agreements then to be performed and conditions then to be satisfied by each of them. All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to Bond Counsel, Disclosure Counsel and the Underwriter. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Bond Purchase Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and none of the Underwriter, the Authority or the City shall be under any further obligation hereunder. 9. Termination. The Underwriter shall have the right to terminate the Underwriter’s obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds by notifying the Authority and the City in writing, of its election to do so, if, after the execution hereof and prior to the Closing: (a) the United States has become engaged in, or there has been an escalation of, hostilities which, in the reasonable opinion of the Underwriter, materially adversely affects the marketability or market price of the Bonds; (b) there shall have occurred the declaration of a general banking moratorium by any authority of the United States or the State of New York or the State of California; City Council Regular Meeting - Page 415 of 473 -18- (c) an event shall have occurred, or been discovered as described in paragraph (k) of Section 5 or paragraph (l) of Section 6 hereof, which in the opinion of the Underwriter requires the preparation and publication of disclosure material or a supplement or amendment to the Official Statement; (d) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency in the State of California, or a decision by any court of competent jurisdiction within the State of California shall be rendered which, in the Underwriter’s reasonable opinion, materially adversely affects the market price of the Bonds; (e) there shall have occurred or any notice shall have been given of any intended downgrading, suspension, withdrawal or negative change in credit watch status by any national rating service to any of the Authority’s or the City’s obligations; (f) legislation shall be introduced, by amendment or otherwise, or be enacted by the House of Representatives or the Senate of the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by or on behalf of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the execution, issuance, delivery, offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by the Official Statement, is or would be in violation of any provision of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the issuance, offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by the Official Statement; (g) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (h) the New York Stock Exchange, or other national securities exchange or association or any governmental authority, shall impose as to the Bonds, or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by or the charge to the net capital requirements of broker-dealers; (i) trading in securities on the New York Stock Exchange or other national securities exchange or association shall have been suspended or limited or minimum prices have been established on either such exchange; (j) any action shall have been taken by any government in respect of its monetary affairs which, in the reasonable opinion of the Underwriter, has a material adverse effect on the United States municipal securities market; or as of the date hereof that in the Underwriter’s reasonable opinion materially adversely affects the marketability or market price of the Bonds; or (k) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Underwriter, has been materially and adversely affected by disruptive events, occurrences or conditions in the securities or debt markets. If this Bond Purchase Agreement shall be terminated pursuant to this Section 9, or if the purchase provided for herein is not consummated because any condition to the Underwriter’s obligations hereunder is not satisfied or because of any refusal, inability or failure on the part of City Council Regular Meeting - Page 416 of 473 -19- the City or the Authority to comply with any of the terms or to fulfill any of the conditions of this Bond Purchase Agreement, or if for any reason the City or the Authority shall be unable to perform all of its respective obligations under this Bond Purchase Agreement, neither the City nor the Authority shall be liable to the Underwriter for damages on account of loss of anticipated profits arising out of the transactions covered by this Bond Purchase Agreement. The Underwriter may, in its sole discretion, waive any of the conditions set forth in Section 9 or this Section 9. 10. Changes in Official Statement. After the Closing, neither the Authority nor the City will adopt any amendment of or supplement to the Official Statement to which the Underwriter shall reasonably object in writing. 11. Payment of Costs and Expenses. (a) All costs and expenses incident to the sale and delivery of the Bonds to the Underwriter shall be payable by the Authority from the proceeds of the Bonds, including, but not limited to: (i) the fees and expenses of the City, its counsel and consultants; (ii) the fees and expenses of the Authority, its counsel and consultants; (iii) the fees and expenses of Bond Counsel; (iv) the fees and expenses of Disclosure Counsel; (v) the fees and expenses of Wolf & Company, Inc. and NHA Advisors, the City’s municipal advisors; (vi) all expenses in connection with the preparation and printing of the Bonds; (vii) all expenses in connection with the preparation, printing, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto; (viii) the initial fees and expenses of the Trustee, including the reasonable fees and expenses of its counsel; (ix) the fees and expenses of any rating agency rating the Bonds; and (x) any credit enhancement costs for the Bonds. (b) The Underwriter shall pay all expenses incurred by it in connection with the public offering and distribution of the Bonds including, but not limited to: (i) all advertising expenses in connection with the offering of the Bonds; (ii) the fees and disbursements of Underwriter’s counsel, if any, and (iii) all out-of-pocket disbursements and expenses incurred by the Underwriter in connection with the offering and distribution of the Bonds, including, air travel and hotel accommodations in connection with the pricing of the Bonds; investor meetings, rating agency trips and meetings; the Closing; meals and transportation for the City, the Underwriter and other working group personnel during rating agency, investor meetings; pricing and Closing trips; expenses related to attending working group meetings, such as parking, meals and transportation and any other miscellaneous costs associated with the Closing; (iv) all other expenses incurred by the Underwriter in connection with the public offering and distribution of Bonds, except as provided in (a) above or as otherwise agreed to by the Underwriter and the City, and (v) the fees of the California Debt and Investment Advisory Commission. City Council Regular Meeting - Page 417 of 473 -20- 12. Notices. Any notice or other communication to be given under this Bond Purchase Agreement may be given by delivering the same in writing: To the Authority: Lynwood Public Financing Authority c/o City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attention: City Manager To the City: City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attention: City Manager To the Underwriter: Cabrera Capital Markets, LLC 444 South Flower Street, 13th Floor Los Angeles, CA 90071 Attention: Mr. Brian Corley, Senior Vice President 13. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the Authority, the City and the Underwriter (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. All of the Authority’s and the City’s representations, warranties and agreements contained in this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of: (a) any investigations made by or on behalf of the Underwriter; (b) delivery of and payment for the Bonds pursuant to this Bond Purchase Agreement; and (c) any termination of this Bond Purchase Agreement. 14. Determination of End of the Underwriting Period. For purposes of this Bond Purchase Agreement, the end of the underwriting period for the Bonds shall mean the earlier of (a) the Closing Date unless the City and the Authority have been notified in writing by the Underwriter, on or prior to the Closing Date, that the “end of the underwriting period” for the Bonds for all purposes of the Rule will not occur on the Closing Date, or (b) the date on which notice is given to the City and the Authority by the Underwriter in accordance with the following sentence. In the event that the Underwriter has given notice to the City and the Authority pursuant to clause (a) above that the “end of the underwriting period” for the Bonds will not occur on the Closing Date, the Underwriter agrees to notify the City and the Authority in writing as soon as practicable following the “end of the underwriting period” for the Bonds for all purposes of the Rule. The Underwriter agrees to file a copy of the Official Statement with each of the nationally recognized municipal securities information repositories. 15. No Assignment. This Bond Purchase Agreement is entered into between the City, the Authority and the Underwriter, and is solely for the benefit of the City, the Authority, the Underwriter and their respective successors or assigns, and no person other than the foregoing shall acquire or have any right under or by virtue of this Bond Purchase Agreement. All of the representations, warranties and agreements contained in this Bond Purchase Agreement shall survive the delivery of and payment for the Bonds and any termination thereof. 16. Effectiveness. This Bond Purchase Agreement shall become effective upon the execution of the acceptance by an authorized representative of the City and an authorized representative of the Authority and shall be valid and enforceable at the time of such acceptance. 17. Headings. The headings of the sections of this Bond Purchase Agreement are inserted for convenience only and shall not be deemed to be a part hereof. City Council Regular Meeting - Page 418 of 473 -21- 18. Governing Law. This Bond Purchase Agreement shall be interpreted, governed and enforced in accordance with the laws of the State of California. 19. Counterparts. This Bond Purchase Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. If the foregoing is in accordance with your understanding of this Bond Purchase Agreement please sign and return to us the enclosed duplicate copies hereof, whereupon it will become a binding agreement among the City, the Authority and the Underwriter in accordance with its terms. Very truly yours, CABRERA CAPITAL MARKETS, LLC, as Underwriter By Brian Corley Senior Vice President LYNWOOD PUBLIC FINANCING AUTHORITY By Ernie Hernandez Executive Director Time of Signature CITY OF LYNWOOD By Ernie Hernandez City Manager Time of Signature City Council Regular Meeting - Page 419 of 473 Exhibit A Page 1 EXHIBIT A MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES AND YIELDS $__________ LYNWOOD PUBLIC FINANCING AUTHORITY Lease Revenue Bonds, Series 2022 (Federally Taxable) Principal Interest Maturity Amount Rate Yield Price Redemption Provisions Optional Redemption. The Bonds maturing on or after August 1, ____ shall be subject to redemption prior to their respective maturity dates as a whole or in part on any date on or after August 1, ____, in any order deemed reasonable by the Authority, and by lot within a maturity, from prepayments of Lease Payments made at the option of the City pursuant to the Lease Agreement, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued but unpaid interest to the date fixed for redemption, without premium. Mandatory Sinking Fund Redemption. The Bonds maturing on August 1, ____, is subject to mandatory redemption, in part by lot, from sinking account payments set forth in the following schedule commencing August 1, ____, and on August 1 in each year thereafter to and including August 1, ____ at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption. Sinking Fund Principal Amount Redemption Date to be Redeemed † Maturity The Bonds maturing on August 1, ____, is subject to mandatory redemption, in part by lot, from sinking account payments set forth in the following schedule commencing August 1, ____, and on August City Council Regular Meeting - Page 420 of 473 Exhibit A Page 2 1 in each year thereafter to and including August 1, ____ at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption. Sinking Fund Principal Amount Redemption Date to be Redeemed † Maturity Extraordinary Mandatory Redemption. The Bonds are subject to redemption prior to their respective maturity dates, upon notice as hereinafter provided, as a whole or in part on any date, from prepayments of Lease Payments made by the City pursuant to the Lease Agreement from funds received by the City due to a taking of the Leased Property or any portion thereof under the power of eminent domain or from insurance proceeds received by the City due to damage to or destruction of the Leased Property or any portion thereof, under the circumstances and upon the conditions and terms prescribed in the Indenture and in the Lease Agreement. City Council Regular Meeting - Page 421 of 473 Agenda Item # 13. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Patrick Matson, Director of Human Resources SUBJECT: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD ADOPTING A STEP PLACEMENT AND SALARY SETTING POLICY IN ACCORDANCE WITH THE AUDITOR OF THE STATE OF CALIFORNIA'S AUDIT FINDINGS AND CONCLUSIONS Recommendation: Staff recommends that the City Council of the City of Lynwood adopt the attached resolution entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD ADOPTING A STEP PLACEMENT AND SALARY SETTING POLICY IN ACCORDANCE WITH THE AUDITOR OF THE STATE OF CALIFORNIA'S AUDIT FINDINGS AND CONCLUSIONS." Background: The City of Lynwood underwent an audit during October and November of 2017 by the Auditor of the State of California. In its follow-up reports dated December of 2018 and September of 2021, the State Auditor identified the need for the City to develop a policy on how to prepare salary surveys and provide justification to the City Council in instances when it proposed salary increases above the amounts recommended by the study. As such, the City implemented a "Salary Setting" policy in June of 2019 to address the concerns outlined in the State Auditor's report. However, in its most recent report, the State Auditor determined that the City was not complying with its own policy, citing the use of non-comparable agencies in its surveys, the absence of supporting documentation, and lack of staff analysis when bringing the proposed salary increases to the City Council for approval. Discussion and Analysis: As mentioned, the City implemented a "Salary Setting" policy in response to the initial State Auditor's report outlining its concerns with respect to salary adjustments. Around the same time, the City also implemented a "Step Placement" policy, which was created to outline the process for employees' salary step placement within a City Council Regular Meeting - Page 422 of 473 particular salary range for various personnel actions. In streamlining its efforts, staff has combined both policies into one and is recommending that the City Council adopt the proposed resolution in order to comply with the recommendations set forth by the State Auditor. If adopted, the City Manager will then task the Director of Human Resources to consistently administer and apply the new policy and its and procedures therein. Furthermore, the Director of Human Resources will be charged with the responsibility of ensuring that the ten (10) mutually agreed upon comparable cities, between the City and bargaining units, are utilized when conducting its salary surveys and/or classification and compensation studies. Fiscal Impact: N/A. Coordinated With: N/A. ATTACHMENTS: Description Exhibit A - Step Placement and Salary Setting Policies (Final) Resolution - Step Placement and Salary Setting Policy City Council Regular Meeting - Page 423 of 473 Exhibit A P a g e 1 | 10 CITY OF LYNWOOD ADMINISTRATIVE POLICY STEP PLACEMENT AND SALARY SETTING POLICIES STEP PLACEMENT POLICY I. PURPOSE To provide guidelines to employees and potential employees on step placement and step increases and ensure a uniform interpretation and application of the City’s compensation and classification system. II. POLICY In accordance with the applicable Memoranda of Understanding, new employees, as well as current employees accepting another position within the City shall be appointed at the first step of the salary range to which their class is assigned, except when the education and/or previous training or experience of a proposed employee are substantially superior to those required of the class and justify a beginning salary in excess of such minimum compensation as deemed appropriate by the Director of Human Resources and/or the City Manager. III. APPLICABILITY This policy applies to all employees and applicants to classified positions. IV. DEFINITIONS A. Anniversary Date: An employee’s initial anniversary date will be one year following the employee’s initial appointment to a classification, minus any unpaid absences. Changes to an employee’s classification resulting from a promotion and/or a reclassification will result in a new anniversary date. B. Seniority Date: An employee seniority date starts when the employee was hired as a fulltime employee. When an employee is on an unpaid leave of absence, such time does not count as service time for step increases, longevity or seniority. C. Merit Step Increase: An employee is eligible for the next step increase following a satisfactory completion of their probation period and thereafter in intervals of one (1) year to the next step on their anniversary date, until they reached the top step of the salary range. There will be no accelerated advancements of steps in between anniversary dates. City Council Regular Meeting - Page 424 of 473 Exhibit A P a g e 2 | 10 D. Salary Upgrade: The movement of a classification to a higher salary rate of pay within the salary schedule assigned to a particular classification. Salary upgrades are processed in accordance with the provisions found under the “Salary Setting Policy” heading on page 6 of this policy. E. Promotion: The movement of an employee from one classification to another classification which is allocated to a higher maximum rate of pay through a Civil Service recruitment process or a reclassification. The employee will be on probation for six (6) months and shall receive the next step upon successfully completing probation. Thereafter, the employee shall receive the next step salary advancement on a yearly basis using the employee’s new anniversary date. F. Probationary Period: A working test period during which an employee is required to demonstrate his/her fitness for the duties to which he/she is appointed by actual performance of the duties of the position. The probation period is six (6) month and can be extended up to a year. G. Demotion: The movement of an employee from one classification to another classification having a lower maximum rate of pay due to disciplinary process. The employee will be placed on the step closest to, but less than, his/her/their current rate of pay. If the employee makes more than the highest step of the new (lower) range, he/she will be placed at Step E. The employee’s anniversary date and seniority dates to the classification shall be adjusted to the date of the demotion. H. Lateral Transfer: A change of an employee from one position to another position in the same classification. Transfers may be inter-or intra-departmental. In order to be eligible for a voluntary transfer, an employee must have completed his/her/their probationary period and be in good standing in his/her/their position. I. Reclassification: Positions, the duties of which have changed materially, so as to necessitate reclassification. A reclassification will follow the procedures established in accordance with the provisions found under the “Salary Setting Policy” heading on page 6 of this policy. Reclassifications shall not be used for the purpose of avoiding rules and regulations for demotions and promotions. J. Pay Grade Advancement: City Council Regular Meeting - Page 425 of 473 Exhibit A P a g e 3 | 10 The movement of an employee from one pay grade in a classification to another grade in the same classification through a selection process or a reclassification. K. Temporary Appointment: An appointment acquired by a person who possesses the minimum qualifications established for a particular class, and who has been appointed to a position in that class in the absence of available eligible list for a maximum period of six (6) months and may be extended up to a year. L. Modified Work Assignment: When an employee is temporarily assigned modified or alternative work due to a work related illness or injury, the employee will receive all pay and benefits as though the employee continued in his/her/their normal assignments, less any premium payments for which the employee is no longer eligible because of duties he/she/they are not performing while on light duty. M. Classification Consolidation: When two or more classifications are consolidated, employees in the positions are transferred to the new salary range with no change in step placement. N. Salary Ranges Each job classification is assigned to a pay range with a minimum and maximum salary range and identifies steps in between the minimum and maximum rate. The Salary Schedule is composed of five (5) steps, A-E. These steps were developed through the collective bargaining process for represented employees. The salary steps were approved by the City Council after receiving recommendations from the City Manager and/or the Human Resources Director. See the Salary Setting Policy on page 6 for additional information. O. Unpaid Leave Occasionally an employee will be absent from work without pay due to an authorized leave, temporary disability, extended leave of absence or suspension. In these instances, the anniversary, longevity and or seniority date, may be adjusted for each full workday of unpaid leave of absence. P. Probationary Reversion When an employee fails probation and revert to the classification in which he/she/they formerly held status, he/she/they will be returned to the position at the same step held prior to the promotion. V. STEP PLACEMENT GUIDELINES A. Salary Upgrade City Council Regular Meeting - Page 426 of 473 Exhibit A P a g e 4 | 10 The approval of the City Council is required to implement a salary upgrade. Upon City Council’s approval, the employee(s) will be placed in the new salary range effective the beginning of the pay period following approval by the City Council. The employee(s) in the classification that receives a salary range upgrade will be placed on a step that is closest to their current range and step, but not lower. The employee will not be required to serve a new probationary period, but will have an adjusted anniversary date. The next step increase will be on the employee’s anniversary date, the year following the salary adjustment and every year thereafter, until the top of the range is reach. B. Pay Grade Advancement Upon the pay grade advancement, an employee will be placed in the new range on the step that provides for a pay increase and will be effective at the beginning of the pay period. The employee will not re-serve probation and will be eligible for his/her/their next step increase one year following the initial placement into the new pay grade. A Pay Grade Advancement will not result in a change in an employee’s seniority in the classification. C. Reclassification The approval of the City Council is required to implement a reclassification. Upon City Council’s approval, the employee will be place in the new position effective the beginning of the pay period following the approval of the City Council. The employee will be placed no higher than the step in the new range that provides for a pay increase and will be required to complete a six-month probationary period. Thereafter, the employee shall receive the next step salary advancement on a yearly basis using the employee’s new anniversary date. D. Temporary Appointment In the absence of an appropriate employment eligibility list, a temporary appointment may be made by the appointing authority of a classified employee or non-employee, who meets the minimum training and experience qualifications for the position. Temporary Appointments are limited to a six (6 months) period and may be extended up to a year. The employee should be placed in the step in the new range that provides for a pay increase. Temporarily appointed employees do not serve a probationary period, are not eligible for subsequent step increases nor are they eligible for incentive/special pays or other benefits that may be afforded the new classification. City Council Regular Meeting - Page 427 of 473 Exhibit A P a g e 5 | 10 E. Promotion When an employee is promoted to a position with skill pay, the skill pay is not included as part of the one-step minimum salary increase. In other words, the skill pay is in addition to the increase received as a result of the promotion. When promoting from a position with a skill pay to a position with no skill pay, the skill pay is included when determining step placement. In determining step placement when both positions have a different skill pay, include the skill pay in the former classification, and treat the new skill pay as being in addition to the increase received as a result of the promotion. When promoting from a position with skill pay to a position with the same skill pay (i.e. ICBO Specialty Certification), do not include the skill pay in the former position to determine step placement. Treat the new skill pay as being in addition to the increase received as a result of the promotion. VI. FULL-TIME NEW HIRE/EMPLOYEE A newly hired employee shall be placed on Step A of the salary range established for the position. A current employee promoting to a higher classification shall be placed on Step A of the salary range established for the position or the next closest step that provides for an increase in pay. To hire an employee at other than Step A, a department is required to complete the “Request for Exception to Step Placement” form found at the end of this policy. A department should review the resume/application of the potential employee, recognizing that approval will be based on individual qualifications and education, market availability, and the salaries of employees already in the classification. The completed form is then forward to the Human Resources Department for review. The HR Department will indicate either approval or disapproval of the request and then return the form to the originating department. Departments are advised not to commit to other than the first step without first receiving authorization. VII. ANNUAL STEP INCREASES An increase within any salary range established in the salary schedule shall be based on satisfactory job performance. Salary increases are not automatic. Supervisors shall complete a performance evaluation prior to the employee’s anniversary date along with a Personnel Action Form (PAF). If the supervisor fails to complete an employee’s performance evaluation prior to the employee’s anniversary date, the increase shall be retroactive to the anniversary date once the evaluation is served and processed. City Council Regular Meeting - Page 428 of 473 Exhibit A P a g e 6 | 10 If an employee is not recommended for a step increase, the supervisor shall issue a subsequent evaluation six months from the date of the original evaluation. The anniversary date for an employee who does not receive a step increase due to unsatisfactory performance will be reset to the date the step increase is received (i.e., original anniversary date on 6/01/19; step withheld for three months and step then given on 9/01/19. New anniversary date is 9/1/20). An employee whose probationary period is extended, will not be eligible for a merit increase until the probationary period is satisfactorily completed. VIII. PART-TIME, SEASONAL EMPLOYEE A newly hired part-time, seasonal employee shall be hired at Step A of the applicable salary range. Should a department request to place a newly hired part-time employee at a higher step other than Step A, a “Request for Exception to Step Placement” form must be submitted to the Director of Human Resources who will review the request and determine whether to approve or deny the request. A part-time employee, regardless of the type of position assigned, is eligible for a step increase upon receiving a favorable annual performance evaluation of “Satisfactory” or higher, one-year from the date of hire of the part-time employee and every year thereafter, until the employee has reached his/her final step within the salary range. SALARY SETTING POLICY I. PURPOSE The purpose of this policy is to establish guidelines and procedures for the City in setting and adjusting employees’ salaries and salary ranges. This policy is not intended to supplant contract negotiations with recognized employee organizations over wages, hours and terms and conditions of employment. II. DEFINITIONS A. Internal Equity - Situation in which employees who do similar jobs within an organization receive salaries, and the amount they are paid is related in a fair way to the type of job that they do. B. Meet and Confer – Requirement under the Meyers-Milias-Brown Act (“MMBA”) (Government Code §3500.5 et seq.) for public employers to meet with recognized employee organizations over wages, hours and terms of conditions of employment. C. Recruitment and Retention – The ability to attract, hire and retain qualified employees to fill positions. D. Salary Ranges – Biweekly pay ranges paid to all employees duly adopted by the Lynwood City Council. City Council Regular Meeting - Page 429 of 473 Exhibit A P a g e 7 | 10 E. Salary Surveys – Surveys conducted to benchmark salaries paid for Lynwood classification against other local agencies and cities, generally conducted within the same job market, to the extent possible, taking into consideration similar job duties of the comparable positions, similarities between the agencies being compared (i.e., population, budget, economic conditions). F. Subordinate Salary Compression – The percentage of difference between salaries of a supervisor and his/her subordinate. III. POLICY It is the policy of the City of Lynwood to pay employees a fair and competitive wage, in keeping with budget limitations, and to ensure that internal equity is maintained when setting or increasing salaries. IV. APPLICABILITY This policy applies to all classified, part-time unclassified and at-will salaries. V. PROCEDURES AND RESPONSIBILITIES New Position A. When a classification is created, Human Resources will conduct a salary survey using ten (10) benchmarked cities, as agree to by the employee associations. There may be a need for different benchmark agencies based on the classification to be analyzed, such as water positions. B. The ten benchmark cities shall be updated as needed, subject to meet and confer. C. The final salary provided a new position will be based on the following factors: 1. Salary (Benchmarking) Surveys 2. Internal Equity 3. Recruitment and Retention issues 4. Subordinate Salary Compression/Compaction 5. Meet and Confer with employee organizations. 6. Existing Salary Ranges D. Human Resources will document the final decision made and the reasons for setting the salary at the level selected and provide the analysis and justification to City Council as part of the staff report. Existing Position City Council Regular Meeting - Page 430 of 473 Exhibit A P a g e 8 | 10 A. An existing position may be evaluated when there has been a change in duties, and at the request of a department head or the employee association, using ten (10) benchmarked cities, as agree to by the employee associations. There may be a need for different benchmark agencies based on the classification to be analyzed, such as utility positions. B. When there has been a change in duties, the incumbent will complete a position evaluation on a form provided by Human Resources. A classification analysis will be conducted. If necessary, a salary survey will also be conducted, based on the results of the classification analysis. C. If there are no change in duties, a salary survey may be conducted if it is believed that the position is paid below market and salary survey has not previously been conducted within the prior 24 months. D. The ten benchmark cities shall be updated as needed, subject to meet and confer. E. The final salary provided to an existing position, with or without a change in duties, will be based on the following factors: 1. Salary (Benchmarking) Survey 2. Internal Equity 3. Recruitment and Retention issues 4. Subordinate Salary Compression/Compaction 5. Meet and Confer with employee organizations. 6. Existing Salary Ranges F. Human Resources will document the final decision made and the reasons for setting the salary at the level selected and provide the analysis and justification to City Council as part of the staff report. VI. APPROVALS In accordance with Title 18 of the Lynwood Municipal Code, all classification and salary changes must be approved by the Lynwood City Council. New classifications or classification changes must also be approved by the Personnel Board. No employee shall be appointed until the necessary approvals are received. VII. DISSEMINATION OF POLICY All employees shall receive a copy of this Policy when they are hired. The Policy may be updated from time to time. City Council Regular Meeting - Page 431 of 473 Exhibit A P a g e 9 | 10 VIII. APPROVED BY THE CITY MANAGER __________________________________________ IX. ACTION This Policy is effective on May 3, 2022. City Council Regular Meeting - Page 432 of 473 Exhibit A P a g e 10 | 10 REQUEST FOR EXCEPTION TO STEP PLACEMENT Instructions: Department should review the resume/application of a potential employee, recognizing that approval will be based on individual qualifications and education, market availability, and the salaries employees already in the classification. Submit completed form, along with documentation, if appropriate, to the HR Department for review. The HR Department will indicate either approval or disapproval of the request and return the form to the originating department. Departments are advised not to commit to other than the first step without first receiving authorization for HR. Date: To: Director of HR & Risk Management From: Applicant’s Name: Title/Position: FT: PT: Salary Range: Step Requesting: Justification for Request: Department Head Signature : Date: FOR HR ONLY Approved: Not Approved: Salary Range/Step Comments: Director of Human Resources, Signature Date City Council Regular Meeting - Page 433 of 473 RESOLUTION NO. [XX] A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD ADOPTING A STEP PLACEMENT AND SALARY SETTING POLICY IN ACCORDANCE WITH THE AUDITOR OF THE STATE OF CALIFORNIA’S AUDIT FINDINGS AND CONCLUSIONS WHEREAS, in its reports dated December 2018 and September 2021, the Auditor of the State of California identified the need for the City to develop a policy on the preparations of its salary surveys and/or classification and compensation studies; and WHEREAS, in response to these reports from the Auditor of the State of California, the City of Lynwood created a “Salary Setting” policy in June of 2019; and WHEREAS, the City is proposing to combine its “Step Placement” and “Salary Setting” policies into one as shown in Exhibit A; and WHEREAS, the City desires to renew its commitment to adhere to its own policy to satisfy the recommendations listed in the Auditor of the State of California’s reports; and WHEREAS, the City Manager will direct the Director of Human Resources to consistently administer the policy in Exhibit A and its procedures therein; and WHEREAS, the Director of Human Resources will be responsible for ensuring that the ten (10) mutually agreed upon comparable cities, between the City and bargaining units, are utilized when conducting its salary surveys and/or classification and compensation studies; and NOW, THEREFORE, THE LYNWOOD CITY COUNCIL DOES HEREBY RESOLVE AND DETERMINE AS FOLLOWS: Section 1. The City Council of the City of Lynwood hereby finds and declares that the foregoing recitals are true and correct, and incorporates them herein as findings and as a substantive part of this Resolution. Section 2. That the City Council adopts the revised “Step Placement” and “Salary Setting” policies into one as shown in Exhibit A. Section 3. Authorize the Mayor to execute the Resolution for and on behalf of the City of Lynwood. Section 4. This Resolution shall take full force and effect immediately upon adoption by the City Council. City Council Regular Meeting - Page 434 of 473 PASSED, APPROVED and ADOPTED this 17th day of May, 2022 Jorge Casanova MAYOR ATTEST: Maria Quinonez CITY CLERK APPROVED AS TO FORM: APPROVED AS TO CONTENT: Noel Tapia Patrick Matson CITY ATTORNEY DIR. OF HUMAN RESOURCES City Council Regular Meeting - Page 435 of 473 Agenda Item # 14. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Mark Flores, Director of Recreation and Community Services John Yonai, Interim Director of Community Development Jose Trejo, Deputy Director SUBJECT: AUTHORIZING THE PROCUREMENT OF CITY FLEET VEHICLES AND SPORTS FIELD EQUIPMENT Recommendation: Staff recommends that the Lynwood City Council adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE PURCHASE OR LEASE OF CITY FLEET VEHICLES AND SPORTS FIELD EQUIPMENT AS DETERMINED APPROPRIATE BY THE CITY MANAGER FOR CITY OPERATIONS” Background: The approved 2021-2023 Citywide Budget with amendments includes funds for the appropriation of fleet and equipment purchases. Pursuant to Lynwood Municipal Code Section 6-3.7(b)(2), purchases of supplies, equipment and routine services where dollar amount involved are $25,000 or more shall be by formal competitive bid. Annually the City budgets for and purchases fleet vehicles and equipment to either replace existing vehicles and equipment or to provide the necessary equipment for related programs and services. Staff is recommending that the City purchase or lease vehicles as appropriate for City operations to include public safety, parking enforcement and recreational activities. Discussion and Analysis: Procurement activities will include staff contacting multiple local dealerships to obtain pricing on comparable vehicles and field equipment. However, local dealerships may not be able to provide pricing due to no availability of comparable vehicles, delays in manufacturer build schedules and general production backlogs throughout the country. Consequently, as the City Council previously approved the use of a cooperative purchasing agreement City Council Regular Meeting - Page 436 of 473 for the purchase of vehicles and equipment on December 15, 2020 (Resolution #2020.166), staff will also utilize this option to purchase or lease the authorized fleet and equipment. If the cooperative agreement option best meets the City's needs, staff will utilize Sourcewell’s national cooperative agreement #091521-NAF with National Auto Fleet Group and the National Intergovernmental Purchasing Alliance Company (NIPA) cooperative agreement #2017025 with the Toro Company for the purchase of fleet and sports equipment. This type of purchase option is similar to “piggyback” procurement pursuant to Lynwood Municipal Code Section 6-6.8(A) for public works contracts which allows securing a contract for a public project with this purchasing method. Piggyback procurement utilizes another public agency’s contract or agreement to obtain more advantageous prices and terms that cannot be otherwise obtained on the open market. Both of the national master agreements offer competitive pricing. This meets the City’s goal of receiving competitive pricing through competitive bidding. This is an alternate procurement procedure and as we revise the purchasing policy we will include such processes to satisfy the current language in the municipal code requiring a four-fifths vote of the City Council as this action is recommending. This alternate procurement waives the formal bidding process by utilizing cooperative agreements to complete the purchases and making a finding, by way of a four-fifths vote of the City Council that such a purchase is more economically and efficiently effected through the use of this alternate procurement method. Staff has identified the desired vehicles and field equipment. Where possible staff will seek to purchase or lease alternate fuel vehicles that generally have a higher price point but qualify for State AQMD funds currently in the City's budget. Staff will prioritize the acquisition of alternate fuel vehicles to take advantage of special restricted funds. Staff is seeking authorization to procure three regular or alternate fuel mid size trucks with MSRPs not to exceed $29,999; one regular or alternate fuel full size sport utility vehicle and one heavy duty truck with MSRPs not to exceed $49,999; two regular or alternate fuel full size trucks with MSRP not to exceed $39,999; and one infield groomer utility vehicle with MSRP not to exceed $29,999 for City operations to include recreation, public works, and public safety related activities. It is anticipated that it will take approximately 3 - 8 months for the City to take delivery of said vehicles and equipment. With this in mind and if needed, staff further recommends that the purchase orders for the truck and equipment be authorized to be carried over into the new FY 23 budget. Fiscal Impact: Funds for the purchase of fleet vehicles and equipment are included in the existing City budget. There are $215,000 in City funds and $250,000 in AQMD funds for alternate fuel vehicles. Coordinated With: City Attorney’s Office Finance Department ATTACHMENTS: Description Reso- Vehicle and Field Equipment City Council Regular Meeting - Page 437 of 473 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE PROCUREMENT OF CITY FLEET VEHICLES AND SPORTS FIELD EQUIPMENT WHEREAS, annually the City budgets for and purchases fleet vehicles and equipment to either replace existing vehicles and equipment or to provide the necessary equipment to provide related programs and services; and WHEREAS, pursuant to the Lynwood Municipal Code Section 6-3.7(b)(2), purchases of supplies, equipment and routine services where the dollar amount involved is $25,000 or more shall be by formal competitive bid; and WHEREAS, the Lynwood Municipal Code Section 6-3.13(a)(3) allows for an exception to the formal bidding process if the City Council finds by resolution adopted by not less than 4/5ths of its members that such an acquisition may be more economically and efficiently effected through the use of an alternate procedure such as using a cooperative purchasing contracts; and WHEREAS, cooperative purchasing contracts offer competitive pricing on the purchase of qualifying vehicles and equipment; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER, AND RESOLVE AS FOLLOWS: Section 1. The City Council for the City of Lynwood finds and declares that the forgoing recitals are true and correct, and incorporates said recitals fully into this Resolution as substantive findings. Section 2. The City Council for the City of Lynwood finds and declares that it is in the City’s best interest to purchasing or lease vehicles and equipment for City operations. Section 3. The City Council of the City of Lynwood approves and authorizes the City Manager to purchase or lease the following fleet and equipment acquisitions and execute corresponding purchase orders with the qualifying vendor: three regular or alternate fuel mid size trucks with MSRPs not to exceed $29,999; one regular or alternate fuel full size sport utility vehicle and one heavy duty truck with MSRPs not to exceed $49,999; two regular or alternate fuel full size trucks with MSRP not to exceed $39,999; and one infield groomer utility vehicle with MSRP not to exceed $29,999, for City operational activities. Section 4. The City Council of the City of Lynwood finds that if vehicles and equipment bids are not available from local vendors the City by a four-fifths vote of its members finds City Council Regular Meeting - Page 438 of 473 that such acquisition is more economically and efficiently effected through the use of an alternate procedure such as cooperative purchasing agencies. Section 5. The City Council of the City of Lynwood authorizes the payment through the pre-pay process should the selected vendors require payment upon delivery. Section 6. The City Council of the City of Lynwood authorizes the City Manager to execute a purchase order for each purchase and allows the designated funding to be carried over into the new FY-23 as it is anticipated that it will take approximately three to nine months to receive the vehicles and equipment. Section 7. The City Clerk shall certify to the adoption of this resolution and hereafter the same shall be in full force and effect. PASSED, APPROVED and ADOPTED this 17th day of May 2022. ________________________________ Jorge Casanova, Mayor ATTEST: ___________________________ _________________________________ Maria Quinonez, Ernie Hernandez, City Clerk City Manager APPROVED AS TO FORM: APPROVED AS TO CONTENT: _________________________ ________________________________ Noel Tapia, City Attorney City Council Regular Meeting - Page 439 of 473 STATE OF CALIFORNIA ) ) § COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the above and foregoing resolution was duly adopted by the City Council of said City at its regular meeting thereof held in the City Hall of the City on the 3rd day of May, 2022 and passed by the following vote: AYES: COUNCIL MEMBERS FLORES, SANTANA, SOTO MAYOR PRO TEM SOLACHE, AND MAYOR CASANOVA NOES: NONE ABSTAIN: NONE ABSENT: NONE Maria Quinonez, City Clerk STATE OF CALIFORNIA ) ) § COUNTY OF LOS ANGELES ) I, the undersigned City Clerk of the City of Lynwood, and Clerk of the City Council of said City, do hereby certify that the above and foregoing is a full, true and correct copy of Resolution No. on file in my office and that said resolution was adopted on the date and by the vote therein stated. Dated this 3rtd day of May, 2022. Maria Quinonez, City Clerk City Council Regular Meeting - Page 440 of 473 Agenda Item # 15. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Mir T. Fattahi, Acting City Engineer George Cambero, Interim Utility Manager Lorry Hempe, Public Works Special Projects Manager SUBJECT: CONTINUATION OF AN EMERGENCY ACTION PER PUBLIC CONTRACT CODE SECTION 22050 FOR THE EMERGENCY ACTION AT WELL NO. 19 Recommendation: Staff recommends for the City Council to adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD FINDING THAT THERE IS A NEED TO CONTINUE THE EMERGENCY ACTION, BY WAY OF A FOUR-FIFTHS VOTE OF ITS MEMBERS, PURSUANT TO PUBLIC CONTRACT CODE SECTION 22050(c)(1) WITH RESPECT TO THE EMERGENCY REHABILITATION ON WELL NO. 19.” Background: The City Council delegated to the City Manager the authority to order any action specified under California Public Contract Code Section 22050(a)(1) and pursuant to Section 22050(b). This delegation gave the City Manager the authority, in case of an emergency, to take any directly related and immediate action required by that emergency, and procure the necessary equipment, services and supplies for those purposes, without giving notice for bids to let contracts. On April 5, 2022, the City Council found that an emergency existed at Well No. 19 necessitating immediate actions. At the same meeting, the City Council authorized the City Manager to begin emergency rehabilitation work which includes backfilling the well, brushing of the casing with Sterilene to remove bio-fouling, patching the seven (7) holes in the well casing, changing the pump from oil to water lubrication, and disinfecting the well and approved the additional optional work on the zone sampling while the well is offline. Discussion and Analysis: The approved emergency work at Well No. 19 has not yet been completed. There is a need to continue the City Council Regular Meeting - Page 441 of 473 emergency work. Four-fifths Vote Requirement to Continue the Action Pursuant to Public Contract Code Section 22050(c)(1) at every regularly scheduled meeting after the initial review of the emergency action, a four-fifths vote of the City Council is needed to continue the action until the emergency action is terminated. Fiscal Impact: Finance Department City Attorney’s Office Coordinated With: Finance Department City Attorney’s Office ATTACHMENTS: Description Resolution City Council Regular Meeting - Page 442 of 473 1 RESOLUTION._____________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD FINDING THAT THERE IS A NEED TO CONTINUE THE EMERGENCY ACTION, BY WAY OF A FOUR-FIFTHS VOTE OF ITS MEMBERS, PURSUANT TO PUBLIC CONTRACT CODE SECTION 22050(c)(1) WITH RESPECT TO THE EMERGENCY REHABILITATION ON WELL NO. 19 WHEREAS, Well No. 19 produces water at 2,054 acre feet per year; and WHEREAS, Well No. 19 water production is almost half of the City’s entire water system; and WHEREAS, staff has observed that Well No. 19 started producing an overwhelming amount of sand and silt during normal pumping and subsequent videos of the well exposed the holes in the well casing; and WHEREAS, upon recommendation from the City’s Utility Services Manager and Acting City Engineer, immediate rehabilitation of Well No. 19 is needed to resolve water quality issues and to bring the well back into production; and WHEREAS, it is cost-effective to conduct the optional zone sampling at a cost of $49,690 while the well is off-line; and WHEREAS, California Public Contract Code Section 22050 provides that in the case of an emergency, a city, pursuant to a 4/5s vote of its governing body, may repair or replace a public facility, take any directly related and immediate action required by that emergency, and procure the necessary equipment, services and supplies for those purposes, without giving notice for bids to let contracts provided the public agency is able to make a finding, based on substantial evidence, that the emergency will not permit a delay resulting from a competitive solicitation for bids, and that the action is necessary to respond to the emergency; and WHEREAS, California Public Contract Code Section 22050 provides that in the case of an emergency, a city, pursuant to a 4/5s vote of its governing body, a public agency may delegate to the City Manager the authority to order any action pursuant to California Public Contract Code Section 22050(a)(1) to address the emergency; and WHEREAS, on April 5, 2022, the City Council found that there is substantial evidence in the record demonstrating that the production and presence of an overwhelming amount of sand and silt during normal pumping and subsequent videos of Wells No. 19 and the existence of holes in the well casing has created an emergency requiring immediate action to procure the necessary equipment, services, and supplies for those purposes, without giving notice for bids to let contracts; and City Council Regular Meeting - Page 443 of 473 2 WHEREAS, the City Council delegated the authority to the City Manager or his or her designee upon recommendation from the Director of Public Works and/or City Engineer the authority to order any action pursuant to the California Public Contract Code Section 22050 (a)(1) including the waiving of formal competitive bidding requirements to engage a consultant to assess and expose Well No. 19 deficiencies as evidenced by the significant presence of sand and silt as well as holes to the well casing; and WHEREAS, the City Council authorized the City Manager to begin emergency rehabilitation work which includes backfilling the well, brushing of the casing with Sterilene to remove bio-fouling, patching the seven (7) holes in the well casing, changing the pump from oil to water lubrication, and disinfecting the well and approves the additional optional work on the zone sampling while the well is offline; and WHEREAS, the approved emergency work at Well No. 19 has not yet been completed, thus requiring continuation of the emergency work. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER AND RESOLVE AS FOLLOWS: Section 1. That the City Council has reviewed the emergency action and finds that by way of a four-fifths vote of its members, finds that there is a need to continue the action pursuant to Public Contract Code Section 22050(c)(2). Section 2. This resolution shall take effect immediately upon its adoption. Section 3. The City Clerk shall certify as to the adoption of this City Council Resolution. PASSED, APPROVED and ADOPTED this 17th day of May, 2022. ______________________________ Jorge Casanova Mayor ATTEST: ___________________________ ______________________________ María Quiñónez Ernie Hernandez City Clerk City Manager City Council Regular Meeting - Page 444 of 473 3 APPROVED AS TO FORM: APPROVED AS TO CONTENT: __________________________ ______________________________ Noel Tapia Mir T. Fattahi City Attorney Acting City Engineer City Council Regular Meeting - Page 445 of 473 4 STATE OF CALIFORNIA ) ) COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a regular meeting held on the 17th day of May 2022, and passed by the following votes: AYES: NOES: ABSTAIN: ABSENT: ________________________ Maria Quinonez, City Clerk STATE OF CALIFORNIA ) ) COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, and the Clerk of the City Council of said City, do hereby certify that the above foregoing is a full, true and correct copy of Resolution No. ____________ on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this 17th day of May 2022. ________________________ Maria Quinonez, City Clerk City Council Regular Meeting - Page 446 of 473 Agenda Item # 16. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Mir T. Fattahi, Acting City Engineer Lorry Hempe, Public Works Special Projects Manager SUBJECT: CONTINUATION OF AN EMERGENCY ACTION PER PUBLIC CONTRACT CODE SECTION 22050 FOR THE EMERGENCY ACTION AT THE NATATORIUM Recommendation: Staff recommends for the City Council to adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD FINDING THAT THERE IS A NEED TO CONTINUE THE EMERGENCY ACTION, BY WAY OF A FOUR-FIFTHS VOTE OF ITS MEMBERS, PURSUANT TO PUBLIC CONTRACT CODE SECTION 22050(c)(1) WITH RESPECT TO THE EMERGENCY REHABILITATION AT THE NATATORIUM.” Background: The City Council delegated to the City Manager the authority to order any action specified under California Public Contract Code Section 22050(a)(1) and pursuant to Section 22050(b). This delegation gave the City Manager the authority, in case of an emergency, to take any directly related and immediate action required by that emergency, and procure the necessary equipment, services and supplies for those purposes, without giving notice for bids to let contracts. On April 5, 2022, the City Council found that an emergency existed at the Natatorium necessitating immediate actions. Discussion and Analysis: Findings of Emergency Actions On April 5, 2022, the City Council found that there is substantial evidence in the record demonstrating that the patio wall shows major signs of compromised structural deficiencies, the pool deck shows evidence of detaching and cracking throughout the surface of the pool deck, the electrical system requires replacement to prevent City Council Regular Meeting - Page 447 of 473 electrical shorts and possible fire, and the pool wall requires replacement to avoid collapse has created an created an emergency requiring immediate action to procure the necessary equipment, services, and supplies for those purposes, without giving notice for bids to let contracts. The conditions necessitating the emergency actions continue to exist. The emergency renovations and repairs have not been completed. Four-fifths Vote Requirement to Continue the Action Pursuant to Public Contract Code Section 22050(c)(1) at every regularly scheduled meeting after the initial review of the emergency action, a four-fifths vote of the City Council is needed to continue the action until the emergency action is terminated. Fiscal Impact: No additional appropriation is needed. Coordinated With: City Attorney ATTACHMENTS: Description Resolution City Council Regular Meeting - Page 448 of 473 1 RESOLUTION._____________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD FINDING THAT THERE IS A NEED TO CONTINUE THE EMERGENCY ACTION BY WAY OF A FOUR-FIFTHS VOTE OF ITS MEMBERS, PURSUANT TO THE PUBLIC CONTRACT CODE SECTION 22050(c)(1) WITH RESPECT TO THE EMERGENCY RENOVATIONS AND EMERGENCY REPAIRS AT THE NATATORIUM WHEREAS, on March 1, 2022, the City Council by minute action approved the recommended repairs at the Natatorium, the City’s pool and the budget of $5,000,000 for these repairs; and WHEREAS, the patio wall shows major signs of compromised structural deficiencies, the pool deck shows evidence of detaching and cracking throughout the surface of the pool deck, the electrical system requires replacement to prevent electrical shorts and possible fire, and the pool wall requires replacement to avoid collapse; and WHEREAS, based on the recommendation from the Acting City Engineer on the immediate repairs of the patio wall, pool deck floor, electrical and interior wall to the City Manager, the City Manager approved the emergency actions waiving the informal competitive bidding requirements; and WHEREAS, California Public Contract Code Section 22050 provides that in the case of an emergency, a city, pursuant to a 4/5s vote of its governing body, may repair or replace a public facility, take any directly related and immediate action required by that emergency, and procure the necessary equipment, services and supplies for those purposes, without giving notice for bids to let contracts provided the public agency is able to make a finding, based on substantial evidence, that the emergency will not permit a delay resulting from a competitive solicitation for bids, and that the action is necessary to respond to the emergency; and WHEREAS, California Public Contract Code Section 22050 provides that in the case of an emergency, a city, pursuant to a 4/5s vote of its governing body, a public agency may delegate to the City Manager the authority to order any action pursuant to California Public Contract Code Section 22050(a)(1) to address the emergency; and WHEREAS, on April 5, 2022, the City Council found that there is substantial evidence in the record demonstrating that the patio wall shows major signs of compromised structural deficiencies, the pool deck shows evidence of detaching and cracking throughout the surface of the pool deck, the electrical system requires replacement to prevent electrical shorts and possible fire, and the pool wall requires replacement to avoid collapse has created an created an emergency requiring immediate action to procure the necessary equipment, services, and supplies for those purposes, without giving notice for bids to let contracts; and City Council Regular Meeting - Page 449 of 473 2 WHEREAS, the City Council delegated the authority to the City Manager or his or her designee upon recommendation from the Director of Public Works and/or City Engineer the authority to order any action pursuant to the California Public Contract Code Section 22050 (a)(1) including the waiving of formal or informal competitive bidding requirements to tear down and replace the patio wall, to replace the pool deck, to upgrade the electrical system, and to replace the pool wall. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER AND RESOLVE AS FOLLOWS: Section 1. That the City Council has reviewed the emergency action and finds that by way of a four-fifths vote of its members, finds that there is a need to continue the action pursuant to Public Contract Code Section 22050(c)(2). Section 2. This resolution shall take effect immediately upon its adoption. Section 3. The City Clerk shall certify as to the adoption of this City Council Resolution. PASSED, APPROVED and ADOPTED this 17th day of May, 2022. ______________________________ Jorge Casanova Mayor ATTEST: ___________________________ ______________________________ María Quiñónez Ernie Hernandez City Clerk City Manager APPROVED AS TO FORM: APPROVED AS TO CONTENT: __________________________ ______________________________ Noel Tapia Mir T. Fattahi City Attorney Acting City Engineer City Council Regular Meeting - Page 450 of 473 3 STATE OF CALIFORNIA ) ) COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a regular meeting held on the 17th day of May 2022, and passed by the following votes: AYES: NOES: ABSTAIN: ABSENT: ________________________ Maria Quinonez, City Clerk STATE OF CALIFORNIA ) ) COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, and the Clerk of the City Council of said City, do hereby certify that the above foregoing is a full, true and correct copy of Resolution No. ____________ on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this 17th day of May 2022. ________________________ Maria Quinonez, City Clerk City Council Regular Meeting - Page 451 of 473 Agenda Item # 17. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Noel Tapia, City Attorney SUBJECT: CONSIDERATION OF A RESOULTION PROCLAIMING A LOCAL EMERGENCY, RATIFYING THE PROCLAMATION OF A STATE OF EMERGENCY BY GOVERNOR NEWSOM, FINDING THAT THE PROCLAIMED STATE OF EMERGENCY CONTINUES TO IMPACT THE ABILITY TO MEET SAFELY IN PERSON, AND DECLARING THAT THE CITY COUNCIL AND CITY COMMISSIONS AND COMMITTEES WILL COTINUE TO MEET REMOTELY IN ADHERENECE WITH AB 361 IN ORDER TO ENSURE THE HEALTH AND SAFETY OF THE PUBLIC Recommendation: Staff is recommending that the City Council adopt a City Council Resolution entitled: “A Resolution Proclaiming a Local Emergency, Ratifying the Proclamation of a State of Emergency by Governor Newsom, Finding that the Proclaimed State of Emergency Continues to Impact the Ability to Meet Safely in Person, and Declaring that the City Council and City Commissions and Committees Will Continue to Meet Remotely in Adherence With AB 361 in Order to Ensure the Health and Safety of the Public” Background: Beginning in March 2020, Governor Newsom issued a series of Executive Orders aimed at containing the novel coronavirus (COVID-19). Among these were several Executive Orders N-25-20, N-29-20, N-35-20 (collectively, the Brown Act Orders) that waived requirements in the Brown Act expressly or impliedly requiring the physical presence of city councilmembers, staff, or the public at local agency meetings. On September 16, 2021, Governor Newsom signed Assembly Bill AB 361 (Rivas, 2021), which allows cities to continue to meet remotely during proclaimed states of emergency under modified Brown Act requirements that are similar, but not identical to the rules and procedures established by the Brown Act Orders. Discussion and Analysis: City Council Regular Meeting - Page 452 of 473 Beginning in March 2020, Governor Newsom issued a series of Executive Orders aimed at containing the novel coronavirus (COVID-19). Among these were several Executive Orders N-25-20, N-29-20, N-35-20 (collectively, the Brown Act Orders) that waived requirements in the Brown Act expressly or impliedly requiring the physical presence of city councilmembers, staff, or the public at local agency meetings. Specifically, the orders: • Waived the requirement that local agencies provide notice of each teleconference location from which a member of the legislative body will be participating in a public meeting; • Waived the requirement that each teleconference location be accessible to the public; • Waived the requirement that members of the public be able to address the legislative body at each teleconference conference location; • Waived the requirement that local agencies post agendas at all teleconference locations; and, • Waived the requirement that at least a quorum of the members of the local body participate from locations within the boundaries of the territory over which the local body exercises jurisdiction. On June 11, 2021, the Governor issued Executive Order (EO) N-08-21 to begin winding down some of the prior measures that were adopted to respond to COVID-19. Notably, EO N-08-21 rescinds the Brown Act Orders, effective September 30, 2021. On September 16, 2021, Governor Newsom signed Assembly Bill AB 361 (Rivas, 2021), which allows cities to continue to meet remotely during proclaimed states of emergency under modified Brown Act requirements that are similar, but not identical to the rules and procedures established by the Brown Act Orders. The pending expiration of the Brown Act Orders and the enactment of AB 361 created some ambiguity. To provide clarification, the Governor issued Executive Order N-15-21, explaining that cities may continue to hold meetings in accordance with the Brown Act Orders until September 30, or they may hold meetings in accordance with the requirements of AB 361. Should the City Council wish to continue meeting remotely beyond September 30 pursuant to AB 361, the City Council would be required to adopt the attached resolution. If the City Council chooses to utilize the option for remote meetings under AB 361, it can continue using the remote meeting procedures it has been using throughout the COVID-19 pandemic, subject to certain requirements that must be considered as part of the initial determination to adopt remote meeting protocols. Once adopted, the initial authorizing resolution is effective for no more than thirty (30) days. The City may extend the authorization for an additional thirty (30) days via another resolution that makes specific findings in support of continuing remote meetings. The City may continue to extend the authorization for additional thirty (30) day increments for the duration of the declared emergency, or until the City Council decides to return to in-person meetings, or otherwise complies with the regular remote meeting requirements of the Brown Act. To implement remote meetings under AB 361, one of three criteria must be met at the time the City is holding a meeting during a proclaimed state of emergency by the Governor that includes area within the jurisdictional boundaries of the City: • State or local officials have imposed or recommended measures to promote social distancing; or • For the purpose of determining, by majority vote, whether as a result of the state of emergency, meeting in person would present imminent risks to the health or safety of attendees; or • The City Council has previously determined, by majority vote, that, as a result of the state of emergency, meeting in person would present imminent risks to the health or safety of attendees. If one of these three criteria are met, then the City can conduct meetings remotely via Government Code §§ 54953(e), et seq. If the City Council makes the required findings and chooses to meet remotely, every 30 days the City Council will be required to make findings about whether the circumstances still apply. The City Council must find that it reconsidered the circumstances of the State of Emergency and that one of the following circumstances remains: • The City Council finds that meeting in person would present imminent risks to the health or safety of attendees; or • State or local officials have imposed or recommended measures to promote social distancing. City Council Regular Meeting - Page 453 of 473 If the City Council makes the findings to continue having remote meetings, the City must meet the following requirements: 1. The City must give notice and post agendas as otherwise required by the Brown Act, including directions for how the public can access the meetings; 2. Provide members of the public access to the meeting and an opportunity to address the body directly; 3. Provide members of the public the opportunity to comment in real time; 4. Suspend further action on items in the meeting agenda in the event that there is a disruption in the ability of the meeting to be broadcast to members of the public or in the ability for members of the public to comment; Fiscal Impact: No fiscal impact is anticipated the proposed action. Coordinated With: ATTACHMENTS: Description Reso- Continue Remote Meetings City Council Regular Meeting - Page 454 of 473 RESOLUTION NO. __________ A RESOLUTION OF THE CITY OF LYNWOOD PROCLAIMING A LOCAL EMERGENCY, RATIFYING THE PROCLAMATION OF A STATE OF EMERGENCY BY GOVERNOR NEWSOM, FINDING THAT THE PROCLAIMED STATE OF EMERGENCY CONTINUES TO IMPACT THE ABILITY TO MEET SAFELY IN PERSON, AND DECLARING THAT THE CITY COUNCIL AND CITY COMMISSIONS AND COMMITTEES WILL CONTINUE TO MEET REMOTELY IN ADHERENCE WITH AB 361 IN ORDER TO ENSURE THE HEALTH AND SAFETY OF THE PUBLIC. WHEREAS, all meetings of the City of Lynwood City Council as a legislative body are open and public, as required by the Brown Act (Cal. Gov. Code 54950 – 54963), so that any member of the public may attend, participate, and watch the City Council as a legislative body conduct their business; and WHEREAS, the Brown Act, Government Code section 54953(e), makes provisions for remote teleconferencing participation in meetings by members of a legislative body, without compliance with the requirements of Government Code section 54953(b)(3), subject to the existence of certain conditions; and WHEREAS, on March 4, 2020, Governor Newsom declared a State of Emergency to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the state prepare for a broader spread of COVID-19; and WHEREAS, on March 17, 2020, Governor Newsom issued Executive Order N-29-20, which suspended certain provisions of the Brown Act in order to allow local legislative bodies to conduct meetings electronically without a physical meeting place; and WHEREAS, on June 11, 2021, the Governor issued Executive Order N-08- 21, which extended the provision of N-29-20 concerning the Brown Act and the conduct of public meetings through September 30, 2021; and WHEREAS, since the issuance of Executive Order N-08-21, the Delta variant has emerged, causing a spike in COVID-19 cases throughout the state; and WHEREAS, Governor Newsom’s proclaimed State of Emergency remains in effect, and State and local officials, including the Los Angeles County Department of Public Health, have imposed or recommended measures to promote social distancing; and WHEREAS, on September 16, 2021, California Assembly Bill 361 was signed into law, as urgency legislation that goes in effect on October 1, 2021, amending Government Code Section 54953 of the Ralph M. Brown Act to allow City Council Regular Meeting - Page 455 of 473 2 legislative bodies to continue to meet remotely during a proclaimed state of emergency, provided certain conditions are met and certain findings are made; and WHEREAS, the City of Lynwood is committed to preserving and nurturing public access and participation in meetings of the Lynwood City Council; and WHEREAS, the City Council desires to take the actions necessary to comply with AB 361 and to continue to hold its City Council, Commission and Committee meetings remotely. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY RESOLVE AND DETERMINE AS FOLLOWS: Section 1. The City Council for the City of Lynwood finds and declares that the foregoing recitals are true and correct, and incorporates said recitals fully into this Resolution as substantive findings. Section 2. The City Council hereby proclaims that a local emergency now exists throughout the City, and social distancing and condition causing imminent risk to attended has caused, and will continue to cause, conditions of peril to the safety of persons within the City that are likely to be beyond the control of services, personnel, equipment, and facilities of the City, and desires to proclaim a local emergency and ratify the proclamation of State of Emergency by the Governor of the State of California. Section 3. That the City Council has reconsidered the circumstances of the State of Emergency and finds the following circumstances: a. The factors triggering the State of Emergency continue to directly impact the ability of the members of the City Council and the City’s subordinate Commissions and Committees to meet safely in person; and b. The State of California and the City of Lynwood continue to impose or recommend measures to promote social distancing. Section 4. City Council and City Commission and Committee meetings will continue to be conducted remotely for the next 30 days in compliance with AB 361 and Government Code Section (e)(2), in order to ensure the health and safety of the public while provides access to public meetings. Section 5. This Resolution shall become effective immediately and shall be reconsidered by the City Council in 30 days or sooner to assess the State of Emergency and determine whether to continue with the provisions set forth in Assembly Bill 361. City Council Regular Meeting - Page 456 of 473 3 PASSED, APPROVED and ADOPTED this_____ day of ________, 2022. _________________________ Jorge Casanova, Mayor City of Lynwood ATTEST: ________________________ Maria Quinonez, City Clerk APPROVED AS TO FORM: APPROVED AS TO CONTENT: ______________________ __________________________ Noel Tapia Ernie Hernandez, City Attorney City Manager STATE OF CALIFORNIA ) ) § COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the above and foregoing resolution was duly adopted by the City Council of said City at its regular meeting thereof held in the City Hall of the City on the _________day of____________, 2022 and passed by the following vote: City Council Regular Meeting - Page 457 of 473 4 AYES: NOES: ABSTAIN: ABSENT: __________________________ City Clerk, City of Lynwood STATE OF CALIFORNIA ) ) § COUNTY OF LOS ANGELES ) I, the undersigned City Clerk of the City of Lynwood, and Clerk of the City Council of said City, do hereby certify that the above and foregoing is a full, true and correct copy of Resolution No. _________ on file in my office and that said resolution was adopted on the date and by the vote therein stated. Dated this ______ day of ________________, 2022. __________________________ City Clerk, City of Lynwood City Council Regular Meeting - Page 458 of 473 Agenda Item # 18. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Ernie Hernandez, City Manager SUBJECT: AWARD OF CONTRACT AND APPROVAL TO FS CONTRACTORS, INC. FOR THE SIDEWALK IMPROVEMENT PROJECT AT WRIGHT ROAD FROM FERNWOOD AVE TO DUNCAN AVE AND CITYWIDE PRIORITY 1 SIDEWALK IMPROVEMENT PROJECT FY22/FY23 PROJECT (CIP 4011.68.022) Recommendation: Staff recommends that the City Council adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD AWARDING A CONTRACT TO FS Contractors, inc. AS THE LOWEST RESPONSIBLE BIDDER, IN THE Amount OF $556,090 FOR THE SIDEWALK IMPROVEMENT PROJECT WRIGHT ROAD FROM FERNWOOD AVE TO DUNCAN AVE AND CITYWIDE PRIORITY 1 SIDEWALK IMPROVEMENT PROJECT FY22/FY23 PROJECT (sidewalk and wheelchair ramp repairs- cip 4011.68.022); AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; APPROVING TO REDUC THE PROJECT BUDGET FOR THE ALEXANDER AVENUE, LOUISE STREET, POPE AVENUE, PENDLETON AVENUE, SEMINOLE AVENUE, AND SHIRLEY AVENUE STREET, WATER, AND SEWER IMPROVEMENT PROJECT (CIP 4011.68.088) IN THE AMOUNT OF $150,000 AND APPROPRIATING SAID AMOUNT OF $150,000 FROM THE MEASURE M BOND (FUND 2357) TO THE SIDEWALK AND WHEELCHAIR RAMP REPAIRS –CIP 4011.68.022). Background: Over the course of a year, Lynwood residents have submitted requests for sidewalk improvements on various locations throughout the City. Staff collected all requests and created a list of priority locations where sidewalk improvements are most needed. In addition, the resident derived priority list, the City identified needed sidewalk improvements along Wright Road from Fernwood Avenue to Duncan Avenue. As such, the Public Works Department, Engineering Division commissioned of Willdan Engineering to develop plans, specifications and estimate for the aforementioned sidewalk improvements along Wright Road and the Citywide Priority 1 Sidewalk Improvement locations. Project Scope The work encompassed by the Sidewalk Improvement Project Wright Road from Fernwood Ave to Duncan Ave and Citywide Priority 1 Sidewalk Improvement Project (CIP NO. 4011.68.022-SIDEWALK AND WHEELCHAIR City Council Regular Meeting - Page 459 of 473 RAMP REPAIRS) FY22/FY23 (“Project”) is more specifically defined in the contract documents, but in general consists of, but is not limited to removal and reconstruction of sidewalk, curb and gutter, and driveway improvements; and the replacement of trees impacted by the repairs. Project Limit Various location throughout the City Wright Road from Fernwood Ave to Duncan Ave Discussion and Analysis: On April 12, 2022, the Notice Inviting Bids (NIB) was advertised on the City’s web site (PlanetBids). The Bid opening took place in the PlanetBids Platform on Thursday, May 05, 2022, at 10:00 am (PST). The following three (3) bids were received: Bidder Bid 1.FS Contractors, Inc $556,090.00 2.Gentry General Engineering, Inc $586,107.00 3.EBS General Engineering, Inc $618,595.00 An analysis of all bidders was conducted, including a review of their bid schedule, license, references, and federal documents. FS Contractors, Inc. was the apparent lowest responsible bidder with a low base bid of $556,090.00. The bidder’s previous performance reveals that the contractor has the necessary experience and contractor’s license for this type of project. It is estimated that this project will take approximately forty (40) working days to complete the work set forth in the specifications. Upon authorization, staff will circulate the contract documents, set up a pre-construction meeting, and schedule work to commence. Bid Items and Construction Budget: SIDEWALK IMPROVEMENT PROJECT WRIGHT ROAD FROM FERNWOOD AVE TO DUNCAN AVE AND CITYWIDE PRIORITY 1 SIDEWALK IMPROVEMENT PROJECT FY22/FY23 Amount Bid Schedule A Mobilization $10,000.00 Traffic Control $5,000.00 Remove and Construct 4-Inch PCC Sidewalk per SPPWC Std Plan 113-2 $25,415.00 Remove and Construct Residential Driveway per SPPWC Std Plan 110-2, Type B, Match Width to Existing $4,290.00 Remove and Construct Commercial Driveway per SPPWC 110-2, Type A, Match Width to Existing $15,150.00 Remove and Construct Type A2-8 Curb and Gutter Per SPPWC Std Plan 120-2 $24,375.00 Remove and Construct Curb Ramp Per SPPWC Std Plan 111-5, Case A, Type 1 and Detail $7,500.00 Remove and Construct Curb Ramp Per SPPWC Std Plan 111-5, Modified Case A, Type 5 and Detail $18,000.00 Remove and Construct Curb Drain per SPPWC Std Plan 151-2 and Detail $5,670.00 Remove and Plant New Tree $37,400.00 Mobilization and Traffic Control $10,000.00 Remove and Plant New Tree $189,000.00 Remove and Construct 4-Inch PCC per SPPWC Std Plan 113-2 $88,550.00 Remove and Construct Type A2-8 Curb and Gutter Per SPPWC Std Plan 120-2, Match Existing Height and Gutter Width. $25,740.00 Remove and Construct Curb Ramp Per SPPWC Std Plan 111-5.$90,000.00 Total Proposed Cost $556,090.00 City Council Regular Meeting - Page 460 of 473 Fiscal Impact: The Sidewalk and Wheelchair Ramp Repairs (CIP NO. 4011.68.022) has an approved FY22 Budget of $400,916 and an approved FY23 Budget of $252,204. Additional appropriation in the amount of $150,000 is needed to fully fund the Project inclusive of all of its soft costs, hard costs and contingency. The total budget for this project will be $803,120. Available funds have been fully programmed for FY22 and FY23. On April 19, 2022, the City Council accepted the completion of Alexander Avenue, Louise Street, Pope Avenue, Pendleton Avenue, Seminole Avenue, And Shirley Avenue Street, Water, and Sewer Improvement Project (CIP 4011.68.088). Staff recommends reducing the adopted budget for this accepted Project to release the unused funds back to the Measure M Bonds to be appropriated to the Sidewalk and Wheelchair Ramp Repairs (CIP No. 4011.68.022). Staff recommends the following budget adjustment and appropriation: Budget Adjustment (FY22) Fund Dept Div Object Description Amount Budgetary Transfer Out 4011 68 088 Alexander Ave.et al.$150,000 Budgetary Transfer In 2357 Measure M Bonds $150,000 Appropriation (FY22) Fund Dept Div Object Description Amount Budgetary Transfer Out 2357 Measure M Bonds $150,000 Budgetary Transfer In 4011 68 022 To Be Determined Sidewalk and Wheelchair Ramp Repairs $150,000 To move forward with this project, it is necessary for the City Council to approve the above appropriation and budget. Coordinated With: City Manager’s Office Department of Finance and Administration Services ATTACHMENTS: Description Resolution City Council Regular Meeting - Page 461 of 473 1 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD AWARDING A CONTRACT TO FS CONTRACTORS, INC. AS THE LOWEST RESPONSIBLE BIDDER, IN THE AMOUNT OF $556,090 FOR THE SIDEWALK IMPROVEMENT PROJECT WRIGHT ROAD FROM FERNWOOD AVE TO DUNCAN AVE AND CITYWIDE PRIORITY 1 SIDEWALK IMPROVEMENT PROJECT FY22/FY23 PROJECT (SIDEWALK AND WHEELCHAIR RAMP REPAIRS- CIP 4011.68.022); AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; APPROVING TO REDUCE THE PROJECT BUDGET FOR THE ALEXANDER AVENUE, LOUISE STREET, POPE AVENUE, PENDLETON AVENUE, SEMINOLE AVENUE, AND SHIRLEY AVENUE STREET, WATER, AND SEWER IMPROVEMENT PROJECT (CIP 4011.68.088) IN THE AMOUNT OF $150,000 AND APPROPRIATING SAID AMOUNT OF $150,000 FROM THE MEASURE M BOND (FUND 2357) TO THE SIDEWALK AND WHEELCHAIR RAMP REPAIRS –CIP 4011.68.022 WHEREAS, the City of Lynwood has received requests from residents for sidewalk improvements for various locations throughout the City; and WHEREAS, Staff has collected all resident requests and created a list of priority locations, including Wright Road from Fernwood Avenue to Duncan Ave; and WHEREAS, the Sidewalk Improvement Project Wright Road from Fernwood Ave to Duncan Ave and Citywide Priority 1 Sidewalk Improvement Project FY22/FY23 (“Project”) consists of removing and reconstructing sidewalks, curb and gutter, driveway improvements, furnishing and replacing trees; and WHEREAS, on April 12, 2022, the Notice Inviting Bids for the Project was advertised on the City’s web site (PlanetBids); and WHEREAS, the bid opening took place in the PlanetBids Platform on May 05, 2022, at 10:00 A.M. (Pacific Time); and WHEREAS, staff received three (3) bid proposals; and WHEREAS, FS Contractors, Inc. is determined the lowest responsible bidder; and WHEREAS, to move forward with this Project, appropriation is needed. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER, AND RESOLVE AS FOLLOWS: Section 1. The City Council of the City of Lynwood hereby finds and declares that the foregoing recitals are true and correct, and incorporates them herein as findings and as a substantive part of this Resolution. Section 2. The City Council of the City of Lynwood authorizes the Mayor to execute the agreement between the City of Lynwood and FS Contractors, Inc. for the Sidewalk City Council Regular Meeting - Page 462 of 473 2 Improvement Project Wright Road from Fernwood Ave to Duncan Ave and Citywide Priority 1 Sidewalk Improvement Project FY22/FY23 (“Project”) in the amount of $556,090.00. Section 3. The City Council approves the following budget adjustment and appropriation: Budget Adjustment (FY22) Fund Dept Div Object Description Amount Budgetary Transfer Out 4011 68 088 Alexander Ave.et al. $150,000 Budgetary Transfer In 2357 Measure M Bonds $150,000 Appropriation (FY22) Fund Dept Div Object Description Amount Budgetary Transfer Out 2357 Measure M Bonds $150,000 Budgetary Transfer In 4011 68 022 To Be Determined Sidewalk and Wheelchair Ramp Repairs $150,000 Section 4. The City Council of the City of Lynwood authorizes the City Manager under LMC 6-3.15(d) to exceed the specific dollar amounts or percentage limitations under LMC 6-3.15(a) and authorizes the City Manager to approve consultant, vendor agreements, modifications, change orders or agreement amendments related to the Project up to the available Project Budget. Section 5. Authorize the Mayor to execute the Resolution for and on behalf of the City of Lynwood. Section 6. This Resolution shall take full force and effect immediately upon adoption by the City Council. (Signatures on Next Page) City Council Regular Meeting - Page 463 of 473 3 PASSED, APPROVED and ADOPTED this 17th day of May 2022. Jorge Casanova Mayor ATTEST: Maria Quinonez Ernie Hernandez City Clerk City Manager APPROVED AS TO FORM: APPROVED AS TO CONTENT: Noel Tapia Ernie Hernandez City Attorney Interim Director of Public Works City Council Regular Meeting - Page 464 of 473 4 STATE OF CALIFORNIA ) ) COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a regular meeting held on the 17th day of May 2022, and passed by the following votes: AYES: NOES: ABSTAIN: ABSENT: Maria Quinonez, City Clerk STATE OF CALIFORNIA ) ) COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, and the Clerk of the City Council of said City, do hereby certify that the above foregoing is a full, true and correct copy of Resolution No. on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this 17th day of May 2022. Maria Quinonez, City Clerk City Council Regular Meeting - Page 465 of 473 Agenda Item # 19. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Ernie Hernandez, City Manager SUBJECT: AWARD OF CONTRACT AND APPROVAL TO HARDY AND HARPER, INC. FOR THE SAN CARLOS AVE., SAN JUAN AVE., SAN LUIS AVE., SAN VICENTE AVE., THORSON AVE., AND ALVADA ST. STREET IMPROVEMENT PROJECT (CDBG FUNDED PROJECT NO:4011.68.103) Recommendation: Staff recommends that the City Council adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD AWARDING A CONTRACT TO HARDY AND HARPER, INC. AS THE LOWEST RESPONSIBLE BIDDER, IN THE AMOUNT OF $650,000 FOR THE SAN CARLOS AVENUE, SAN JUAN AVENUE, SAN LUIS AVENUE, SAN VICENTE AVENUE, ALVADA STREET AND THORSON AVENUE STREET IMPROVEMENT PROJECT (CDBG FUNDED PROJECT NO:4011.68.103); AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; AND AUTHORIZING AN APPROPRIATION AND BUDGET IN THE AMOUNT OF $737,317 FOR THE PROJECT." Background: In 2017, the City commissioned Bucknam Infrastructure Group, Inc. to prepare a report on the City’s pavement network, “2017 Pavement Management Program” (PMP). The PMP provides current data on the City’s street network and cost-effective maintenance strategies to maintain a desirable level of pavement performance on a network scale, while optimizing the expenditure of limited fiscal resources. On April 20, 2021, Alvada Street, San Carlos Avenue, San Juan Avenue, San Luis Avenue, San Vicente Avenue and Thorson Avenue Street and Sidewalk Improvement Project was included in the City’s FY2021-22 Annual Action Plan for the use of CDBG in the amount of $376,000. On June 15, 2021, the City Council approved to include Alvada Street, San Carlos Avenue, San Juan Avenue, San Luis Avenue, San Vicente Avenue and Thorson Avenue Street and Sidewalk Improvement Project in the FY22 CIP Budget to be funded by SB1Fund (Fund 2121) in the amount of $361,317. On January 18, 2022, City Council adopted a resolution approving FY22 Capital Improvement Program Budget and include Alvada Street, San Carlos Avenue, San Juan Avenue, San Luis Avenue, San Vicente Avenue and City Council Regular Meeting - Page 466 of 473 Thorson Avenue (CIP No. 4011.8.103 Street Improvement Project) The Public Works Department, Engineering Division requested the services of Infrastructure Engineers (IE) to develop plans, specifications and estimate for the aforementioned roadway improvements also known as Priority 2 Streets Improvements – Phase I. Project Scope The work encompassed by the San Carlos Avenue, San Juan Avenue, San Luis Avenue, San Vicente Avenue, Alvada Street, and Thorson Avenue Street Improvement Project (CDBG funded project No: 4011.68.103) (“Project”) is more specifically defined in the contract documents, but in general consists of, but is not limited to, the following work: street resurfacing, ADA compliant curb ramps, gutters, driveway approaches, traffic signing and striping, and utility covers. Project Limit San Carlos Avenue between Abbot Road and North City Limit San Juan Avenue between Abbot Road and North City Limit San Luis Avenue between Abbot Road and North City Limit San Vicente Avenue between Abbot Road and North City Limit Thorson Avenue between South City Limit and Harris Avenue Alvada Street between Virginia Avenue and Duncan Avenue Discussion and Analysis: On March 21, 2022, the Notice of Inviting Bids (NIB) was advertised on the City’s web site (PlanetBids). The Bid opening took place in the PlanetBids Platform on Thursday, April 14, 2022, at 10:00 am (PST). The following two (2) bids were received: Bidder Bid 1.Hardy and Harper, Inc.$650,000.00 2.Excel Paving Company $684,499.00 An analysis of all bidders was conducted, including a review of their bid schedule, license, references, and federal documents. Hardy and Harper, Inc. was the apparent lowest responsible bidder with a low base bid of $650,000.00. The bidder’s precious performance reveals that his contractor has the necessary experience and contractor’s license for this type of project. It is estimated that it will take approximately fifteen (15) working days to complete the work set forth in the specifications. Upon authorization, staff will circulate the contract documents, set up a pre-construction meeting, and schedule work to commence. Project Budget: SAN CARLOS AVE, SAN JUAN AVE, SAN LUIS, AVE, SAN VICENTE AVE, THORSON AVE, AND ALVADA ST. STREET IMPROVEMENT PROJECT (CDBG FUNDED PROJECT NO:4011.68.103); Amount Mobilization/ Demobilization (Not to exceed 3% of total of all other prime contract Bid Items)$15,000.00 Traffic Control $76,141.00 Sawcut and Remove AC Pavement, Base, Subbase and Subgrade $78,660.00 Cold Mill Existing Asphalt Concrete (AC) Pavement (3” depth)$3,589.00 Cold Mill Existing Asphalt Concrete (AC) Pavement (2” depth)$11,873.00 Prune Tree Roots and Install Root Barriers $2,400.00 Sawcut and Remove Existing Concrete Longitudinal Gutter $5,837.00 City Council Regular Meeting - Page 467 of 473 Remove and Construct Concrete Sidewalk (4” Thick)$6,792.00 Remove and Construct Concrete Curb & Gutter $8,190.00 Remove and Construct Concrete Curb Ramp $7,000.00 Remove and Construct Concrete Driveway Approach (6” Thick)$27,952.00 Remove Concrete Curb and Construct Concrete Curb & Gutter $15,390.00 Remove and Construct Concrete Cross Gutter $7,860.00 Remove and Construct Concrete Local Depression $1,330.00 Construct Detectable Warning Surface (Truncated Domes)$6,000.00 Construct Concrete Longitudinal Gutter $118,440.00 Remove and Construct Concrete Alley Intersection $10,170.00 Construct Concrete Driveway approach $12,016.00 Provide and Place Crushed Aggregate Base (CAB)$68,640.00 Construct Conventional AC Base Course Over 95% Compacted Native Soil (2.5” Thick)$3,150.00 Construct AC Leveling Course (1" Thick)$37,800.00 Construct ARHM Overlay (2" Thick)$97,200.00 Construct Asphalt Concrete Berm $7,070.00 Adjust Existing Storm Drain/ Sewer/ Utility Manhole Frames and Covers to Finished Grade $5,000.00 Adjust Existing Water Valve Can and Cover to Finished Grade $4,500.00 Traffic Striping, Marking, Curb Painting, House Addresses, and Signs $4,000.00 Install Public Improvement Project Signs $8,000.00 Total Proposed Cost $650,000.00 By way of resolution approved by the City Council, City of Lynwood Municipal Code Section 6-3.15(d) authorizes the City Manager to exceed specific dollar amounts or percentage limitations established pursuant to LMC Section 6-3(a) for the purposed of approving consultant, vendor agreements, modifications, change orders or agreement amendments related to the Project up to the available Project Budget. City staff is requesting the City Council to authorize the City Manager to exercise this authority. Fiscal Impact: Financial Impact: Staff recommends the following appropriation: APPROPRIATION Fund Dept Div Object Description Amount Budgetary Transfer Out 2941 95 991 68020 CDBG – Fund $376,000 2121 95 991 68020 SB 1 Fund to Capital Projects Fund $361,317 To move forward with this project, it is necessary for the City Council to approve the above appropriation and budget. City Council Regular Meeting - Page 468 of 473 Coordinated With: City Manager’s Office Department of Finance and Administration Services ATTACHMENTS: Description Resolution City Council Regular Meeting - Page 469 of 473 1 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD AWARDING A CONTRACT TO HARDY AND HARPER, INC. AS THE LOWEST RESPONSIBLE BIDDER, IN THE AMOUNT OF $650,000 FOR THE SAN CARLOS AVENUE, SAN JUAN AVENUE, SAN LUIS AVENUE, SAN VICENTE AVENUE, THORSON AVENUE, AND ALAVADA STREET STREET IMPROVEMENT PROJECT (CDBG FUNDED PROJECT NO:4011.68.103); AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; AND AUTHORIZING AN APPROPRIATION AND BUDGET IN THE AMOUNT OF $737,317 FOR THE PROJECT WHEREAS, on January 18, 2022, the City Council approved the FY22 Capital Improvement Program Budget and project referred to as Alvada Street, San Carlos Avenue, San Juan Avenue, San Luis Avenue, San Vicente Avenue and Thorson Avenue (CIP No. 4011.8.103 Street Improvement Project); and WHEREAS, the street segments of 1) San Carlos Avenue between Abbot Road and North City Limit, 2) San Juan Avenue between Abbot Road and North City Limit, 3) San Luis Avenue between Abbot Road and North City Limit, 4) San Vicente Avenue between Abbot Road and North City Limit, 5) Thorson Avenue between South City Limit and Harris Avenue, 6) Alvada Street between Virginia Avenue and Duncan Avenue are included in the Priority 2 Streets list; and WHEREAS, the San Carlos Ave, San Juan Ave, San Luis Ave, San Vicente Ave, Thorson Ave, and Alavada St Street Improvement Project (CDBG funded project No: 4011.68.103) (“Project”) consists of street resurfacing; ADA compliant curbs ramps, gutters, driveway approaches; traffic signing and striping; and utility covers; and WHEREAS, on March 21, 2022, the Notice Inviting Bids for the Project was advertised on the City’s web site (PlanetBids); and WHEREAS, the bid opening took place in the PlanetBids Platform on April 14, 2022, at 10:00 A.M. (Pacific Time); and WHEREAS, staff received two (2) bid proposals; and WHEREAS, Hardy and Harper, Inc is the lowest responsible bidder; and WHEREAS, to move forward with this Project, appropriation is needed. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER, AND RESOLVE AS FOLLOWS: Section 1. The City Council of the City of Lynwood hereby finds and declares that the foregoing recitals are true and correct, and incorporates them herein as findings and as a substantive part of this Resolution. City Council Regular Meeting - Page 470 of 473 2 Section 2. The City Council of the City of Lynwood authorizes the Mayor to execute the agreement between the City of Lynwood and Hardy and Harper, Inc. for the San Carlos Ave., San Juan Ave., San Luis Ave., San Vicente Ave., Thorson Ave., and Alvada St. Street Improvement Project (CDBG funded project No: 4011.68.103) (“Project”) in the amount of $650,000. Section 3. The City Council approves the following appropriation: APPROPRIATION Fund Dept Div Object Description Amount Budgetary Transfer Out 2941 95 991 68020 CDBG – Fund $376,000 2121 95 991 68020 SB 1 Fund to Capital Projects Fund $361,317 Section 4. The City Council of the City of Lynwood authorizes the City Manager under LMC 6-3.15(d) to exceed the specific dollar amounts or percentage limitations under LMC 6-3.15(a) and authorizes the City Manager to approve consultant, vendor agreements, modifications, change orders or agreement amendments related to the Project up to the available Project Budget. Section 5. Authorize the Mayor to execute the Resolution for and on behalf of the City of Lynwood. Section 6. This Resolution shall take full force and effect immediately upon adoption by the City Council. (Signatures on Next Page) City Council Regular Meeting - Page 471 of 473 3 PASSED, APPROVED and ADOPTED this 17th day of May 2022. Jorge Casanova Mayor ATTEST: Maria Quinonez Ernie Hernandez City Clerk City Manager APPROVED AS TO FORM: APPROVED AS TO CONTENT: Noel Tapia Ernie Hernandez City Attorney Interim Director of Public Works City Council Regular Meeting - Page 472 of 473 4 STATE OF CALIFORNIA ) ) COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a regular meeting held on the 17th day of May 2022, and passed by the following votes: AYES: NOES: ABSTAIN: ABSENT: Maria Quinonez, City Clerk STATE OF CALIFORNIA ) ) COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, and the Clerk of the City Council of said City, do hereby certify that the above foregoing is a full, true and correct copy of Resolution No. on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this 17th day of May 2022. Maria Quinonez, City Clerk City Council Regular Meeting - Page 473 of 473 This Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603-0220, ext. 200. Procedures for Addressing the Council IN ORDER TO EXPEDITE CITY COUNCIL BUSINESS, WE ASK THAT ALL PERSONS WISHING TO ADDRESS THE COUNCIL SUBMIT YOUR COMMENTS IN ADVANCE TO CITYCLERK@LYNWOOD.CA.US OR FILL OUT A FORM PROVIDED AT THE PODIUM, AND TO TURN IT IN TO THE CITY CLERK PRIOR TO THE START OF THE MEETING. FAILURE TO FILL OUT SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE COUNCIL IN THE ABSENCE OF THE UNANIMOUS CONSENT OF THE COUNCIL. AGENDA Lynwood Public Financing Authority TO BE HELD ON May 17, 2022 COUNCIL CHAMBERS - 11350 BULLIS RD. LYNWOOD, CA 90262 or Web conference via ZOOM - To participate via Zoom or by telephone: 1-669-900-9128 or 1-253-215-8782 Meeting ID: 835 2029 8238 Duly Posted on 5/13/2022 By MQ 6:00 PM 1.CALL TO ORDER 2.CERTIFICATION OF AGENDA POSTING BY SECRETARY 3.ROLL CALL OF MEMBERS Jorge Casanova, President Jose Luis Solache, Vice President Oscar Flores, Member Marisela Santana, Member Rita Soto, Member 4.GOVERNMENT CODE SECTION 54954.3 Members of the City Council are also members of Lynwood Public Financing Authority, which is concurrently convening with the City Council this evening and each Council Member is paid an Additional Stipend of $100 for Attending the Lynwood Public Financing Authority Meeting. Further, the Authority is scheduled to meet four (4) timer per year. If additional meetings are required beyond the scheduled four (4) meetings, the City Council will only get paid for the first four(4) meetings. PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) NON-AGENDA PUBLIC ORAL COMMUNICATIONS Lynwood Public Financing Authority - Page 1 of 242 THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE LYNWOOD PUBLIC FINANCING AUTHORITY ON ITEMS WITHIN THE JURISDICTION OF THE LYNWOOD PUBLIC FINANCING AUTHORITY AND NOT LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL DISCUSSION OF THE ISSUE BY LYNWOOD PUBLIC FINANCING AUTHORITY, BUT LYNWOOD PUBLIC FINANCING AUTHORITY MAY REFER THE MATTER TO STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M. Brown Act, Government Code Section 54954.2 (a).) CONSENT CALENDAR ALL MATTERS LISTED UNDER THE CONSENT CALENDAR WILL BE ACTED UPON BY ONE MOTION AFFIRMING THE ACTION RECOMMENDED ON THE AGENDA. THERE WILL BE NO SEPARATE DISCUSSION ON THESE ITEMS PRIOR TO VOTING UNLESS MEMBERS OF THE COUNCIL OR STAFF REQUEST SPECIFIC ITEMS TO BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION. 5.TREASURER'S MONTHLY INVESTMENT REPORT Comments: The purpose of this item is to have the Honorable President and Members of the Public Finance Authority review the Treasurer’s Monthly Investment Report as required by State Statutes. (CT) Recommendation: It is recommended that the Honorable President and Members of the Public Finance Authority receive and file the attached Monthly Investment Report. The following information is provided to ensure the City Council is informed of the investment activities for the City. 6.APPROVING PENSION UNFUNDED ACCRUED LIABILITY (“UAL”) REFINANCE WITH THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY IN MAXIMUM AMOUNT OF $50,000,000 (FEDERALLY TAXABLE); APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS Comments: The City Council previously directed staff to evaluate the potential financial benefits of refinancing the City of Lynwood's (“City”) Pension Unfunded Accrued Liability (“UAL”) with the California Public Employees’ Retirement System (“CalPERS”). Based on analysis done to date, it appears savings to the City’s General Fund may be achieved from a refinancing; however, the municipal bond market is experiencing high levels of volatility and ultimate expected savings will not be known until interest rates can be locked. Staff recommends the City Council approve the resolutions and related lease documents so that the Lynwood Public Financing Authority (“Financing Authority”) is in a position to issue Lease Revenue Bonds to refinance the City’s pension obligation with CalPERS. Staff will work with its financial consultants to closely monitor the market in the coming months. (FIN) Recommendation: 1. Staff recommends that the City Council consider adoption of the attached Resolution No. ______ entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY, APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS” 2. Staff recommends that the Lynwood Public Financing Authority consider adoption of the attached Resolution No. ______ entitled, “A RESOLUTION OF THE LYNWOOD PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF LEASE REVENUE BONDS, AUTHORIZING AND DIRECTING EXECUTION OF AN INDENTURE, A LEASE, A SITE LEASE, AND CERTAIN OTHER DOCUMENTS, AUTHORIZING THE NEGOTIATION FOR THE SALE OF BONDS, AND AUTHORIZING OTHER RELATED Lynwood Public Financing Authority - Page 2 of 242 ACTIONS” ADJOURNMENT THE LYNWOOD PUBLIC FINANCE AUTHORITY MEETINGS WILL BE POSTED AS NEEDED. THE NEXT MEETING WILL BE HELD IN THE COUNCIL CHAMBERS OF CITY HALL ANNEX, 11350 BULLIS ROAD, CITY OF LYNWOOD, CALIFORNIA. Lynwood Public Financing Authority - Page 3 of 242 Agenda Item # 5. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable President and Members of the Public Finance Authority APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Gabriela Camacho, City Treasurer Sheila Harding, Deputy City Treasurer SUBJECT: TREASURER'S MONTHLY INVESTMENT REPORT Recommendation: It is recommended that the Honorable President and Members of the Public Finance Authority receive and file the attached Monthly Investment Report. The following information is provided to ensure the City Council is informed of the investment activities for the City. Background: Government Code Section 53607, last amended 1996, with reference to the reporting of investment transactions states that the Treasurer shall make a monthly report of those transaction to the legislative body. Government Code Section 53646 (b) (1), last amended 2004, with reference to discussion related to establishment of an Investment Policy and investment reporting states that “the Treasurer may render a quarterly report”. To determine the applicable code inasmuch as reference to Government Code Section 53607 or non-compliance thereof has never been included in past audit findings. While Government Code Section 53646 (b) (1) which is the most current version related to Investment Reporting utilizes the word “may” indicating the reporting mechanism is optional, to err on the side of caution, and in order to ensure that we are in compliance with all Government Codes, a new procedure of submitting monthly reports to the Council/Agency agenda was implemented. Attached for Council/Agency review is the City’s/Agency’s Monthly Treasurer’s Report. Subsequent reports will be provided on a monthly basis at the second meeting of each month. Discussion and Analysis: The investment transactions were executed in accordance with the City's Investment Policy and the California State Government Code Section 5346(b)(3) that requires the general fund is able to meet its expenditure requirements for the next six months. Lynwood Public Financing Authority - Page 4 of 242 Agenda Item # 2 Fiscal Impact: The action recommended in this report will not have a fiscal impact on the City. Coordinated With: FHN Financial Main Street Advisors currently monitors the City’s investment activities. ATTACHMENTS: Description ACTIVITY & PERFORMANCE - APRIL 2022 FHN REPORT - APRIL 2022 ECONOMIC REPORT - APRIL 2022 Lynwood Public Financing Authority - Page 5 of 242 Agenda Item # 2 The following is the City’s cash flow and the monthly investment report. The monthly report includes a summary of the City’s investment portfolio, a monthly review of the investment market as prepared by the investment managers and detailed information on monthly transactions, cash flows and investments by issuer. FHN Investment Advisors manage the portion of investments not invested by LAIF (State Local Agency Investment Fund). The table below provide key statistics regarding the City’s cash flow and investment portfolio as of April 30, 2022. Type Balances Held Cash - US Bank $ 54,147,849.66 Cash - JPMorgan Chase Bank $ 7,518,250.93 Local Agency Investment Fund $ 9,537,751.55 FHN Investment Advisors/BNY $ 16,027,753.18 TOTAL $ 87,231,605.32 ACCOUNT SUMMARY 30-Apr-22 31-Mar-22 Market Value $25,573,021 $25,697,469 Book Value $26,227,898 $26,207,517 Variance ($654,878) ($510,048) Par Value $26,181,918 $26,159,477 Net Asset Value $97.50 $98.05 Book Yield 1.03% 0.96% Market Yield 1.80% 1.49% Years to Maturity 1.49 1.5 Effective Duration 1.44 1.45 INVESTMENT COMPLIANCE % % Company Book Value of Portfolio of Total US Treasuries 6,502,257.27 25% 100% US Federal Agencies 3,223,961.53 12% 100% Supranational Obligations 0.00 0% 30% LAIF 9,545,267.55 36% 100% Commercial Paper 349,786.09 1% 25% Money Market Funds 618,649.97 2% 20% Negotiable Certificates of Deposit 3,966,959.31 15% 30% Corporate Obligations 2,021,016.67 8% 30% State and Local Governments 0.00 0% 100% All of the City’s rated investments are rated “A” or higher by at least two rating agencies on April 30, 2022. The City’s investments comply with its current investment policy, which emphasizes the safety, liquidity, and return of its investments, allowing the city to meet its expenditures for the next six months. Lynwood Public Financing Authority - Page 6 of 242 Agenda Item # 2 Run Date: 5/10/2022 - 10:36 AM Amortizing Page 2 Portfolio Summary City of Lynwood 4/30/2022 SECTOR ALLOCATION MATURITY DISTRIBUTION CREDIT QUALITY (MOODY'S) ACCOUNT SUMMARY MONTH-END PORTFOLIO BOOK YIELD TOP ISSUERS 4/30/22 3/31/22 Issuer % Portfolio Market Value $25,573,021 $25,697,469 LAIF 36.4% Book Value $26,227,898 $26,207,517 U.S. Treasury 24.8% Variance -$654,878 -$510,048 FHLB 3.9% FNMA 3.8% Par Value $26,181,918 $26,159,477 FFCB 2.7% Goldman Sachs Govt MMF 2.4% Net Asset Value $97.50 $98.05 JPMorgan 1.9% FHLMC 1.9% Book Yield 1.03%0.96%Royal Bank of Canada 1.3% Exxon Mobil 1.0% Market Yield 1.80%1.49%Toyota 1.0% US Bancorp 1.0% Years to Maturity 1.49 1.50 Jackson National Life 1.0% New York Life 1.0% Effective Duration 1.44 1.45 Charles Schwab 1.0% Ma y - 2 1 Ju n - 2 1 Ju l - 2 1 Au g - 2 1 Se p - 2 1 Oc t - 2 1 No v - 2 1 De c - 2 1 Ja n - 2 2 Fe b - 2 2 Ma r - 2 2 Ap r - 2 2 0.60% 0.65% 0.70% 0.75% 0.80% 0.85% 0.90% 0.95% 1.00% 1.05% 1.10% 1.3% 2.4% 7.7% 12.3% 15.1% 24.8% 36.4% CP MMF CORP AGY CD TSY LAIF 100%75%50%25%0% 50.5% 12.3%13.4%13.2%10.5% 0-1Y 1-2Y 2-3Y 3-4Y 4-5Y+ 0% 10% 20% 30% 40% 50% 60% 70% 51.5% 3.8% 1.9% 1.0% 40.4% 1.3% NR A3 A2 A1 Aa3 Aa2 Aa1 Aaa P-1 100%75%50%25%0% 2Lynwood Public Financing Authority - Page 7 of 242 Agenda Item # 2 Run Date: 5/10/2022 - 10:36 AM Amortizing Page 3 Investment Policy Compliance City of Lynwood 4/30/2022 Category Book Value % of Portfolio % Allowed by Policy In ComplianceReserved row US Treasuries 6,502,257.27 24.79%100%Yes US Federal Agencies 3,223,961.53 12.29%100%Yes Supranational Obligations 0.00 0.00%30%Yes LAIF 9,545,267.55 36.39%100%Yes Commercial Paper 349,786.09 1.33%25%Yes Money Market Funds 618,649.97 2.36%20%Yes Negotiable Certificates of Deposit 3,966,959.31 15.12%30%Yes Corporate Obligations 2,021,016.67 7.71%30%Yes State and Local Governments 0.00 0.00%100%Yes Total 26,227,898.39 100.00% Other Metrics Portfolio Metric In Compliance Weighted Average Maturity 1.49 Less than 3.0 Years Yes Liquidity 50.53%30% Under 365 Days Yes Ratings Yes 3Lynwood Public Financing Authority - Page 8 of 242 Agenda Item # 2 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining Certificates of Deposit 27002YEM4 248,000.00EagleBank 05/10/2019 248,000.00 100.06 248,141.60 0.95% NR/NR 0.0305/10/2022 141.60 NR 0.03 370.98 2.60% 248,000.00 0.56%2.600% 33847E2J5 248,000.00Flagstar Bank 06/12/2019 248,000.00 100.22 248,546.05 0.95% NR/NR 0.1206/13/2022 546.05 NR 0.12 2,378.08 2.50% 248,000.00 0.67%2.500% 1404203Z1 248,000.00Capital One Bank USA 08/03/2017 247,417.20 100.31 248,759.37 0.95% NR/NR 0.2608/02/2022 789.39 NR 0.26 1,375.21 2.35% 247,969.98 1.11%2.300% 795450D36 248,000.00Sallie Mae Bank 08/24/2017 247,417.20 100.39 248,967.56 0.95% NR/NR 0.3208/23/2022 1,004.29 NR 0.31 1,069.80 2.40% 247,963.28 1.11%2.350% 61747MF63 248,000.00Morgan Stanley Bank 01/12/2018 247,417.20 100.39 248,959.16 0.95% NR/NR 0.7001/11/2023 1,040.91 NR 0.68 1,980.60 2.70% 247,918.25 2.09%2.650% 59013J5Z8 248,000.00Merrick Bank 12/19/2018 247,516.40 100.89 250,214.53 0.95% NR/NR 0.8102/21/2023 2,308.71 NR 0.79 295.90 3.41% 247,905.82 2.24%3.350% 20033AZK5 248,000.00Comenity Capital Bank 06/29/2018 247,427.12 100.71 249,748.40 0.95% NR/NR 1.1606/29/2023 1,881.74 NR 1.12 44.84 3.40% 247,866.66 2.68%3.300% 38148PR33 248,000.00Goldman Sachs Bank 07/09/2018 247,432.08 100.71 249,754.97 0.95% NR/NR 1.1807/06/2023 1,889.55 NR 1.14 2,578.52 3.35% 247,865.42 2.69%3.300% 949763TF3 248,000.00Wells Fargo Bank NA 08/31/2018 247,429.60 100.68 249,677.19 0.94% NR/NR 1.3308/30/2023 1,829.40 NR 1.29 717.50 3.35% 247,847.79 2.78%3.300% 29278TLY4 248,000.00EnerBank 09/30/2019 247,523.84 98.93 245,357.61 0.94% NR/NR 1.4109/27/2023 -2,474.19 NR 1.38 54.36 2.05% 247,831.81 2.77%2.000% 17312Q3B3 248,000.00Citibank 02/28/2019 247,427.12 100.14 248,335.38 0.94% NR/NR 1.8302/27/2024 545.07 NR 1.76 1,284.16 3.05% 247,790.31 2.92%3.000% 32100LCB9 248,000.00First Missouri State Bank 09/13/2019 248,000.00 97.26 241,203.07 0.95% NR/NR 2.3809/13/2024 -6,796.93 NR 2.31 615.92 1.85% 248,000.00 3.06%1.850% 05580AXF6 248,000.00BMW Bank 09/25/2020 248,000.00 91.66 227,312.58 0.95% NR/NR 3.4109/25/2025 -20,687.42 NR 3.37 125.70 0.50% 248,000.00 3.10%0.500% 856283S98 248,000.00State Bank of India 04/27/2021 248,000.00 92.26 228,793.19 0.95% NR/NR 3.9904/27/2026 -19,206.81 NR 3.91 27.18 1.00% 248,000.00 3.08%1.000% 89235MLC3 248,000.00Toyota Financial Savings Bank 07/15/2021 248,000.00 91.69 227,383.13 0.95% NR/NR 4.2107/15/2026 -20,616.87 NR 4.11 684.21 0.95% 248,000.00 3.07%0.950% 90348JR93 248,000.00UBS Bank USA 08/11/2021 248,000.00 91.51 226,956.55 0.95% NR/NR 4.2808/11/2026 -21,043.45 NR 4.18 129.10 0.95% 248,000.00 3.07%0.950% 3,963,007.76 3,888,110.34 15.12% 1.71 3,966,959.31 2.28% 3,968,000.00 2.31% 13,732.06 -78,848.96 1.67Total Certificates of Deposit Commercial Paper Run Date: 5/10/2022 - 10:37 AM Amortizing 16Lynwood Public Financing Authority - Page 9 of 242 Agenda Item # 2 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining Commercial Paper 78015DG61 350,000.00Royal Bank of Canada, NY 12/20/2021 349,364.75 99.82 349,374.38 1.33% P-1/A-1+ 0.1807/06/2022 -411.71 F1+ 0.19 0.00 0.33% 349,786.09 0.98%0.000% 349,364.75 349,374.38 1.33% 0.18 349,786.09 0.33% 350,000.00 0.98% 0.00 -411.71 0.19Total Commercial Paper Corporate Bonds 46849LSW2 250,000.00Jackson National Life 07/12/2017 247,795.00 100.13 250,322.50 0.95% A2/A 0.1606/27/2022 392.91 A 0.15 2,152.78 2.69% 249,929.59 1.67%2.500% 90331HNV1 250,000.00US Bank 03/01/2019 253,307.50 100.84 252,097.50 0.96% A1/AA- 1.2307/24/2023 1,169.81 AA- 1.15 2,290.28 3.08% 250,927.69 2.70%3.400%06/23/2023 89236TFS9 250,000.00Toyota Motor Credit 02/28/2019 253,545.00 100.58 251,455.00 0.96% A1/A+ 1.6901/08/2024 223.37 A+ 1.62 2,628.82 3.03% 251,231.63 2.99%3.350% 46625HJX9 500,000.00JPMorgan Chase & Co 05/13/2019 515,115.00 100.86 504,315.00 1.93% A2/A- 2.0405/13/2024 -1,840.16 AA- 1.92 8,458.33 2.97% 506,155.16 3.18%3.625% 64952WDL4 250,000.00New York Life 01/22/2020 249,102.50 96.09 240,217.50 0.95% Aaa/AA+ 2.7301/22/2025 -9,292.86 AAA 2.62 1,375.00 2.08% 249,510.36 3.52%2.000% 30231GBH4 250,000.00Exxon Mobil 06/22/2020 272,752.50 99.09 247,725.00 1.01% Aa2/AA- 2.8903/19/2025 -16,123.77 NR 2.72 872.67 0.99% 263,848.77 3.32%2.992%02/19/2025 808513BW4 250,000.00Charles Schwab 04/12/2022 249,407.50 98.21 245,520.00 0.95% A2/NR 4.9204/01/2027 -3,893.46 NR 4.43 687.50 3.35% 249,413.46 3.70%3.300% 2,041,025.00 1,991,652.50 7.71% 2.22 2,021,016.67 2.63% 2,000,000.00 3.04% 18,465.38 -29,364.16 2.07Total Corporate Bonds LAIF 9819499 9,545,267.55LAIF 04/15/2022 9,545,267.55 1.00 9,545,267.55 36.39% NR/NR 0.0005/01/2022 0.00 NR 0.00 0.00 0.52% 9,545,267.55 0.52%0.520% 9,545,267.55 9,545,267.55 36.39% 0.00 9,545,267.55 0.52% 9,545,267.55 0.52% 0.00 0.00 0.00Total LAIF Money Market Funds FGTXX 618,649.97Goldman Sachs Govt MMF 618,649.97 1.00 618,649.97 2.36% Aaa/AAA 0.0005/01/2022 0.00 NR 0.00 98.76 0.31% 618,649.97 0.31%0.308% Run Date: 5/10/2022 - 10:37 AM Amortizing 17Lynwood Public Financing Authority - Page 10 of 242 Agenda Item # 2 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining 618,649.97 618,649.97 2.36% 0.00 618,649.97 0.31% 618,649.97 0.31% 98.76 0.00 0.00Total Money Market Funds U.S. Agencies 3135G0T78 500,000.00FNMA 11/30/2017 497,400.00 100.28 501,415.00 1.91% Aaa/AA+ 0.4310/05/2022 1,645.95 AAA 0.42 722.22 2.11% 499,769.05 1.34%2.000% 3133EKTV8 500,000.00FFCB 07/02/2019 499,900.00 98.48 492,420.00 1.91% Aaa/AA+ 2.1707/01/2024 -7,536.59 AAA 2.10 3,166.67 1.90% 499,956.59 2.62%1.900% 3133EK3B0 200,000.00FFCB 10/17/2019 198,370.00 97.09 194,176.00 0.76% Aaa/AA+ 2.4710/16/2024 -5,021.23 AAA 2.40 125.00 1.67% 199,197.23 2.73%1.500% 3130A4CH3 500,000.00FHLB 10/07/2020 541,330.00 98.61 493,065.00 2.01% Aaa/AA+ 2.8703/14/2025 -33,694.69 AAA 2.75 1,550.35 0.49% 526,759.69 2.88%2.375% 3136G4H71 500,000.00FNMA 08/18/2020 500,000.00 92.52 462,580.00 1.91% Aaa/AA+ 3.2908/12/2025 -37,420.00 AAA 3.24 506.94 0.50% 500,000.00 2.91%0.500%02/18/2022 3137EAEX3 500,000.00FHLMC 10/20/2020 497,505.00 91.80 458,975.00 1.90% Aaa/AA+ 3.4009/23/2025 -39,303.97 AAA 3.34 197.92 0.48% 498,278.97 2.93%0.375% 3130AQEC3 500,000.00FHLB 12/30/2021 500,000.00 93.96 469,775.00 1.91% Aaa/AA+ 4.6712/30/2026 -30,225.00 AAA 4.31 2,302.36 1.37% 500,000.00 2.76%1.370%06/30/2022 3,234,505.00 3,072,406.00 12.29% 2.79 3,223,961.53 1.17% 3,200,000.00 2.58% 8,571.46 -151,555.53 2.68Total U.S. Agencies U.S. Treasuries 912828ZD5 500,000.00U.S. Treasury 12/16/2020 504,140.63 98.72 493,615.00 1.91% Aaa/AA+ 0.8703/15/2023 -7,997.77 AAA 0.86 319.29 0.13% 501,612.77 1.98%0.500% 91282CAW1 1,000,000.00U.S. Treasury 07/22/2021 999,960.94 96.58 965,820.00 3.81% Aaa/AA+ 1.5511/15/2023 -34,153.96 AAA 1.52 1,153.31 0.25% 999,973.96 2.52%0.250% 91282CBV2 500,000.00U.S. Treasury 11/22/2021 496,308.59 95.60 478,010.00 1.89% Aaa/AA+ 1.9604/15/2024 -18,969.37 AAA 1.93 81.97 0.69% 496,979.37 2.69%0.375% 912828YV6 1,000,000.00U.S. Treasury 07/22/2021 1,035,742.19 96.68 966,840.00 3.92% Aaa/AA+ 2.5911/30/2024 -60,687.60 AAA 2.50 6,263.74 0.43% 1,027,527.60 2.84%1.500% 912828ZT0 500,000.00U.S. Treasury 06/29/2021 491,542.97 92.25 461,270.00 1.88% Aaa/AA+ 3.0905/31/2025 -32,074.22 AAA 3.04 521.98 0.69% 493,344.22 2.89%0.250% 91282CAZ4 1,000,000.00U.S. Treasury 07/22/2021 989,492.19 91.36 913,590.00 3.78% Aaa/AA+ 3.5911/30/2025 -77,763.50 AAA 3.52 1,565.93 0.62% 991,353.50 2.93%0.375% 91282CBH3 500,000.00U.S. Treasury 02/25/2021 494,433.59 90.96 454,805.00 1.89% Aaa/AA+ 3.7601/31/2026 -40,954.51 AAA 3.68 466.16 0.60% 495,759.51 2.94%0.375% Run Date: 5/10/2022 - 10:37 AM Amortizing 18Lynwood Public Financing Authority - Page 11 of 242 Agenda Item # 2 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining U.S. Treasuries 91282CCF6 1,000,000.00U.S. Treasury 07/22/2021 1,002,382.81 91.61 916,130.00 3.82% Aaa/AA+ 4.0905/31/2026 -85,874.03 AAA 3.97 3,131.87 0.70% 1,002,004.03 2.94%0.750% 91282CCZ2 500,000.00U.S. Treasury 10/19/2021 492,949.22 91.50 457,480.00 1.88% Aaa/AA+ 4.4209/30/2026 -36,222.29 AAA 4.28 370.56 1.17% 493,702.29 2.94%0.875% 6,506,953.13 6,107,560.00 24.79% 2.90 6,502,257.27 0.56% 6,500,000.00 2.76% 13,874.81 -394,697.25 2.83Total U.S. Treasuries 26,258,773.16 25,573,020.73 100.00% 1.49 54,742.47 -654,877.61 1.45 1.80% 26,227,898.39 1.03% 26,181,917.52TOTAL PORTFOLIO TOTAL MARKET VALUE PLUS ACCRUED INTEREST 25,627,763.20 Run Date: 5/10/2022 - 10:37 AM Amortizing 19Lynwood Public Financing Authority - Page 12 of 242 Agenda Item # 2 Maturity Report City of Lynwood April 30, 2022 CUSIP Date Purchase Value Book Rate Coupon Date Maturity Par Remaining Term Value Market YTMIssuer Days to Maturity Book FGTXX 0.308% 1Goldman Sachs Govt MMF 618,649.97 05/01/2022 1 0.31% 618,649.97 618,649.97 9819499 0.520% 1LAIF05/18/2020 9,545,267.55 05/01/2022 1 0.52% 9,545,267.55 9,545,267.55 27002YEM4 2.600% 1,086EagleBank05/10/2019 248,000.00 05/10/2022 10 2.60% 248,000.00 248,141.60 33847E2J5 2.500% 1,053Flagstar Bank 06/12/2019 248,000.00 06/13/2022 44 2.50% 248,000.00 248,546.05 46849LSW2 2.500% 1,753Jackson National Life 07/12/2017 249,929.59 06/27/2022 58 2.69% 250,000.00 250,322.50 78015DG61 0.000% 131Royal Bank of Canada, NY 12/20/2021 349,786.09 07/06/2022 67 0.33% 350,000.00 349,374.38 1404203Z1 2.300% 1,731Capital One Bank USA 08/03/2017 247,969.98 08/02/2022 94 2.35% 248,000.00 248,759.37 795450D36 2.350% 1,710Sallie Mae Bank 08/24/2017 247,963.28 08/23/2022 115 2.40% 248,000.00 248,967.56 3135G0T78 2.000% 1,612FNMA11/30/2017 499,769.05 10/05/2022 158 2.11% 500,000.00 501,415.00 61747MF63 2.650% 1,569Morgan Stanley Bank 01/12/2018 247,918.25 01/11/2023 256 2.70% 248,000.00 248,959.16 59013J5Z8 3.350% 1,228Merrick Bank 12/19/2018 247,905.82 02/21/2023 297 3.41% 248,000.00 250,214.53 912828ZD5 0.500% 500U.S. Treasury 12/16/2020 501,612.77 03/15/2023 319 0.13% 500,000.00 493,615.00 20033AZK5 3.300% 1,401Comenity Capital Bank 06/29/2018 247,866.66 06/29/2023 425 3.40% 248,000.00 249,748.40 38148PR33 3.300% 1,391Goldman Sachs Bank 07/09/2018 247,865.42 07/06/2023 432 3.35% 248,000.00 249,754.97 90331HNV1 3.400% 1,156US Bank 03/01/2019 250,927.69 07/24/2023 450 3.08% 250,000.00 252,097.50 949763TF3 3.300% 1,338Wells Fargo Bank NA 08/31/2018 247,847.79 08/30/2023 487 3.35% 248,000.00 249,677.19 29278TLY4 2.000% 943EnerBank09/30/2019 247,831.81 09/27/2023 515 2.05% 248,000.00 245,357.61 91282CAW1 0.250% 282U.S. Treasury 07/22/2021 999,973.96 11/15/2023 564 0.25% 1,000,000.00 965,820.00 89236TFS9 3.350% 1,157Toyota Motor Credit 02/28/2019 251,231.63 01/08/2024 618 3.03% 250,000.00 251,455.00 17312Q3B3 3.000% 1,157Citibank02/28/2019 247,790.31 02/27/2024 668 3.05% 248,000.00 248,335.38 91282CBV2 0.375% 159U.S. Treasury 11/22/2021 496,979.37 04/15/2024 716 0.69% 500,000.00 478,010.00 46625HJX9 3.625% 1,083JPMorgan Chase & Co 05/13/2019 506,155.16 05/13/2024 744 2.97% 500,000.00 504,315.00 3133EKTV8 1.900% 1,033FFCB07/02/2019 499,956.59 07/01/2024 793 1.90% 500,000.00 492,420.00 32100LCB9 1.850% 960First Missouri State Bank 09/13/2019 248,000.00 09/13/2024 867 1.85% 248,000.00 241,203.07 3133EK3B0 1.500% 926FFCB10/17/2019 199,197.23 10/16/2024 900 1.67% 200,000.00 194,176.00 912828YV6 1.500% 282U.S. Treasury 07/22/2021 1,027,527.60 11/30/2024 945 0.43% 1,000,000.00 966,840.00 64952WDL4 2.000% 829New York Life 01/22/2020 249,510.36 01/22/2025 998 2.08% 250,000.00 240,217.50 3130A4CH3 2.375% 570FHLB10/07/2020 526,759.69 03/14/2025 1,049 0.49% 500,000.00 493,065.00 30231GBH4 2.992% 677Exxon Mobil 06/22/2020 263,848.77 03/19/2025 1,054 0.99% 250,000.00 247,725.00 912828ZT0 0.250% 305U.S. Treasury 06/29/2021 493,344.22 05/31/2025 1,127 0.69% 500,000.00 461,270.00 3136G4H71 0.500% 620FNMA08/18/2020 500,000.00 08/12/2025 1,200 0.50% 500,000.00 462,580.00 3137EAEX3 0.375% 557FHLMC10/20/2020 498,278.97 09/23/2025 1,242 0.48% 500,000.00 458,975.00 05580AXF6 0.500% 582BMW Bank 09/25/2020 248,000.00 09/25/2025 1,244 0.50% 248,000.00 227,312.58 91282CAZ4 0.375% 282U.S. Treasury 07/22/2021 991,353.50 11/30/2025 1,310 0.62% 1,000,000.00 913,590.00 91282CBH3 0.375% 429U.S. Treasury 02/25/2021 495,759.51 01/31/2026 1,372 0.60% 500,000.00 454,805.00 856283S98 1.000% 368State Bank of India 04/27/2021 248,000.00 04/27/2026 1,458 1.00% 248,000.00 228,793.19 Run Date: 5/10/2022 - 10:37 AM Amortizing 20Lynwood Public Financing Authority - Page 13 of 242 Agenda Item # 2 Maturity Report City of Lynwood April 30, 2022 CUSIP Date Purchase Value Book Rate Coupon Date Maturity Par Remaining Term Value Market YTMIssuer Days to Maturity Book 91282CCF6 0.750% 282U.S. Treasury 07/22/2021 1,002,004.03 05/31/2026 1,492 0.70% 1,000,000.00 916,130.00 89235MLC3 0.950% 289Toyota Financial Savings Bank 07/15/2021 248,000.00 07/15/2026 1,537 0.95% 248,000.00 227,383.13 90348JR93 0.950% 262UBS Bank USA 08/11/2021 248,000.00 08/11/2026 1,564 0.95% 248,000.00 226,956.55 91282CCZ2 0.875% 193U.S. Treasury 10/19/2021 493,702.29 09/30/2026 1,614 1.17% 500,000.00 457,480.00 3130AQEC3 1.370% 121FHLB12/30/2021 500,000.00 12/30/2026 1,705 1.37% 500,000.00 469,775.00 808513BW4 3.300% 18Charles Schwab 04/12/2022 249,413.46 04/01/2027 1,797 3.35% 250,000.00 245,520.00 Net Maturities and Averages 26,227,898.39 545 1.03% 25,573,020.73 26,181,917.52 Run Date: 5/10/2022 - 10:37 AM Amortizing 21Lynwood Public Financing Authority - Page 14 of 242 Agenda Item # 2 Income Earned City of Lynwood April 01, 2022 - April 30, 2022 CUSIP Value Ending Par Date Maturity Book Value Beginning Value Ending Book Accrued Beginning /Purchased Int.Received Accrued Ending Issuer Earned Interest Amortization/ Accretion Earned Net Income Certificates of Deposit 27002YEM4 05/10/2022 248,000.00EagleBank 248,000.00 248,000.00 388.65 547.64 370.98 529.97 0.00 529.97 33847E2J5 06/13/2022 248,000.00Flagstar Bank 248,000.00 248,000.00 1,868.49 0.00 2,378.08 509.59 0.00 509.59 1404203Z1 08/02/2022 248,000.00Capital One Bank USA 247,960.40 247,969.98 906.39 0.00 1,375.21 468.82 9.58 478.40 795450D36 08/23/2022 248,000.00Sallie Mae Bank 247,953.70 247,963.28 590.78 0.00 1,069.80 479.02 9.58 488.60 61747MF63 01/11/2023 248,000.00Morgan Stanley Bank 247,908.67 247,918.25 1,440.44 0.00 1,980.60 540.16 9.58 549.74 59013J5Z8 02/21/2023 248,000.00Merrick Bank 247,896.30 247,905.82 318.66 705.61 295.90 682.85 9.51 692.36 20033AZK5 06/29/2023 248,000.00Comenity Capital Bank 247,857.25 247,866.66 67.27 695.08 44.84 672.65 9.41 682.06 38148PR33 07/06/2023 248,000.00Goldman Sachs Bank 247,856.07 247,865.42 1,905.86 0.00 2,578.52 672.66 9.35 682.01 949763TF3 08/30/2023 248,000.00Wells Fargo Bank NA 247,838.41 247,847.79 44.84 0.00 717.50 672.66 9.38 682.04 29278TLY4 09/27/2023 248,000.00EnerBank 247,822.01 247,831.81 67.95 421.26 54.36 407.67 9.80 417.47 17312Q3B3 02/27/2024 248,000.00Citibank 247,780.89 247,790.31 672.66 0.00 1,284.16 611.50 9.42 620.92 32100LCB9 09/13/2024 248,000.00First Missouri State Bank 248,000.00 248,000.00 238.83 0.00 615.92 377.09 0.00 377.09 05580AXF6 09/25/2025 248,000.00BMW Bank 248,000.00 248,000.00 23.78 0.00 125.70 101.92 0.00 101.92 856283S98 04/27/2026 248,000.00State Bank of India 248,000.00 248,000.00 1,059.95 1,236.60 27.18 203.83 0.00 203.83 89235MLC3 07/15/2026 248,000.00Toyota Financial Savings Bank 248,000.00 248,000.00 490.56 0.00 684.21 193.65 0.00 193.65 90348JR93 08/11/2026 248,000.00UBS Bank USA 248,000.00 248,000.00 135.55 200.10 129.10 193.65 0.00 193.65 Certificates of Deposit - Sub Total 3,968,000.00 3,966,873.71 3,966,959.31 10,220.66 3,806.29 13,732.06 7,317.69 85.60 7,403.29 Commercial Paper 4497W1DM5 04/21/2022 0.00ING US Funding LLC 349,952.95 0.00 0.00 0.00 0.00 0.00 47.06 47.06 78015DG61 07/06/2022 350,000.00Royal Bank of Canada, NY 349,692.10 349,786.09 0.00 0.00 0.00 0.00 93.99 93.99 Commercial Paper - Sub Total 350,000.00 699,645.04 349,786.09 0.00 0.00 0.00 0.00 141.05 141.05 Corporate Bonds 59217GCD9 04/08/2022 0.00MetLife 250,008.78 0.00 3,183.68 3,312.50 0.00 128.82 -8.78 120.04 46849LSW2 06/27/2022 250,000.00Jackson National Life 249,893.76 249,929.59 1,631.94 0.00 2,152.78 520.84 35.82 556.66 90331HNV1 07/24/2023 250,000.00US Bank 250,988.28 250,927.69 1,581.94 0.00 2,290.28 708.34 -60.59 647.75 89236TFS9 01/08/2024 250,000.00Toyota Motor Credit 251,292.41 251,231.63 1,930.90 0.00 2,628.82 697.92 -60.77 637.15 46625HJX9 05/13/2024 500,000.00JPMorgan Chase & Co 506,398.68 506,155.16 6,947.92 0.00 8,458.33 1,510.41 -243.52 1,266.89 64952WDL4 01/22/2025 250,000.00New York Life 249,495.90 249,510.36 958.33 0.00 1,375.00 416.67 14.46 431.13 30231GBH4 03/19/2025 250,000.00Exxon Mobil 264,235.31 263,848.77 249.33 0.00 872.67 623.34 -386.54 236.80 808513BW4 04/01/2027 250,000.00Charles Schwab 0.00 249,413.46 0.00 -252.08 687.50 435.42 5.96 441.38 Corporate Bonds - Sub Total 2,000,000.00 2,022,313.13 2,021,016.67 16,484.04 3,060.42 18,465.38 5,041.76 -703.96 4,337.80 Run Date: 5/10/2022 - 10:37 AM Amortizing 24Lynwood Public Financing Authority - Page 15 of 242 Agenda Item # 2 Income Earned City of Lynwood April 01, 2022 - April 30, 2022 CUSIP Value Ending Par Date Maturity Book Value Beginning Value Ending Book Accrued Beginning /Purchased Int.Received Accrued Ending Issuer Earned Interest Amortization/ Accretion Earned Net Income LAIF 9819499 05/01/2022 9,545,267.55LAIF 9,537,751.55 9,545,267.55 7,516.00 7,516.00 0.00 0.00 0.00 0.00 LAIF - Sub Total 9,545,267.55 9,537,751.55 9,545,267.55 7,516.00 7,516.00 0.00 0.00 0.00 0.00 Money Market Funds FGTXX 05/01/2022 618,649.97Goldman Sachs Govt MMF 253,724.99 618,649.97 28.27 28.27 98.76 98.76 0.00 98.76 Money Market Funds - Sub Total 618,649.97 253,724.99 618,649.97 28.27 28.27 98.76 98.76 0.00 98.76 U.S. Agencies 3135G0T78 10/05/2022 500,000.00FNMA 499,724.36 499,769.05 4,888.89 5,000.00 722.22 833.33 44.70 878.03 3133EKTV8 07/01/2024 500,000.00FFCB 499,954.97 499,956.59 2,375.00 0.00 3,166.67 791.67 1.61 793.28 3133EK3B0 10/16/2024 200,000.00FFCB 199,170.96 199,197.23 1,375.00 1,500.00 125.00 250.00 26.28 276.28 3130A4CH3 03/14/2025 500,000.00FHLB 527,510.20 526,759.69 560.76 0.00 1,550.35 989.59 -750.51 239.08 3136G4H71 08/12/2025 500,000.00FNMA 500,000.00 500,000.00 298.61 0.00 506.94 208.33 0.00 208.33 3137EAEX3 09/23/2025 500,000.00FHLMC 498,238.16 498,278.97 41.67 0.00 197.92 156.25 40.81 197.06 3130AQEC3 12/30/2026 500,000.00FHLB 500,000.00 500,000.00 1,731.53 0.00 2,302.36 570.83 0.00 570.83 U.S. Agencies - Sub Total 3,200,000.00 3,224,598.65 3,223,961.53 11,271.46 6,500.00 8,571.46 3,800.00 -637.12 3,162.88 U.S. Treasuries 912828ZD5 03/15/2023 500,000.00U.S. Treasury 501,764.44 501,612.77 115.49 0.00 319.29 203.80 -151.67 52.13 91282CAW1 11/15/2023 1,000,000.00U.S. Treasury 999,972.57 999,973.96 946.13 0.00 1,153.31 207.18 1.39 208.57 91282CBV2 04/15/2024 500,000.00U.S. Treasury 496,852.81 496,979.37 865.38 937.50 81.97 154.09 126.56 280.65 912828YV6 11/30/2024 1,000,000.00U.S. Treasury 1,028,401.50 1,027,527.60 5,027.47 0.00 6,263.74 1,236.27 -873.89 362.38 912828ZT0 05/31/2025 500,000.00U.S. Treasury 493,167.05 493,344.22 418.96 0.00 521.98 103.02 177.17 280.19 91282CAZ4 11/30/2025 1,000,000.00U.S. Treasury 991,155.49 991,353.50 1,256.87 0.00 1,565.93 309.06 198.01 507.07 91282CBH3 01/31/2026 500,000.00U.S. Treasury 495,666.79 495,759.51 310.77 0.00 466.16 155.39 92.72 248.11 91282CCF6 05/31/2026 1,000,000.00U.S. Treasury 1,002,044.33 1,002,004.03 2,513.74 0.00 3,131.87 618.13 -40.30 577.83 91282CCZ2 09/30/2026 500,000.00U.S. Treasury 493,585.23 493,702.29 11.95 0.00 370.56 358.61 117.06 475.67 U.S. Treasuries - Sub Total 6,500,000.00 6,502,610.22 6,502,257.27 11,466.76 937.50 13,874.81 3,345.55 -352.95 2,992.60 26,181,917.52Grand Total 26,207,517.28 26,227,898.39 56,987.19 21,848.48 54,742.47 19,603.76 -1,467.38 18,136.38 Run Date: 5/10/2022 - 10:37 AM Amortizing 25Lynwood Public Financing Authority - Page 16 of 242 Agenda Item # 2 Realized Gains and Losses City of Lynwood April 01, 2022 - April 30, 2022 Par Value Sale Date Days Held Maturity/Sales RealizedCUSIP Coupon Rate Maturity Date Book Value Proceeds Gain/LossPurchase Date TermIssuer Commercial Paper 4497W1DM5 350,000.0012/21/2021 04/21/2022 121 350,000.00 0.00 350,000.00 04/21/2022 121ING US Funding LLC 0.000% Total Commercial Paper 0.00 350,000.00 350,000.00 Corporate Bonds 59217GCD9 250,000.0011/02/2017 04/08/2022 1,618 250,000.00 0.00 250,000.00 04/08/2022 1,618MetLife 2.650% Total Corporate Bonds 0.00 250,000.00 250,000.00 Grand Total 0.00 600,000.00 600,000.00 Run Date: 5/10/2022 - 10:37 AM Amortizing 26Lynwood Public Financing Authority - Page 17 of 242 Agenda Item # 2 Transaction Report City of Lynwood April 01, 2022 - April 30, 2022 Transaction Transaction Security Security Maturity Date Type ID Description Date Purchases Redemptions Interest Deposits Withdrawals 04/04/2022 Interest FGTXX GSGF - - 28.27 - - 04/05/2022 Interest 3135G0T78 FNMA 2 10/05/22 10/05/2022 - - 5,000.00 - - 04/08/2022 Interest 59217GCD9 MET 2.65 04/08/22 04/08/2022 - - 3,312.50 - - 04/08/2022 Maturity 59217GCD9 MET 2.65 04/08/22 04/08/2022 - 250,000.00 - - - 04/11/2022 Interest 27002YEM4 EGBN 2.6 05/10/22 05/10/2022 - - 547.64 - - 04/11/2022 Interest 90348JR93 UBS 0.95 08/11/26 08/11/2026 - - 200.10 - - 04/12/2022 Purchase 808513BW4 SCHW 3.3 04/01/27 04/01/2027 -249,407.50 - -252.08 - - 04/15/2022 Interest 9819499 LAIF - - 7,516.00 - - 04/18/2022 Interest 91282CBV2 T 0 3/8 04/15/24 04/15/2024 - - 937.50 - - 04/18/2022 Interest 59013J5Z8 MERICK 3.35 02/21/23 02/21/2023 - - 705.61 - - 04/18/2022 Interest 3133EK3B0 FFCB 1 1/2 10/16/24 10/16/2024 - - 1,500.00 - - 04/21/2022 Maturity 4497W1DM5 ING (US) FUNDING 04/21/2022 - 350,000.00 - - - 04/27/2022 Interest 856283S98 SBIIN 1 04/27/26 04/27/2026 - - 1,236.60 - - 04/27/2022 Interest 29278TLY4 CMS 2 09/27/23 09/27/2023 - - 421.26 - - 04/29/2022 Interest 20033AZK5 ADS 3.3 06/29/23 06/29/2023 - - 695.08 - - Grand Total:-249,407.50 600,000.00 21,848.48 0.00 0.00 Run Date: 5/10/2022 - 10:37 AM Amortizing 27Lynwood Public Financing Authority - Page 18 of 242 Agenda Item # 2 Consumer Prices Although U.S. consumer prices rose less than expected in March, inflation remained elevated at a 40-year high. The Consumer Price Index (CPI) was up 8.5% year-over-year in March, versus up 7.9% year-over-year in February. Core CPI (CPI less food and energy) was up 6.5% year-over-year in March, versus up 6.4% year-over-year in February. Gasoline costs drove half of the monthly increase, while food was also a sizable contributor. Used vehicle prices declined, resulting in lower than forecast core increases for the month. The Personal Consumption Expenditures (PCE) index was up 6.4% year-over-year in February, up from 6.0% in January. Core PCE was up 5.4% year-over-year in February, versus up 5.2% in January. Current inflation readings continue to run well above the Fed’s longer-run target of around 2.0%. While gas prices have started to decline in recent weeks in part due to COVID lockdowns in China, we believe pricing pressures may remain elevated longer than anticipated because of the conflict in Europe. Retail Sales Retail sales edged higher in February, but there are signs that higher gas prices are affecting discretionary spending. On a year-over-year basis, retail sales were up 17.6% in February versus 14% in January. On a month-over-month basis, retail sales moderated, rising 0.3% in February versus an upwardly revised increase of 4.9% in January. Excluding vehicles and gas, retail sales were down 0.4% month-over-month. Although inflation threatens to put a dent in expected growth, we believe high levels of consumer savings along with improvement in the health situation and continued improvement in the labor market should provide a healthy tailwind for consumer spending. The Consumer Confidence Index rebounded to 107.2 in March following declines in January and February, primarily driven by positive assessments of employment. However, while consumers’ evaluations of the present situation were strong, future expectations have been deteriorating. Labor Market The U.S. economy added 431,000 jobs in March, with upward revisions from the prior months totaling 95,000. Trends in employment remain strong, with the three-month moving average payrolls at 561,000 and the six-month moving average at 600,000. Job gains were broad based in March, led by leisure, hospitality, professional, and business services. The unemployment rate fell to 3.6% from 3.8%, the lowest level since February 2020. The labor participation rate increased marginally to 62.4% in March from 62.3% in February but remains lower than the pre-pandemic level of 63.4%. The U-6 underemployment rate, which includes those who are marginally attached to the labor force and employed part time for economic reasons, fell to 6.9% in March from 7.2% in February, declining below its pre-pandemic level of 7.0% in February 2020. Wage growth accelerated in March, with average hourly earnings rising 5.6% from 5.2% year-over-year. As more participants enter the labor force, wage inflation dynamics should start to moderate, helping to lower the current elevated inflation readings. Housing Starts Total housing starts rebounded 6.8% to an annual rate of 1,769,000 in February. Single-family starts increased 5.7%, and multi-family starts increased 9.3%, month-over-month. On a year-over-year basis, total housing starts were up 22.3% in February driven by multi-family starts. According to the Case-Shiller 20-City home price index, home prices were up 19.1% year-over-year in January versus up 18.6% year- over-year in December, suggesting tight supply may be continuing to support prices. Rising mortgage rates and affordability could be headwinds to further price growth. Lynwood Public Financing Authority - Page 19 of 242 Agenda Item # 2 Agenda Item # 6. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Harry Wong, Director of Finance & Administration SUBJECT: APPROVING PENSION UNFUNDED ACCRUED LIABILITY (“UAL”) REFINANCE WITH THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY IN MAXIMUM AMOUNT OF $50,000,000 (FEDERALLY TAXABLE); APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS Recommendation: 1. Staff recommends that the City Council consider adoption of the attached Resolution No. ______ entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY, APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS” 2. Staff recommends that the Lynwood Public Financing Authority consider adoption of the attached Resolution No. ______ entitled, “A RESOLUTION OF THE LYNWOOD PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF LEASE REVENUE BONDS, AUTHORIZING AND DIRECTING EXECUTION OF AN INDENTURE, A LEASE, A SITE LEASE, AND CERTAIN OTHER DOCUMENTS, AUTHORIZING THE NEGOTIATION FOR THE SALE OF BONDS, AND AUTHORIZING OTHER RELATED ACTIONS” Background: The City Council previously directed staff to evaluate the potential financial benefits of refinancing the City of Lynwood's (“City”) Pension Unfunded Accrued Liability (“UAL”) with the California Public Employees’ Retirement System (“CalPERS”). Based on analysis done to date, it appears savings to the City’s General Fund may be achieved from a refinancing; however, the municipal bond market is experiencing high levels of volatility and ultimate expected savings will not be known until interest rates can be locked. Staff recommends the City Council approve the resolutions and related lease documents so that the Lynwood Public Financing Authority (“Financing Authority”) is in a position to issue Lease Revenue Bonds to refinance the City’s pension obligation with CalPERS. Staff will work with its financial consultants to closely monitor the market in the coming months. Lynwood Public Financing Authority - Page 20 of 242 Agenda Item # 3 The City’s pension plans are managed under contract with CalPERS. The City’s annual pension payments to CalPERS consist of two components which include the Normal Cost, and UAL. The normal cost is the amount CalPERS charges the City, as a percentage of its payroll, that is estimated to annually fully fund a share of all future pension obligations. The UAL repayment portion is the amount that is charged to the City to repay the City’s estimated long-term UAL that is owed to CalPERS for past changes in benefits, underperforming CalPERS investment returns, and changes in the discount rate. The UAL represents the difference between the amount necessary to pay actuarially determined future benefits already earned by current and former employees and the market value of the assets currently on deposit with CalPERS. The City’s UAL constitutes a debt that must be repaid to CalPERS and it is listed as a liability on the City’s Balance Sheet in accordance with the Governmental Accounting Standards Board requirements. CalPERS currently charges the City 7.00% interest on this debt (scheduled to change to 6.80% for Fiscal Year ending June 30, 2024), and has a repayment structure that will result in a significant increase in annual pension costs over the coming years. As in many other cities in California, the growing obligations related to employee retirements represent a significant financial burden to the City. CalPERS calculates the actuarial value of benefits owed to plan members and the market value of plan assets annually, but it takes them one year to publish results. Furthermore, CalPERS determines the UAL amortization schedules based on the projected future UAL balance at the end of the year in which results are published. This means that results based on a June 30, 2020 valuation date, which are released in July of 2021, project the UAL balance at June 30, 2022 to determined UAL amortization payments for Fiscal Year Ending June 30, 2023. Therefore, UAL amortization payments for the Fiscal Year Ending June 30, 2023 (the upcoming Fiscal Year) are based on the City’s projected unfunded liabilities to CalPERS of $35,582,515 for the Miscellaneous Plan and $7,516,349 for the Safety Plan. CalPERS’ investment returns for 2021-22 and demographic and other changes that are currently being calculated by CalPERS could further increase this amount. Current taxable municipal bond rates are currently lower than the 7.00% (soon to be 6.80%) CalPERS is currently charging the City. By issuing its own obligations to finance the UAL (instead of continuing to make payments to CalPERS on its terms), the City may be able to realize substantial budgetary savings and better manage future pension costs. Under IRS regulations, obligations that are issued to finance a UAL must be issued at taxable (as opposed to tax-exempt) interest rates. The financing team is recommending that the City authorize the Financing Authority to issue Lease Revenue Bonds secured by lease payments to be made by the City for the lease of certain City assets, which are anticipated to consist of City streets, but which may instead consist of other City facilities such as Police Stations, Fire Stations, City maintenance facilities, or combinations thereof, to refinance some or all of the UAL. Similar financings have been done in various other cities in the State over the past several years to similarly refinance UAL amounts owed to CalPERS. Discussion and Analysis: Overview of Bond Financing. The proposed financing is in the form of Lease Revenue Bonds (“Bonds”) to be issued by the Lynwood Public Financing Authority, similar to financings undertaken by Lynwood in 2019 and 2020. Pursuant to the documents to be approved, the City and Financing Authority would enter into (1) a Site Lease, pursuant to which the Financing Authority leases City property in exchange for an upfront site lease payment used for the UAL pay-off, and (2) a Lease Agreement, pursuant to which the City leases back the property from the Financing Authority in exchange for semi-annual lease payments. The lease payments would be assigned under the Assignment Agreement to the trustee, which would administer the Bonds under the Indenture of Trust. The lease payments would be payable from any legally available funds of the City, and are anticipated to be further secured by a pledge of the pension tax override approved by the voters of the City in 1946. The pension tax override is accounted for in a special fund, apart from the General Fund, and may only be used for pension costs in accordance with applicable law. Lynwood Public Financing Authority - Page 21 of 242 Agenda Item # 3 The property to be leased under the leases will be determined to have adequate value and other characteristics necessary to satisfy legal and marketing requirements. Valuation of the leased properties will be performed by Kosmont Realty. The resolutions contain a provision that allows City staff to determine the appropriate combination of City assets for use as the leased property. Preliminary Official Statement; Continuing Disclosure. The resolutions also approve the form of Preliminary Official Statement (POS) for the Bonds. The POS is the document pursuant to which material information concerning the City and the Bonds is conveyed to prospective purchasers of the Bonds. It also includes various risk factors for Bond holders to consider. Included as an exhibit to the POS is a Continuing Disclosure Certificate, pursuant to which the City will agree to provide its audited financial statements and certain other financial and operating information to Bondholders on an annual basis, as well as notification of certain enumerated events. Bond Purchase Agreement. The final document approved by the resolutions is the Bond Purchase Agreement, pursuant to which the Bonds would be sold by the Financing Authority to the underwriter, for further resale and distribution to ultimate investors. The agreement contains customary representations, warranties and covenants of the City and Financing Authority and closing conditions. Financing Team. Transaction support is being provided to the City and the Financing Authority by Kosmont Transactions Services as the City’s municipal advisor. Additional transaction team members include Jones Hall (Bond Counsel); U.S. Bank Trust Company, National Association (Trustee), and Cabrera Capital Markets (Underwriter). Fiscal Impact: Current projections indicate that refinancing the CalPERS UAL and thereby restructuring the currently front-loaded UAL amortization schedule to level payments could produce significant budget savings that average approximately $462,000 per year over the next 10 fiscal years, with the greatest savings of approximately $714,000 to occur in the upcoming 2023 Fiscal Year. Net Present Value savings over the remaining life of the Bonds would be approximately $2.25 million, for an NPV% savings of 5.21%. It is generally considered advisable to proceed with a refinancing transaction when NPV savings amounts are greater than 3%. In accordance with Government Code Section 5852.1, the following information has been obtained and disclosed to the City Council and Financing Authority prior to the issuance of the Bonds: (i) the estimated true interest cost of the Bonds (being the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds) is 5.5457%; (ii) the estimated finance charge of the Bonds (being the sum of all fees and charges paid to third parties) is $769,641; (iii) the estimated proceeds of the Bonds expected to be received, net of proceeds for finance charges in (ii) above to paid from the principal amount of the Bonds and any reserves or capitalized interest paid or funded with Bonds is $43,098,864, and (iv) the estimated total payment amount of the Bonds (being the sum of debt service plus finance to be paid to final maturity, plus any financing costs not paid from proceeds of the Bonds) is $75,410,107. This information is based on good-faith estimates provided by the City’s municipal advisor. The foregoing is based on analysis done to date; however, the municipal bond market is experiencing high levels of volatility and ultimate expected savings will not be known until interest rates can be locked. Staff will work with its financial consultants to closely monitor the market in the coming months. Coordinated With: City Manager's Office City Attorney Kosmont Transactions Services, as Municipal Advisor Jones Hall, as Bond Counsel Lynwood Public Financing Authority - Page 22 of 242 Agenda Item # 3 ATTACHMENTS: Description Attach A - City Reso Attach B -JPA Reso Attach C - Indenture Attach D - Site Lease Attach E - Lease Agmt Attach F - Assignment Agmt Attach G - Lynwood LRBs POS Attach H - LynwoodBPA Lynwood Public Financing Authority - Page 23 of 242 Agenda Item # 3 RESOLUTION NO. ____________________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY, APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS WHEREAS, the City of Lynwood (the “City”) and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Lynwood Public Financing Authority (the “Authority”) for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs; and WHEREAS, the City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City; and WHEREAS, the City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”); and WHEREAS, the CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”); and WHEREAS, on April 9, 1946, the voters in the City approved a retirement tax to support amounts owed by the City to CalPERS pursuant to the CalPERS Contract (the “Pension Tax Override”), which Pension Tax Override is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes; and WHEREAS, the City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit; and WHEREAS, the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members; and Lynwood Public Financing Authority - Page 24 of 242 Agenda Item # 3 2 WHEREAS, the Authority proposes to issue lease revenue bonds under the Bond Law for the purpose of refunding all or a portion of the CalPERS Obligation, including paying all costs of issuing the lease revenue bonds; and WHEREAS, pursuant to a Site Lease (the “Site Lease”), the City proposes to lease to the Authority certain real property (as described more fully in the Site Lease, as executed, the “Leased Property”); and WHEREAS, pursuant to a Lease Agreement, between the City and the Authority (the “Lease”), the City proposes to lease the Leased Property from the Authority, and the Authority will use the lease payments paid by the City to the Authority under the Lease to pay debt service on the lease revenue bonds; WHEREAS, the Authority proposes to sell the lease revenue bonds to Cabrera Capital Markets, LLC, as underwriter (the “Underwriter”), pursuant to a bond purchase agreement (the “Bond Purchase Agreement”); and WHEREAS, in order to assist the Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission, the City will undertake certain continuing disclosure obligations with respect to the lease revenue bonds pursuant to a continuing disclosure certificate to be executed by the City (the “Continuing Disclosure Certificate”); and WHEREAS, in order to comply with Government Code Section 5852.1, certain information relating to the proposed lease revenue bonds is set forth in the staff report accompanying this Resolution, and such information is hereby disclosed and made public; and WHEREAS, the City has duly considered such transactions and wishes at this time to approve the transactions as being in the public interest of the City; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER AND RESOLVE AS FOLLOWS: Section 1. The City Council hereby finds and determines that the foregoing recitals are true and correct. Section 2. The City Council hereby approves the issuance of the lease revenue bonds (the “Bonds”) by the Authority under the Bond Law in the maximum principal amount of $50,000,000. The Bonds shall be issued pursuant to an Indenture of Trust between the Authority and a corporate trustee (the “Indenture”). Section 3. The City Council hereby approves the forms of the Site Lease and the Lease on file with the City Clerk, with such additions thereto and changes therein as the City Manager, the Finance Director, the Treasurer or the designee of any of them (each, an “Authorized Officer”) deem necessary, desirable or appropriate upon consultation with the bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. In furtherance of the foregoing, the Leased Property is anticipated to consist of the City’s interest in City streets; however, other real property of the City may be leased instead. In addition, Lynwood Public Financing Authority - Page 25 of 242 Agenda Item # 3 3 as described more fully in the Lease, the Pension Tax Override shall be pledged by the City to the payment of the lease payments. The Authorized Officers and all other appropriate officials of the City are hereby authorized and directed to execute, and the City Clerk is hereby authorized to attest, as appropriate, the Site Lease and the Lease and such other agreements, documents and certificates as may be necessary or desirable to effectuate the purposes of this resolution and the financing herein authorized, including, without limitation, such other agreements, documents and certificates as may be required by the Site Lease, and the Lease. The City Council hereby authorizes the performance by the City of its obligations under the Site Lease and the Lease. Section 4. The City Council hereby approves the preliminary Official Statement describing the Bonds, and Continuing Disclosure Certificate included therein in substantially the form on file with the City Clerk. Each of the Authorized Officers 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 and the Continuing Disclosure Certificate shall be executed on behalf of the City by an Authorized Officer. Section 5. The City Council hereby approves the form of the Bond Purchase Agreement on file with the City Clerk, with such additions thereto and changes therein as the Authorized Officers deem necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions or changes; provided that no such addition or change shall increase the aggregate principal amount of the Bonds in excess of the maximum principal amount set forth in Section 2, or shall provide for a true interest cost in excess of 5.95% or an Underwriter’s discount (exclusive of any original issue discount) of greater than 0.8%. The Authorized Officers, each acting alone, are hereby authorized and directed to execute the Bond Purchase Agreement and to take all actions necessary to fulfill the City’s obligations thereunder. Section 6. Notwithstanding the foregoing references to the Bonds, the Indenture, the preliminary Official Statement and the Bond Purchase Agreement, if an Authorized Officer determines that a private placement lease financing is more advantageous to the City and the Authority, the lease payments payable by the City to the Authority may be assigned by the Authority to a private placement bank without further action of the City Council so long as the parameters included in this Resolution are met. Lynwood Public Financing Authority - Page 26 of 242 Agenda Item # 3 4 Section 7. The City Council hereby approves the appointment of (a) Jones Hall, A Professional Law Corporation, as bond counsel and disclosure counsel; (b) Kosmont Transactions Services, Inc., as municipal advisor; and (c) Cabrera Capital Markets, LLC, as underwriter/private placement agent. The Authorized Officers, each acting alone, are hereby authorized to execute new or amended services agreements with these financing team members in connection with the issuance of the Bonds, as deemed necessary by such Authorized Officer executing the same. Section 8. The Authorized Officers, the City Clerk and any and all other officers of the City are hereby authorized and directed, for and in the name of and on behalf of the City, to do any and all things and take any and all actions, including execution and delivery of any and all documents, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and documents, which they, or any of them, may deem necessary or advisable in order to consummate the transactions described herein. The City Council hereby authorizes the Authorized Officers, each acting alone, to provide for a debt service reserve fund and debt service and reserve fund insurance policies. Section 9. This Resolution shall take effect immediately upon its passage and adoption. Adoption of this Resolution is intended to start the 60 day period provided for in California Code of Civil Procedure Section 863 for an interested person to bring an action to determine the validity of the matters approved herein, including, but not limited to, the validity of the Bonds, the Indenture, the Site Lease (including the property proposed to be leased to the Authority by the City therein), and the Lease, and the legality and validity of this Resolution, the use of the proceeds of the Bonds, and the payment of the lease payments and the Bonds. Lynwood Public Financing Authority - Page 27 of 242 Agenda Item # 3 5 PASSED, APPROVED AND ADOPTED THIS 17th day of May 2022. Jorge Casanova, Mayor ATTEST: Maria Quinonez, City Clerk Ernie Hernandez, City Manager APPROVED AS TO FORM: Noel Tapia, City Attorney APPROVED AS TO CONTENT: Ernie Hernandez, City Manager [Insert City Clerk certification page] Lynwood Public Financing Authority - Page 28 of 242 Agenda Item # 3 RESOLUTION NO. ___________ A RESOLUTION OF THE LYNWOOD PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF LEASE REVENUE BONDS, AUTHORIZING AND DIRECTING EXECUTION OF AN INDENTURE, A LEASE, A SITE LEASE, AND CERTAIN OTHER DOCUMENTS, AUTHORIZING THE NEGOTIATION FOR THE SALE OF BONDS, AND AUTHORIZING OTHER RELATED ACTIONS WHEREAS, the City of Lynwood (the “City”) and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Lynwood Public Financing Authority (the “Authority”) for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs; and WHEREAS, the City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City; and WHEREAS, the City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”); and WHEREAS, the CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”); and WHEREAS, on April 9, 1946, the voters in the City approved a retirement tax to support the City’s contributions owed to CalPERS pursuant to the CalPERS Contract (the “Pension Tax Override”), which Pension Tax Override is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes; and WHEREAS, the City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit; and WHEREAS, the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members; and Lynwood Public Financing Authority - Page 29 of 242 Agenda Item # 3 2 WHEREAS, the Authority proposes to issue lease revenue bonds under the Bond Law for the purpose of refunding all or a portion of the CalPERS Obligation, including paying all costs of issuing the lease revenue bonds; and WHEREAS, pursuant to a Site Lease (the “Site Lease”), the City proposes to lease to the Authority certain real property (as described more fully in the Site Lease, as executed, the “Leased Property”); and WHEREAS, pursuant to a Lease Agreement, between the City and the Authority (the “Lease”), the City proposes to lease the Leased Property from the Authority, and the Authority will use the lease payments paid by the City to the Authority under the Lease to pay debt service on the lease revenue bonds; WHEREAS, the Authority proposes to sell the lease revenue bonds to Cabrera Capital Markets, LLC, as underwriter (the “Underwriter”), pursuant to a bond purchase agreement (the “Bond Purchase Agreement”); and WHEREAS, in order to comply with Government Code Section 5852.1, certain information relating to the proposed lease revenue bonds is set forth in the staff report accompanying this Resolution, and such information is hereby disclosed and made public; and WHEREAS, the Authority has duly considered these transactions and wishes at this time to approve these transactions and make certain findings regarding significant public benefits to the Authority’s members with respect to these transactions; NOW, THEREFORE, THE LYNWOOD PUBLIC FINANCING AUTHORITY DOES HEREBY FIND, PROCLAIM, ORDER AND RESOLVE AS FOLLOWS: Section 1. The Authority hereby finds and determines that the issuance of the lease revenue bonds and the transactions related thereto will result in significant public benefits to the City. Section 2. The Authority hereby authorizes the issuance of the lease revenue bonds (the “Bonds”) under the Bond Law in the maximum principal amount of not to exceed $50,000,000. The Bonds shall be issued pursuant to an Indenture of Trust between the Authority and a corporate trustee (the “Indenture”). The Authority hereby approves the Indenture in the form on file with the Secretary of the Authority (the “Secretary”), together with such additions thereto and changes therein as the Chief Administrative Officer, the Authority Finance Director, the Authority Treasurer or the designee of any of them (each, a “Authorized Officer”), deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. The Leased Property is anticipated to consist of the City’s interest in City streets; however, other real property of the City may be leased instead. The Authorized Officers, each acting alone, are hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final form of the Indenture for and in the name and Lynwood Public Financing Authority - Page 30 of 242 Agenda Item # 3 3 on behalf of the Authority. The Authority hereby authorizes the performance by the Authority of its obligations under the Indenture. Section 3. The Authority hereby approves the form of the Lease and the Site Lease by and between the Authority and the City in the form on file with the Secretary together with such additions thereto and changes therein as the Authorized Officers deem necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. The Authorized Officers, each acting alone, are hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final forms of the Lease and the Site Lease for and in the name of and on behalf of the Authority. The Authority hereby authorizes the performance by the Authority of its obligations under the Lease and the Site Lease. Section 4. The Authority shall assign to the Trustee its right to receive the lease payments from the City under an Assignment Agreement. The Authority hereby approves the Assignment Agreement in the form on file with the Secretary, together with such additions thereto and changes therein as a Authorized Officer deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. The Authorized Officers, each acting alone, are hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final form of the Assignment Agreement for and in the name and on behalf of the Authority. The Authority hereby authorizes the performance by the Authority of its obligations under the Assignment Agreement. Section 5. The Authority hereby approves the preliminary Official Statement describing the Bonds in substantially the form on file with the Secretary. Each of the Authorized Officers 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 Authority’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 Authority hereby authorizes the distribution of the final Official Statement by the Underwriter. The final Official Statement shall be executed on behalf of the Authority by an Authorized Officer. Section 6. The Authority hereby authorizes and directs an Authorized Officer to authorize the sale of the Bonds pursuant to a negotiated sale to the Underwriter. The Authority hereby approves the form of the Bond Purchase Agreement on file with the Secretary, with such additions thereto and changes therein as Authorized Officers deem necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by Lynwood Public Financing Authority - Page 31 of 242 Agenda Item # 3 4 the Authority shall be conclusive evidence of the approval of any such additions or changes, provided that no such addition or change may increase the aggregate principal amount of Bonds to be in excess of the amount specified in Section 2, or shall provide for a true interest cost in excess of 5.95% or an Underwriter’s discount (exclusive of any original issue discount) of greater than 0.8%. The Authorized Officers, each acting alone, are hereby authorized and directed to execute the Bond Purchase Agreement and to take all actions necessary to fulfill the Authority’s obligations thereunder. Section 7. Notwithstanding the foregoing references to the Bonds, the Indenture, the preliminary Official Statement and the Bond Purchase Agreement, if an Authorized Officer determines that a private placement lease financing is more advantageous to the City and the Authority, the lease payments payable by the City to the Authority may be assigned by the Authority to a private placement bank without further action of the Authority so long as the parameters included in this Resolution are met. Section 8. The Authority hereby approves the appointment of (a) Jones Hall, A Professional Law Corporation, as bond counsel and disclosure counsel; (b) Kosmont Transactions Services, Inc., as municipal advisor; and (c) Cabrera Capital Markets, LLC, as underwriter/private placement agent. The Authorized Officers, each acting alone, are hereby authorized to execute new or amended services agreements with these financing team members in connection with the issuance of the Bonds, as deemed necessary by such Authorized Officer executing the same. Section 9. The Authorized Officers, the Secretary and any and all other officers of the Authority are hereby authorized and directed, for and in the name of and on behalf of the Authority, to do any and all things and take any and all actions, including execution and delivery of any and all documents, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and documents, which they, or any of them, may deem necessary or advisable in order to consummate the transactions described herein. The Authority hereby authorizes the Authorized Officers, each acting alone, to provide for a debt service reserve fund and debt service and reserve fund insurance policies. Section 10. This Resolution shall take effect immediately upon its passage and adoption. Adoption of this Resolution is intended to start the 60 day period provided for in California Code of Civil Procedure Section 863 for an interested person to bring an action to determine the validity of the matters approved herein, including, but not limited to, the validity of the Bonds, the Indenture, the Site Lease (including the property proposed to be leased to the Authority by the City therein), and the Lease, and the legality and validity of this Resolution, the use of the proceeds of the Bonds, and the payment of the lease payments and the Bonds. Lynwood Public Financing Authority - Page 32 of 242 Agenda Item # 3 5 PASSED, APPROVED AND ADOPTED THIS 17th day of May 2022. Jorge Casanova, President ATTEST: Maria Quinonez, City Clerk/Secretary Ernie Hernandez, Chief Administrative Officer APPROVED AS TO FORM: Noel Tapia, City Attorney APPROVED AS TO CONTENT: Ernie Hernandez, Chief Administrative Officer [Insert City Clerk certification page] Lynwood Public Financing Authority - Page 33 of 242 Agenda Item # 3 Jones Hall Draft of May 11, 2022 INDENTURE OF TRUST Dated as of July 1, 2022 between U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee and the LYNWOOD PUBLIC FINANCING AUTHORITY Authorizing the Issuance of $__________ Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) Lynwood Public Financing Authority - Page 34 of 242 Agenda Item # 3 -i- TABLE OF CONTENTS ARTICLE I .................................................................................................................................. 3 DEFINITIONS; RULES OF CONSTRUCTION ...................................................................................... 3 SECTION 1.01. Definitions ........................................................................................................... 3 SECTION 1.02. Authorization ....................................................................................................... 3 SECTION 1.03. Interpretation ....................................................................................................... 3 ARTICLE II ................................................................................................................................. 3 The Bonds ................................................................................................................................. 3 SECTION 2.01. Authorization of Bonds ........................................................................................ 3 SECTION 2.02. Terms of the Bonds ............................................................................................. 4 SECTION 2.03. Transfer and Exchange of Bonds ........................................................................ 5 SECTION 2.04. Book-Entry System ............................................................................................. 6 SECTION 2.05. Registration Books .............................................................................................. 7 SECTION 2.06. Form and Execution of Bonds ............................................................................. 8 SECTION 2.07. Bonds Mutilated, Lost, Destroyed or Stolen ........................................................ 8 ARTICLE III ................................................................................................................................ 9 Issuance of Bonds; Application of Proceeds .............................................................................. 9 SECTION 3.01. Issuance of the Bonds......................................................................................... 9 SECTION 3.02. Application of Proceeds of Sale of Bonds............................................................ 9 SECTION 3.03. Establishment and Application of Costs of Issuance Fund .................................. 9 SECTION 3.04. Validity of Bonds ................................................................................................. 9 ARTICLE IV ..............................................................................................................................10 Redemption of Bonds................................................................................................................10 SECTION 4.01. Terms of Redemption........................................................................................ 10 SECTION 4.02. Selection of Bonds for Redemption ................................................................... 11 SECTION 4.03. Notice of Redemption; Rescission..................................................................... 12 SECTION 4.04. Partial Redemption of Bonds ............................................................................. 12 SECTION 4.05. Effect of Redemption ........................................................................................ 12 ARTICLE V ...............................................................................................................................13 Revenues; Funds and Accounts; Payment of Principal and Interest ..........................................13 SECTION 5.01. Security for the Bonds; Bond Fund.................................................................... 13 SECTION 5.02. Allocation of Revenues ..................................................................................... 13 SECTION 5.03. Application of Interest Account .......................................................................... 14 SECTION 5.04. Application of Principal Account ........................................................................ 14 SECTION 5.05. No Reserve Account ......................................................................................... 14 SECTION 5.06. Application of Redemption Fund ....................................................................... 14 SECTION 5.07. Insurance and Condemnation Fund .................................................................. 14 SECTION 5.08. Investments ...................................................................................................... 16 SECTION 5.09. Valuation and Disposition of Investments .......................................................... 17 ARTICLE VI ..............................................................................................................................18 Covenants of the Authority ........................................................................................................18 SECTION 6.01. Punctual Payment ............................................................................................. 18 SECTION 6.02. Extension of Payment of Bonds ........................................................................ 18 SECTION 6.03. Against Encumbrances ..................................................................................... 18 SECTION 6.04. Power to Issue Bonds and Make Pledge and Assignment ................................ 18 SECTION 6.05. Accounting Records .......................................................................................... 18 SECTION 6.06. Limitation on Additional Obligations .................................................................. 19 SECTION 6.07. Federal Tax Law ............................................................................................... 19 Lynwood Public Financing Authority - Page 35 of 242 Agenda Item # 3 -ii- SECTION 6.08. Enforcement of Lease ....................................................................................... 19 SECTION 6.09. Waiver of Laws ................................................................................................. 19 SECTION 6.10. Further Assurances ........................................................................................... 19 ARTICLE VII .............................................................................................................................19 Events of Default and Remedies ...............................................................................................19 SECTION 7.01. Events of Default ............................................................................................... 19 SECTION 7.02. Remedies Upon Event of Default ...................................................................... 20 SECTION 7.03. Application of Revenues and Other Funds After Default ................................... 21 SECTION 7.04. Trustee to Represent Bond Owners .................................................................. 21 SECTION 7.05. Limitation on Bond Owners' Right to Sue .......................................................... 22 SECTION 7.06. Absolute Obligation of Authority ........................................................................ 22 SECTION 7.07. Termination of Proceedings .............................................................................. 22 SECTION 7.08. Remedies Not Exclusive ................................................................................... 22 SECTION 7.09. No Waiver of Default ......................................................................................... 23 SECTION 7.10. Notice to Bond Owners of Default ..................................................................... 23 ARTICLE VIII ............................................................................................................................23 The Trustee ..............................................................................................................................23 SECTION 8.01. Appointment of Trustee ..................................................................................... 23 SECTION 8.02. Acceptance of Trusts; Removal and Resignation of Trustee ............................. 23 SECTION 8.03. Merger or Consolidation .................................................................................... 25 SECTION 8.04. Liability of Trustee ............................................................................................. 25 SECTION 8.05. Right to Rely on Documents.............................................................................. 28 SECTION 8.06. Preservation and Inspection of Documents ....................................................... 29 SECTION 8.07. Compensation and Indemnification ................................................................... 29 ARTICLE IX ..............................................................................................................................30 Modification or Amendment Hereof ...........................................................................................30 SECTION 9.01. Amendments Permitted ..................................................................................... 30 SECTION 9.02. Effect of Supplemental Indenture ...................................................................... 31 SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds .......................................... 31 SECTION 9.04. Amendment of Particular Bonds ........................................................................ 31 ARTICLE X ...............................................................................................................................32 Defeasance ...............................................................................................................................32 SECTION 10.01. Discharge of Indenture .................................................................................... 32 SECTION 10.02. Discharge of Liability on Bonds ....................................................................... 32 SECTION 10.03. Deposit of Money or Securities with Trustee ................................................... 33 SECTION 10.04. Unclaimed Funds ............................................................................................ 33 ARTICLE XI ..............................................................................................................................34 Miscellaneous ...........................................................................................................................34 SECTION 11.01. Liability of Authority Limited to Revenues ........................................................ 34 SECTION 11.02. Limitation of Rights to Parties and Bond Owners ............................................ 34 SECTION 11.03. Funds and Accounts ....................................................................................... 34 SECTION 11.04. Waiver of Notice; Requirement of Mailed Notice ............................................. 34 SECTION 11.05. Destruction of Bonds ....................................................................................... 35 SECTION 11.06. Severability of Invalid Provisions ..................................................................... 35 SECTION 11.07. Notices ............................................................................................................ 35 SECTION 11.08. Evidence of Rights of Bond Owners ................................................................ 35 SECTION 11.09. Disqualified Bonds .......................................................................................... 36 SECTION 11.10. Money Held for Particular Bonds ..................................................................... 36 SECTION 11.11. Waiver of Personal Liability ............................................................................. 36 SECTION 11.12. Successor Is Deemed Included in All References to Predecessor .................. 37 SECTION 11.13. Execution in Several Counterparts .................................................................. 37 Lynwood Public Financing Authority - Page 36 of 242 Agenda Item # 3 -iii- SECTION 11.14. Payment on Non-Business Day ...................................................................... 37 SECTION 11.15. Governing Law ................................................................................................ 37 APPENDIX A DEFINITIONS APPENDIX B FORM OF BOND Lynwood Public Financing Authority - Page 37 of 242 Agenda Item # 3 INDENTURE OF TRUST This INDENTURE OF TRUST (this “Indenture”), dated for convenience as of July 1, 2022, is between the LYNWOOD PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under the laws of the State of California (the “Authority”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, being qualified to accept and administer the trusts hereby created (the “Trustee”). R E C I T A L S : 1. The City of Lynwood (the “City”) and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Authority for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs. 2. The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City. 3. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”). 4. The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”). 5. The City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit, and the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members. 6. The Authority proposes to issue lease revenue bonds under the Bond Law and this Indenture for the purpose of refunding all or a portion of the City’s obligations under the CalPERS Contract, including paying all costs of issuing the lease revenue bonds and of refunding the CalPERS Contract. 7. To that end, the City has proposed to lease to the Authority certain real property (the “Leased Property”), under a Site Lease, dated as of the date hereof, by and Lynwood Public Financing Authority - Page 38 of 242 Agenda Item # 3 -2- between the City and the Authority (the “Site Lease”) in consideration of the payment by the Authority of an upfront rental payment (the “Site Lease Payment”) which is sufficient to provide funds for the refunding of the CalPERS Contract. 8. The Authority wishes to issue its Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) in the aggregate principal amount of $__________ (the “Bonds”) under this Indenture 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. 9. The Authority has leased the Leased Property back to the City under a Lease Agreement dated the date hereof (the “Lease”), under which the City has agreed to pay semiannual Lease Payments as the rental for the Leased Property thereunder. 10. The lease payments made by the City under the Lease have been assigned by the Authority to the Trustee for the security of the Bonds under an Assignment Agreement, dated the date hereof, between the Authority as assignor and the Trustee as assignee. 11. In order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and to secure the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) thereof, premium (if any) and interest thereon, the Authority has authorized the execution and delivery of this Indenture. 12. The Authority has found and determined, and hereby affirms, that all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute this Indenture 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 Indenture have been in all respects duly authorized. A G R E E M E N T : In order to secure the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and the interest and redemption premium (if any) on all the Outstanding Bonds under this Indenture according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable considerations, the receipt of which is hereby acknowledged, the Authority and the Trustee do hereby covenant and agree with one another, for the benefit of the respective Owners from time to time of the Bonds, as follows: Lynwood Public Financing Authority - Page 39 of 242 Agenda Item # 3 -3- ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION SECTION 1.01. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms defined in Appendix A attached to this Indenture have the respective meanings specified in that Appendix when used in this Indenture. SECTION 1.02. Authorization. Each of the parties hereby represents and warrants that it has full legal authority and is duly empowered to enter into this Indenture, and has taken all actions necessary to authorize the execution hereof by the officers and persons signing it. SECTION 1.03. Interpretation. (a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to include 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 shall 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 Indenture; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. ARTICLE II THE BONDS SECTION 2.01. Authorization of Bonds. The Authority has reviewed all proceedings heretofore taken and has found, as a result of such review, and hereby finds and determines that all things, conditions and acts required by law to exist, happen or be performed precedent to and in connection with the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Authority is now duly empowered, under each and every requirement of law, to issue the Bonds in the manner and form provided in this Indenture. The Authority hereby authorizes the issuance of Bonds in the aggregate principal amount of $__________ under the Bond Law for the purposes of providing funds to pay the Site Lease Payment to the City and thereby provide funds to refund all or a portion of the CalPERS Contract. The Bonds are authorized and issued under, and are subject to the terms of, this Indenture and the Bond Law. The Bonds are designated the “Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable).” Lynwood Public Financing Authority - Page 40 of 242 Agenda Item # 3 -4- SECTION 2.02. Terms of the Bonds. (a) Payment Provisions. The Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof, so long as no Bond has more than one maturity date. The Bonds shall mature on October 1 in each of the years and in the amounts, and bear interest (calculated on the basis of a 360-day year of twelve 30-day months) at the rates, as follows: Maturity Date (October 1) Principal Amount Interest Rate Issue Price (T): Term Bond Interest on the Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless: (a) 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, (b) a Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date, or (c) 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 payable on each Interest Payment Date to the persons in whose names the ownership of the Bonds 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 Lynwood Public Financing Authority - Page 41 of 242 Agenda Item # 3 -5- 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. The Trustee will pay principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of the Bonds in lawful money of the United States of America by check of the Trustee or by wire upon presentation and surrender thereof at the Office of the Trustee. SECTION 2.03. Transfer and Exchange of Bonds. (a) Transfer. 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 shall 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 or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and deliver to the transferee a new Bond or Bonds of like series, interest rate, maturity and aggregate principal amount. The Authority shall pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer of Bonds. Prior to any transfer of the Bonds outside the book-entry system (including, but not limited to, the initial transfer outside the book-entry system) the transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045, as amended. The Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information. (b) Exchange. The Bonds 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 shall 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 shall pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any exchange of Bonds. (c) Limitations. The Trustee may refuse to transfer or exchange, under the provisions of this Section 2.03, any Bonds selected by the Trustee for redemption under Article IV, or any Bonds during the period established by the Trustee for the selection of Bonds for redemption. Lynwood Public Financing Authority - Page 42 of 242 Agenda Item # 3 -6- SECTION 2.04. Book-Entry System. (a) Original Delivery. The Bonds will be initially delivered in the form of a separate single fully registered bond (which may be typewritten) for each maturity of the Bonds. Upon initial delivery, the Trustee shall register the ownership of each Bond on the Registration Books in the name of the Nominee. Except as provided in subsection (c), the ownership of all of the Outstanding Bonds shall be registered in the name of the Nominee on the Registration Books. With respect to Bonds the ownership of which shall be registered in the name of the Nominee, the Authority and the Trustee has no responsibility or obligation to any Depository System Participant or to any person on behalf of which the Nominee holds an interest in the Bonds. Without limiting the generality of the immediately preceding sentence, the Authority and the Trustee has no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Depository System Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Depository System Participant or any other person, other than a Bond Owner as shown in the Registration Books, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed if the Authority elects to redeem the Bonds in part, (iv) the payment to any Depository System Participant or any other person, other than a Bond Owner as shown in the Registration Books, of any amount with respect to principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption), premium, if any, or interest on the Bonds or (v) any consent given or other action taken by the Depository as Owner of the Bonds. The Authority and the Trustee may treat and consider the person in whose name each Bond is registered as the absolute owner of such Bond for the purpose of payment of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers of ownership of such Bond, and for all other purposes whatsoever. The Trustee shall pay the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and the interest and premium, if any, on the Bonds only to the respective Owners or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to payment of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium, if any, on the Bonds to the extent of the sum or sums so paid. No person other than a Bond Owner shall receive a Bond evidencing the obligation of the Authority to make payments of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption), interest and premium, if any, under this Indenture. Upon delivery by the Depository to the Authority of written notice to the effect that the Depository has determined to substitute a new Nominee in its place, and subject to the provisions herein with respect to Record Dates, such new nominee shall become the Nominee hereunder for all purposes; and upon receipt of such a notice the Authority shall promptly deliver a copy of the same to the Trustee. (b) Representation Letter. In order to qualify the Bonds for the Depository’s book-entry system, the Authority shall execute and deliver to such Depository a letter in which the Authority will agree to the Depository’s operational arrangements. To the extent Lynwood Public Financing Authority - Page 43 of 242 Agenda Item # 3 -7- required to do so by the Depository, the Trustee shall also execute such representation letter and agree to the Depository’s operational arrangements. The execution and delivery of such letter shall not in any way limit the provisions of subsection (a) above or in any other way impose upon the Authority or the Trustee any obligation whatsoever with respect to persons having interests in the Bonds other than the Bond Owners. In addition to the execution and delivery of such letter, the Authority may take any other actions, not inconsistent with this Indenture, to qualify the Bonds for the Depository’s book-entry program. (c) Transfers Outside Book-Entry System. If either (i) the Depository determines not to continue to act as Depository for the Bonds, or (ii) the Authority determines to terminate the Depository as such, then the Authority shall thereupon discontinue the book- entry system with such Depository. In such event, the Depository shall cooperate with the Authority and the Trustee in the issuance of replacement Bonds by providing the Trustee with a list showing the interests of the Depository System Participants in the Bonds, and by surrendering the Bonds, registered in the name of the Nominee, to the Trustee on or before the date such replacement Bonds are to be issued. The Depository, by accepting delivery of the Bonds, agrees to be bound by the provisions of this subsection (c). If, prior to the termination of the Depository acting as such, the Authority fails to identify another Securities Depository to replace the Depository, then the Bonds shall no longer be required to be registered in the Registration Books in the name of the Nominee, and, upon transfer or exchange, shall be registered in whatever name or names the Owners transferring or exchanging Bonds shall designate, in accordance with the provisions hereof. If the Authority determines that it is in the best interests of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the Authority may notify the Depository System Participants of the availability of such certificated Bonds through the Depository. In such event, the Trustee will issue, transfer and exchange Bonds as required by the Depository and others in appropriate amounts; and whenever the Depository requests, the Trustee and the Authority shall cooperate with the Depository in taking appropriate action (y) to make available one or more separate certificates evidencing the Bonds to any Depository System Participant having Bonds credited to its account with the Depository, or (z) to arrange for another Securities Depository to maintain custody of a single certificate evidencing such Bonds, all at the Authority’s expense. (d) Payments to the Nominee. Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium, if any, on such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the letter described in subsection (b) of this Section or as otherwise instructed by the Depository. SECTION 2.05. Registration Books. 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 Bonds, which shall 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 shall, 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 hereinbefore provided. Lynwood Public Financing Authority - Page 44 of 242 Agenda Item # 3 -8- SECTION 2.06. Form and Execution of Bonds. The Bonds, the form of Trustee’s certificate of authentication, and the form of assignment to appear thereon, are set forth in Appendix B attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture. The Chief Administrative Officer of the Authority shall execute, and the Secretary of the Authority shall attest each Bond. Either or both of such signatures may be made manually or may be affixed by facsimile thereof. If any officer whose signature appears on any Bond ceases to be such officer before the Closing Date, such signature will nevertheless be as effective as if the officer had remained in office until the Closing Date. Any Bond may be signed and attested on behalf of the Authority by such persons as at the actual date of the execution of such Bond are the proper officers of the Authority, duly authorized to execute debt instruments on behalf of the Authority, although on the date of such Bond any such person was not an officer of the Authority. Only those Bonds bearing a certificate of authentication in the form set forth in Appendix B, manually or electronically executed and dated by the Trustee, are valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee is conclusive evidence that such Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture. SECTION 2.07. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond is mutilated, the Authority, at the expense of the Owner of such Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. The Trustee shall cancel every mutilated Bond surrendered to it and deliver such mutilated Bond to, or upon the order of, the Authority. If any Bond is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is satisfactory and if indemnity satisfactory to the Trustee and the Authority is given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen. The Trustee may require payment of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses which may be incurred by the Trustee in connection therewith. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen will constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds issued under this Indenture. Notwithstanding any other provision of this Section 2.07, in lieu of delivering a new Bond for which principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) has become due for a Bond which has been mutilated, lost, destroyed or stolen, the Trustee may make payment of such Bond in accordance with its terms upon receipt of indemnity satisfactory to the Trustee. Lynwood Public Financing Authority - Page 45 of 242 Agenda Item # 3 -9- ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS SECTION 3.01. Issuance of the Bonds. At any time after the execution of this Indenture, the Authority may execute and the Trustee shall authenticate and, upon the Written Request of the Authority, deliver the Bonds to the Original Purchaser. SECTION 3.02. Application of Proceeds of Sale of Bonds. On the Closing Date, the Original Purchaser will pay a purchase price for the Bonds in the amount of $___________, which is equal to the original principal amount of the Bonds ($__________), less an underwriter’s discount of $___________. On the Closing Date, the Original Purchaser will wire the purchase price as follows: (a) the Original Purchaser will wire to the Trustee the amount of $_________, and the Trustee shall deposit such amount into the Costs of Issuance Fund, and (b) the Original Purchaser will wire to the City the amount of $___________, and the City will apply such amount to refund a portion of the City’s obligations under the CalPERS Contract. The Trustee may establish a temporary fund or account in its records to facilitate such deposits or transfers. The deposits described in paragraphs (a) and (b) represent the full amount of the Site Lease Payments under Section 3 of the Site Lease. SECTION 3.03. Establishment and Application of Costs of Issuance Fund. The Trustee shall establish, maintain and hold in trust a separate fund designated as the “Costs of Issuance Fund” into which the Trustee shall deposit a portion of the proceeds of sale of the Bonds under Section 3.02(c). The Trustee shall disburse amounts in the Costs of Issuance Fund from time to time to pay the Costs of Issuance upon submission of a Written Requisition of the Authority stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund. Each such Written Requisition of the Authority shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. The Trustee may conclusively rely on such Written Requisitions and shall be fully protected in relying thereon. On the date that is 3 months after the Closing Date, or upon the earlier Written Request of the Authority, the Trustee shall transfer all amounts remaining in the Costs of Issuance Fund to the Interest Account and shall thereupon close the Costs of Issuance Fund. SECTION 3.04. Validity of Bonds. The recital contained in the Bonds that the same are issued under the Constitution and laws of the State of California shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance. Lynwood Public Financing Authority - Page 46 of 242 Agenda Item # 3 -10- ARTICLE IV REDEMPTION OF BONDS SECTION 4.01. Terms of Redemption. (a) Optional Redemption. The Bonds maturing on or after October 1, 20__ are subject to redemption, as a whole or in part, at the option of the Authority, on October 1, 20___, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. The Authority must give the Trustee at least 10 days’ written notice of its intention to redeem Bonds under this subsection (a), and the manner of selecting such Bonds for redemption from among the maturities thereof, in sufficient time for the Trustee to give notice of such redemption in accordance with Section 4.03. (b) Special Mandatory Redemption From Insurance or Condemnation Proceeds. The Bonds are subject to redemption as a whole, or in part , on any date, from any Net Proceeds required to be used for such purpose as provided in Section 5.07, at a redemption price equal to 100% of the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium. (c) Mandatory Sinking Fund Redemption of Term Bonds. The Term Bonds are subject to mandatory redemption in whole, from sinking fund payments made under Section 5.02(b), at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on October 1 in the years as set forth in the following tables: Term Bonds Maturing October 1, 20___ Payment Date (October 1) Payment Amount Lynwood Public Financing Authority - Page 47 of 242 Agenda Item # 3 -11- Term Bonds Maturing October 1, 20___ Payment Date (October 1) Payment Amount If some but not all of the Term Bonds have been redeemed under subsections (a) or (b) of this Section, the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of the Term Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis as determined by the Authority, which shall notify the Trustee in writing of such determination (and such writing shall include a revised sinking fund payment schedule). SECTION 4.02. Selection of Bonds for Redemption. If less than all of the Bonds are to be redeemed, the particular maturities of Bonds to be redeemed at the option of the Authority will be determined by the Authority in its sole discretion. If the Bonds are registered in book-entry only form and so long as DTC or a successor securities depository is the sole registered owner of such Bonds, if less than all of the Bonds of a maturity are called for prior redemption, the particular Bonds or portions thereof to be redeemed shall be allocated on a pro rata pass-through distribution of principal basis in accordance with DTC procedures, provided that, so long as the Bonds are held in book-entry form, the selection for redemption of such Bonds shall be made in accordance with the operational arrangements of DTC then in effect, and, if the DTC operational arrangements do not allow for redemption on a pro rata pass-through distribution of principal basis, the Bonds will be selected for redemption, in accordance with DTC procedures, by lot. In connection with any repayment of principal, including payments of scheduled mandatory sinking fund payments, the Trustee will direct DTC to make a pass-through distribution of principal to the holders of the Bonds. For purposes of calculation of the “pro rata pass-through distribution of principal,” “pro rata” means, for any amount of principal to be paid, the application of a fraction to each denomination of the respective Bonds where (a) the numerator of which is equal to the amount due to the respective bondholders on a payment date, and (b) the denominator of which is equal to the total original par amount of the respective Bonds. If the Bonds are no longer registered in book-entry-only form, each owner will receive an amount of Bonds equal to the original face amount then beneficially held by that owner, registered in such investor’s name. Thereafter, any redemption of less than all of the Bonds of any maturity will continue to be paid to the registered owners of such Bonds on a pro-rata basis, based on the portion of the original face amount of any such Bonds to be redeemed. Lynwood Public Financing Authority - Page 48 of 242 Agenda Item # 3 -12- SECTION 4.03. Notice of Redemption; Rescission. The Trustee shall mail notice of redemption of the Bonds by first class mail, postage prepaid, not less than 20 nor more than 60 days before any redemption date, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Registration Books and to one or more Securities Depositories and to the Municipal Securities Rulemaking Board. Each notice of redemption shall state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the Bonds (or all Bonds of a single maturity) are to be redeemed, the CUSIP numbers and (in the event that not all Bonds within a maturity are called for redemption) Bond numbers of the Bonds to be redeemed and the maturity or maturities of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on the redemption date there will become due and payable on each of said Bonds the redemption price thereof, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered to the Trustee. Neither the failure to receive any notice nor any defect therein shall affect the sufficiency of the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date. Notice of redemption of Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority. Redemption notices may be conditional. The Authority has the right to rescind any notice of the redemption of Bonds under Section 4.01(a) by written notice to the Trustee on or prior to the dated fixed for redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default. The Authority and the Trustee have no liability to the Bond Owners or any other party related to or arising from such rescission of redemption. The Trustee shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under this Section. SECTION 4.04. Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered. SECTION 4.05. Effect of Redemption. Notice of redemption having been duly given as aforesaid, 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 shall become due and payable, interest on the Bonds so called for redemption shall cease to accrue, said Bonds (or portions thereof) shall cease to be entitled to any benefit or security under this Indenture, and the Owners of said Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. All Bonds redeemed under the provisions of this Article shall be canceled by the Trustee upon surrender thereof and destroyed in accordance with the retention policy of the Trustee then in effect. Lynwood Public Financing Authority - Page 49 of 242 Agenda Item # 3 -13- ARTICLE V REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST SECTION 5.01. Security for the Bonds; Bond Fund. (a) Pledge of Revenues and Other Amounts. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Revenues and all amounts (including proceeds of the sale of the Bonds) held in any fund or account established under this Indenture other than the Costs of Issuance Fund are hereby pledged to secure the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds in accordance with their terms and the provisions of this Indenture. Said pledge constitutes a lien on and security interest in the Revenues and such amounts and shall attach, be perfected and be valid and binding from and after the Closing Date, without the need for any physical delivery thereof or further act. (b) Assignment to Trustee. Under the Assignment Agreement, the Authority has transferred to the Trustee all of the rights of the Authority in the Lease (other than the rights of the Authority under Sections 4.5, 5.10, 7.3 and 8.4 thereof and its rights to give approvals and consents thereunder). The Trustee is entitled to collect and receive all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. The Trustee is also entitled to and may, subject to the provisions of Article VIII, 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. (c) Deposit of Revenues in Bond Fund. All Revenues shall be promptly deposited by the Trustee upon receipt thereof in a special fund designated as the “Bond Fund” which the Trustee shall establish, maintain and hold in trust; except that all moneys received by the Trustee and required hereunder 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 this Indenture. Any surplus remaining in the Bond Fund, after payment in full of (i) the principal of and interest on the Bonds or provision therefore under Article X, and (ii) any applicable fees and expenses to the Trustee, shall be withdrawn by the Trustee and remitted to the City. SECTION 5.02. Allocation of Revenues. On or before each Interest Payment Date, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts and subaccount (each of which the Trustee shall establish and maintain within the Bond Fund), the following amounts in the following order of priority: (a) Deposit to Interest Account. The Trustee shall deposit in the Interest Account an amount required to cause the aggregate amount on Lynwood Public Financing Authority - Page 50 of 242 Agenda Item # 3 -14- 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. (b) Deposit to Principal Account. The Trustee shall 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 (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption). SECTION 5.03. Application of Interest Account. All amounts in the Interest Account shall 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). SECTION 5.04. Application of Principal Account. All amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal amount of the Bonds at their respective maturity dates (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption). SECTION 5.05. No Reserve Account. The Authority has not established a debt service reserve fund for the Bonds. SECTION 5.06. 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 (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) and premium (if any) of the Bonds to be redeemed under Section 4.01; provided, however, that at any time prior to the selection of Bonds for redemption, the Trustee may apply such amounts to the purchase of Bonds at public or private sale, when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as shall be directed under a Written Request of the Authority, except that the purchase price (exclusive of accrued interest) may not exceed the redemption price then applicable to the Bonds. The Trustee shall be entitled to conclusively rely on any Written Request of the Authority received under this Section 5.06, and shall be fully protected in relying thereon. SECTION 5.07. Insurance and Condemnation Fund. (a) Establishment of Fund. Upon the receipt of proceeds of insurance or eminent domain with respect to the Leased Property, the Trustee shall establish and maintain an Insurance and Condemnation Fund, to be held and applied as hereinafter set forth in this Section 5.07. (b) Application of Insurance Proceeds. Any Net Proceeds of insurance against accident to or destruction of the Leased Property collected by the City or the Authority in the event of any such accident or destruction shall be paid to the Trustee under Section 6.3 of the Lease and deposited by the Trustee promptly upon receipt thereof in the Lynwood Public Financing Authority - Page 51 of 242 Agenda Item # 3 -15- Insurance and Condemnation Fund. If the City fails to determine and notify the Trustee in writing of its determination, within 90 days following the date of such deposit, to replace, repair, restore, modify or improve the Leased Property which has been damaged or destroyed, then such Net Proceeds shall be promptly transferred by the Trustee to the Redemption Fund and applied to the redemption of Bonds under Section 4.01(b). Notwithstanding the foregoing sentence, however, if the Leased Property is damaged or destroyed in full, the Net Proceeds of such insurance shall be used by the City to rebuild or replace the Leased Property if such proceeds are not sufficient to redeem Outstanding Bonds equal in aggregate principal amount to the unpaid Lease Payments allocable to the Leased Property. All proceeds deposited in the Insurance and Condemnation Fund and not so transferred to the Redemption Fund shall be applied to the prompt replacement, repair, restoration, modification or improvement of the damaged or destroyed portions of the Leased Property by the City, upon receipt of a Written Request of the City which: (i) states with respect to each payment to be made (A) the requisition number, (B) the name and address of the person to whom payment is due, (C) the amount to be paid and (D) that each obligation mentioned therein has been properly incurred, is a proper charge against the Insurance and Condemnation Fund and has not been the basis of any previous withdrawal; and (ii) specifies in reasonable detail the nature of the obligation. Any balance of the proceeds remaining after such work has been completed as certified by the City under a Written Certificate to the Trustee shall be paid to the City. The Trustee shall be entitled to conclusively rely on any Written Request or Written Certificate received under this subsection (b) of this Section 5.07 and in each case, shall be fully protected in relying thereon. (c) Application of Eminent Domain Proceeds. If all or any part of the Leased Property is taken by eminent domain proceedings (or sold to a government threatening to exercise the power of eminent domain) the Authority shall deposit or cause to be deposited with the Trustee the Net Proceeds therefrom, which the Trustee shall deposit in the Insurance and Condemnation Fund under Section 6.2(b) of the Lease and which shall be applied and disbursed by the Trustee as follows: (i) If the City has not given written notice to the Trustee, within 90 days following the date on which such Net Proceeds are deposited with the Trustee, of its determination that such Net Proceeds are needed for the replacement of the Leased Property or such portion thereof, the Trustee shall transfer such Net Proceeds to the Redemption Fund to be applied towards the redemption of the Bonds under Section 4.01(b). (ii) If the City has given written notice to the Trustee, within 90 days following the date on which such Net Proceeds are deposited with the Trustee, of its determination that such Net Proceeds are needed for replacement of the Leased Property or such portion thereof, the Trustee shall pay to the City, or to its order, from said proceeds such amounts as the City may expend for such replacement, upon the filing of Written Requisitions of the City as agent for the Authority. In each case, the Trustee may conclusively rely upon any notice received under this subsection (c)(ii) of this Section and is protected in relying thereon. Lynwood Public Financing Authority - Page 52 of 242 Agenda Item # 3 -16- (d) Reliance on Independent Advice. In making any such determination whether to repair, replace or rehabilitate the Leased Property under this Section 5.07, the City may obtain, but is not required to obtain, at its expense, the report of an independent engineer or other independent professional consultant, a copy of which must be filed with the Trustee. The Trustee shall have no duty to review or examine such report. Any such determination by the City is final. (e) Effect of Substitution or Release. Notwithstanding any other provision of this Section 5.07 or the Lease, the Trustee shall pay to the City all moneys in the Insurance and Condemnation Fund upon the Trustee’s receipt of a written notice executed by a City Representative which states that, pursuant to the Lease, the City has substituted other real property for the Leased Property that was damaged, destroyed or condemned and that there will be no abatement of the Lease Payments as a result of such damage, destruction or condemnation. SECTION 5.08. Investments. All moneys in any of the funds or accounts established with the Trustee under this Indenture shall be invested by the Trustee solely in Permitted Investments. Such investments shall be directed by the Authority in a Written Request of the Authority filed with the Trustee at least 2 Business Days in advance of the making of such investments. In the absence of any such directions from the Authority, the Trustee shall invest any such moneys in Permitted Investments which constitute money market funds; provided, however, that any such investment shall be made by the Trustee only if, prior to the date on which such investment is to be made, the Trustee shall have received a Written Request of the Authority specifying a specific money market fund and, if no such Written Request of the Authority is so received, the Trustee shall hold such moneys uninvested. Permitted Investments purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. To the extent Permitted Investments are registrable, such Permitted Investments must be registered in the name of the Trustee. All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in the Bond Fund. For purposes of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder. The Trustee or any of its affiliates may act as principal or agent in the acquisition or disposition of any investment and may impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made under this Section 5.08. Subject to applicable law, the Trustee may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or any affiliate. The Trustee or any of its affiliates may act as sponsor, advisor or manager to the investment provider in connection with any investments made by the Trustee hereunder. The Trustee is hereby authorized, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or is dealing as a principal for its own account. The Trustee may, from time to time, provide the City and the Authority with a list of investments that are available on the Trustee’s investment platform, but the Trustee will not give investment advice to the City or the Authority, and the City or the Authority may direct the Trustee to purchase investments that are not included on the list provided by the Trustee. The Lynwood Public Financing Authority - Page 53 of 242 Agenda Item # 3 -17- Trustee shall be entitled to rely conclusively on the Authority’s investment direction as to the suitability and legality of the directed investments. The Trustee shall furnish the Authority periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the Authority. Upon the Authority’s election, such statements will be delivered via the Trustee’s Online Trust and Custody service and upon electing such service, paper statements will be provided only upon request. The Authority waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by law. The Authority further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker. SECTION 5.09. Valuation and Disposition of Investments. (a) Except as otherwise provided in subsection (b) of this Section, the Authority covenants that all investments of amounts deposited in any fund or account created by or under this Indenture, or otherwise containing gross proceeds of the Bonds shall be acquired, disposed of and valued at the fair market value thereof, as determined by the Authority. The Trustee shall have no duty in connection with the determination of fair market value other than to follow the investment directions of the Authority in any Written Request of the Authority. (b) For the purpose of determining the amount in any fund or account established hereunder, the value of Permitted Investments credited to such fund shall be valued by the Trustee at least annually on or before July 15. The Trustee may sell or present for redemption, any Permitted Investment so purchased by the Trustee whenever it is necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from any such Permitted Investment. (c) To the extent of any valuations made by the Trustee hereunder, the Trustee may utilize and rely upon computerized or generally recognized securities pricing services that may be available to it, including those available through its regular accounting system (including brokers and dealers). Lynwood Public Financing Authority - Page 54 of 242 Agenda Item # 3 -18- ARTICLE VI COVENANTS OF THE AUTHORITY SECTION 6.01. Punctual Payment. The Authority shall punctually pay or cause to be paid the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on all the Bonds in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of the Revenues and other amounts pledged for such payment as provided in this Indenture. SECTION 6.02. Extension of Payment of Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon which have not been so extended. Nothing in this Section 6.02 limits the right of the Authority to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance does not constitute an extension of maturity of the Bonds. SECTION 6.03. Against Encumbrances. The Authority shall not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by this Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, and reserves the right to issue other obligations for such purposes. SECTION 6.04. Power to Issue Bonds and Make Pledge and Assignment. The Authority is duly authorized under law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues and other amounts purported to be pledged and assigned, respectively, under this Indenture and under the Assignment Agreement in the manner and to the extent provided in this Indenture and the Assignment Agreement. The Bonds and the provisions of this Indenture are and will be the legal, valid and binding special obligations of the Authority in accordance with their terms, and the Authority and the Trustee shall at all times, subject to the provisions of Article VIII and to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all the rights of the Bond Owners under this Indenture against all claims and demands of all persons whomsoever. SECTION 6.05. Accounting Records. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of Bonds and all funds and accounts established under this Indenture. The Trustee shall make such books of record and account available for inspection by the Authority and the City, during business hours, upon reasonable notice, and under reasonable circumstances. Lynwood Public Financing Authority - Page 55 of 242 Agenda Item # 3 -19- SECTION 6.06. Limitation on Additional Obligations. The Authority covenants that no additional bonds, notes or other indebtedness shall be issued or incurred which are payable out of the Revenues in whole or in part. SECTION 6.07. Federal Tax Law. The Authority does not intend the interest on the Bonds to be excluded from gross income for federal income tax purposes. SECTION 6.08. Enforcement of Lease. The Trustee shall promptly collect all amounts (to the extent any such amounts are available for collection) due from the City under the Lease. Subject to the provisions of Article VIII, the Trustee may enforce, and take all steps, actions and proceedings which are determined to be reasonably necessary for the enforcement of all of its rights thereunder as assignee of the Authority and for the enforcement of all of the obligations of the City under the Lease. SECTION 6.09. Waiver of Laws. The Authority shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in this Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law. SECTION 6.10. Further Assurances. The Authority will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES SECTION 7.01. Events of Default. The following events constitute Events of Default hereunder: (a) Failure to pay any installment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of any Bonds when due, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise. (b) Failure to pay any installment of interest on the Bonds when due. (c) Failure by the Authority to observe and perform any of the other covenants, agreements or conditions on its part contained in this Indenture or in the Bonds, if such failure has continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, has been given to the Authority by the Trustee; provided, however, if in the reasonable opinion of the Authority the failure stated in the notice can be corrected, but not Lynwood Public Financing Authority - Page 56 of 242 Agenda Item # 3 -20- within such 30-day period, such failure shall not constitute an Event of Default if the Authority institutes corrective action within such 30- day period and thereafter diligently and in good faith cures the failure in a reasonable period of time, which period shall end 180 days after the delivery of such default notice. (d) The commencement by the Authority of a voluntary case under Title 11 of the United States Code or any substitute or successor statute. (e) The occurrence and continuation of an event of default under and as defined in the Lease. SECTION 7.02. Remedies Upon Event of Default. If any Event of Default occurs, then, and in each and every such case during the continuance of such Event of Default, the Trustee may, and at the written direction of the Owners of a majority in aggregate principal amount of the Bonds at the time Outstanding shall, in each case, upon receipt of indemnification satisfactory to Trustee against the costs, expenses and liabilities to be incurred in connection with such action, upon notice in writing to the Authority, declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding; provided, however, that no such acceleration will have the effect of accelerating the City’s obligations under the Lease Agreement. Any such declaration is subject to the condition that if, at any time after such declaration and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the Authority deposits with the Trustee a sum sufficient to pay all the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and installments of interest on the Bonds payment of which is overdue, with interest on such overdue principal at the rate borne by the respective Bonds to the extent permitted by law, and the reasonable fees, charges and expenses (including those of its legal counsel, including the allocated costs of internal attorneys) of the Trustee, and any and all other Events of Default actually known to the Trustee (other than in the payment of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest on the Bonds due and payable solely by reason of such declaration) have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate has been made therefor, then, and in every such case, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Authority, the City and the Trustee, may, on behalf of the Owners of all of the Bonds, rescind and annul such declaration and its consequences and waive such Event of Default; but no such rescission and annulment shall extend to or shall affect any subsequent Event of Default, or shall impair or exhaust any right or power consequent thereon. Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Bondholder any plan of reorganization, arrangement, adjustment, or composition affecting the Bonds or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Bondholder in any such proceeding without the approval of the Bondholders so affected. Lynwood Public Financing Authority - Page 57 of 242 Agenda Item # 3 -21- SECTION 7.03. Application of Revenues and Other Funds After Default. If an Event of Default occurs and is continuing, all Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of this Indenture shall be applied by the Trustee in the following order of priority: (a) To the payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its legal counsel including outside counsel and the allocated costs of internal attorneys) incurred in and about the performance of its powers and duties under this Indenture; (b) To the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest then due on the Bonds (upon presentation of the Bonds to be paid, and stamping or otherwise noting thereon of the payment if only partially paid, or surrender thereof if fully paid) in accordance with the provisions of this Indenture, as follows: First: To the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference; Second: To the payment to the persons entitled thereto of the unpaid principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of any Bonds which shall have become due, whether at maturity or by acceleration or redemption, with interest on the overdue principal at the rate borne by the respective Bonds (to the extent permitted by law), and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the persons entitled thereto, without any discrimination or preference; and SECTION 7.04. Trustee to Represent Bond Owners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the Bonds, this Indenture and applicable provisions of any law. All rights of action under this Indenture or the Bonds may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such Bonds, subject to the provisions of this Indenture. Lynwood Public Financing Authority - Page 58 of 242 Agenda Item # 3 -22- SECTION 7.05. Limitation on Bond Owners’ Right to Sue. Notwithstanding any other provision hereof, no Owner of any Bonds has the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Lease or any other applicable law with respect to such Bonds, unless (a) such Owner has given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of the Bonds then Outstanding have requested the Trustee in writing to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) such Owner or Owners have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee has failed to comply with such request for a period of 60 days after such written request has been received by, and said tender of indemnity has been made to, the Trustee; and (e) no direction inconsistent with such written request has been given to the Trustee during such 60 day period by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding. Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right under the Bonds, this Indenture, the Lease or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of this Indenture. SECTION 7.06. Absolute Obligation of Authority. Nothing herein or in the Bonds contained affects or impairs the obligation of the Authority, which is absolute and unconditional, to pay the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds to the respective Owners of the Bonds at their respective dates of maturity, or upon acceleration or call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds. SECTION 7.07. Termination of Proceedings. In case any proceedings taken by the Trustee or by any one or more Bond Owners on account of any Event of Default have been discontinued or abandoned for any reason or have been determined adversely to the Trustee or the Bond Owners, then in every such case the Authority, the Trustee and the Bond Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the Authority, the Trustee and the Bond Owners shall continue as though no such proceedings had been taken. SECTION 7.08. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee, to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise. Lynwood Public Financing Authority - Page 59 of 242 Agenda Item # 3 -23- SECTION 7.09. No Waiver of Default. No delay or omission of the Trustee or any Owner of the Bonds to exercise any right or power arising upon the occurrence of any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein; and every power and remedy given by this Indenture to the Trustee or to the Owners of the Bonds may be exercised from time to time and as often as may be deemed expedient by the Trustee or the Bond Owners. SECTION 7.10. Notice to Bond Owners of Default. Immediately upon becoming aware of the occurrence of an Event of Default, but in no event later than five Business Days following becoming aware of such occurrence, the Trustee shall promptly give written notice thereof by first class mail, postage prepaid, to the Owner of each Outstanding Bond, unless such Event of Default has been cured before the giving of such notice; provided, however that except in the case of an Event of Default described in Sections 7.01(a) or 7.01(b), the Trustee may elect not to give such notice to the Bond Owners if and so long as the Trustee in good faith determines that it is in the best interests of the Bond Owners not to give such notice. ARTICLE VIII THE TRUSTEE SECTION 8.01. Appointment of Trustee. U.S. Bank Trust Company, National Association is hereby appointed Trustee by the Authority for the purpose of receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Authority will maintain a Trustee which is qualified under the provisions of the foregoing provisions of this Article VIII, so long as any Bonds are Outstanding. SECTION 8.02. Acceptance of Trusts; Removal and Resignation of Trustee. The Trustee hereby accepts the express trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions: (a) The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture and no implied duties or covenants shall be read into this Indenture against the Trustee. If an Event of Default has occurred (which has not been cured), the Trustee shall exercise such of the rights and powers vested in it by hereunder, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) The Authority may remove the Trustee upon 30 days’ prior notice, unless an Event of Default has occurred and is then continuing, and shall remove the Trustee (a) if at any time requested to do so by the Lynwood Public Financing Authority - Page 60 of 242 Agenda Item # 3 -24- Owners of a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or (b) if at any time the Trustee ceases to be eligible in accordance with Section 8.02, or becomes incapable of acting, or is adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property is appointed, or any public officer takes control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation. (c) The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City, and by giving the Bond Owners notice of such resignation by mail at the addresses shown on the Registration Books. (d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. In the event of the removal or resignation of the Trustee under subsections (b) or (c), respectively, the Authority shall promptly appoint a successor Trustee. If no successor Trustee has been appointed and accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the retiring Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture, must signify its acceptance of such appointment by executing and delivering to the Authority, to its predecessor Trustee a written acceptance thereof, and after payment by the Authority of all unpaid fees and expenses of the predecessor Trustee, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the Authority or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to the Leased Property held by such predecessor Trustee under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Authority shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in Lynwood Public Financing Authority - Page 61 of 242 Agenda Item # 3 -25- this subsection, the Authority shall promptly mail or cause the successor trustee to mail a notice of the succession of such Trustee to the trusts hereunder to each rating agency which is then rating the Bonds and to the Bond Owners at the addresses shown on the Registration Books. If the Authority fails to mail such notice within 15 days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Authority. (e) Any Trustee appointed under this Indenture shall be a corporation or association organized and doing business under the laws of any state or the United States of America or the District of Columbia, shall be authorized under such laws to exercise corporate trust powers, shall have (or, in the case of a corporation or association that is a member of a bank holding company system, the related bank holding company has) a combined capital and surplus of at least $50,000,000, and shall be subject to supervision or examination by a federal or state agency, so long as any Bonds are Outstanding. If such corporation or association publishes a report of condition at least annually under law or to the requirements of any supervising or examining agency above referred to, then for the purpose of this subsection (e), the combined capital and surplus of such corporation or association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If the Trustee at any time ceases to be eligible in accordance with the provisions of this subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section. SECTION 8.03. Merger or Consolidation. Any bank, national banking association, federal savings association, or trust company into which the Trustee may be merged or converted or with which it may be consolidated or any bank, national banking association, federal savings association, or trust company resulting from any merger, conversion or consolidation to which it shall be a party or any bank, national banking association, federal savings association, or trust company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such bank, national banking association, federal savings association, or trust company shall be eligible under subsection (e) of Section 8.02 shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. SECTION 8.04. Liability of Trustee. (a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee shall not assume responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of this Indenture, the Bonds or the Lease (including any right to receive moneys thereunder or the value of or title to the premises upon which the Leased Property is located), nor shall the Trustee incur any responsibility in respect thereof, other than as expressly stated herein in connection with the respective duties or obligations of Trustee herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee Lynwood Public Financing Authority - Page 62 of 242 Agenda Item # 3 -26- shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee, and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bond Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. (b) The Trustee is not liable for any error of judgment made by a responsible officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts. (c) The Trustee is not liable with respect to any action taken or omitted to be taken by it in accordance with the direction of the Owners of a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture or assigned to it under the Assignment Agreement. (d) The Trustee is not liable for any action taken by it and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. (e) The Trustee shall not be deemed to have knowledge of any Event of Default hereunder, or any other event which, with the passage of time, the giving of notice, or both, would constitute an Event of Default hereunder unless and until it shall have actual knowledge thereof, or a corporate trust officer shall have received written notice thereof at its Office from the City, the Authority or the Owners of at least 25% in aggregate principal amount of the Outstanding Bonds. Except as otherwise expressly provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance by the Authority or the City of any of the terms, conditions, covenants or agreements herein, under the Lease or the Bonds or of any of the documents executed in connection with the Bonds, or as to the existence of a default or an Event of Default or an event which would, with the giving of notice, the passage of time, or both, constitute an Event of Default. The Trustee is not responsible for the validity, effectiveness or priority of any collateral given to or held by it. Without limiting the generality of the foregoing, the Trustee shall not be required to ascertain or inquire as to the performance or observance by the City or the Authority of the terms, conditions, covenants or agreements set forth in the Lease, other than the covenants of the City to make Lease Payments to the Trustee when due and to file with the Trustee when due, such reports and certifications as the City is required to file with the Trustee thereunder. (f) No provision of this Indenture requires the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. (g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or through agents, receivers or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, receiver or attorney appointed with due care by it hereunder. (h) The Trustee has no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of the Bond Owners under this Indenture, Lynwood Public Financing Authority - Page 63 of 242 Agenda Item # 3 -27- unless such Owners have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities (including but not limited to fees and expenses of its attorneys), including, without limitations, any liability arising under federal, state or local environmental laws which might be incurred by it in compliance with such request or direction. No permissive power, right or remedy conferred upon the Trustee hereunder shall be construed to impose a duty to exercise such power, right or remedy. (i) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to the provisions of Section 8.02(a), this Section 8.04 and Section 8.05, and shall be applicable to the assignment of any rights under the Lease to the Trustee under the Assignment Agreement. (j) The Trustee is not accountable to anyone for the subsequent use or application of any moneys (including the proceeds of the Bonds) which are released or withdrawn in accordance with the provisions hereof. (k) The Trustee makes no representation or warranty, expressed or implied as to the title, value, design, compliance with specifications or legal requirements, quality, durability, operation, condition, merchantability or fitness for any particular purpose for the use contemplated by the Authority or the City of the Leased Property. In no event shall the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising from the Lease or this Indenture for the existence, furnishing or use of the Leased Property. (l) The Trustee has no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds. (m) The Trustee is authorized and directed to execute the Assignment Agreement in its capacity as Trustee hereunder. (n) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Indenture and delivered using Electronic Means ("Electronic Means" shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the Authority and/or City shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Authority and/or the City whenever a person is to be added or deleted from the listing. If the Authority and/or City elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s reasonable understanding of such Instructions shall be deemed controlling. The Authority and City understand and agree that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Authority and City shall be responsible for ensuring that only Authorized Officers transmit such Lynwood Public Financing Authority - Page 64 of 242 Agenda Item # 3 -28- Instructions to the Trustee and that the Authority, City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Authority and/or City. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Authority and City agree: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Authority and City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures. (o) In acting or omitting to act pursuant to the Assignment Agreement, the Lease or the Site Lease, the Trustee shall be entitled to all of the rights, immunities and indemnities accorded to it under this Indenture, including, but not limited to, this Article VIII. Notwithstanding the effective date of this Indenture or anything to the contrary in this Indenture, the Trustee shall have no liability or responsibility for any act or event relating to this Indenture which occurs prior to the date the Trustee formally executes this Indenture and commences acting as Trustee hereunder. (p) The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care. Force majeure shall include, but not be limited to, acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar occurrences. SECTION 8.05. Right to Rely on Documents. The Trustee shall be protected and shall incur no liability in acting or refraining from acting in reliance upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds or other paper or document believed by them to be genuine and to have been signed or presented by the proper party or parties. The Trustee is under no duty to make any investigation or inquiry as to any statements contained or matter referred to in any paper or document but may accept and conclusively rely upon the same as conclusive evidence of the truth and accuracy of any such statement or matter and shall be fully protected in relying thereon. The Trustee may consult with counsel, who may be counsel of or to the Authority, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. The Trustee may treat the Owners of the Bonds appearing in the Registration Books as the absolute owners of the Bonds for all purposes and the Trustee shall not be affected by any notice to the contrary. Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee deems it necessary or desirable that a matter be proved or established prior to Lynwood Public Financing Authority - Page 65 of 242 Agenda Item # 3 -29- taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate, Written Request or Written Requisition of the Authority or the City, and such Written Certificate, Written Request or Written Requisition shall be full warrant to the Trustee for any action taken or suffered under the provisions of this Indenture in reliance upon such Written Certificate, Written Request or Written Requisition, and the Trustee shall be fully protected in relying thereon, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. The Trustee shall have no duty to review, verify or analyze any financial statements furnished to it by the City, and shall hold such financial statements solely as a repository for Bond Owners. The Trustee shall not be deemed to have notice of any information contained therein or any Event of Default that may be disclosed therein in any manner. SECTION 8.06. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its respective possession and in accordance with its retention policy then in effect and shall, upon reasonable notice to Trustee, be subject to the inspection of the Authority, the City and any Bond Owner, and their agents and representatives duly authorized in writing, during business hours and under reasonable conditions as agreed to by the Trustee. SECTION 8.07. Compensation and Indemnification. The Authority shall pay to the Trustee from time to time, on demand, the compensation for all services rendered under this Indenture and also all reasonable expenses, advances (including any interest on advances), charges, legal (including outside counsel and the allocated costs of internal attorneys) and consulting fees and other disbursements, incurred in and about the performance of its powers and duties under this Indenture. The Authority shall indemnify the Trustee, its officers, directors, employees and agents against any cost, loss, liability, suit, claim, damages, judgment or expense whatsoever (including but not limited to fees and expenses of its attorneys) incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of this trust and this Indenture, the Assignment Agreement, the Site Lease and the Lease, including costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers hereunder or under the Assignment Agreement or the Lease. As security for the performance of the obligations of the Authority under this Section 8.07 and the obligation of the Authority to make Additional Rental Payments to the Trustee, the Trustee shall have a lien prior to the lien of the Bonds upon all property and funds held or collected by the Trustee as such. The rights of the Trustee and the obligations of the Authority under this Section 8.07 shall survive the resignation or removal of the Trustee or the discharge of the Bonds and this Indenture and the Lease. When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law. Lynwood Public Financing Authority - Page 66 of 242 Agenda Item # 3 -30- ARTICLE IX MODIFICATION OR AMENDMENT HEREOF SECTION 9.01. Amendments Permitted. (a) Amendments With Bond Owner Consent. This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time by Supplemental Indenture, which the Authority and the Trustee may enter into when the written consents of the Owners of a majority in aggregate principal amount of all Bonds then Outstanding are filed with the Trustee. No such modification or amendment may (i) extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture except as permitted herein, or deprive the Owners of the Bonds of the lien created by this Indenture on such Revenues and other assets (except as expressly provided in this Indenture), without the consent of the Owners of all of the Bonds then Outstanding. It is not necessary for the consent of the Bond Owners to approve the particular form of any Supplemental Indenture, but it is sufficient if such consent approves the substance thereof. (b) Amendments Without Owner Consent. This Indenture and the rights and obligations of the Authority, of the Trustee and the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority and the Trustee may enter into without the consent of any Bond Owners, if the Trustee has been furnished an opinion of counsel that the provisions of such Supplemental Indenture shall not materially adversely affect the interests of the Owners of the Bonds, including, without limitation, for any one or more of the following purposes: (i) to add to the covenants and agreements of the Authority in this Indenture contained, other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority; (ii) to cure any ambiguity, inconsistency or omission, or to cure or correct any defective provision, contained in this Indenture, or in regard to matters or questions arising under this Indenture, as the Authority deems necessary or desirable, provided that such modification or amendment does not materially adversely affect the interests of the Bond Owners, in the opinion of Bond Counsel filed with the Trustee; (iii) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to Lynwood Public Financing Authority - Page 67 of 242 Agenda Item # 3 -31- add such other terms, conditions and provisions as may be permitted by said act or similar federal statute; or (iv) to facilitate the issuance of additional obligations of the City under the Lease Agreement as provided in Section 7.5(b)(iv) thereof. (c) Limitation. The Trustee is not obligated to enter into any Supplemental Indenture authorized by subsections (a) or (b) of this Section 9.01 which materially adversely affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise. (d) Bond Counsel Opinion Requirement. Prior to the Trustee entering into any Supplemental Indenture hereunder, the Authority shall deliver to the Trustee an opinion of Bond Counsel stating, in substance, that such Supplemental Indenture has been adopted in compliance with the requirements of this Indenture. (e) Notice of Amendments. The Authority shall deliver or cause to be delivered a draft of any Supplemental Indenture to each rating agency which then maintains a rating on the Bonds, at least 10 days prior to the effective date of such Supplemental Indenture under this Section 9.01. SECTION 9.02. Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture under this Article IX, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the Trustee and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the execution of any Supplemental Indenture under this Article may, and if the Authority so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand on the Owner of any Bonds Outstanding at the time of such execution and presentation of his Bonds for the purpose at the Office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand on the Owners of any Bonds then Outstanding shall be exchanged at the Office of the Trustee, without cost to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amount of the same maturity. SECTION 9.04. Amendment of Particular Bonds. The provisions of this Article IX do not prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such Owner. Lynwood Public Financing Authority - Page 68 of 242 Agenda Item # 3 -32- ARTICLE X DEFEASANCE SECTION 10.01. Discharge of Indenture. Any or all of the Outstanding Bonds may be paid by the Authority in any of the following ways, provided that the Authority also pays or causes to be paid any other sums payable hereunder by the Authority: (a) by paying or causing to be paid the principal of and interest and premium (if any) on such Bonds, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem such Bonds; or (c) by delivering all of such Bonds to the Trustee for cancellation. If the Authority also pays or causes to be paid all other sums payable hereunder by the Authority, then and in that case, at the election of the Authority (evidenced by a Written Certificate of the Authority, filed with the Trustee, signifying the intention of the Authority to discharge all such indebtedness and this Indenture), and notwithstanding that any of such Bonds shall not have been surrendered for payment, this Indenture and the pledge of Revenues and other assets made under this Indenture with respect to such Bonds and all covenants, agreements and other obligations of the Authority under this Indenture with respect to such Bonds shall cease, terminate, become void and be completely discharged and satisfied, subject to Section 10.02, and except for Section 8.07 hereof, which shall survive. In such event, upon the Written Request of the Authority, the Trustee shall execute and deliver to the Authority all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver to the City all moneys or securities or other property held by it under this Indenture which are not required for the payment or redemption of any of such Bonds not theretofore surrendered for such payment or redemption. The Trustee is entitled to conclusively rely on any such Written Certificate or Written Request and, in each case, is fully protected in relying thereon. SECTION 10.02. Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem any Outstanding Bonds (whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed prior to maturity, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the Authority in respect of such Bonds shall cease, terminate and be completely discharged, and the Owners thereof shall thereafter be entitled only to payment out of such money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 10.04. The Authority may at any time surrender to the Trustee, for cancellation by the Trustee, any Bonds previously issued and delivered, which the Authority may have Lynwood Public Financing Authority - Page 69 of 242 Agenda Item # 3 -33- acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired. SECTION 10.03. Deposit of Money or Securities with Trustee. Whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any Bonds, the money or securities so to be deposited or held may include money or securities held by the Trustee in the funds and accounts established under this Indenture and shall be: (a) lawful money of the United States of America in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity, except that, in the case of Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be equal to the principal amount (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of such Bonds, premium, if any, and all unpaid interest thereon to the redemption date; or (b) non-callable Federal Securities, the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest on which when due will, in the written opinion of an Independent Accountant filed with the City, the Authority and the Trustee, provide money sufficient to pay the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds to be paid or redeemed, as such principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption), interest and premium become due, provided that in the case of Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee has been made for the giving of such notice; provided, in each case, that (i) the Trustee shall have been irrevocably instructed (by the terms of this Indenture or by Written Request of the Authority) to apply such money to the payment of such principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption), interest and premium (if any) with respect to such Bonds, and (ii) the Authority shall have delivered to the Trustee an opinion of Bond Counsel to the effect that such Bonds have been discharged in accordance with this Indenture (which opinion may rely upon and assume the accuracy of the Independent Accountant’s opinion referred to above). The Trustee shall be entitled to conclusively rely on such Written Request or opinion and shall be fully protected, in each case, in relying thereon. SECTION 10.04. Unclaimed Funds. Notwithstanding any provisions of this Indenture, any moneys held by the Trustee in trust for the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of, or interest on, any Bonds and remaining unclaimed for 2 years after Lynwood Public Financing Authority - Page 70 of 242 Agenda Item # 3 -34- the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of all of the Bonds has become due and payable (whether at maturity or upon call for redemption or by acceleration as provided in this Indenture), if such moneys were so held at such date, or 2 years after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall be repaid (without liability for interest) to the Authority free from the trusts created by this Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee shall (at the cost of the Authority) first mail to the Owners of Bonds which have not yet been paid, at the addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof. ARTICLE XI MISCELLANEOUS SECTION 11.01. Liability of Authority Limited to Revenues. Notwithstanding anything in this Indenture or in the Bonds contained, the Authority is not required to advance any moneys derived from any source other than the Revenues, the Additional Rental Payments and other assets pledged under this Indenture for any of the purposes in this Indenture mentioned, whether for the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of or interest on the Bonds or for any other purpose of this Indenture. Nevertheless, the Authority may, but is not required to, advance for any of the purposes hereof any funds of the Authority which may be made available to it for such purposes. SECTION 11.02. Limitation of Rights to Parties and Bond Owners. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any person other than the Authority, the Trustee, the City and the Owners of the Bonds, any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Authority, the Trustee, the City and the Owners of the Bonds. SECTION 11.03. Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with corporate industry standards to the extent practicable, and with due regard for the requirements of Section 6.05 and for the protection of the security of the Bonds and the rights of every Owner thereof. The Trustee may establish such funds and accounts as it deems necessary or appropriate to perform its obligations under this Indenture. SECTION 11.04. Waiver of Notice; Requirement of Mailed Notice. Whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such notice Lynwood Public Financing Authority - Page 71 of 242 Agenda Item # 3 -35- may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Whenever in this Indenture any notice is required to be given by mail, such requirement may be satisfied by the deposit of such notice in the United States mail, postage prepaid, by first class mail. SECTION 11.05. Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee, and the delivery to the Authority, of any Bonds, the Trustee shall destroy such Bonds as may be allowed by law and, upon the Authority’s request, deliver a certificate of such destruction to the Authority. SECTION 11.06. Severability of Invalid Provisions. If any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Authority hereby declares that it would have entered into this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable. SECTION 11.07. Notices. All notices or communications to be given under this Indenture shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective either (a) upon transmission by facsimile transmission or other form of telecommunication, confirmed by telephone, (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 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/Authority: City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attn: City Manager/Chief Administrative Officer If to the Trustee: U.S. Bank Trust Company, National Association U.S. Bank Tower 633 West 5th Street, 24th Floor Los Angeles, CA 90071 Attn: Corporate Trust Services SECTION 11.08. Evidence of Rights of Bond Owners. Any request, consent or other instrument required or permitted by this Indenture to be signed and executed by Bond Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bond Owners in person or by an agent or agents duly appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, or of the holding by any person of Bonds transferable by delivery, shall be sufficient for any purpose of this Indenture and Lynwood Public Financing Authority - Page 72 of 242 Agenda Item # 3 -36- shall be conclusive in favor of the Trustee and the Authority if made in the manner provided in this Section 11.08. The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the person signing such request, consent or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer. The ownership of Bonds shall be proved by the Registration Books. Any request, consent, or other instrument or writing of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in accordance therewith or reliance thereon. SECTION 11.09. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are actually known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any other obligor on the Bonds, or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination unless all Bonds are so owned or held, in which case such Bonds shall be considered Outstanding for the purpose of such determination.. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City or any other obligor on the Bonds. In case of a dispute as to such right, the Trustee shall be entitled to rely upon the advice of counsel in any decision by Trustee and shall be fully protected in relying thereon. Upon request, the Authority and the City shall certify to the Trustee those Bonds disqualified under this Section 11.09, and the Trustee may conclusively rely on such certifications. SECTION 11.10. Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, premium, if any, or principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) due on any date with respect to particular Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.04 but without any liability for interest thereon. SECTION 11.11. Waiver of Personal Liability. No member, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of or interest or premium (if any) on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing herein Lynwood Public Financing Authority - Page 73 of 242 Agenda Item # 3 -37- contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or by this Indenture. SECTION 11.12. Successor Is Deemed Included in All References to Predecessor. Whenever in this Indenture either the Authority, the City or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Authority, the City or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. SECTION 11.13. Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. SECTION 11.14. Payment on Non-Business Day. In the event any payment is required to be made hereunder on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and with the same effect as if made on such preceding non-Business Day. SECTION 11.15. Governing Law. This Indenture shall be governed by and construed in accordance with the laws of the State of California. Lynwood Public Financing Authority - Page 74 of 242 Agenda Item # 3 -38- IN WITNESS WHEREOF, the LYNWOOD PUBLIC FINANCING AUTHORITY has caused this Indenture to be signed in its name by its Chief Administrative Officer and attested to by its Secretary, and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written. LYNWOOD PUBLIC FINANCING AUTHORITY By Ernie Hernandez Chief Administrative Officer Attest: Maria Quiñonez Secretary U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By Authorized Officer Lynwood Public Financing Authority - Page 75 of 242 Agenda Item # 3 A-1 APPENDIX A DEFINITIONS “Additional Rental Payments” means the amounts of additional rental which are payable by the City under Section 4.5 of the Lease or which are otherwise identified as Additional Rental Payments under the Lease. “Assignment Agreement” means the Assignment Agreement dated as of July 1, 2022, between the Authority as assignor and the Trustee as assignee, as originally executed or as thereafter amended. “Authority” means the Lynwood Public Financing Authority, a joint exercise of powers authority duly organized and existing under the laws of the State of California. “Authorized Representative” means: (a) with respect to the Authority, its President, Chief Administrative Officer, Authority Finance Director, Treasurer, General Counsel or any other person designated as an Authorized Representative of the Authority by a Written Certificate of the Authority signed by its Chief Administrative Officer and filed with the City and the Trustee; and (b) with respect to the City, its Mayor, City Manager, Finance Director, Treasurer, City Attorney or any other person designated as an Authorized Representative of the City by a Written Certificate of the City signed by its City Manager and filed with the Authority and the Trustee. “Bond Counsel” means (a) Jones Hall, A Professional Law Corporation, or (b) any other attorney or firm of attorneys appointed by or acceptable to the Authority of nationally- recognized experience in the issuance of municipal bonds. “Bond Fund” means the fund by that name established and held by the Trustee under Section 5.01. “Bond Year” means each twelve-month period extending from October 2 in one calendar year to October 1 of the succeeding calendar year, both dates inclusive; except that the first Bond Year commences on the Closing Date and extends to and including October 1, 2022. “Bonds” means the $__________ aggregate principal amount of Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) authorized by and at any time Outstanding under this Indenture. “Business Day” means a day (other than a Saturday or a Sunday) on which banks are not required or authorized to remain closed in the City in which the Office of the Trustee is located. “City” means the Lynwood, a general law city and municipal corporation organized and existing under the Constitution and laws of the State of California. “Closing Date” means _________, 2022, the date of delivery of the Bonds to the Original Purchaser. Lynwood Public Financing Authority - Page 76 of 242 Agenda Item # 3 A-2 “Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City relating to the authorization, issuance, sale and delivery of the Bonds, including but not limited to: printing expenses; rating agency fees; filing and recording fees; initial fees, expenses and charges of the Trustee and their respective counsel, including the Trustee’s first annual administrative fee; fees, charges and disbursements of attorneys, financial advisors, accounting firms, consultants and other professionals; fees and charges for preparation, execution and safekeeping of the Bonds; and any other cost, charge or fee in connection with the original issuance of the Bonds. “Costs of Issuance Fund” means the fund by that name established and held by the Trustee under Section 3.03. “Depository” means (a) initially, DTC, and (b) any other Securities Depositories acting as Depository under Section 2.04. “Depository System Participant” means any participant in the Depository’s book- entry system. “DTC” means The Depository Trust Company, and its successors and assigns. “Event of Default” means any of the events specified in Section 7.01. “Federal Securities” means: (a) any direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), for which the full faith and credit of the United States of America are pledged; (b) obligations of any agency, department or instrumentality of the United States of America, the timely payment of principal of and interest on which are directly or indirectly secured or guaranteed by the full faith and credit of the United States of America. “Fiscal Year” means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the Authority as its official fiscal year period. “Indenture” means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture under the provisions hereof. “Independent Accountant” means any certified public accountant or firm of certified public accountants appointed and paid by the Authority or the City, and who, or each of whom (a) is in fact independent and not under domination of the Authority or the City; (b) does not have any substantial interest, direct or indirect, in the Authority or the City; and (c) is not connected with the Authority or the City as an officer or employee of the Authority or the City but who may be regularly retained to make annual or other audits of the books of or reports to the Authority or the City. “Insurance and Condemnation Fund” means the fund by that name established and held by the Trustee under Section 5.07. Lynwood Public Financing Authority - Page 77 of 242 Agenda Item # 3 A-3 “Interest Account” means the account by that name established and held by the Trustee in the Bond Fund under Section 5.02. “Interest Payment Date” means each April 1 and October 1, commencing October 1, 2022, so long as any Bonds remain unpaid. “Law” has the meaning given that term in the Recitals. “Lease” means the Lease Agreement dated as of July 1, 2022, between the Authority as lessor and the City as lessee of the Leased Property, as originally executed and as it may from time to time be supplemented, modified or amended in accordance with the terms thereof and of this Indenture. “Lease Payment Date” means, with respect to any Interest Payment Date, the Business Day immediately preceding such Interest Payment Date. “Lease Payments” means the amounts payable by the City under Section 4.3(a) of the Lease, including any prepayment thereof and including any amounts payable upon a delinquency in the payment thereof. “Leased Property” means the real property described in Appendix A to the Lease. “Net Proceeds” means amounts derived from any policy of casualty insurance with respect to the Leased Property, or the proceeds of any taking of the Leased Property or any portion thereof in eminent domain proceedings (including sale under threat of such proceedings), to the extent remaining after payment therefrom of all expenses incurred in the collection and administration thereof. “Nominee” means (a) initially, Cede & Co. as nominee of DTC, and (b) any other nominee of the Depository designated under Section 2.04(a). “Office” means the corporate trust office of the Trustee in Los Angeles, or such other or additional offices as the Trustee may designate in writing to the Authority from time to time as the corporate trust office for purposes of the Indenture; except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term means the office or agency of the Trustee at which, at any particular time, its corporate trust agency business is conducted. “Original Purchaser” means Cabrera Capital Markets, LLC, as original underwriter of the Bonds upon their delivery by the Trustee on the Closing Date. “Outstanding”, when used as of any particular time with reference to Bonds, means all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section 10.02, including Bonds (or portions thereof) described in Section 11.09; and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee under this Indenture. Lynwood Public Financing Authority - Page 78 of 242 Agenda Item # 3 A-4 “Owner”, whenever used herein with respect to a Bond, means the person in whose name the ownership of such Bond is registered on the Registration Books. “Permitted Encumbrances” means, as of any time: (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may permit to remain unpaid under Article V of the Lease; (b) the Site Lease, the Lease and the Assignment Agreement; (c) any right or claim of any mechanic, laborer, material man, supplier or vendor not filed or perfected in the manner prescribed by law; and (d) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record and which the City certifies in writing will not materially impair the use of the Leased Property for its intended purposes. “Permitted Investments” means any of the following: (a) any direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), for which the full faith and credit of the United States of America are pledged. (b) obligations of any agency, department or instrumentality of the United States of America, the timely payment of principal and interest on which are directly or indirectly secured or guaranteed by the full faith and credit of the United States of America. (c) Any direct or indirect obligations of an agency or department of the United States of America whose obligations represent the full faith and credit of the United States of America, or which are rated A or better by S&P. (d) Interest-bearing deposit accounts (including certificates of deposit placed by a third party pursuant to a separate agreement between the Authority and the Trustee), time deposits, bank deposit products, trust funds, trust accounts, interest bearing deposits, overnight bank deposits or interest bearing money market accounts in federal or State chartered savings and loan associations or in federal or State of California banks (including the Trustee or any of its affiliates), provided that: (i) the unsecured obligations of such commercial bank or savings and loan association are rated A or better by S&P; or (ii) such deposits are fully insured by the Federal Deposit Insurance Corporation or secured at all times by collateral described in (a) or (b) above. (e) Commercial paper rated at the time of purchase “A-1+” or better by S&P. (f) Federal funds or bankers acceptances with a maximum term of one year of any bank (which may include the Trustee and its affliates) which an unsecured, uninsured and unguaranteed obligation rating of “A-1+” or better by S&P. Lynwood Public Financing Authority - Page 79 of 242 Agenda Item # 3 A-5 (g) Money market mutual funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of at least AAAm-G, AAAm or AAm, which funds may include funds for which the Trustee, its affiliates, parent or subsidiaries provide investment advisory, custodial, transfer agency or other management services, and for which they receive and retain a fee for such services provided to the fund. Money market funds permitted under this paragraph shall not include funds with a floating net asset value. (h) Obligations the interest on which is excludable from gross income pursuant to Section 103 of the Tax Code and which are either (a) rated A or better by S&P, or (b) fully secured as to the payment of principal and interest by Permitted Investments described in clauses (a) or (b). (i) Obligations issued by any corporation organized and operating within the United States of America having assets in excess of $500,000,000, which obligations are rated A or better by S&P. (j) Bonds or notes issued by any state or municipality which are rated A or better by S&P. (k) Any investment agreement with, or guaranteed by, a financial institution the long-term unsecured obligations or the claims paying ability of which are rated A or better by S&P at the time of initial investment, by the terms of which all amounts invested thereunder are required to be withdrawn and paid to the Trustee in the event either of such ratings at any time falls below A. (l) The Local Agency Investment Fund of the State of California, created pursuant to Section 16429.1 of the California Government Code, to the extent the Trustee is authorized to register such investment in its name. “Principal Account” means the account by that name established and held by the Trustee in the Bond Fund under Section 5.02. “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. “Redemption Fund” means the fund by that name established and held by the Trustee under Section 5.06. “Registration Books” means the records maintained by the Trustee under Section 2.05 for the registration and transfer of ownership of the Bonds. “Revenues” means: (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, Lynwood Public Financing Authority - Page 80 of 242 Agenda Item # 3 A-6 and whether paid from any source), but excluding (i) any amounts described in Section 7.5(b)(iv) of the Lease, and (ii) any Additional Rental Payments; and (b) all interest, profits or other income derived from the investment of amounts in any fund or account established under this Indenture. “Securities Depositories” means DTC; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other securities depositories as the Authority designates in written notice filed with the Trustee. “Site Lease” means the Site Lease dated as of July 1, 2022, between the City as lessor and the Authority as lessee, as amended from time to time in accordance with its terms. “Site Lease Payment” means the amount payable by the Authority to the City on the Closing Date under Section 3 of the Site Lease. “S&P” means S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC business, its successors and assigns. “Supplemental Indenture” means any indenture hereafter duly authorized and entered into between the Authority and the Trustee, supplementing, modifying or amending this Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. “Term” means, with reference to the Lease, the time during which the Lease is in effect, as provided in Section 4.2 thereof. “Term Bonds” means the Bonds maturing on October 1 in each of the years 20___ and 20___. “Trustee” means U.S. Bank Trust Company, National Association, a national banking association organized and existing under the laws of United States of America, or its successor or successors, as Trustee hereunder as provided in Article VIII. “Written Certificate,” “Written Request” and “Written Requisition” of the Authority or the City mean, respectively, a written certificate, request or requisition signed in the name of the Authority or the City by its Authorized Representative. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. Lynwood Public Financing Authority - Page 81 of 242 Agenda Item # 3 B-1 APPENDIX B BOND FORM NO. R- ***$ *** UNITED STATES OF AMERICA STATE OF CALIFORNIA Lynwood Public Financing Authority LEASE REVENUE BONDS, SERIES 2022 (FEDERALLY TAXABLE) INTEREST RATE: MATURITY DATE: ORIGINAL ISSUE DATE: CUSIP: ______% October 1, ____ _______, 2022 _______ REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: *** *** The LYNWOOD PUBLIC FINANCING AUTHORITY, a public body corporate and politic duly organized and existing under the laws of the State of California (the “Authority”), for value received, hereby promises to pay to the Registered Owner specified above or registered assigns (the “Registered Owner”), on the Maturity Date specified above (subject to any right of prior redemption hereinafter provided for), the Principal Amount specified above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond unless (i) this Bond is authenticated on or before an Interest Payment Date and after the close of business on the 15th day of the month preceding such interest payment date, in which event it shall bear interest from such Interest Payment Date, or (ii) this Bond is authenticated on or before September 15, 2022, in which event it shall bear interest from the Original Issue Date specified above; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on this Bond, at the Interest Rate per annum specified above, payable semiannually on April 1 and October 1 in each year, commencing October 1, 2022 (the “Interest Payment Dates”), calculated on the basis of a 360-day year composed of twelve 30-day months. Principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) hereof and premium, if any, upon early redemption hereof are payable upon presentation and surrender hereof at the designated corporate trust office of U.S. Bank Trust Company, National Association (the “Trust Office”), as Lynwood Public Financing Authority - Page 82 of 242 Agenda Item # 3 B-2 trustee (the “Trustee”). Interest hereon is payable by check of the Trustee mailed to the Registered Owner hereof at the Registered Owner’s address as it appears on the registration books of the Trustee as of the close of business on the fifteenth day of the month preceding each Interest Payment Date (a “Record Date”), or, upon written request filed with the Trustee as of such Record Date by a registered owner of at least $1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available funds to an account in the United States designated by such registered owner in such written request. This Bond is not a debt of the City of Lynwood (the “City”), the County of Los Angeles, the State of California, or any of its political subdivisions, and neither the City, said County, said State, nor any of its political subdivisions, is liable hereon nor in any event shall this Bond be payable out of any funds or properties of the Authority other than the Revenues. This Bond is one of a duly authorized issue of bonds of the Authority designated as the “Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable)” (the “Bonds”), in an aggregate principal amount of $__________, all of like tenor and date (except for such variation, if any, as may be required to designate varying numbers, maturities, interest rates or redemption provisions) and all issued under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, and under an Indenture, dated as of July 1, 2022, between the Authority and the Trustee (the “Indenture”) and a resolution of the Authority adopted on _____________, 2022, authorizing the issuance of the Bonds. Reference is hereby made to the Indenture (copies of which are on file at the office of the Authority) and all supplements thereto for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues, and the rights thereunder of the owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Authority thereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees. The Bonds have been issued by the Authority for the purpose of refunding all or a portion of the City’s obligations under the CalPERS Contract (as defined in the Indenture), including paying all costs of issuing the Bonds and of refunding the CalPERS Contract. This Bond and the interest and premium, if any, hereon are special obligations of the Authority, payable from the Revenues, and secured by a charge and lien on the Revenues as defined in the Indenture, consisting principally of lease payments made by the City under a Lease Agreement dated as of July 1, 2022, between the Authority as lessor and the City as lessee (the “Lease”). As and to the extent set forth in the Indenture, all of the Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds. The rights and obligations of the Authority and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the owner of each Bond so affected. Lynwood Public Financing Authority - Page 83 of 242 Agenda Item # 3 B-3 The Bonds maturing on or after October 1, 20___ are subject to redemption, as a whole or in part, at the option of the Authority, on October 1, 20___, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. The Bonds are subject to redemption as a whole, or in part, on any date, to the extent of any net proceeds of hazard insurance with respect to the property which has been leased under the Lease (the “Leased Property”) or any portion thereof which are not used to repair or replace the Leased Property pursuant to the Lease, or to the extent of any net proceeds arising from the disposition of the Leased Property or any portion thereof in eminent domain proceedings which the City elects to be used for such purpose pursuant to the Lease, at a redemption price equal to the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium. The Bonds maturing on October 1 in each of the years 20___ and 20___ are subject to mandatory redemption, in part, from sinking fund payments made under the Indenture, at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on October 1 in the respective years as set forth in the following tables: Term Bonds Maturing October 1, 20___ Payment Date (October 1) Payment Amount Term Bonds Maturing October 1, 20___ Payment Date (October 1) Payment Amount As provided in the Indenture, notice of redemption will be mailed by the Trustee by first class mail not less than 20 nor more than 60 days prior to the redemption date to the respective owners of any Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, but neither failure to receive such notice nor any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption Lynwood Public Financing Authority - Page 84 of 242 Agenda Item # 3 B-4 or the cessation of accrual of interest thereon from and after the date fixed for redemption. Notice of any optional redemption of the Bonds may be conditional and may be rescinded under the circumstances set forth in the Indenture, upon notice to the owners of such Bonds. If this Bond is called for redemption and payment is duly provided therefor as specified in the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption. This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Trust Office, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon registration of such transfer, a new Bond or Bonds, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. This Bond may be exchanged at the Trust Office for Bonds of the same tenor, aggregate principal amount, interest rate and maturity, of other authorized denominations. The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Authority or the Trustee for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. It is hereby certified by the Authority that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due and regular time, form and manner as required by the Ordinance and the laws of the State of California and that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Ordinance or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture. The Bonds are legally and validly issued under the Constitution and laws of the State of California. This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been manually signed by the Trustee. Lynwood Public Financing Authority - Page 85 of 242 Agenda Item # 3 B-5 IN WITNESS WHEREOF, the Lynwood Public Financing Authority has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Chief Administrative Officer and attested to by the facsimile signature of its Secretary, all as of the Original Issue Date specified above. Lynwood Public Financing Authority By Chief Administrative Officer Attest: Secretary FORM OF CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within-mentioned Indenture. Dated: U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By Authorized Signatory Lynwood Public Financing Authority - Page 86 of 242 Agenda Item # 3 B-6 FORM OF ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto __________________________________ whose address and social security or other tax identifying number is ____________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) ________________________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises. Dated: Signature Guaranteed: Note: Signature(s) must be guaranteed by an eligible guarantor institution. Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. Lynwood Public Financing Authority - Page 87 of 242 Agenda Item # 3 Jones Hall Draft of May 11, 2022 SITE LEASE This SITE LEASE (this “Site Lease”), dated for convenience as of July 1, 2022, is between the CITY OF LYNWOOD, a general law city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, as lessor (the “City”), and the LYNWOOD PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under the laws of the State of California, as lessee (the “Authority”). B A C K G R O U N D : 1. The City and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Authority for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs. 2. The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City. 3. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”). 4. The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”). 5. The City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit, and the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members. 6. The Authority proposes to issue lease revenue bonds under the Bond Law and an Indenture, dated as of July 1, 2022 (the “Indenture”), for the purpose of refunding all or a portion of the City’s obligations under the CalPERS Contract, including paying all costs of issuing the lease revenue bonds and of refunding the CalPERS Contract. Lynwood Public Financing Authority - Page 88 of 242 Agenda Item # 3 -2- 7. To that end, the City has proposed to lease to the Authority certain real property described in Appendix A attached hereto and by this reference incorporated herein (the “Leased Property”), under this Site Lease, in consideration of the payment by the Authority of an upfront rental payment (the “Site Lease Payment”) which is sufficient to provide funds for refunding of the CalPERS Contract. 8. The Authority has authorized the issuance of its Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) (the “Bonds”) under the Indenture 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. 9. 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 a Lease Agreement dated as of July 1, 2022 (the “Lease”), under which the City has agreed to pay semiannual Lease Payments as the rental for the Leased Property thereunder. 10. The lease payments made by the City under the Lease have been assigned by the Authority to the Trustee for the security of the Bonds under an Assignment Agreement dated as of July 1, 2022, between the Authority as assignor and the Trustee as assignee. A G R E E M E N T : 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 (as defined in the Indenture) and ends on the date on which the Indenture is discharged in accordance with Section 10.03 thereof, but under any circumstances not later than October 1, 20__. 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. Lynwood Public Financing Authority - Page 89 of 242 Agenda Item # 3 -3- 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. SECTION 6. Substitution or Release of Property. If the City exercises its option under Section 3.2 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 3.3 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. Lynwood Public Financing Authority - Page 90 of 242 Agenda Item # 3 -4- 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 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 City/Authority: City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attn: City Manager/Chief Administrative Officer If to the Trustee: U.S. Bank Trust Company, National Association U.S. Bank Tower 633 West 5th Street, 24th Floor Los Angeles, CA 90071 Attn: Corporate Trust Services 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; Lynwood Public Financing Authority - Page 91 of 242 Agenda Item # 3 -5- (ii) to conform to any amendment of the Indenture which is made thereto in accordance with Section 9.01 of the Indenture; or (iii) 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 Constitution and 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. Lynwood Public Financing Authority - Page 92 of 242 Agenda Item # 3 -6- 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. CITY OF LYNWOOD, as lessor By Ernie Hernandez City Manager Attest: Maria Quiñonez City Clerk LYNWOOD PUBLIC FINANCING AUTHORITY, as lessee By Ernie Hernandez Chief Administrative Officer Attest: Maria Quiñonez Secretary Lynwood Public Financing Authority - Page 93 of 242 Agenda Item # 3 A-1 APPENDIX A DESCRIPTION OF THE LEASED PROPERTY The Leased Property consists of the City’s interest in the roadway portion of the City’s public streets, whether fee simple or easement, including arterial/collector streets, local streets and alleys, as described in the attached list. [List of City streets to come] Lynwood Public Financing Authority - Page 94 of 242 Agenda Item # 3 Jones Hall Draft of May 11, 2022 LEASE AGREEMENT Dated as of July 1, 2022 between the Lynwood Public Financing Authority, as lessor and the City of Lynwood, as lessee Relating to $___________ Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) Lynwood Public Financing Authority - Page 95 of 242 Agenda Item # 3 -i- TABLE OF CONTENTS ARTICLE I ................................................................................................................. 2 Definitions; Rules of Interpretation ............................................................................. 2 SECTION 1.1. Definitions ............................................................................................................ 2 SECTION 1.2. Interpretation ....................................................................................................... 2 ARTICLE II ................................................................................................................ 3 Covenants, Representations and Warranties ............................................................ 3 SECTION 2.1. Covenants, Representations and Warranties of the City .................................... 3 SECTION 2.2. Covenants, Representations and Warranties of the Authority ............................ 4 ARTICLE III ............................................................................................................... 6 Deposit and Application of Funds; Acquisition and Construction of the Project; Substitution and Release of Property ........................................................... 6 SECTION 3.1. Deposit of Moneys; Refunding of CalPERS Contract ......................................... 6 SECTION 3.2. Substitution of Property ....................................................................................... 6 SECTION 3.3. Release of Property ............................................................................................. 7 ARTICLE IV .............................................................................................................. 8 Lease of Leased Property; Term of This Lease; Lease Payments: ............................ 8 SECTION 4.1. Lease of Leased Property ................................................................................... 8 SECTION 4.2. Term .................................................................................................................... 8 SECTION 4.3. Lease Payments .................................................................................................. 8 SECTION 4.4. Source of Payments; Covenant to Budget and Appropriate; Pledge of Pension Tax Override ................................................................................................................ 9 SECTION 4.5. Additional Rental Payments .............................................................................. 10 SECTION 4.6. Quiet Enjoyment ................................................................................................ 10 SECTION 4.7. Title .................................................................................................................... 10 ARTICLE V ............................................................................................................. 11 Maintenance; Taxes; Insurance; and Other Matters ................................................ 11 SECTION 5.1. Maintenance, Utilities, Taxes and Assessments ............................................... 11 SECTION 5.2. Modification of Leased Property ........................................................................ 11 SECTION 5.3. Liability Insurance .............................................................................................. 12 SECTION 5.4. Property Insurance ............................................................................................ 12 SECTION 5.5. Reserved ........................................................................................................... 12 SECTION 5.6. Reserved ........................................................................................................... 12 SECTION 5.7. Insurance Net Proceeds; Form of Policies ........................................................ 12 SECTION 5.8. Installation of City’s Personal Property ............................................................. 13 SECTION 5.9. Liens .................................................................................................................. 13 SECTION 5.10. Advances ......................................................................................................... 13 ARTICLE VI ............................................................................................................ 14 Damage, Destruction and Eminent Domain; Use of Net Proceeds .......................... 14 SECTION 6.1. Application of Net Proceeds .............................................................................. 14 SECTION 6.2. Termination or Abatement Due to Eminent Domain ......................................... 14 SECTION 6.3. Abatement Due to Damage or Destruction ....................................................... 14 SECTION 6.3. Reserved ........................................................................................................... 15 ARTICLE VII ........................................................................................................... 15 Other Covenants of the City .................................................................................... 15 SECTION 7.1. Disclaimer of Warranties ................................................................................... 15 SECTION 7.2. Access to the Leased Property ......................................................................... 15 SECTION 7.3. Release and Indemnification Covenants ........................................................... 15 SECTION 7.4. Assignment and Subleasing by the City ............................................................ 16 SECTION 7.5. Amendment Hereof ........................................................................................... 16 SECTION 7.6. Federal Tax Law ............................................................................................... 17 SECTION 7.7. Continuing Disclosure ....................................................................................... 17 ARTICLE VIII........................................................................................................... 18 Lynwood Public Financing Authority - Page 96 of 242 Agenda Item # 3 -ii- Events of Default and Remedies ............................................................................. 18 SECTION 8.1. Events of Default Defined .................................................................................. 18 SECTION 8.2. Remedies on Default ......................................................................................... 18 SECTION 8.3. No Remedy Exclusive ....................................................................................... 18 SECTION 8.4. Agreement to Pay Attorneys' Fees and Expenses ............................................ 19 SECTION 8.5. No Additional Waiver Implied by One Waiver ................................................... 19 SECTION 8.6. Application of Proceeds ..................................................................................... 19 SECTION 8.7. Trustee and Bond Owners to Exercise Rights .................................................. 19 ARTICLE IX ............................................................................................................ 19 Prepayment of Lease Payments.............................................................................. 19 SECTION 9.1. Security Deposit ................................................................................................ 19 SECTION 9.2. Optional Prepayment ......................................................................................... 20 SECTION 9.3. Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain .................................................................................................................................... 20 SECTION 9.4. Credit for Amounts on Deposit .......................................................................... 20 ARTICLE X ............................................................................................................. 21 Miscellaneous ......................................................................................................... 21 SECTION 10.1. Notices ............................................................................................................. 21 SECTION 10.2. Binding Effect .................................................................................................. 21 SECTION 10.3. Severability ...................................................................................................... 21 SECTION 10.4. Net-net-net Lease ............................................................................................ 21 SECTION 10.5. Third Party Beneficiary .................................................................................... 21 SECTION 10.6. Further Assurances and Corrective Instruments ............................................. 21 SECTION 10.7. Execution in Counterparts. .............................................................................. 21 SECTION 10.8. Applicable Law ................................................................................................ 22 SECTION 10.9. Authority and City Representatives ................................................................. 22 SECTION 10.10. Captions ........................................................................................................ 22 APPENDIX A DESCRIPTION OF THE LEASED PROPERTY APPENDIX B SCHEDULE OF LEASE PAYMENTS Lynwood Public Financing Authority - Page 97 of 242 Agenda Item # 3 LEASE AGREEMENT This LEASE AGREEMENT (this “Lease”), dated for convenience as of July 1, 2022, is between the LYNWOOD PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under the laws of the State of California, as lessor (the “Authority”), and the CITY OF LYNWOOD, a general law city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, as lessee (the “City”). B A C K G R O U N D : 1. The City and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Authority for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs. 2. The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City. 3. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”). 4. The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”). 5. The City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit, and the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members. 6. The Authority proposes to issue lease revenue bonds under the Bond Law and an Indenture, dated as of July 1, 2022 (the “Indenture”), for the purpose of refunding all or a portion of the City’s obligations under the CalPERS Contract, including paying all costs of issuing the lease revenue bonds and of refunding the CalPERS Contract. 7. To that end, the City has proposed to lease to the Authority certain real property described in Appendix A attached hereto and by this reference incorporated herein (the “Leased Property”), under a Site Lease, dated the date hereof (the “Site Lynwood Public Financing Authority - Page 98 of 242 Agenda Item # 3 -2- Lease”), in consideration of the payment by the Authority of an upfront rental payment (the “Site Lease Payment”) which is sufficient to provide funds for refunding of the CalPERS Contract. 8. The Authority has authorized the issuance of its Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) (the “Bonds”) under the Indenture 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. 9. 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 has agreed to pay semiannual Lease Payments as the rental for the Leased Property thereunder. 10. 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 July 1, 2022, between the Authority as assignor and the Trustee as assignee. 11. 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. A G R E E M E N T : 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. Lynwood Public Financing Authority - Page 99 of 242 Agenda Item # 3 -3- (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, the Trustee as of the date of the execution and delivery of this Lease: (a) Due Organization and Existence. The City is a general law city and municipal corporation duly organized and validly existing under the Constitution and 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. (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 Lynwood Public Financing Authority - Page 100 of 242 Agenda Item # 3 -4- 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. SECTION 2.2. Covenants, Representations and Warranties of the Authority. The Authority makes the following covenants, representations and warranties to the City, the Trustee as of the date of the execution and delivery of this Lease: (a) Due Organization and Existence. The Authority is a joint exercise of powers authority duly organized and existing under a joint powers agreement and 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. Lynwood Public Financing Authority - Page 101 of 242 Agenda Item # 3 -5- (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. (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 Lynwood Public Financing Authority - Page 102 of 242 Agenda Item # 3 -6- 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; Refunding of CalPERS Contract. (a) Deposit of Bond Proceeds. 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 such proceeds in accordance with Section 3.02 of the Indenture. (b) Refunding of CalPERS Contract. Pursuant to Section 3.02 of the Indenture, the Authority will transfer a portion of the proceeds of the Bonds to the City. The City hereby agrees to apply such proceeds to refund the CalPERS Contract. SECTION 3.2. 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, as certified in writing by the City. (b) The City has filed with the Authority and the Trustee, and if the Substitute Property is property other than the City’s streets, caused to be recorded in the office of the Los Angeles County Recorder sufficient memorialization of an amendment hereof that adds the legal description of the Substitute Property to Appendix A and deletes therefrom the legal description of the Former Property, and, if applicable, has filed and caused to be recorded corresponding amendments to the Site Lease and Assignment Agreement. (c) If the Substitute Property is property other than the City’s streets, 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 essential to the proper, efficient and economic operation of the City and to serve an essential governmental function of the City. Lynwood Public Financing Authority - Page 103 of 242 Agenda Item # 3 -7- (e) The Substitute Property does not cause the City to violate any of its covenants, representations and warranties made herein, as certified in writing by the City. (g) The City has filed with the Authority and the Trustee a written certificate of the City or other written evidence stating that the useful life of the Substitute Property at least extends to the final maturity of the Bonds, that the estimated value of the Leased Property, after substitution of the Substitute Property and release of the Former Property, is at least equal to the aggregate Outstanding principal amount of the Bonds, and the fair rental value of the Leased Property, after substitution of the Substitute Property and release of the Former Property, 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 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. If applicable, 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 3.3. 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, as certified in writing by the City. (b) The City has filed with the Authority and the Trustee, and if the Substitute Property is property other than the City’s streets, caused to be recorded in the office of the Los Angeles County Recorder sufficient memorialization of an amendment hereof, the Site Lease and the Assignment Agreement which removes the Released Property from the Site Lease, the Assignment Agreement and this Lease. (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 aggregate Outstanding principal amount of the 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. Lynwood Public Financing Authority - Page 104 of 242 Agenda Item # 3 -8- 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. If applicable, 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 10.03 thereof, but under any circumstances not later than October 1, 20__. The provisions of this Section are subject to the provisions of Sections 6.2 through 6.4 relating to the taking in eminent domain, damage and destruction of the Leased Property in whole or in part and interference with completion of construction of the Project. SECTION 4.3. Lease Payments. (a) Obligation to Pay. Subject to the provisions of Sections 6.2 through 6.4 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 (including the Capitalized Interest Subaccount) 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 (including the Capitalized Interest Subaccount) 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 Sections 9.2 or 9.3, 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 Sections 9.2 or 9.3, the principal components of the remaining Lease Payments will be reduced in integral 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 Lynwood Public Financing Authority - Page 105 of 242 Agenda Item # 3 -9- 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; Pledge of Pension Tax Override. The Lease Payments are payable from any source of available funds of the City, subject to the provisions of Sections 6.2 through 6.4. Subject to the provisions of Sections 6.2 through 6.4, 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. On April 9, 1946, the voters in the City approved a retirement tax to support amounts owed by the City to CalPERS pursuant to the CalPERS Contract (the “Pension Tax Override”), which Pension Tax Override is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes. In furtherance of its authorized purposes, the City hereby pledges the Pension Tax Override to the payment of the Lease Payments. The obligation of the City to make Lease Payments or 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 other Lynwood Public Financing Authority - Page 106 of 242 Agenda Item # 3 -10- than the Pension Tax Override. Neither the Bonds nor the obligation of the City to make Lease Payments or Additional Rental Payments constitutes an indebtedness of the City, the State or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction. 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, (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, and (d) 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. If applicable, 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. Lynwood Public Financing Authority - Page 107 of 242 Agenda Item # 3 -11- 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 intention to do so, the City may in good faith contest any lien filed or established against the Leased Property, Lynwood Public Financing Authority - Page 108 of 242 Agenda Item # 3 -12- 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 Insurance. The City shall maintain or cause to be maintained throughout the Term of this 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. 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. Property Insurance. Solely to the extent the Leased Property is property other than the City’s streets, the City shall procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease, property insurance against loss or damage to all improvements situated on the Leased Property, in an amount at least equal to the lesser of (a) 100% of the replacement value of the improvements, 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; provided, that such coverage shall include earthquake insurance only 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. Reserved. SECTION 5.6. Reserved. SECTION 5.7. Insurance Net Proceeds; Form of Policies. Each policy of insurance maintained under Section 5.4 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. 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 Lynwood Public Financing Authority - Page 109 of 242 Agenda Item # 3 -13- 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 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). Lynwood Public Financing Authority - Page 110 of 242 Agenda Item # 3 -14- 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. 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. 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) this Lease shall 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. The abatement of Lease Payments hereunder in accordance with the terms hereof shall not constitute an Event of Default (as defined in Section 8.1) hereunder. 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 (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. Notwithstanding the foregoing, there shall be no abatement of Lease Payments to the extent that the proceeds of property insurance, rental interruption insurance or capitalized interest are available to pay Lease Payments which would otherwise be abated under this Section, it being hereby declared that such proceeds and amounts constitute a special fund for the payment of the Lease Payments. The abatement of Lease Payments hereunder in accordance with the terms hereof shall not constitute an Event of Default (as defined in Section 8.1) hereunder. Lynwood Public Financing Authority - Page 111 of 242 Agenda Item # 3 -15- SECTION 6.4. Reserved. ARTICLE VII OTHER COVENANTS OF THE CITY SECTION 7.1. Disclaimer of Warranties. THE AUTHORITY AND THE TRUSTEE MAKE 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 and its assigns have 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 Authority 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, (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, Lynwood Public Financing Authority - Page 112 of 242 Agenda Item # 3 -16- (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, the Assignment Agreement 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. 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, as certified in writing by 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; and (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, as certified in writing by the City. 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 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 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 3.2 or 3.3; Lynwood Public Financing Authority - Page 113 of 242 Agenda Item # 3 -17- (iv) 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 amounts of rental are pledged or assigned for the payment of any bonds, notes, leases or other obligations the proceeds of which are applied to finance authorized expenditures of the City for the common benefit, and (B) the City has obtained and filed with the Trustee an appraisal or other evidence of value satisfactory to the City showing that the estimated value of the Leased Property is at least equal to the aggregate principal amount of the Outstanding Bonds and all such other bonds, notes, leases or other obligations; or (v) 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. If the Trustee’s consent to such modification or amendment is required, the Trustee shall be entitled to the same documents as it would be entitled to under Article IX of the Indenture for such type of modification or amendment. SECTION 7.6. Federal Tax Law. The City and the Authority do not intend the interest on the Bonds to be excluded from gross income for federal income tax purposes. 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. Lynwood Public Financing Authority - Page 114 of 242 Agenda Item # 3 -18- 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, such period of time not to be longer than 180 days after the delivery of such default notice. (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 to collect the amounts then due and thereafter to become due hereunder or to enforce any other of its rights hereunder, except as provided herein. Notwithstanding anything herein or in the Indenture to the contrary, (a) 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 (the Authority hereby expressly waives the right to receive any amount from the City pursuant to Section 1951.2 of the California Civil Code to accelerate payment of the Lease Payments) and (b) neither the Authority nor the Trustee shall have the right to re-lease any portion of the Leased Property that constitutes a City street. 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. 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 Lynwood Public Financing Authority - Page 115 of 242 Agenda Item # 3 -19- 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; provided, however, that the Trustee shall not be required to expend its own funds for any payment described in this Section. 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 the breach, 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. 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, (which opinion must be addressed and delivered to the Lynwood Public Financing Authority - Page 116 of 242 Agenda Item # 3 -20- Trustee), 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. Optional Prepayment. The City has the option to prepay the principal components of the Lease Payments in whole, or in part in any integral multiple of $5,000, from any source of legally available funds, on any date on or after October 1, 20__, at a prepayment price equal to the aggregate principal components of the Lease Payments to be prepaid, together with the interest component of the Lease Payment required to be paid on such Interest Payment Date, and together with a prepayment premium equal to the premium (if any) required to be paid on the resulting redemption of Bonds 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 10 days’ written notice to the Trustee of its intention to prepay the Lease Payments under this Section. 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(b) of the Indenture. 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. Lynwood Public Financing Authority - Page 117 of 242 Agenda Item # 3 -21- 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/Authority: City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attn: City Manager/Chief Administrative Officer If to the Trustee: U.S. Bank Trust Company, National Association U.S. Bank Tower 633 West 5th Street, 24th Floor Los Angeles, CA 90071 Attn: Corporate Trust Services 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 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. Lynwood Public Financing Authority - Page 118 of 242 Agenda Item # 3 -22- 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. Authority 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. Lynwood Public Financing Authority - Page 119 of 242 Agenda Item # 3 -23- 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. LYNWOOD PUBLIC FINANCING AUTHORITY, as lessor By Ernie Hernandez Chief Administrative Officer Attest: Maria Quiñonez Secretary CITY OF LYNWOOD, as lessee By Ernie Hernandez City Manager Attest: Maria Quiñonez City Clerk Lynwood Public Financing Authority - Page 120 of 242 Agenda Item # 3 A-1 APPENDIX A DESCRIPTION OF THE LEASED PROPERTY The Leased Property consists of the City’s interest in the roadway portion of the City’s public streets, whether fee simple or easement, including arterial/collector streets, local streets and alleys, as described in the attached list. [List of City streets to come] Lynwood Public Financing Authority - Page 121 of 242 Agenda Item # 3 B-1 APPENDIX B SCHEDULE OF LEASE PAYMENTS Lease Payment Date* Principal Component Interest Component Aggregate Lease Payment * Lease Payment Dates are the Business Day immediately preceding each date listed in the schedule Lynwood Public Financing Authority - Page 122 of 242 Agenda Item # 3 Jones Hall Draft of May 11, 2022 ASSIGNMENT AGREEMENT This ASSIGNMENT AGREEMENT (this “Agreement”), dated for convenience as of July 1, 2022, is between the LYNWOOD PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under the laws of the State of California (the “Authority”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as trustee (the “Trustee”). B A C K G R O U N D : 1. The City of Lynwood (the “City”) and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Authority for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs. 2. The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City. 3. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”). 4. The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”). 5. The City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit, and the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members. 6. The Authority proposes to issue lease revenue bonds under the Bond Law and an Indenture, dated as of July 1, 2022 (the “Indenture”), for the purpose of refunding Lynwood Public Financing Authority - Page 123 of 242 Agenda Item # 3 -2- all or a portion of the City’s obligations under the CalPERS Contract, including paying all costs of issuing the lease revenue bonds and of refunding the CalPERS Contract. 7. To that end, the City has proposed to lease to the Authority certain real property described in Appendix A attached hereto and by this reference incorporated herein (the “Leased Property”), under a Site Lease, dated the date hereof (the “Site Lease”), in consideration of the payment by the Authority of an upfront rental payment (the “Site Lease Payment”) which is sufficient to provide funds for refunding of the CalPERS Contract. 8. The Authority has authorized the issuance of its Lynwood Joint Powers Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) (the “Bonds”) under the Indenture 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. 9. 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 a Property Lease, dated the date hereof (the “Lease”), under which the City has agreed to pay semiannual Lease Payments as the rental for the Leased Property thereunder. 10. The Authority has requested the Trustee to enter into this Agreement for the purpose of assigning certain of its rights under the Lease to the Trustee for the benefit of the Bond owners. A G R E E M E N T : In consideration of the material covenants contained in this Agreement, the parties hereto hereby formally covenant, agree and bind themselves as follows: SECTION 1. Defined Terms. All capitalized terms not otherwise defined herein have the respective meanings given those terms in the Indenture. SECTION 2. Assignment. The Authority hereby assigns to the Trustee, for the benefit of the Owners of all Bonds which are issued and Outstanding under the Indenture, all of the Authority’s rights under the Lease (excepting only the Authority’s rights under Sections 4.5, 5.10, 7.3 and 8.4 of the Lease and its rights to give consents and approvals under the Lease), including but not limited to: (a) the right to receive and collect all of the Lease Payments from the City under the Lease; (b) the right to receive and collect any proceeds of any insurance maintained thereunder with respect to the Leased Property, or any eminent domain award (or proceeds of sale under threat of eminent domain) paid with respect to the Leased Property; and (c) the right to exercise such rights and remedies conferred on the Authority under the Lease as may be necessary or convenient (i) to enforce payment of the Lease Payments and any amounts required Lynwood Public Financing Authority - Page 124 of 242 Agenda Item # 3 -3- to be deposited in the Insurance and Condemnation Fund established under Section 5.07 of the Indenture, or (ii) otherwise to protect the interests of the Bond Owners in the event of a default by the City under the Lease. The Trustee shall administer all of the rights assigned to it by the Authority under this Agreement in accordance with the provisions of the Indenture, for the benefit of the Owners of Bonds. The assignment made under this Section 2 is absolute and irrevocable, and without recourse to the Authority. SECTION 3. Acceptance. The Trustee hereby accepts the assignments made herein for the purpose of securing the payments due under the Lease and Indenture to, and the rights under the Lease and Indenture of, the Owners of the Bonds, all subject to the provisions of the Indenture. The recitals contained herein are those of the Authority and not of the Trustee, and the Trustee assumes no responsibility for the correctness thereof. SECTION 4. Conditions. This Agreement confers no rights and imposes no duties upon the Trustee beyond those expressly provided in the Indenture. The assignment hereunder to the Trustee is solely in its capacity as Trustee under the Indenture, and the Trustee shall have the same rights, protections, immunities and indemnities hereunder as afforded to it under the Indenture. SECTION 5. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which is an original and all together constitute one and the same agreement. Separate counterparts of this Agreement may be separately executed by the Trustee and the Authority, both with the same force and effect as though the same counterpart had been executed by the Trustee and the Authority. SECTION 6. Binding Effect. This Agreement inures to the benefit of and binds the Authority and the Trustee, and their respective successors and assigns, subject, however, to the limitations contained herein. SECTION 7. Governing Law. This Agreement is governed by the Constitution and laws of the State of California. Lynwood Public Financing Authority - Page 125 of 242 Agenda Item # 3 -4- IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized officers as of the day and year first written above. LYNWOOD PUBLIC FINANCING AUTHORITY By Ernie Hernandez Chief Administrative Officer Attest: Maria Quiñonez Secretary U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By Authorized Representative Lynwood Public Financing Authority - Page 126 of 242 Agenda Item # 3 A-1 APPENDIX A DESCRIPTION OF THE LEASED PROPERTY The Leased Property consists of the City’s interest in the roadway portion of the City’s public streets, whether fee simple or easement, including arterial/collector streets, local streets and alleys, as described in the attached list. [List of City streets to come] Lynwood Public Financing Authority - Page 127 of 242 Agenda Item # 3 Th i s P r e l i m i n a r y O f f i c i a l S t a t e m e n t a n d t h e i n f o r m a t i o n c o n t a i n e d h e r e i n a r e s u b j e c t t o c o m p l e t i o n o r a m e n d m e n t . Un d e r n o c i r c u m s t a n c e s s h a l l t h i s P r e l i m i n a r y O f f i c i a l St a t e m e n t c o n s t i t u t e a n o f f e r t o s e l l o r a s o l i c i t a t i o n o f a n o f f e r t o b u y n o r s h a l l t h e r e b e a n y s a l e o f t h e s e s e c u r i t i e s i n an y j u r i s d i c t i o n i n w h i c h s u c h o f f e r s o l i c i t a t i o n o r s a l e w o u l d b e un l a w f u l p r i o r t o r e g i s t r a t i o n o r q u a l i f i c a t i o n u n d e r t h e s e c u r i t i e s l a w s o f s u c h j u r i s d i c t i o n . Jones Hall Draft of May 11, 2022 PRELIMINARY OFFICIAL STATEMENT DATED ________, 2022 NEW ISSUE – FULL BOOK-ENTRY S&P [(Insured)]: “__” [(Underlying)]: “__” See “RATING[S]” herein. 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, interest on the Bonds is exempt from State of California personal income taxes. Bond counsel observes that interest on the Bonds is not excluded from gross income for federal income tax purposes. See “TAX MATTERS” herein.” $______________* LYNWOOD PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2022 (FEDERALLY TAXABLE) Dated: Date of Delivery Due: October 1, as shown on inside cover Authority for Issuance. The bonds captioned above (the “Bonds”) are being issued by the Lynwood Public Financing Authority (the “Authority”) pursuant to resolutions adopted by the governing body of the Authority and the City Council of the City of Lynwood (the “City”) on [May 17], 2022, and an Indenture of Trust dated as of July 1, 2022 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). See “THE BONDS – Authority for Issuance.” Purpose. The proceeds of the Bonds will be used to (i) refund a portion of the City’s obligations under the CalPERS Contract, 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” consisting primarily of lease payments (the “Lease Payments”) made by the City for the lease of property under a Lease Agreement dated as of July 1, 2022, between the Authority, as lessor, and the City, as lessee, concerning the leaseback of certain real property, as described in this Official Statement. The Bonds are also secured by certain funds held under the Indenture. See “SECURITY 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 April 1 and October 1 of each year, commencing on October 1, 2022, and will be issued in fully-registered form without coupons in integral multiples 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.” [Bond Insurance. To come, if applicable] The Bonds are special obligations of the Authority, payable solely from and secured by a pledge of the Revenues as specified therein and in the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds. The obligation of the City to pay Lease Payments does not constitute an 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, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation, except for the pension tax override levied and collected by the City as described herein. The Authority has no power to tax. MATURITY SCHEDULE (see inside cover) This cover page contains certain information for general reference only. It is not a summary of all the provisions of the Bonds. Prospective investors must read the entire Official Statement to obtain information essential to making an informed investment decision. The Bonds are offered when, as and if issued, subject to approval as to their legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, and subject to certain other conditions. 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 Authority and the City by the City Attorney of the City. Certain legal matters will be passed on for the Underwriter by Quint & Thimmig LLP, as Underwriter’s Counsel. It is anticipated that the Bonds will be delivered in book-entry form through the facilities of DTC on or about ______, 2022. [Underwriter Logo] The date of this Official Statement is: _____ __, 2022 * Preliminary; subject to change. Lynwood Public Financing Authority - Page 128 of 242 Agenda Item # 3 LYNWOOD PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2022 (FEDERALLY TAXABLE) MATURITY SCHEDULE (Base CUSIP:† ________) $_____ Serial Bonds Maturity Date (October 1) Principal Amount Interest Rate Yield Price CUSIP† $______ - ____% Term Bonds due October 1, 20__; Yield ____%; Price ___; CUSIP†: ___ $______ - ____% Term Bonds due October 1, 20__; Yield ____%; Price ___; CUSIP†: ___ C: Yield to the first optional redemption date of October 1, 20__, at par. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright (c) 2022 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the Authority, the Underwriter or their agents or counsel take any responsibility for the accuracy of such numbers. Lynwood Public Financing Authority - Page 129 of 242 Agenda Item # 3 LYNWOOD PUBLIC FINANCING AUTHORITY CITY OF LYNWOOD, CALIFORNIA AUTHORITY BOARD/CITY COUNCIL Jorge Casanova, Mayor and President José Luis Solache, Mayor Pro Tem and Vice President Oscar Flores, Councilmember and Authority Member Marisela Santana, Councilmember and Authority Member Rita Soto, Councilmember and Authority Member AUTHORITY/CITY OFFICIALS Ernie Hernandez, City Manager and Chief Administrative Officer Harry Wong, City and Authority Finance Director Gabriela Camacho, City and Authority Treasurer Noel Tapia, City Attorney and Authority Counsel Maria Quiñonez, City Clerk and Authority Secretary PROFESSIONAL SERVICES MUNICIPAL ADVISOR Kosmont Transactions Services, Inc. Manhattan Beach, California BOND AND DISCLOSURE COUNSEL Jones Hall, A Professional Law Corporation San Francisco, California Trustee U.S. Bank Trust Company, National Association Los Angeles, California Lynwood Public Financing Authority - Page 130 of 242 Agenda Item # 3 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 a contract between any bond owner and the Authority or the Underwriter. No Offering Except by This Official Statement. No dealer, broker, salesperson or other person has been authorized by the Authority or the Underwriter to give any information or to make any representations other than those contained in this Official Statement and, if given or made, such other information or representation must not be relied upon as having been authorized by the Authority or the Underwriter. No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor may 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. Preparation of Official Statement. The information set forth in this Official Statement has been furnished by the Authority and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness. 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, their 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. Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the Authority in any press release and in any oral statement made with the approval of an authorized officer of the City or the Authority or any other entity described or referenced herein, 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, Authority or any other entity described or referenced herein since the date hereof. 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 securities dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the inside cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter. Document Summaries. All summaries of the Indenture or other documents referred to in this Official Statement are made subject to the provisions of such documents and qualified in their entirety to reference to such documents, and do not purport to be complete statements of any or all of such provisions. No Securities Laws Registration. The Bonds have not been registered under the Securities Act of 1933, as amended, in reliance upon exceptions therein for the issuance and sale of municipal securities. The Bonds have not been registered or qualified under the securities laws of any state. Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, give rise to any implication that there has been no change in the affairs of the City, the Authority, the other parties described in this Official Statement, or the condition of the property within the City since the date of this Official Statement. Website. The City maintains a website. However, the information presented on the website is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds. Lynwood Public Financing Authority - Page 131 of 242 Agenda Item # 3 -i- TABLE OF CONTENTS INTRODUCTION ................................................ 1 REFINANCING PLAN ........................................ 4 Refinancing of CalPERS Contract ................. 4 Estimated Sources and Uses of Funds .......... 4 THE LEASED PROPERTY ................................ 5 Description and Location ................................ 5 Modification of Leased Property ..................... 5 Substitution ..................................................... 6 Release of Leased Property ........................... 7 THE BONDS ...................................................... 7 Authority for Issuance .................................... 7 General Provisions ......................................... 8 Redemption .................................................... 9 Book-Entry Only System .............................. 11 Transfer, Registration and Exchange .......... 11 DEBT SERVICE SCHEDULE .......................... 13 SECURITY FOR THE BONDS ........................ 14 Revenues; Pledge of Revenues ................... 14 Allocation of Revenues by Trustee; Application of Funds................................. 15 Lease Payments; Covenant to Appropriate . 15 Limited Obligation......................................... 16 Abatement .................................................... 17 Default; Remedies ........................................ 17 Insurance ...................................................... 18 Additional Lease Payments and Additional Bonds ....................................................... 19 THE AUTHORITY ............................................ 20 THE CITY ......................................................... 20 General ......................................................... 20 City Government .......................................... 20 Labor Relations ............................................ 21 CITY FINANCIAL INFORMATION ................... 21 Accounting and Financial Reporting ............ 21 Pension Tax Override; Bartel Report ........... 23 General Fund Overview and Budget ............ 23 Sales and Use Taxes ................................... 28 Property Taxes ............................................. 31 Other Sources of Revenues ......................... 35 Financial Statements .................................... 36 General Fund Historical Financial Data ....... 36 Relevant Fiscal Policies ............................... 38 Risk Management ........................................ 39 Employee Retirement System; CalPERS .... 39 Other Post-Employment Benefits (OPEB) ... 44 General Fund Long-Term Indebtedness ...... 45 Direct and Overlapping Bonded Debt .......... 46 CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS ..................................... 48 Limitations on Revenues.............................. 48 Statutory Revenue Limitations - Proposition 62 .......................................... 51 Proposition 1A .............................................. 51 Proposition 22 .............................................. 52 Unitary Property ........................................... 52 Possible Future Initiatives ............................ 53 BOND OWNERS’ RISKS ................................. 53 Abatement of Lease Payments .................... 53 Limitation on Remedies ............................... 54 No Acceleration Upon Default ..................... 54 Early Prepayment Risk ................................ 54 Limitations on Taxes and Fees .................... 56 Additional Obligations of the City ................. 57 Property Taxes ............................................. 57 Public Health Emergencies .......................... 59 Certain Risks Associated with Sales Tax and Other Local Tax Revenues ............... 59 Natural Calamities ........................................ 60 Hazardous Substances ................................ 61 Potential Impact of Climate Change ............ 61 COVID-19 Pandemic ................................... 61 Cyber Security ............................................. 62 Litigation ....................................................... 62 Secondary Market for Bonds ....................... 62 TAX MATTERS ................................................ 63 CERTAIN LEGAL MATTERS .......................... 63 NO LITIGATION ............................................... 63 RATING[S] ....................................................... 64 CONTINUING DISCLOSURE .......................... 64 UNDERWRITING ............................................. 64 MUNICIPAL ADVISOR .................................... 65 EXECUTION .................................................... 65 APPENDIX A - GENERAL INFORMATION ABOUT THE CITY OF LYNWOOD AND THE COUNTY OF LOS ANGELES APPENDIX B - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS APPENDIX C - AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR ENDED JUNE 30, 2021 APPENDIX D - PROPOSED FORM OF OPINION OF BOND COUNSEL APPENDIX E - FORM OF CONTINUING DISCLOSURE CERTIFICATE APPENDIX F - DTC AND THE BOOK-ENTRY ONLY SYSTEM [APPENDIX G - FORM OF MUNICIPAL BOND INSURANCE POLICY] Lynwood Public Financing Authority - Page 132 of 242 Agenda Item # 3 -1- __________________________________ OFFICIAL STATEMENT __________________________________ $_____________* LYNWOOD PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2022 (FEDERALLY TAXABLE) The purpose of this Official Statement, which includes the cover page, inside cover page and attached appendices, is to set forth certain information concerning the sale and delivery of the bonds captioned above (the “Bonds”) by the Lynwood Public Financing Authority (the “Authority”). All capitalized terms used in this Official Statement, unless noted otherwise, have the meanings set forth in the Indenture (as defined below). 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 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. Authority for Issuance. The Authority is issuing the Bonds pursuant to (a) the Marks- Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”), (b) resolutions adopted by the governing body of the Authority on [May 17], 2022 (the “Authority Resolution”), and by the City Council of the City of Lynwood (the “City”) on [May 17], 2022 (the “City Resolution”), and (c) an Indenture of Trust (the “Indenture”) dated as of July 1, 2022, by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Authority. The Authority was formed pursuant to the provisions of Articles 1 through 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”) and the Join Exercise of Powers Agreement, dated as of December 1, 1992, by and between the City and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency), to assist in financings for either member. The City Council of the City serves as the governing body of the Authority. The City. The City was incorporated in 1921 under the general laws of the State of California (the “State”). The City is situated approximately 13 miles south of downtown Los Angeles at the intersection of two major freeways. The local economy represents a diverse blend of industrial, commercial, agricultural and residential development. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY.” * Preliminary; subject to change. Lynwood Public Financing Authority - Page 133 of 242 Agenda Item # 3 -2- Purpose of the Bonds. The Bonds are being issued to provide funds to refund a portion of the City’s obligations under the CalPERS Contract (as hereinafter defined), and to pay the costs of issuing the Bonds. See “REFINANCING PLAN.” Security for the Bonds and Pledge of Revenues. Under the Indenture, the Bonds are payable from and secured by a pledge of and lien on “Revenues,” consisting principally of lease payments (the “Lease Payments”) made by the City for the lease of property under a Lease Agreement dated as of July 1, 2022 (the “Lease Agreement”), between the Authority, as lessor, and the City, as lessee, concerning the leaseback of the City’s interest in the City’s streets (as more particularly described herein, the “Leased Property”). The Bonds are also secured by certain funds on deposit under the Indenture. Under an Assignment Agreement dated as of _______ 1, 2022 (the “Assignment Agreement”), between the Authority and the Trustee, the Authority has transferred to the Trustee all of the rights of the Authority in the Lease Agreement (other than the rights of the Authority under the provisions of the Lease Agreement regarding Additional Rental Payments, advances, release and indemnification covenants, and agreement to pay attorneys’ fees). To provide an upfront site lease payment to facilitate the financing plan, the City and the Authority will enter into a Site Lease dated as of _______ 1, 2022 (the “Site Lease”), under which the City will lease the Leased Property to the Authority. Concurrently, the City and the Authority will enter into the Lease Agreement, under which the Authority will lease the Leased Property back to the City. See SECURITY FOR THE BONDS” and “THE LEASED PROPERTY.” [No Reserve Fund. The Authority will not establish a debt service reserve fund for the Bonds.] [Bond Insurance. To come, if applicable.] Covenant to Budget and Appropriate Lease Payments. The Lease Payments are payable from any source of available funds of the City, subject to the provisions of the Lease Agreement regarding abatement. See “– Abatement” below. The City covenants in the Lease Agreement to take all actions required to include the Lease Payments in each of its budgets during the Term of the Lease Agreement and to make the necessary appropriations for all Lease Payments and Additional Rental Payments, subject to the provisions of the Lease Agreement regarding abatement. Such covenant 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 agreed to be carried out and performed by the City under the Lease Agreement. Pledge of Pension Tax Override. On April 9, 1946, the voters in the City approved a retirement tax to support amounts owed by the City to CalPERS pursuant to the CalPERS Contract (the “Pension Tax Override”), which Pension Tax Override is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes. In furtherance of its authorized purposes, under the Lease Agreement, the City pledges the Pension Tax Override to the payment of the Lease Payments. Form of Bonds; Book-Entry Only. The Bonds 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 Bonds will not receive certificates Lynwood Public Financing Authority - Page 134 of 242 Agenda Item # 3 -3- representing the Bonds that are purchased. See “THE BONDS – Book-Entry Only System” and “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.” Other General Fund Obligations. The Lease Agreement may be amended to obligate the City to pay additional amounts of rental for the use and occupancy of the Leased Property if certain conditions are met. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” The Lease Agreement does not limit the City’s right to incur additional obligations payable from its General Fund. The City has existing obligations payable from its General Fund. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY” for more information. Redemption. The Bonds are subject to optional redemption, mandatory sinking fund redemption, and special mandatory redemption from the proceeds of insurance or condemnation proceeds 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 Agreement, the Bond Owners would receive less than the full amount of principal of and interest on the Bonds. To the extent proceeds of property insurance (as described in this Official Statement), Lease Payments (or a portion thereof) may be made from those proceeds during periods of abatement. The City is neither required nor will it maintain rental interruption insurance with respect to the Leased Property. See “SECURITY FOR THE BONDS – Abatement” and “BOND OWNERS’ RISKS.” Legal Opinion. Upon delivery of the Bonds, Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel (“Bond Counsel”) will release its final approving legal opinion with respect to the Bonds, regarding the validity of the Bonds, in the form attached hereto as Appendix D. See “APPENDIX D – PROPOSED FORM OF OPINION OF BOND COUNSEL.” Risks of Investment; COVID-19 Pandemic. Debt service on the Bonds is payable only from Lease Payments and other amounts payable by the City to the Authority under the Lease Agreement. While the City’s General Fund has not experienced a material adverse impact due to the COVID-19 pandemic to date, continued and/or renewed outbreaks could lead to additional or modified public health restrictions and have an adverse effect on the City’s operations and financial condition in the future, and the effect could be material. For a discussion of some of the risks associated with the purchase of the Bonds, including the potential impact of the COVID-19 pandemic on the City’s operations, see “BOND OWNERS’ RISKS,” and in particular “– Public Health Emergencies” and “– COVID-19 Pandemic.” The Bonds are special obligations of the Authority, payable solely from and secured by a pledge of the Revenues as specified therein and in the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State, or any political subdivision thereof, is pledged to the payment of the Bonds. The obligation of the City to pay Lease Payments does not constitute an indebtedness of the City, the State, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation, except for the Lynwood Public Financing Authority - Page 135 of 242 Agenda Item # 3 -4- pension tax override levied and collected by the City as described herein. The Authority has no power to tax. REFINANCING PLAN Refinancing of CalPERS Contract The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State, as amended (the “Retirement Law”) to make payments relating to pension benefits accruing to the California Public employees’ Retirement System’s (“CalPERS”) members, including the City. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”). The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”). According to the most recent actuarial valuations performed by CalPERS, dated June 30, 2021, the City’s unfunded accrued liability (the “UAL”) with respect to the City’s pension plans totaled approximately $_____ million. Upon the issuance of the Bonds, the City will apply proceeds thereof in the amount of $_____ million* to refund a portion of the CalPERS Contract. The City projects that, immediately after the refunding of the CalPERS Contract with such proceeds, the funding level of the City’s pension plans will be raised to an estimated ___%, saving the City approximately $____ million in fiscal year 2022-23, and an additional $___ million after fiscal year 2022-23 (across all City funds, including the General Fund).* The City anticipates using such savings, commencing in fiscal year 2022-23, to mitigate projected decreases in General Fund revenues, establish and fund a trust under Section 115 of the Internal Revenue Code for the purpose of paying costs associated with its pension plans, and rebuild reserves. Estimated Sources and Uses of Funds The estimated sources and uses of funds relating to the Bonds are as follows: SOURCES: Amount Principal Amount of Bonds $ Plus/Less: [Net] Original Issue [Premium/Discount] TOTAL SOURCES $ USES: Refund Portion of CalPERS Contract $ Costs of Issuance (2) TOTAL USES $ (1) Includes, among other things, Underwriter’s discount, the fees and expenses of Bond Counsel and Disclosure Counsel, the Trustee, the Municipal Advisor, rating agency fees, and printing Official Statement. * Preliminary; subject to change. Lynwood Public Financing Authority - Page 136 of 242 Agenda Item # 3 -5- THE LEASED PROPERTY Description and Location Lease Payments will be made by the City under the Lease Agreement for the use and occupancy of the Leased Property. The Leased Property consists of the City’s interest in the roadway portion of the City’s public streets, whether fee simple or easement, including arterial/collector streets, local streets and alleys. According to the City’s Pavement Management Program Final Report, dated June 29, 2020 (the “2020 PMP Report”), the City’s pavement management network consists of approximately 24.4 section miles of arterial/collector streets (approximately 7,267,122 square feet of pavement), 60.2 section miles of local streets (approximately 10,976,318 square feet of pavement), and 10.6 section miles of alleys (approximately 975,467 square feet of pavement). According to the 2020 PMP Report, the City estimates the total replacement value of the Leased Property is approximately $288,283,600. As stated in the 2020 PMP Report, “This value clearly indicates that the City’s pavement network is the most valuable and essential asset to Lynwood.” Simultaneously with the delivery of the Bonds, the Authority will acquire a leasehold interest in the Leased Property from the City. The Authority will sublease the Leased Property to the City pursuant to the Lease Agreement. While the City is in possession of the Leased Property, all maintenance and repair of the Leased Property is the responsibility of the City. The City has determined that the replacement value of the Leased Property is in excess of the principal amount of the Bonds and the fair rental value of the Leased Property is commensurate with the Lease Payments. Under the Lease Agreement, remedies available to the Authority and the Trustee to collect amounts due from the City do not include (i) the right to accelerate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable or (ii) right to re-lease any portion of the Leased Property that constitutes a City street. See “SECURITY FOR THE BONDS – Default; Remedies” below and “BOND OWNERS’ RISKS – Limitation on Remedies.” Modification of Leased Property Under the Lease Agreement, 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 the Lease Agreement. 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, 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 the Lynwood Public Financing Authority - Page 137 of 242 Agenda Item # 3 -6- Lease Agreement; except that if any such lien is established and the City first notifies or causes to be notified the Authority of the City’s 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. Substitution Under the Lease Agreement, 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 requirements set forth in the Lease Agreement, which includes (among others) the following: • The City has filed with the Authority and the Trustee, and, if the Substitute Property is property other than the City’s streets, caused to be recorded in the office of the Los Angeles County Recorder sufficient memorialization of an amendment of the Lease Agreement that adds the legal description of the Substitute Property to the Lease Agreement and deletes therefrom the legal description of the Former Property, and, if applicable, has filed and caused to be recorded corresponding amendments to the Site Lease and Assignment Agreement. • If the Substitute Property is property other than the City’s streets, the City has obtained a CLTA policy of title insurance insuring the City’s leasehold estate under the Lease Agreement in the Substitute Property, subject only to Permitted Encumbrances, in an amount at least equal to the estimated value thereof. • 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, and has been determined to be essential to the proper, efficient and economic operation of the City and to serve an essential governmental function of the City. • The Substitute Property does not cause the City to violate any of its covenants, representations and warranties made in the Lease Agreement, as certified in writing by the City. • The City has filed with the Authority and the Trustee a written certificate of the City or other written evidence stating that the useful life of the Substitute Property at least extends to the final maturity of the Bonds, that the estimated value of the Leased Property, after substitution of the Substitute Property and release of the Former Property, is at least equal to the aggregate Outstanding principal amount of the Bonds, and the fair rental value of the Leased Property, after substitution of the Substitute Property and release of the Former Property, is at least equal to the Lease Payments thereafter coming due and payable under the Lease Agreement. Upon the satisfaction of all such conditions precedent, the Term of the Lease Agreement 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 Lynwood Public Financing Authority - Page 138 of 242 Agenda Item # 3 -7- Payments whatsoever as a result of any substitution of property under the Lease Agreement. If applicable, the Authority and the City will execute, deliver and cause to be recorded all documents required to discharge the Site Lease, the Lease Agreement 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, the Lease Agreement and the Assignment Agreement. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” Release of Leased Property Under the Lease Agreement, the City has the option at any time and from time to time to release any portion of the Leased Property from the Lease Agreement (the “Released Property”) provided that the City has satisfied all of the requirements under the Lease Agreement that are conditions precedent to such release, which include (among others) the following: • The City has filed with the Authority and the Trustee, and, if applicable, caused to be recorded in the office of the Los Angeles County Recorder sufficient memorialization of an amendment of the Lease Agreement, the Site Lease and the Assignment Agreement which removes the Released Property from the Site Lease, the Assignment Agreement and the Lease Agreement. • The City has certified in writing to the Authority and the Trustee that the value of the property which remains subject to the Lease Agreement following such release is at least equal to the aggregate Outstanding principal amount of the Bonds, and the fair rental value of the property which remains subject to the Lease Agreement following such release is at least equal to the Lease Payments thereafter coming due and payable under the Lease Agreement. Upon the satisfaction of all such conditions precedent, the Term of the Lease Agreement 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. If applicable, the Authority and the City shall execute, deliver and cause to be recorded all documents required to discharge the Site Lease, the Lease Agreement and the Assignment Agreement of record against the Released Property. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” THE BONDS This section provides summaries of the Bonds and certain provisions of the Indenture. See APPENDIX B for a more complete summary of the Indenture. Capitalized terms used but not defined in this section have the meanings given in APPENDIX B. Authority for Issuance The Bonds are being issued under the Bond Law, the Authority Resolution, the City Resolution, and the Indenture. Under Section 863 of the California Code of Civil Procedure, any interested person may bring an action within 60 days from the date the City Resolution and Lynwood Public Financing Authority - Page 139 of 242 Agenda Item # 3 -8- Authority Resolution were adopted to determine the validity of the Bonds and related lease documents. The period for bringing such action will expire on [July 16], 2022. General Provisions Bond Terms. The Bonds will be dated their date of delivery and issued in fully registered form without coupons in integral multiples of $5,000, so long as no Bond has more than one maturity date. The Bonds will mature on October 1 in each of the years and in the amounts, and bear interest at the rates, set forth on the inside cover page of this Official Statement. Calculation of Interest. Interest on the Bonds will be payable on April 1 and October 1 in each year, commencing October 1, 2022 (each an “Interest Payment Date”). Interest on the Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless: (a) 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, (b) a Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date, or (c) 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 with respect to the Bonds will be computed on the basis of a 360-day year composed of 12 months of 30 days each. 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. Payments of Principal and Interest. Interest is payable on each Interest Payment Date to the persons in whose names the ownership of the Bonds 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 Lynwood Public Financing Authority - Page 140 of 242 Agenda Item # 3 -9- United States of America as specified in such written request, which will remain in effect until rescinded in writing by the Owner. The Trustee will pay principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of the Bonds in lawful money of the United States of America by check of the Trustee upon presentation and surrender thereof at the Office of the Trustee. 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 subsequent disbursement to beneficial owners of the Bonds. See “– Book-Entry Only System” below. Redemption* Optional Redemption. The Bonds maturing on or after October 1, 20__, will be subject to redemption, as a whole or in part at the option of the Authority, on October 1, 20__, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. Special Mandatory Redemption From Insurance or Condemnation Proceeds. The Bonds are subject to redemption as a whole, or in part among maturities, on any date, from any Net Proceeds required to be used for such purpose as provided in the Indenture, at a redemption price equal to 100% of the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium. Mandatory Sinking Fund Redemption. The Bonds maturing on October 1, 20__ and October 1, 20__ (collectively, the “Term Bonds”) are subject to mandatory redemption in whole, from sinking fund payments made under the Indenture, at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on October 1 in the years as set forth in the following tables: Term Bonds Maturing October 1, _____ Payment Date (October 1) Payment Amount (Maturity) * Preliminary; subject to change. Lynwood Public Financing Authority - Page 141 of 242 Agenda Item # 3 -10- Term Bonds Maturing October 1, _____ Payment Date (October 1) Payment Amount (Maturity) If some but not all of the Term Bonds have been redeemed under optional or special mandatory redemption from insurance or condemnation proceeds provisions of the Indenture as described above, the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of the Term Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis as determined by the Authority, which shall notify the Trustee in writing of such determination. Selection of Bonds for Redemption. If less than all of the Bonds are to be redeemed, the particular maturities of Bonds to be redeemed at the option of the Authority will be determined by the Authority in its sole discretion. If the Bonds are registered in book-entry only form and so long as DTC or a successor securities depository is the sole registered owner of such Bonds, if less than all of the Bonds of a maturity are called for prior redemption, the particular Bonds or portions thereof to be redeemed shall be allocated on a pro rata pass-through distribution of principal basis in accordance with DTC procedures, provided that, so long as the Bonds are held in book-entry form, the selection for redemption of such Bonds shall be made in accordance with the operational arrangements of DTC then in effect, and, if the DTC operational arrangements do not allow for redemption on a pro rata pass-through distribution of principal basis, the Bonds will be selected for redemption, in accordance with DTC procedures, by lot. Notice of Redemption. The Trustee shall mail notice of redemption of the Bonds by first class mail, postage prepaid, not less than 20 nor more than 60 days before any redemption date, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Registration Books and to one or more Securities Depositories and to the Municipal Securities Rulemaking Board. 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. Conditional Redemption Notices; Rescission of Redemption. Redemption notices may be conditional. The Authority has the right to rescind any notice of redemption of the Bonds by written notice to the Trustee on or prior to the date 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 under the Indenture. 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 Lynwood Public Financing Authority - Page 142 of 242 Agenda Item # 3 -11- rescission of redemption in the same manner as the original notice of redemption was sent under the Indenture. Effect of Redemption. If notice of redemption has been duly given as provided 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, said Bonds (or portions thereof) will cease to be entitled to any benefit or security under the Indenture, and the Owners of said 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. 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 Bonds, which shall 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 shall, 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 of Bonds. 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 or Bonds are surrendered for transfer, the Authority will execute and the Trustee will authenticate and deliver to the transferee a new Bond or Bonds of like series, interest rate, maturity and aggregate principal amount. The Authority will pay the cost of printing Bonds and Lynwood Public Financing Authority - Page 143 of 242 Agenda Item # 3 -12- any services rendered or expenses incurred by the Trustee in connection with any transfer of Bonds. Exchange of Bonds. The Bonds 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. Limitations on Transfer and Exchange. The Trustee may refuse to transfer or exchange, under these provisions of the Indenture, any Bonds selected by the Trustee for redemption under the Indenture, or any Bonds during the period established by the Trustee for the selection of Bonds for redemption. Lynwood Public Financing Authority - Page 144 of 242 Agenda Item # 3 -13- DEBT SERVICE SCHEDULE The table below shows annualized debt service payments on the Bonds, assuming no optional redemption or special mandatory redemption from insurance or condemnation proceeds. Year Ending June 30 Principal Interest Total Debt Service Total: Lynwood Public Financing Authority - Page 145 of 242 Agenda Item # 3 -14- 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 Agreement and the Site Lease. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS” for a more complete summary of the Indenture, the Lease Agreement and the Site Lease. Revenues; Pledge of Revenues Pledge of Revenues and Other Amounts. 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 other than the Costs of Issuance Fund are pledged to secure the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds in accordance with their terms and the provisions of the Indenture. Said 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 Agreement, 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 additional amounts of rental paid by the City for the use and occupancy of the Leased Property that are pledged to other bonds, notes or other obligations in accordance with the terms of the Lease Agreement, and (ii) any Additional Rental Payments (consisting of certain administrative costs due to the Authority and the Trustee under the Lease Agreement), 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 has transferred to the Trustee all of the rights of the Authority in the Lease Agreement (other than the rights of the Authority under the provisions of the Lease Agreement regarding Additional Rental Payments, advances, release and indemnification covenants, and agreement to pay 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 forthwith be paid by the Authority to the Trustee. The Trustee is also entitled to and required to, subject to the provisions of the Indenture regarding rights of the Trustee, take all steps, actions and proceedings which the Trustee Lynwood Public Financing Authority - Page 146 of 242 Agenda Item # 3 -15- 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 Agreement. Allocation of Revenues by Trustee; Application of Funds Deposit of Revenues in Bond Fund. All Revenues will be promptly deposited by the Trustee upon receipt thereof in a special fund designated as the “Bond Fund” which the Trustee will establish, maintain and hold in trust; except that all moneys received by the Trustee and required under the Indenture or under the Lease Agreement to be deposited in the Redemption Fund or the Insurance and Condemnation Fund will be promptly deposited in such funds. All Revenues deposited with the Trustee will 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 the principal of and interest on the Bonds or provision therefore under Indenture, and any applicable fees and expenses to the Trustee, will be withdrawn by the Trustee and remitted to the City. Allocation of Revenues. On or before each Interest Payment Date, the Trustee will transfer from the Bond Fund and deposit into the following respective accounts and subaccounts (each of which the Trustee will establish and maintain within the Bond Fund), the following amounts in the following order of priority: (a) 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. (b) 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 (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption). Application of Interest Account. All amounts in the Interest Account shall 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 shall be used and withdrawn by the Trustee solely to pay the principal amount of the Bonds at their respective maturity dates (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption). No Reserve Account. The Authority will not establish a debt service reserve fund for the Bonds. Lease Payments; Covenant to Appropriate Obligation to Pay. Under the Lease Agreement, subject to the provisions of the Lease Agreement regarding abatement and prepayment, the City agrees to pay to the Authority, its successors and assigns, the Lease Payments in the amounts specified in the Lease Agreement, Lynwood Public Financing Authority - Page 147 of 242 Agenda Item # 3 -16- 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 Agreement, and to be deposited by the City with the Trustee on each of the Lease Payment Dates specified in the Lease Agreement. 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 Agreement, 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 thereunder. 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. 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 City and the Authority 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 Agreement, 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. Source of Payments; Covenant to Budget and Appropriate; Pledge of Pension Tax Override. Under the Lease Agreement, the Lease Payments are payable from any source of available funds of the City, subject to the provisions of the Lease Agreement regarding abatement. See “– Abatement” below. The City covenants in the Lease Agreement to take all actions required to include the Lease Payments in each of its budgets during the Term of the Lease Agreement and to make the necessary appropriations for all Lease Payments and Additional Rental Payments, subject to the provisions of the Lease Agreement regarding abatement. Such covenant 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 agreed to be carried out and performed by the City under the Lease Agreement. In addition, in furtherance of its authorized purposes, the City pledges the Pension Tax Override under the Lease Agreement to the payment of the Lease Payments. Limited Obligation The Bonds are special obligations of the Authority, payable solely from and secured by a pledge of the Revenues as specified therein and in the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State, or any political subdivision thereof, is pledged to the payment of the Bonds. Lynwood Public Financing Authority - Page 148 of 242 Agenda Item # 3 -17- The obligation of the City to pay Lease Payments does not constitute an indebtedness of the City, the State, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation, except for the pension tax override levied and collected by the City as described herein. The Authority has no power to tax. Abatement Termination or Abatement Due to Eminent Domain. Under the Lease Agreement, 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 Agreement 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 Agreement 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. Under the Lease Agreement, 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. In the event of any such damage or destruction, the Lease Agreement continues in full force and effect and the City waives any right to terminate the Lease Agreement by virtue of any such damage and destruction. Notwithstanding the foregoing, there will be no abatement of Lease Payments under the Lease Agreement to the extent that the proceeds of property insurance are available to pay Lease Payments that would otherwise be abated, it being declared that such proceeds and amounts constitute a special fund for the payment of the Lease Payments. Default; Remedies The occurrence of any one or more of the certain events constitute an Event of Default under the Lease Agreement, including: (a) Failure by the City to pay any Lease Payment or other payment required to be paid under the Lease Agreement at the time specified therein. Lynwood Public Financing Authority - Page 149 of 242 Agenda Item # 3 -18- (b) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed Agreement (subject to a cure period as described in the Lease Agreement). Whenever any Event of Default has happened and is continuing, the Authority may exercise any and all remedies available under law or granted under the Lease Agreement to collect the amounts then due and thereafter to become due thereunder or to enforce any other of its rights thereunder, except as provided therein. Notwithstanding anything in the Lease Agreement or in the Indenture to the contrary, (a) 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 (the Authority expressly waives the right to receive any amount from the City pursuant to Section 1951.2 of the California Civil Code to accelerate payment of the Lease Payments under the Lease Agreement) and (b) the Authority shall have no right to re-lease any portion of the Leased Property that constitutes a City street. Each covenant in the Lease Agreement 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 under the Lease Agreement; except that no termination of the Lease Agreement may be effected either by operation of law or acts of the parties hereto, except only in the manner therein expressly provided. Insurance Liability Insurance. Under the Lease Agreement, the City is required to maintain or cause to be maintained throughout the Term of the Lease Agreement, 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. 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 the Lease Agreement, 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. Property Insurance. Solely to the extent the Leased Property is property other than the City’s streets, the City shall procure and maintain, or cause to be procured and maintained, throughout the Term of the Lease Agreement, property insurance against loss or damage to all improvements situated on the Leased Property, in an amount at least equal to the lesser of (a) 100% of the replacement value of the improvements, 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; provided, that such coverage shall include Lynwood Public Financing Authority - Page 150 of 242 Agenda Item # 3 -19- earthquake insurance only 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 Agreement and described below. No Rental Interruption Insurance. The City is neither required nor will it maintain rental interruption insurance with respect to the Leased Property. 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 to the redemption of Bonds as set forth in the Indenture. Additional Lease Payments and Additional Bonds The City may amend or supplement the Lease Agreement to obligate itself to pay additional amounts of rental for the use and occupancy of the Leased Property, subject to the following: (A) such additional amounts of rental are pledged or assigned for the payment of any bonds, notes, leases or other obligations the proceeds of which are applied to finance authorized expenditures of the City for the common benefit, and (B) the City has obtained and filed with the Trustee an appraisal or other evidence of value satisfactory to the City showing that the estimated value of the Leased Property is at least equal to the aggregate principal amount of the Outstanding Bonds and all such other bonds, notes, leases or other obligations. Accordingly, the City and the Authority have the ability to enter into other long-term obligations secured by the payment of lease payments on the Leased Property without the prior consent of the Trustee or the Owners of the Bonds. [Remainder of page intentionally left blank] Lynwood Public Financing Authority - Page 151 of 242 Agenda Item # 3 -20- THE AUTHORITY The Authority was formed pursuant to the provisions of Articles 1 through Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”) and the Join Exercise of Powers Agreement, dated as of December 1, 1992, by and between the City and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency), to assist in financings undertaken by either member. The City Council of the City serves as the governing body of the Authority. THE CITY General The City of Lynwood (the “City”) was incorporated in 1921 under the general laws of the State of California (the “State”). The City is situated approximately 13 miles south of downtown Los Angeles at the intersection of two major freeways. The local economy represents a diverse blend of industrial, commercial, agricultural and residential development. The City covers 4.9 square miles and serves a population of 69,880. The City provides the full range of municipal services contemplated by statute, including those functions delegated to cities under State law. These services including public safety (which are contracted to Los Angeles County), public works, recreational and cultural activities, public improvements, planning, zoning, and general administrative services. Other services-such as sanitation, flood control and transportation are provides by special districts with the City being a member. City Government The City has a Council-Manager form of government made up of five council members elected to four-year, overlapping terms. The Mayor and the Council appoint a City Manager who is responsible for daily administration of City affairs, including preparation and submission of the annual budget, which is done under the direction of the Mayor and the City Council for the Mayor’s submission to the City Council. The City Treasurer, an elected position, invests public funds in a prudent manner that provides maximum security while meeting daily cash flow demands and conforming to all statutes governing the investment of public funds. The City Attorney, directly appointed by the City Council, and the deputy city attorney are responsible for administration of all legal affairs of the city, including the City Council, the various city commissions, as well as all city departments and officers. Member Position Term Expires Jorge Casanova Mayor December 20__ José Luis Solache Mayor Pro Tem December 20__ Oscar Flores Council Member December 20__ Marisela Santana Council Member December 20__ Rita Soto Council Member December 20__ Lynwood Public Financing Authority - Page 152 of 242 Agenda Item # 3 -21- Following are short biographies of the City Manager and Finance Director: Ernie, Hernandez, City Manager. Mr. Hernandez was City Manager in neighboring Hawaiian Gardens where he served in that position for four years. Prior to that he was Deputy City Manager in Norwalk for nearly a decade. He has extensive experience in leading and directing municipal administrative and operational functions. Mr. Hernandez, who also worked for the cities of Santa Ana, Long Beach and South El Monte, holds a Master’s Degree in Public Administration from Long Beach State University, and a Bachelor of Arts Degree from the California State University Dominguez Hills. Harry Wong, Finance Director. Mr. Wong has more than 10 years of financial management experience in municipalities, together with more than 3 years of audit experience with PWC and a Big-4 Accounting firm. Mr. Wong also has a bachelor’s in accountancy from California State University Northridge, an MBA from University of Irvine and has been a CPA since 2004. Labor Relations As of May 3, 2022, the City employed 100 full-time equivalent (FTE) employees and 21 part-time employees. Two unions represent 109.5 of the FTEs. The following table identifies the number of employees covered and the current status of the contracts with the bargaining units. Labor Organization Employees Current Contract Expiration Date LEA Association 93.5 June 30, 2023 LEA Management Group 16.0 June 30, 2023 CITY FINANCIAL INFORMATION Accounting and Financial Reporting The City maintains its accounting records in accordance with Generally Accepted Accounting Principles (“GAAP”) and the standards established by the Governmental Accounting Standards Board (“GASB”). The Governmental Accounting Standards Board published its Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments, on June 30, 1999 (“GASB Statement No. 34”). GASB Statement No. 34 provides guidelines to auditors, state and local governments and special purpose governments such as school districts and public utilities, on new requirements for financial reporting for all governmental agencies in the United States. Generally, the basic financial statements and required supplementary information should include (i) Management’s Discussion and Analysis; (ii) government-wide financial statements prepared using the economic measurement focus and the accrual basis of accounting and fund financial statements prepared using both the current financial resources measurement focus and the modified accrual method of accounting (governmental funds) and funds using the economic measurement focus and the accrual basis of accounting (proprietary funds) and (iii) required supplementary information. The City’s financial statements are prepared in conformance with the requirements of GASB Statement No. 34. Lynwood Public Financing Authority - Page 153 of 242 Agenda Item # 3 -22- In the government-wide Statement of Net Position and Statement of Activities in the City’s audited financial statements for the Fiscal Year ending June 30, 2021, both governmental and proprietary activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset is used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when “measurable and available.” Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. The City defines available to be within 60 days of year- end. Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for principal and interest on long-term liabilities, claims and judgments, and compensated absences, which are reported when due. Governmental capital asset acquisitions are reported as expenditures in governmental funds. Proceeds for governmental long-term liabilities and acquisitions under capital leases are reported as other financing sources. Those revenues susceptible to accrual include taxes and intergovernmental revenues. All other revenue items are considered to be measurable and available only when cash is received by the government. Impact fees are received and recognized as revenue upon project completion and inspection. Certain indirect costs are included in program expenses reported for individual functions and activities. Grant revenues are recognized in the Fiscal Year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position are available to finance program expenditures. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary. All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset is used. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary funds’ principal operations. The principal operating revenues of the enterprise and internal service funds are charges for services. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. The City’s fiduciary funds consist of a private-purpose trust fund, which is reported using the economic resources measurement focus, and agency funds, which have no measurement focus, but utilizes the accrual basis for reporting assets and liabilities. The City Council employs, at the beginning of each Fiscal Year, an independent certified public accounting firm which, at such time or times as specified by the City Council, at least Lynwood Public Financing Authority - Page 154 of 242 Agenda Item # 3 -23- annually, at such other times as such firm shall determine, examines the books, records, inventories and reports of all officers and employees who receive, control, handle or disburse public funds and of all such other officers, employees or departments as the City Council may direct. As soon as practicable after the end of the Fiscal Year, a final audit and report is submitted by such firm to the City Council and a copy of the financial statements as of the close of the Fiscal Year is published. Pension Tax Override; Bartel Report Overview. On April 9, 1946, the voters in the City approved the Pension Tax Override, which is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes. The Pension Tax Override is accounted for in the Retirement Special Revenue Fund maintained by the City. Pension Tax Override revenues for the fiscal year ended June 30, 2021 were $___________. AB 377 Limitation. Although the 1946 ballot measure approving the Pension Tax Override authorizes the City to levy the Pension Tax Override in an amount sufficient to provide revenues to meet all of the City’s obligations for contributions to CalPERS under the Retirement Law, the maximum tax rate for the Pension Tax Override was capped by Assembly Bill 377 (“AB 377”), enacted in July 1983 as Chapter 491 of Statutes of 1983, now codified as Section 96.31 of the California Revenue and Taxation Code. AB 377 prohibits the levying of a retirement tax to pay for pension system costs in excess of the rate imposed in Fiscal Year 1982-83 or 1983-84, whichever is higher. The Fiscal Year ________ rates were $_____ per $100 of assessed valuation, which established the maximum rate of the Pension Override Tax per AB 377. In addition, the City was previously involved in litigation regarding the amount of the Pension Tax Override. In accordance with a settlement of the lawsuit relating to the Pension Tax Override, the City fixed the rate of tax at $0.125 per $100 of assessed valuation. California courts have held that Proposition 13, discussed further herein, permits additional property taxation to pay for pension plans with special tax authority approved by the voters prior to July 1, 1978; provided, the imposition of such tax is limited to the funding of employee retirement benefits at a level not in excess of the retirement benefits in existence prior to July 1, 1978. Bartel Report. In order to ascertain the amount or revenues that may be pledged to the payment of Lease Payments in accordance with applicable limitations, the City commissioned Bartel Associates, LLC to prepare a report, dated __________, 2022 (the “Bartel Report”). General Fund Overview and Budget Overview. The City’s General Fund is its primary operating fund, and is where the City accounts for all its general-purpose revenues. It is distinguished from the City’s other governmental funds that are used to account for special purpose revenues, capital projects, debt service activities, and monies held for the benefit of others. The City operates on a Fiscal Year basis that begins on the first day of July of each year and ends on the thirtieth day of June the following year. The annual budget adopted by the City Council provides for the general operation of the City. Development of the City’s annual budget is a process which generally begins in February and March and continues until the budget is adopted by the City Council in June. The General City Budget includes programs which are provided on a largely city-wide basis. The programs and services are financed primarily by the Lynwood Public Financing Authority - Page 155 of 242 Agenda Item # 3 -24- City’s share of sales tax, property tax, revenues from the State and/or federal government, and charges for services provided. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the Fiscal Year. Appropriations lapse at Fiscal Year-end. The City Council generally reauthorizes appropriations for continuing projects and activities. The City Council has the legal authority to amend the budget of any fund at any time during the Fiscal Year. The budgetary level of control (the level on which expenditures may not legally exceed appropriations) is generally at the fund level. The City Manager is authorized to transfer budgeted amounts within departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. Long-Term Financial Planning. The City continues to explore additional sources of revenue to meet expectations for community services. The City utilizes a combination of expenditure spending limits, budget cuts, some increases in fees and the prudent use of reserves to balance each year’s budget. The City must continue to be conservative and manage its fiscal affairs in a prudent manner. Budgetary Control Policy. The City maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the general fund, special revenue funds, debt service funds, capital projects funds, enterprise funds, and internal service funds are included in the annual appropriated budget. The level of budgetary control (the level at which expenditures cannot legally exceed the appropriated amount) is established by function and activity within an individual fund. The City’s budgetary records are maintained on a modified accrual basis. Revenues are recorded when measurable and available and expenditures are recorded when goods or services are received and the liability incurred. Based on the City’s financial management policies, the City is required to maintain a balanced operating budget, which is adopted by resolution on or before June 30th for the ensuing Fiscal Year. Following the adoption of the budget, it is sometimes necessary to amend the budget. Appropriations in the budget may be adjusted by recommendation of the Finance Director and approval by the City Manager when the budget is not increased in total amount. Savings from appropriations in one section of a department budget may be used to fund another section of a department budget. Any increase in appropriations that increases the total adopted budget must be approved by the City Council. The City Council formally reviews the City’s fiscal condition and amends appropriations, if necessary, six months after the beginning of each fiscal year. COVID-19 Pandemic. The City continues to monitor the spread of COVID-19 and has been working with local, state, and national agencies to address the potential impact of the pandemic upon the City since its outbreak in the United States in 2020. 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. See the references to COVID-19 in the following subsection in connection with the unknown impacts on the City’s budgeting process. Lynwood Public Financing Authority - Page 156 of 242 Agenda Item # 3 -25- Most Recently Adopted Budget. The adopted biannual budget for fiscal years 2021-22 and 2022-23 was approved on July 20, 2021 (the “Adopted Budget”). The Fiscal Year 2021-22 and Fiscal Year 2022-23 Proposed Budgets were developed in the context of the City gradually recovering from the impact of the Covid-19 pandemic. The adopted Fiscal Year 2021-22 operating revenues for all funds, excluding the Successor Agency, is $97.77M and $42.24M for adopted transfers in, for a total of $140.01M. The approved Fiscal Year 2022-23 operating revenues for all funds, excluding the Successor Agency, is $91.03M and $18.38M for approved transfers in, for a total of $109.42M. The adopted Fiscal Year 2021-22 operating expenditures for all funds, excluding the Successor Agency, is $110.27M and $42.24M for adopted transfers out, for a total of $152.51M. The approved Fiscal Year 2022-23 operating expenditures for all funds, excluding the Successor Agency, is $89.57M and $18.38M for approved transfers out, for a total of $107.96M. The adopted General Fund operating revenue budget for Fiscal Year 2021-22 is $35.95M with an additional $2.09M for non-operating transfers in for a total of $38.04M. The approved General Fund operating revenue budget for Fiscal Year 2022-23 is $36.56M with an additional $2.21M for non- operating transfers in for a total of $38.77M. The adopted General Fund operating expenditure budget for Fiscal Year 2021-22 is $36.26M with an additional $3.14M for non-operating transfers out for a total of $39.40M. The approved operating expenditure budget for Fiscal Year 2022-23 is $37.65M with an additional $2.42M for non-operating transfers out for a total of $40.07M. Current Budget and Historical Budget Information. Set forth in Table 1 are the General Fund budgets that were adopted for Fiscal Years 2020-21 through 2022-23, as well as the audited actuals for Fiscal Year 2020-21. The budget may be amended and revised as necessary by the City Council. Lynwood Public Financing Authority - Page 157 of 242 Agenda Item # 3 -26- TABLE 1 City of Lynwood General Fund Budget Summary Fiscal Years 2020-21 through 2022-23 2020-21 Revised Budget 2020-21 Audited 2021-22 Adopted Budget 2022-23 Approved Budget Revenues Property taxes $11,646,501 $12,237,047 $11,844,069 $11,749,505 Sales taxes 9,228,862 12,886,776 12,173,400 12,558,100 Utility users tax 5,270,000 5,225,838 5,270,000 5,270,000 Franchise fees 833,144 1,103,890 973,144 973,144 Licenses and permits 786,000 1,038,026 594,820 614,600 Revenues from other agencies 124,229 144,666 149,929 159,929 Charges for current services 1,210,064 953,382 1,604,025 1,933,450 Other revenue 1,128,650 2,412,879 2,036,001 1,885,474 Fines and Forfeitures 1,210,000 2,323,943 906,000 1,016,000 Use of money and property 442,997 246,191 395,497 395,497 Transfers in - - - Total Revenues 34,922,283 38,572,647 35,946,885 36,555,699 Expenditures Current: General Government 4,609,215 3,951,512 4,772,211 5,037,430 Public safety 19,660,906 19,042,384 20,541,020 21,544,072 Public works 6,764,664 6,201,299 7,063,923 7,289,390 Community development 229,467 88,181 467,414 307,644 Parks and recreation 3,188,630 2,334,105 3,419,876 3,472,725 Capital outlay - - - - Debt Service: - - - - Principal retirement - - - - Interest and fiscal charges - - - - Total expenditures 34,452,882 31,617,481 36,264,444 37,651,261 Excess (deficiency) of revenues over (under) expenditures 469,401 6,955,166 (317,559) (1,095,562) Other financing sources(uses) Transfers in 3,446,240 2,725,050 2,097,474 2,218,674 Transfers out (5,417,574) (4,505,549) (3,138,612) (2,421,931) Proceeds from sale of land 2,000,000 - - - Total other financing sources 28,666 (1,780,499) (1,041,138) (203,257) Net Change in fund balances 498,067 5,174,667 (1,358,697) (1,298,819) Beginning of year 5,529,106 5,529,106 6,253,309 4,894,611 End of year 6,027,173 10,703,773 4,894,611 3,595,793 ____________________ Source: City of Lynwood Finance Department. Lynwood Public Financing Authority - Page 158 of 242 Agenda Item # 3 -27- General Fund Key Revenue Sources. The three major general fund revenue sources of the City for Fiscal Year 2020-21 (collectively, the “Key Revenue Sources”), are Sales Tax (approximately 39.6% of total general fund revenue), Property Tax (approximately 36.3% of total general fund revenue) and Utility User’s Taxes (approximately 16.1% of total general fund revenue). Also see “APPENDIX A – AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR 2020-21” herein. The following Table 2 sets forth the audited revenues received by the City for each of the Key Revenue Sources for Fiscal Years 2016-17 through 2020-21, which have been totaled and compared to the prior Fiscal Year to illustrate the amount and percent of change. Table 2 CITY OF LYNWOOD Fiscal Years 2016-17 through 2020-21 General Fund Key Revenue Sources and Change From Prior Year(1) Fiscal Year Property Taxes Utility User’s Taxes Sales Taxes Franchise Taxes Business License Taxes Other Taxes Total of Key Tax Sources Taxes % Change From Prior Year 2016-17 $9,265,676 $5,169,598 $4,814,034 $577,959 $876,656 $185,814 $20,889,737 --% 2017-18 9,795,477 5,196,640 9,176,594 671,343 885,191 143,648 25,868,893 23.8 2018-19 10,683,709 5,014,483 10,236,088 673,766 896,212 192,692 27,696,950 7.1 2019-20 10,877,603 4,736,649 10,107,253 702,844 800,001 201,617 27,425,967 (1.0) 2020-21 11,807,523 5,225,838 12,886,776 652,305 764,016 410,021 31,746,479 15.8 (1) Includes transfers in from other funds. Source: City of Lynwood - audited financial statements 2018-19 through 2020-21. [Remainder of page intentionally left blank] Lynwood Public Financing Authority - Page 159 of 242 Agenda Item # 3 -28- The following Table 3 sets forth the audited revenues received by the City for the total of Key Revenue Sources and total of Other General Fund Revenue Sources for Fiscal Years 2018- 19 through 2020-21. TABLE 3 City of Lynwood General Fund Revenues by Revenue Source Fiscal Years 2018-19 through 2020-21 2018-19 2019-20 2020-21 Category Revenues % of Total Revenues % of Total Revenues % of Total Taxes: Property tax $10,683,709 32.2% $10,877,603 32.3% $11,807,523 36.3% Utility users 5,014,483 15.1 4,736,649 14.1 5,225,838 16.1 Sales Tax 10,236,088 30.8 10,107,253 30.1 12,886,776 39.6 Franchise taxes 673,766 2.0 702,844 2.1 652,305 2.0 Business license tax 896,212 2.7 800,001 2.4 764,016 2.3 Other taxes 192,692 0.6 201,617 0.6 410,021 1.3 Use of money and property 4,371,883 13.2 6,076,939 18.1 (11,930) 0.0 Miscellaneous 1,158,007 3.5 127,625 0.4 823,915 2.5 Total Revenues(1) $33,226,840 100% $33,630,531 100% $32,558,464 100% ________________ (1) Totals may not add due to rounding. Source: City of Lynwood - audited financial statements 2018-19 through 2020-21. Sales and Use Taxes Sales & Use Taxes represented the largest source of tax revenues to the City’s General Fund for the most recent fiscal year, accounting for approximately 39.6% of total General Fund revenues for Fiscal Year 2020-21. 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. [Remainder of page intentionally left blank] Lynwood Public Financing Authority - Page 160 of 242 Agenda Item # 3 -29- Historic Taxable Transactions. The following table shows historical taxable transactions in the City for the most recent five years available. TABLE 4 City of Lynwood Taxable Transactions Fiscal Years 2017 through 2021 (In Thousands) 2017 2018 2019 2020 2021 Motor Vehicle and Parts Dealers $23,702 $23,316 $26,389 $24,852 $28,014 Home Furnishings and Appliances 6,776 11,044 18,895 16,012 21,848 Building Materials 32,762 37,310 35,596 38,410 46,570 Food and beverage stores 41,736 42,863 43,481 46,957 47,257 Gasoline stations 51,543 63,082 69,490 53,414 73,906 Apparel stores 26,020 26,990 26,025 22,780 37,981 General merchandise stores 17,089 14,057 5,670 5,586 7,566 Food services and drinking places 85,634 88,206 94,000 86,974 102,747 Other retail stores 22,323 24,146 24,819 31,344 41,606 All other outlets 43,605 40,403 49,275 57,571 97,330 Total All Outlets $351,191 $371,417 $393,641 $383,880 $504,825 ____________________ Source: California Department of Tax and Fee Administration (as of January 11, 2022). State-Wide Sales Tax Law. 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 5 City of Lynwood Sales Tax Rate Effective April 1, 2022 Statewide Rate 6.00% Los Angeles County Sales Tax 0.25 Los Angeles County Special Tax 3.00 City of Lynwood Transactions and Use Tax 1.00 Total 10.25% ____________ Source: City of Lynwood Finance Department. 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 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. Lynwood Public Financing Authority - Page 161 of 242 Agenda Item # 3 -30- 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. Lynwood Public Financing Authority - Page 162 of 242 Agenda Item # 3 -31- Property Taxes Property Taxes represents the second-largest sources of taxes to the City’s General Fund, after sales/use taxes. 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. 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 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 Lynwood Public Financing Authority - Page 163 of 242 Agenda Item # 3 -32- 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. Historical Assessed Valuations. The table below presents the assessed valuation of taxable property in the City from fiscal year 2012-13 through fiscal year 2021-22. TABLE 6 City of Lynwood Assessed Valuations of All Taxable Property Fiscal Years 2012-13 through 2021-22 Fiscal Year Local Secured Utility Unsecured Total % Change 2012-13 $2,683,399,346 $977 $87,408,507 $2,770,808,830 --% 2013-14 2,589,115,897 191 90,514,780 2,679,630,868 (3.3) 2014-15 2,694,961,056 182 89,872,751 2,784,833,989 3.9 2015-16 2,831,887,191 177 91,500,901 2,923,388,269 5.0 2016-17 2,960,766,716 159 87,435,655 3,048,202,530 4.3 2017-18 3,112,901,366 153 86,372,576 3,199,274,095 5.0 2018-19 3,388,317,977 0 125,816,908 3,514,134,885 9.8 2019-20 3,475,747,092 0 131,942,448 3,607,689,540 2.7 2020-21 3,761,035,322 0 98,013,824 3,859,049,146 7.0 2021-22 4,017,350,210 0 102,846,558 4,120,196,768 6.8 Source: California Municipal Statistics Inc. Lynwood Public Financing Authority - Page 164 of 242 Agenda Item # 3 -33- Historical Secured Property Tax Levies and Collections. The table below presents secured property tax collections and delinquencies in the City for the for fiscal years shown. TABLE 7 City of Lynwood Secured Property Tax Levies and Collections Fiscal Years 2016-17 through 2020-21 Fiscal Year Secured Tax Charge(1) Amount Delinquent June 30 % Delinquent June 30 2016-17 $3,504,433.67 $41,620.71 1.19% 2017-18 3,694,410.57 45,896.21 1.24 2018-19 4,035,343.98 55,151.38 1.37 2019-20 4,157,736.12 93,766.39 2.26 2020-21 4,440,356.83 75,698.69 1.70 (1) 1% General Fund apportionment. Excludes redevelopment agency impounds. Source: California Municipal Statistics Inc. Assessed Valuations and Parcels by Land Use. The following table shows secured assessed valuations and parcels by land use for fiscal year 2021-22. As shown in the table, approximately 89.15% of the parcels in the City, representing almost 70.87% of the assessed valuation in the City, has residential uses. Table 8 City of Lynwood Secured Assessed Valuation and Parcels by Land Use Fiscal Year 2021-22 2021-22 % of No. of % of Non-Residential: Assessed Valuation (1) Total Parcels Total Commercial $502,075,052 12.50% 564 5.40% Vacant Commercial 13,232,592 0.33 83 0.80 Industrial 407,752,814 10.15 206 1.97 Vacant Industrial 16,359,725 0.41 31 0.30 Recreational 4,097,904 0.10 3 0.03 Government/Social/Institutional 217,602,947 5.42 174 1.67 Miscellaneous 9,272,788 0.23 72 0.69 Subtotal Non-Residential $1,170,393,822 29.13% 1,133 10.85% Residential: Single Family Residence $1,936,833,150 48.21% 7,187 68.85% Condominium/Townhouse 16,768,067 0.42 59 0.57 Mobile Home 928,203 0.02 35 0.34 Mobile Home Park 1,671,868 0.04 1 0.01 2-4 Residential Units 567,853,557 14.14 1,543 14.78 5+ Residential Units/Apartments 312,520,698 7.78 373 3.57 Vacant Residential 10,380,845 0.26 108 1.03 Subtotal Residential $2,846,956,388 70.87% 9,306 89.15% Total $4,017,350,210 100.00% 10,439 100.00% _________________ (1) Local Secured Assessed Valuation, excluding tax exempt property. Source: California Municipal Statistics, Inc. Lynwood Public Financing Authority - Page 165 of 242 Agenda Item # 3 -34- Per Parcel Assessed Valuation of Single-Family Homes. Table 8 below shows the per parcel assessed valuation for improved single-family homes (according to 2021-22 assessed valuation) in the City. The average assessed valuation is $269,491, and the median assessed valuation is $252,366. Table 9 CITY OF LYNWOOD Fiscal Year 2021-22 Per Parcel Assessed Valuation of Single-Family Homes No. of 2021-22 Average Median Parcels Assessed Valuation Assessed Valuation Assessed Valuation Single Family Residential 7,187 $1,936,833,150 $269,491 $252,366 2021-22 No. of % of Cumulative Total % of Cumulative Assessed Valuation Parcels (1) Total % of Total Valuation Total % of Total $0 - $24,999 17 0.237% 0.237% $340,684 0.018% 0.018% $25,000 -$49,999 275 3.826 4.063 11,200,788 0.578 0.596 $50,000 - $74,999 310 4.313 8.376 18,971,861 0.980 1.575 $75,000 - $99,999 194 2.699 11.076 16,818,626 0.868 2.444 $100,000 - $124,999 201 2.797 13.872 22,578,936 1.166 3.610 $125,000 - $149,999 250 3.479 17.351 34,428,099 1.778 5.387 $150,000 - $174,999 384 5.343 22.694 62,715,499 3.238 8.625 $175,000 - $199,999 524 7.291 29.985 98,646,645 5.093 13.718 $200,000 - $224,999 703 9.782 39.766 149,957,684 7.742 21.461 $225,000 - $249,999 686 9.545 49.311 162,746,521 8.403 29.863 $250,000 - $274,999 537 7.472 56.783 140,765,197 7.268 37.131 $275,000 - $299,999 471 6.553 63.337 135,507,953 6.996 44.128 $300,000 - $324,999 405 5.635 68.972 126,414,420 6.527 50.654 $325,000 - $349,999 323 4.494 73.466 108,616,571 5.608 56.262 $350,000 - $374,999 291 4.049 77.515 105,375,216 5.441 61.703 $375,000 - $399,999 284 3.952 81.467 110,108,037 5.685 67.388 $400,000 - $424,999 267 3.715 85.182 110,040,568 5.681 73.069 $425,000 - $449,999 254 3.534 88.716 111,082,076 5.735 78.805 $450,000 - $474,999 235 3.270 91.986 108,453,204 5.600 84.404 $475,000 - $499,999 160 2.226 94.212 77,833,212 4.019 88.423 $500,000 and greater 416 5.788 100.000 224,231,353 11.577 100.000 7,187 100.000% $1,936,833,150 100.000% (1) Improved single-family residential parcels. Excludes condominiums and parcels with multiple family units. Source: California Municipal Statistics, Inc. [Remainder of Page Intentionally Left Blank] Lynwood Public Financing Authority - Page 166 of 242 Agenda Item # 3 -35- 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 10.60% of the total City fiscal year 2021-22 assessed valuation of $425,931,536. TABLE 10 City of Lynwood Principal Property Taxpayers (Secured Roll) Fiscal Year 2021-22 2021-22 % of Property Owner Primary Land Use Assessed Valuation Total (1) 1. Duke Lynwood LP Industrial $72,417,502 1.80% 2. Terreno Lynwood LLC Industrial 64,887,602 1.62 3. Plamex Investment LLC Shopping Center 48,220,864 1.20 4. Rexford Industrial Industry Way Industrial 24,427,126 0.61 5. Prime Desert Properties LLC Professional Building 24,336,813 0.61 6. Primrose 19 LP Office Building 21,641,910 0.54 7. Earl M. Jorgensen Co. Industrial 20,682,478 0.51 8. EK Lynwood LLC Shopping Center 16,640,575 0.41 9. Lee Riviera Enterprises LLC Professional Building 15,282,705 0.38 10. Albi Lynwood Investments LLC Commercial 14,937,452 0.37 11. 805 Property LLC Shopping Center 14,816,150 0.37 12. Shapco Partnership Industrial 11,864,476 0.30 13. Lynwood MFT LLC Professional Building 11,232,643 0.28 14. Jones Holdings I, II & III LLC Industrial 11,101,937 0.28 15. El Segundo Boulevard Property Apartments 10,742,115 0.27 16. Yousuf H. Haroon Industrial 8,840,650 0.22 17. Deborah Drooz Commercial 8,712,380 0.22 18. Tony Trinh Trust Commercial 8,639,796 0.22 19. Nova Storage Lynwood LP Industrial 8,316,163 0.21 20. NP Wright LLC Industrial 8,190,199 0.20 $425,931,536 10.60% _________________________________ (1) The total City secured assessed valuation for fiscal year 2021-22 is $4,017,350,210. Source: California Municipal Statistics, Inc. Other Sources of Revenues Utility Tax. It is the third largest, which comprises about 14% of the City’s total annual General Fund revenues. Currently, a 9% utility users tax is imposed on the City’s water, telephone, gas, electricity and cable television services. Business License Tax and Permit Fee. The City collects fees for licenses and permits provided by the City, including, but not limited to, regulatory permits, development permits, plan check and permitting, building permits and inspections and other development fees. The business license tax is an annual charge that is applied to either gross receipts of payroll for each business or more commonly, the number of employees per business depending on the type of business. There are some exceptions and additional fees that may apply to certain specialty or professional businesses. The permit fee is project based. Franchise Tax. The City levies a franchise tax on its pipelines, cable, towing, and utility services franchises. A franchise tax of 5% is imposed on any franchise holder operating within the boundaries of the City. Lynwood Public Financing Authority - Page 167 of 242 Agenda Item # 3 -36- Financial Statements General. The City’s accounting policies conform to generally accepted accounting principles and reporting standards set forth by the State Controller. The audited financial statements also conform to the principles and standards for public financial reporting established by GASB. Basis of Accounting and Financial Statement Presentation. The government-wide financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due. Most Recent Audited Financial Statements. Set forth in the following tables is the City’s General Fund balance sheets and statements of revenues, expenditures and changes in General Fund Balance for fiscal years 2016-17 through 2020-21, 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 Annual Comprehensive Financial Report (“ACFR”) for Fiscal Year 2020-21, including the City’s audited financial statements, is set forth in Appendix A. General Fund Historical Financial Data The following Tables 11 and 12 provide a five-year history of (i) the City’s General Fund revenues, expenditures, and changes in fund balances for Fiscal Years 2016-17 through 2020- 21 and (ii) the City’s Comparative Balance Sheet for Fiscal Years 2016-17 through 2020-21. Lynwood Public Financing Authority - Page 168 of 242 Agenda Item # 3 -37- TABLE 11 City of Lynwood Statements of Revenues, Expenditures and Changes in General Fund Balance Fiscal Years 2016-17 through 2020-21 2016-17 2017-18 2018-19 2019-20 2020-21 Revenues Taxes and assessments $20,005,982 $24,941,479 $28,505,748 $26,806,601 $31,453,560 Licenses and permits 943,700 815,194 945,896 942,376 1,038,026 Fines, penalties and forfeitures 1,601,620 1,751,217 2,344,777 1,654,693 2,323,943 Use of money and property 298,652 346,348 588,774 618,797 246,191 Intergovernmental 131,653 118,915 119,595 137,311 144,666 Charges for service 1,720,903 1,546,418 1,872,551 1,907,408 953,382 Administrative support 1,118,246 1,118,246 1,118,246 1,118,674 1,118,674 Miscellaneous 1,086,943 1,924,946 1,192,765 370,148 1,294,205 Total Revenues 26,907,699 32,562,763 36,688,352 33,556,008 38,572,647 Expenditures Current: General Government 4,306,522 5,330,570 4,433,873 5,100,825 3,951,512 Public safety 16,326,446 17,437,065 17,729,040 18,742,412 19,042,384 Public works 4,293,658 5,495,132 6,841,748 6,822,296 6,201,299 Community development 113,187 48,519 138,816 -- 88,181 Parks and recreation 2,935,450 3,377,729 3,453,952 3,393,928 2,334,105 Capital outlay 1,191 7,893 138,883 83,100 -- Total expenditures 27,976,454 31,696,908 32,736,312 34,142,561 31,617,481 Excess (deficiency) of revenues over (under) expenditures (1,068,755) 865,855 3,952,040 (586,553) 6,955,166 Other financing sources(uses) Transfers in 2,635,588 3,094,178 2,677,967 1,105,160 2,725,050 Transfers out (1,457,756) (1,650,331) (4,446,163) (2,052,818) (4,505,549) Total other financing sources 1,177,832 1,443,847 (1,768,196) (947,658) (1,780,499) Net Change in fund balances 109,077 2,309,702 2,183,844 (1,534,211) 5,174,667 Beginning of year 2,460,694 2,569,771 4,879,473 7,063,317 5,529,106 End of year $2,569,771 $4,879,473 $7,063,317 $5,529,106 $10,703,773 ____________ Source: City Finance Department and City of Lynwood - audited financial statements for fiscal years 2016-17 through 2020-21. Lynwood Public Financing Authority - Page 169 of 242 Agenda Item # 3 -38- TABLE 12 City of Lynwood General Fund Balance Sheets Fiscal Years 2016-17 through 2020-21 2016-17 2017-18 2018-19 2019-20 2020-21 Assets Cash and investments $4,454,157 $4,644,238 $9,177,157 $5,516,506 $8,633,865 Receivables: Accounts 1,161,134 1,329,982 1,374,808 1,170,756 2,763,310 Interest 8,160 12,927 97,159 40,433 5,813 Intergovernmental 1,299,671 2,076,734 1,936,313 2,289,577 2,873,421 Due from other funds 3,604,714 5,021,046 3,125,668 4,681,451 4,998,943 Other assets 19,161 -- -- -- -- Restricted cash and investments: Cash and investments 7,329 7,330 7,330 7,331 7,331 Cash and investments with fiscal agents -- -- -- -- -- Total Assets 10,554,326 13,092,257 15,718,435 13,706,054 19,282,683 Deferred Inflow of Resources Unavailable revenues 627,166 687,255 515,820 505,722 1,078,424 Total Deferred Outflow of Resources 627,166 687,255 515,820 505,722 1,078,424 Liabilities Accounts payable and accrued liability 3,074,338 3,171,269 3,755,016 3,513,809 3,420,166 Deposits 1,242,826 1,314,035 1,344,057 1,117,192 1,040,095 Advances from successor agency 3,040,225 3,040,225 3,040,225 3,040,225 3,040,225 Total Liabilities 7,357,389 7,525,529 8,139,298 7,671,226 7,500,486 Fund Balances Restricted 7,329 7,330 7,330 7,331 7,331 Committed 75,372 561,594 1,621,084 3,159,083 4,828,977 Unassigned 2,487,070 4,310,549 5,434,903 2,362,692 5,867,465 Total Fund Balance 2,569,771 4,879,473 7,063,317 5,529,106 10,703,773 Total Liabilities & Fund Balance $10,554,326 $13,092,257 $15,718,435 $13,706,054 $19,282,683 _____________ Source: City of Lynwood - Audited Financial Statements for fiscal years 2016-17 through 2020-21. Relevant Fiscal Policies Reserve Policy. Pursuant to the City’s adopted fiscal and budget policies, the City maintain General Operating Reserves at a level equal to at least 10% of the total General Fund budgeted revenue. These reserves are created and maintained to provide sufficient cash flow to meet daily financial needs and sustain City services in the event of a catastrophic event such as a natural/manmade disaster (for example, earthquake, windstorm, flood, terrorist attack) or a major downturn in the economy. In general, the City endeavors to support ongoing operations with ongoing revenue but uses reserves on a one-time basis to support City services pending the development of a longer- term financial solution. However, in no event will reserves be used longer than one biennium to support City operation. If reserves are used, the City will begin to replenish these reserves at the end of biennium if a surplus exists, but no later than biennium following their use. Surplus balances in the General Fund are used to fund one-time operations and capital expenditures, dedicated to the Capital Improvement Program or places in an economic Lynwood Public Financing Authority - Page 170 of 242 Agenda Item # 3 -39- contingency account if there are surplus balances remaining after all current expenditure obligations and reserve requirements are met and if the City has made a determination that revenues for the ensuing biennium are sufficient to support budgeted General Fund operations. Debt Policy. The City has adopted Debt Management Policies in compliance with California Government Code Section 8855. The Debt Management Policies sets forth the purposes for which long-term debt financings may be undertaken (i.e., for projects that will provide benefit to constituents over multiple years). The Debt Management Policies provide that short- term financings may be undertaken for operational cash flow purposes and for short-lived capital projects (i.e. equipment leases). City Investment Policy. To maximize interest income and maintain liquidity, the City pools operating cash for its various funds and invests the monies in securities of various maturities. City and Agency funds are invested pursuant to the City’s Investment Policy in compliance with Section 53601 of the California Government Code. The investment types authorized for investment by the City include the Local Agency Investment Fund (State Pool), U.S. Treasury Obligations, U.S. Government Agency Issues, Certificates of Deposit, Commercial Paper, as well as Mutual Funds and Money Market Funds comprised of eligible securities. The objectives of the Investment Policy are to preserve capital, provide adequate liquidity to meet cash disbursements of the City, and to achieve market- average rates of return. Investments are secured by collateral as required under law, with maturity dates staggered to ensure that cash is available as needed. The City Council receives regular reports from the City Treasurer on the performance of the City’s pooled investment program. Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s Investment Policy. The City manages its exposure to interest rate risk by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Risk Management The City is a member of Independent Cities Risk Management Authority (“ICRMA”). ICRMA was established in 1980 to provide excess insurance coverage, risk management and self-insurance services for California cities. ICRMA is a Joint Powers Authority (“JPA”) directed by a Governing Board consisting of one representative from each Member City. ICRMA offers members excess liability, excess workers’ compensation, property and special events coverage. Currently there are 22 member cities. ICRMA maintains a management services agreement with Bickmore Risk Services to provide staff services to the Authority. See APPENDIX A Note 12 for additional details regarding the City’s Risk Management. Employee Retirement System; CalPERS 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 Lynwood Public Financing Authority - Page 171 of 242 Agenda Item # 3 -40- the information provided by CalPERS and makes no representations and expresses no opinion as to the accuracy of the information provided by CalPERS. The annual comprehensive 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 be changed in the future. Actuarial assessments will change with the future experience of the pension plans. General Information about the Pension Plans. The City contributes to two defined benefit pension plans: Employees Retirement Plan (“Miscellaneous Plan”) and Fire Retirement Plan (“Safety Plan”). Each plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The Miscellaneous Plan is part of the Public Agency portion of the California Public Employees Retirement System (“CalPERS”), an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for the participating public employers within the State of California. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS’ audited financial statements can be obtained at CalPERS’ website under Forms and Publications Effective November 1, 2000, the City’s fire department was transferred to the County. As a result, certain safety members (employees of the fire department) of CalPERS have ceased to be employed by the fire department of the City and have been employed by the County, and upon such transfer, these safety members have become members of Los Angeles County Employees Retirement Association (“LACERA”). This transfer did not apply to safety members who have retired on or before the effective date of the transfer. Those retirees will continue to receive their pension benefits from the City’s Safety Plan with CalPERS. The City’s Safety Plan is currently part of the CalPERS Inactive Agency Risk Pool, a cost-sharing multiple-employer defined benefit plan. Employees Covered. At the June 30, 2019 Valuation date, the following employees were covered by the benefit terms for each Plan: Miscellaneous Safety Active employees 120 0 Transferred and terminated employees 191 5 Retired employees and beneficiaries 255 111 Total 566 116 Source: City of Lynwood. 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 Lynwood Public Financing Authority - Page 172 of 242 Agenda Item # 3 -41- 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 retirement and disability benefits, annual cost-of- living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions under both plans are established by the State statute and City resolution as follows: Miscellaneous Plan Hire Date Prior to January 1, 2013 On or after January 1, 2013 Benefit Formula 2.0% @ 55 2.0% @ 60 Benefit Vesting Schedule 5 years of service 5 years of service Benefit Payments Monthly for life Monthly for life Retirement Age 50-55 52-67 Monthly Benefits, As a % of Eligible Compensation 2.0% to 2.7% 1.0% to 2.5% Required Employee Contribution Rates 8.000% 5.250% Required Employer Contributions Rates 27.244% 27.244% Safety Plan Hire Date Prior to January 1, 2013 On or after January 1, 2013 Benefit Formula 2.0% @ 50 2.0% @ 57 Benefit Vesting Schedule 5 years of service 5 years of service Benefit Payments Monthly for life Monthly for life Retirement Age 50 50-57 Monthly Benefits, As a % of Eligible Compensation 3.0% 2.0% to 2.7% Required Employee Contribution Rates 0.000% 0.000% Required Employer Contributions Rates 0.000% 0.000% _____________ Source: City of Lynwood Audit Fiscal Year ended June 30, 2021. See APPENDIX A Note 9 for additional details regarding the City’s pension and other employee benefits. Contributions. Section 20814(c) of the California Public Employees’ Retirement Law (“PERL”) 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. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. 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 employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. The City is required to contribute at an actuarially determined rate of annual covered payroll, plus a fixed payment of unfunded liability. The actuarially determined normal cost rates Lynwood Public Financing Authority - Page 173 of 242 Agenda Item # 3 -42- and UAL contribution amounts for each Plan for the Fiscal Years ended June 30, 2022, through June 30, 2023, are as follows: CITY’S REQUIRED EMPLOYER CONTRIBUTION RATES & PAYMENTS Fiscal Year 2021-22 Fiscal Year 2022-23 Pension Plan Employer Normal Cost Rate Employer Normal Cost Payment Employer Normal Cost Rate Employer Normal Cost Payment Miscellaneous 10.940% $3,530,648 10.81% $3,887,362 Safety 11.003 2,642,352 0.00 797,804 Source: CalPERS Annual Valuation Report as of June 2019 and 2020. Projected Employer Contributions. The following tables show the City’s actuarially- determined required employer contribution for Fiscal Year 2022-23 and projected employer contributions (before cost sharing) for Fiscal Years 2023-24 through 2027-28 for each Plan by normal cost (expressed as a percentage of total active payroll) and amortization of the unfunded accrued liability (expressed as a dollar amount). Miscellaneous Required Contribution Projected Future Employer Contributions (Assumes 7.00% Return for Fiscal Year 2020-21) Fiscal Year 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Normal Cost % 10.81% 10.6% 10.5% 10.3% 10.2% 10.0% UAL Payment $3,887,362 $3,373,000 $3,567,000 $3,415,000 $3,549,000 $3,617,000 Safety Required Contribution Projected Future Employer Contributions (Assumes 7.00% Return for Fiscal Year 2020-21) Fiscal Year 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Normal Cost % 0.00% 0.0% 0.0% 0.0% 0.0% 0.0% UAL Payment $797,804 $798,000 $798,000 $798,000 $798,000 $798,000 Source: CalPERS Annual Valuation Report as of June 30, 2020. Funding History. The funding history for the Miscellaneous Pension Plan and the Safety Pension Plan is shown in the tables below, listing for each plan the actuarial accrued liability, share of the pool’s market value of assets, share of the pool’s unfunded liability, funded ratio, and annual covered payroll. MISCELLANEOUS PLAN Valuation Date Accrued Liability (AL) Market Value of Assets (MVA) Unfunded Liability Funded Ratio Annual Covered Payroll 6/30/2018 $98,338,645 $70,958,787 $27,379,858 72.2% $5,143,023 6/30/2019 108,448,698 74,444,764 34,003,934 68.6 8,089,873 6/30/2020 113,717,205 76,893,685 36,823,520 67.6 8,484,551 Source: CalPERS Annual Valuation Report as of June 30, 2020. Lynwood Public Financing Authority - Page 174 of 242 Agenda Item # 3 -43- SAFETY PLAN Valuation Date Accrued Liability (AL) Market Value of Assets (MVA) Unfunded Liability Funded Ratio Annual Covered Payroll 06/30/2018 $20,965,985 $13,130,338 $7,835,647 62.6% $0 06/30/2019 19,787,845 11,982,990 7,804,855 60.6 0 06/30/2020 19,193,302 11,225,642 7,967,660 58.5 0 Source: CalPERS Annual Valuation Report as of June 30, 2020. Payable to the Pension Plan. At June 30, 2021, the City reported a payable of $51,444 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2021. Actions Taken by CalPERS Related to Discount Rate and Other Assumptions. In 2013, the CalPERS’ Board of Administration (the “Board of Administration”) approved a recommendation to change the CalPERS amortization and smoothing policies. In 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. In 2014, the Board of Administration approved new demographic actuarial assumptions based on a 2013 study of recent experience. The largest impact, applying to all benefit groups, is a new 20-year mortality projection reflecting longer life expectancies and that longevity will continue to increase. Because retirement benefits will be paid out for more years, the cost of those benefits will increase as a result. In 2015, the Board of Administration adopted a funding risk mitigation policy intended to incrementally lower its discount rate – its assumed rate of investment return – in years of good investment returns, help pay down the pension fund’s unfunded liability, and provide greater predictability and less volatility in contribution rates for employers. In 2016, the Board of Administration voted to lower its discount rate for local agencies per the following schedule: Fiscal Year Discount Rate 2018-19 7.375% 2019-20 7.250 2020-21 7.000 On July 12, 2021, CalPERS announced it had achieved a preliminary investment return of 21.3% for the 12-month period ending June 30, 2021. Under the Funding Risk Mitigation Policy approved by the CalPERS Board of Administration in 2015, the double-digit return triggered a November 2021 reduction in the discount rate from 7.00% to 6.80%. 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, under PEPRA will also see their contribution rates rise. PEPRA included certain other provisions to try to minimize pension costs for covered employees. 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. Lynwood Public Financing Authority - Page 175 of 242 Agenda Item # 3 -44- Fiscal Year 2020-21 investment returns and changes to the discount rate and other assumptions, including demographic changes, will be reported on the June 30, 2021 CalPERS actuarial reports. These changes, including the newly determined discount rate, will be reflected in contribution levels for cities, counties, and special districts in Fiscal Year 2023-24. Asset Volatility Ratio (AVR). Plans that have higher asset-to-payroll ratios experience more volatile employer contributions (as a percentage of payroll) due to investment return. For example, a plan with an asset-to-payroll ratio of 8 may experience twice the contribution volatility due to investment return volatility, than a plan with an asset-to-payroll ratio of 4. Shown below is the asset volatility ratio for the Miscellaneous Plan which measure the plan’s current contribution volatility. It should be noted that this ratio is a measure of the current situation. It increases over time but generally tends to stabilize as the plan matures. Liability Volatility Ratio (LVR). Plans that have higher liability-to-payroll ratios experience more volatile employer contributions (as a percentage of payroll) due to investment return and changes in liability. For example, a plan that has a higher LVR experience more volatile employer contribution (as a percentage of payroll) due to changes in liability. For example, a plan with LVR of 8 is expected to have twice the contribution volatility of a plan with LVR of 4 when there is a change in accrued liability, such as when there is a change in actuarial assumptions. It should be noted that this ratio indicates a longer-term potential for contribution volatility, since the AVR, described above, will tend to move closer to the LVR as the funded status approaches 100%. Rate Volatility Miscellaneous Plan* Safety Plan* Market Value of Assets $76,461,330 $11,225,642 Payroll 8,484,551 -- Asset Volatility Ratio (AVR) 9.0 N/A Accrued Liability 113,717,205 19,193,302 Liability Volatility Ratio (LVR) 13.4 N/A * As of June 30, 2020 Source: CalPERS Annual Valuation Report as of June 30, 2020. Deferred Compensation Plan. The City offers a deferred compensation plan (the “Plan”), created in accordance with the Internal Revenue Code Section 457, to its employees. Amounts deferred may not be paid to the employee during employment with the City, except for a catastrophic circumstance creating an undue financial hardship for the employee. The Plan is administered by an independent financial institution that has fiduciary responsibilities over the Plan assets. Consistent with the amended IRC Section 457, which took effect on January 1, 1997, the City no longer reports the Plan assets and liabilities on its financial statements. Other Post-Employment Benefits (OPEB) Plan Description. In addition to the retirement plan described in Note 10, the City provides healthcare and life insurance benefits, in accordance with memorandum of understandings, to eligible retired employees. The City joined and contributed to CalPERS California Employers’ Retiree Benefit Trust (“CERBT”) Fund. As of June 2018, there is no separate audited financial report available for the said plan. Employees Covered. At the June 30, 2020 measurement date, the following employees were covered by the benefit terms for each Plan: Lynwood Public Financing Authority - Page 176 of 242 Agenda Item # 3 -45- Active employees 113 Transferred and terminated employees 30 Retired employees and beneficiaries 111 Total 254 Source: City of Lynwood. Contributions. The City contributed $1,170,498 during the measurement period and $1,245,311 during the fiscal year ended June 30, 2021. Changes in OPEB Liability of the District. The changes in OPEB liability of the City as of June 30, 2019 measurement date, is shown in the following table: CHANGES IN TOTAL OPEB LIABILITY City of Lynwood Total OPEB Liability Balance at June 30, 2018 $27,299,477 Service Cost 509,557 Interest 1,837,851 Changes of assumptions or other inputs (503,935) Benefit payments (1,163,219) Net changes 680,254 Balance at June 30, 2019 $27,979,731 Source: City of Lynwood - 2020-21 Audit Report. OPEB Expense. For the year ended June 30, 2021, the City recognized OPEB expenses of $1,671,742. See Note 10 to the City’s audited financial statements for the fiscal year ending June 30, 2021 attached hereto as Appendix A for more information. General Fund Long-Term Indebtedness The following table shows the outstanding long-term obligations of the City and the Authority payable from the City’s general fund. Governmental Activities Final Maturity Original Par Amount Par Amount Outstanding 2017 Lease Revenue Bonds September 1, 2035 7,685,000 6,015,567 2019A PFA Lease Revenue Bonds October 1, 2040 8,465,000 8,013,703 2019B PFA Lease Revenue Bonds October 1, 2040 13,955,000 13,643,666 2020A PFA Lease Revenue Bonds October 1, 2040 13,500,000 13,388,185 Total $85,615,000 $78,086,901 2017 Lease Revenue Bonds. In April 2017, the City issued $7,685,000 Lease Revenue Bonds to current refund Lynwood Public Financing Authority 2003 Lease Revenue Refunding Bonds Series A and B, to finance the costs of the 2017 capital improvements projects (“2017 Project”), and to pay for the cost of issuance. Interest on the bonds is payable semi-annually each March 1 and September 1, beginning September 1, 2017 at a rate of 3.72% annum. Principals matures each September 1 beginning 2017 and maturing in 2035. The refunding resulted in economic gain in the amount of $60,285 and the saving in debt service in the amount of $74,625. The principal balance outstanding at June 30, 2021 was $6,015,567. Lynwood Public Financing Authority - Page 177 of 242 Agenda Item # 3 -46- 2019 Lease Revenue Bonds. On November 26, 2019, the Lynwood Public Financing Authority issued $8,465,000 Lynwood Public Financing Authority Lease Revenue Refunding Bonds, Series 2019A (federally taxable) to provide funds to refund Lease Revenue Bonds, 2010 Series A (Civic Center Improvement Project), and to pay cost of issuance of the bonds. Interest will be payable on April 1, and October 1 of each year commencing April 1, 2020. Interest rate on the bonds will be payable on June 1 and October 1 of each year commencing October 1, 2020 to 2040. Interest rates on the bonds vary between 2.153% and 3.961%. The principal balance outstanding at June 30, 2021, including unamortized discount of $11,297 was $8,013,703. On November 26, 2019, the Lynwood Public Financing Authority issued $13,955,000 Lynwood Public Financing Authority Lease Revenue Refunding Bonds, Series 2019B (tax- exempt) to provide funds to finance a portion of the costs associated with certain park improvements within the City limits and to pay cost of issuance of the bonds. Interest will be payable on April 1, and October 1 of each year commencing April 1, 2020. Interest rate on the bonds will be payable on June 1 and October 1 of each year commencing October 1, 2020. Interest rates on the bonds vary between 2.750% and 3.150%. The principal balance outstanding at June 30, 2021, including unamortized discount of $311,334 was $13,643,666. 2020 Lease Revenue Bonds. On December 10, 2020, the City issued the $13,500,000 Lynwood Public Financing Authority Lease Revenue Bonds Series 2020A to provide funds to finance working capital for the City’s General Fund or such other purposes as the City may determine including public capital improvements and to fund a debt service reserve fund for the bonds, and to pay costs of issuance of the bonds. Interest on the bonds is payable semiannually on April 1, and October 1 of each year commencing April 1, 2021. Interest rates on the bonds vary between 1.793% and 4.195%. The principal balance outstanding at June 30, 2021, including unamortized discount of $111,815 was $13,388,185. See Note 8 to the City’s audited financial statements for the fiscal year ending June 30, 2021 attached hereto as Appendix A for more information. Direct and Overlapping Bonded 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. and dated as of May 1, 2022. 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. The total 2021-22 assessed valuation of $4,120,196,768 reflected in the Debt Report is provided by California Municipal Statistics, Inc. Neither the City, the Authority nor the Underwriter has verified this information. Lynwood Public Financing Authority - Page 178 of 242 Agenda Item # 3 -47- TABLE 13 City of Lynwood Direct and Overlapping Debt Statement (as of May 1, 2022) 2021-22 Assessed Valuation: $4,120,196,768 OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 5/1/22 Metropolitan Water District 0.121% $24,412 Compton Community College District 16.181 17,679,496 Los Angeles Community College District 0.006 248,791 Compton Unified School District 0.722 1,745,823 Los Angeles Unified School District 0.007 753,904 Lynwood Unified School District 98.242 120,801,783 TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT $141,254,209 Less: Los Angeles Unified School District General Obligation Bonds, Election of 2005, Series J (2010) Qualified School Construction Bonds: Election of 2005, Series H (2009) Qualified School Construction Bonds: Amount accumulated in Interest and Sinking Fund and Set Asides for Repayment 10,841 TOTAL NET OVERLAPPING TAX AND ASSESSMENT DEBT $141,243,368 DIRECT AND OVERLAPPING GENERAL FUND DEBT: Los Angeles County General Fund Obligations 0.233% $6,614,118 Los Angeles County Superintendent of Schools Certificates of Participation 0.233 9,255 Compton Unified School District Certificates of Participation 0.722 210,066 Los Angeles Unified School District Certificates of Participation 0.007 8,450 Lynwood Unified School District Certificates of Participation 98.242 15,988,886 City of Lynwood General Fund Obligations 100.000 40,861,044 (1) Los Angeles County Sanitation District No. 1 Authority 11.307 111,154 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $63,802,973 OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 100.000% $38,300,000 GROSS COMBINED TOTAL DEBT $243,357,182 (2) NET COMBINED TOTAL DEBT $243,346,341 Ratios to 2021-22 Assessed Valuation: Total Gross Overlapping Tax and Assessment Debt ............. 3.43% Total Net Overlapping Tax and Assessment Debt ................. 3.43% Total Direct Debt ($40,861,044) .......................................... 0.99% Gross Combined Total Debt ................................................... 5.91% Net Combined Total Debt ....................................................... 5.91% Ratios to Redevelopment Successor Agency Incremental Valuation ($1,236,716,919) Overlapping Tax Increment Debt ........................................... 3.10% ____________________________________ (1) Excludes issue to be sold. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations. Source: California Municipal Statistics, Inc. Lynwood Public Financing Authority - Page 179 of 242 Agenda Item # 3 -48- 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. Limitations on Revenues Article XIIIA of the California Constitution. Article XIIIA of the State Constitution, adopted and known as Proposition 13, was approved by the voters in June 1978 and has been amended on occasions, including most recently on November 7, 2000 to reduce the voting percentage required for the passage of school bonds. Section 1(a) of Article XIIIA limits the maximum ad valorem tax on real property to one percent of “full cash value,” and provides that such tax shall be collected by the counties and apportioned according to State statutes. Section 1(b) of Article XIIIA provides that the one-percent limitation does not apply to ad valorem taxes levied to pay interest and redemption charges on (i) indebtedness approved by the voters prior to July 1, 1978, or (ii) bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition, or (iii) bonded indebtedness incurred by a school district or community college district or county office of education for the construction, reconstruction, rehabilitation or replacement of school facilities, including the furnishing and equipping of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters voting on the proposition. The tax for payment of the City’s general obligation bonds falls within the exception for bonds approved by a two-thirds vote. 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 Fiscal Year tax bill, or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred. The full cash value may be adjusted annually to reflect inflation at a rate not to exceed two percent per year, or to reflect a reduction in the consumer price index or comparable data for the area under taxing jurisdiction, or may be reduced in the event of declining property value caused by substantial damage, destruction or other factors. See “Litigation Relating to Two Percent Limitation” below. Legislation implementing Article XIIIA provides that, notwithstanding any other law, local agencies may not levy any ad valorem property tax except the 1% base tax levied by each County and taxes to pay debt service on indebtedness approved by the voters as described above. Such legislation further provides that each county will levy the maximum tax permitted by Article XIIIA, which is $1.00 per $100 of assessed market value. Since its adoption, Article XIIIA has been amended a number of times. These amendments have created a number of exceptions to the requirement that property be reassessed when it is purchased, newly constructed or undergoes a change in ownership has occurred. These exceptions include certain transfers of real property between family members, certain purchases of replacement dwellings for persons over age 55 and by property owners whose original property has been destroyed in a declared disaster, and certain improvements to accommodate disabled persons and for seismic upgrades to property. These amendments have resulted in marginal reductions in the property tax revenues of the City. Both the California State Supreme Court and the United States Supreme Court have upheld the validity of Article XIIIA. Lynwood Public Financing Authority - Page 180 of 242 Agenda Item # 3 -49- Articles XIIIC and XIIID of the California 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. 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 into the City’s General Fund, require a two-thirds vote. The voter approval requirements of Article XIIIC 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 such taxes in the future to meet increased expenditure needs. Property-Related Fees, Charges and Assessments. 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, 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.” Lynwood Public Financing Authority - Page 181 of 242 Agenda Item # 3 -50- 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. Impact on City’s General Fund. 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. The City does not believe that any material source of General Fund revenue is subject to challenge under Proposition 218 or Proposition 26. Judicial Interpretation. The interpretation and application of Articles XIIIC and XIIID will ultimately be determined by the courts with respect to a number of the matters discussed below, and it is not possible at this time to predict with certainty the outcome of such determination. Expenditures and Appropriations In addition to the limits Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and local governments are subject to an annual “appropriations limit” or “Gann Limit” imposed by Article XIIIB of the State Constitution, which effectively limits the amount of such revenues that government entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes” exclude tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees, and certain other non-tax funds. Article XIIIB also does not limit appropriation of local revenues to pay debt service on bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990, levels. The appropriations limit may also be exceeded in cases of emergency; however, the appropriations limit for the three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two-thirds of the legislative body of the local government. The State and each local government entity has its own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Each school district is required to establish an appropriations limit each year. In the event that a school district’s revenues exceed its spending limit, the district may increase its appropriations limit to equal its spending by taking appropriations limit from the State. Proposition 111 requires that each agency’s actual appropriations be tested against its limit every two years. If the aggregate “proceeds of taxes” for the preceding two-year period Lynwood Public Financing Authority - Page 182 of 242 Agenda Item # 3 -51- exceed the aggregate limit, the excess must be returned to the agency’s taxpayers through tax rate or fee reductions over the following two years. Statutory Revenue Limitations - Proposition 62 Proposition 62 was adopted by the voters at the November 4, 1986, general election and (a) requires that any new or higher taxes for general governmental purposes imposed by local governmental entities such as the City be approved by a two-thirds vote of the governmental entity’s legislative body and by a majority vote of the voters of the governmental entity voting in an election on the tax, (b) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two- thirds vote of the voters of the governmental entity voting in an election on the tax, (c) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax was imposed, (d) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA, (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities, and (f) requires that any tax imposed by a local governmental entity on or after August 1, 1985, be ratified by a majority vote of the voters voting in an election on the tax within two years of the adoption of the initiative or be terminated by November 15, 1988. Following its adoption by the voters, various provisions of Proposition 62 were declared unconstitutional at the appellate court level. On September 28, 1995, however, the California Supreme Court, in Santa Clara City Local Transportation Authority v. Guardino, upheld the constitutionality of the portion of Proposition 62 requiring a two–thirds vote in order for a local government or district to impose a special tax and, by implication, upheld a parallel provision requiring a majority vote in order for a local government or district to impose any general tax. The Guardino decision did not address whether it should be applied retroactively. In response to Guardino, the California Legislature adopted Assembly Bill 1362, which provided that Guardino should apply only prospectively to any tax that was imposed or increased by an ordinance or resolution adopted after December 14, 1995. Assembly Bill 1362 was vetoed by the Governor; hence the application of the Guardino decision on a retroactive basis remains unclear. Proposition 62, as an initiative statute, does not have the same level of authority as a constitutional initiative. It is analogous to legislation adopted by the State Legislature, except that it may be amended only by a vote of the State’s electorate. However, Proposition 218, as a constitutional amendment, is applicable to charter cities and supersedes many of the provisions of Proposition 62. Proposition 1A Proposition 1A, proposed by the Legislature in connection with the State’s Fiscal Year 2004-2005 Budget, approved by the voters in November 2004 and generally effective in fiscal year 2006-2007, provides that the State may not reduce any local sales tax rate, 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 prohibits 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 must be approved by two-thirds of both houses of the Legislature. Proposition 1A provides, Lynwood Public Financing Authority - Page 183 of 242 Agenda Item # 3 -52- however, that beginning in fiscal year 2008-2009, the State may shift to schools and community colleges up to 8% of local government property tax revenues, which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state financial hardship, the shift is approved by two-thirds of both houses and certain other conditions are met. The State may also approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county. Proposition 1A also provides that if the State reduces the motor vehicle license fee rate currently in effect, 0.65 percent of vehicle value, the State must provide local governments with equal replacement revenues. Further, Proposition 1A requires the State, beginning July 1, 2005, to suspend State mandates affecting cities, counties and special districts, excepting mandates relating to employee rights, schools or community colleges, in any year that the State does not fully reimburse local governments for their costs to comply with such mandates. Proposition 1A may result in increased and more stable City revenues. The magnitude of such increase and stability is unknown and would depend on future actions by the State. However, Proposition 1A could also result in decreased resources being available for State programs. This reduction, in turn, could affect actions taken by the State to resolve budget difficulties. Such actions could include increasing State taxes, decreasing spending on other State programs or other action, some of which could be adverse to the City. 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 amended the state Constitution to eliminate or reduce 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. This Proposition was intended to, among other things, stabilize local government revenue sources by restricting the State’s control over local property taxes. 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 Fiscal Year 1988-89, 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 constitute neither 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. Lynwood Public Financing Authority - Page 184 of 242 Agenda Item # 3 -53- Possible Future Initiatives Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 62, 111, 218 and 1A 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 revenues of the City or the City’s ability to expend revenues. There is no assurance that the California electorate or Legislature will not at some future time approve additional limitations. 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. The Bonds are limited obligations of the Authority payable solely from and secured solely by the Revenues pledged therefor under the Indenture, together with amounts on deposit from time to time in certain funds and accounts held by the Trustee. Revenues consist primarily of Lease Payments. If for any of the reasons described below, or for any other reason, the Authority does not receive sufficient Lease Payments to pay debt service on the Bonds, the Authority will not be obligated to utilize any other of its funds, other than amounts on deposit in certain funds and accounts established under the Indenture, to pay debt service on the Bonds. The Lease Payments are payable from all funds lawfully available to the City, which includes is the Pension Override Tax. The City has the capacity to enter into other obligations that may constitute additional obligations against its revenues. In the event the City’s revenue sources are less than its total obligations, the City could choose to fund other obligations before making Lease Payments; in that case, the failure to pay Lease Payments in full would constitute a default under the Lease Agreement. The same result could occur if, because of State constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues; in that case, the failure to pay Lease Payments in full would constitute a default under the Lease Agreement. The City must adopt a balanced Budget each year, and has covenanted in the Lease Agreement to budget for, appropriate and make the Lease Payments in each year that it has possession and use of the Leased Property. Abatement of Lease Payments Under California law, the obligation of the City to make Lease Payments is contingent upon the availability of the Leased Property for use and occupancy by the City. The Lease Payments will be abated proportionately during any period in which by reason of material damage or destruction, there is substantial interference with the use and occupancy of any portion of the Leased Property by the City, and such abatement will continue until substantial completion of the work of repair or replacement of the portion of the Leased Property damaged or destroyed; provided that, in determining the amount of abatement. Any abatement of Lease Payments could affect the Authority’s ability to pay debt service on the Bonds. In the event Lease Payments are abated, no assurances can be given that moneys on deposit in the Revenue Fund or the proceeds of property insurance (which is not expected to be Lynwood Public Financing Authority - Page 185 of 242 Agenda Item # 3 -54- available to cover earthquake damage) will be sufficient to pay the debt service on the Bonds during the period of such abatement. The City is neither required nor will it maintain rental interruption insurance with respect to the Leased Property. Notwithstanding the provisions of the Lease Agreement specifying the extent of abatement in the event of the City’s failure to have full use and occupancy of the Leased Property, such provisions may be superseded by operation of law, and, in such event, the resulting Lease Payments of the City may not be sufficient to pay all of the remaining principal and interest with respect to the Bonds. Limitation on Remedies The enforcement of any remedies provided for in the Lease Agreement and in the Indenture could prove to be both expensive and time-consuming. The Lease Agreement provides that upon the occurrence and during the continuance of the City’s failure to deposit with the Trustee any Lease Payments when due, the bankruptcy of the City, or if the City breaches any other terms, covenants, conditions or agreements contained in the Lease Agreement (subject to a cure period as described in the Lease Agreement), 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, and the Authority shall have no right to re-lease any portion of the Leased Property that constitutes a City street. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” In addition to the limitations on remedies contained in the Lease Agreement and the Indenture, the rights and remedies provided in those documents may be limited by and are subject to provisions of federal bankruptcy laws, as now or hereafter enacted, and to other laws or equitable principles that may affect creditors’ rights generally. The various legal opinions to be delivered concurrently with the issuance of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by State and federal laws, rulings and decisions affecting remedies, and by bankruptcy, reorganization or other laws of general application affecting the enforcement of creditors’ rights, including equitable principles. See “– Bankruptcy Risks” below. No Acceleration Upon Default In the event of a default, there is no remedy of acceleration of the total Lease Payments for the term of the Lease. Any suit for money damages would be subject to the legal limitations on remedies against cities and counties in the State, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” Early Prepayment Risk Early payment of the Lease Payments and early prepayment of the Bonds may occur in whole or in part, without premium, from the proceeds of title insurance, on any date, if the Leased Property, or a portion thereof, is lost, destroyed or damaged beyond repair or taken by eminent domain and if the City exercises it right to prepay the Lease Payments in whole or in part pursuant to the provisions of the Lease Agreement and the Indenture. Lynwood Public Financing Authority - Page 186 of 242 Agenda Item # 3 -55- Bankruptcy Risks The rights of the owners of the Bonds and the enforceability of the Authority’s obligation to make payments on the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights under currently existing law or laws enacted in the future, and may also be subject to the exercise of judicial discretion under certain circumstances. Under existing law, the City is eligible to file for bankruptcy. Should the City file for bankruptcy, there could be adverse effects on the holders of the Bonds. In a bankruptcy of the City, the Authority or the Trustee as its assignee and the owners of the Bonds may be prohibited from taking any action against the City, any official of the City, or any property of the City (including the Leased Property) to enforce the terms of the Lease Agreement, unless the consent of the bankruptcy court is first obtained. The bankruptcy court is not required to give its consent. This prohibition on action may even prohibit the Trustee from using funds in its possession to make payments on the Bonds. As a result, Owners may experience temporary or permanent delays in the payment of the Bonds. In a bankruptcy case, a plan of adjustment for the City could be confirmed that would allow for enforcement of the Lease Agreement, but the priority, interest rate, payment terms, collateral, maturity dates, payment sources, covenants and other terms or provisions of the Lease Agreement and the Bonds may be altered by the bankruptcy court. Such a plan could be confirmed even over the objections of the Authority or the Trustee as its assignee and the owners of the Bonds, and without their consent. Additionally, the resulting plan could adjust some or all of the City’s financial obligations, which include the City’s lease payment obligations under the Lease Agreement and the City’s obligation to fund certain retirement benefits. The adjustment plans approved by the Bankruptcy Courts in connection with the bankruptcies of the cities of Vallejo, San Bernardino and Stockton resulted in significant reductions in the amounts payable by the cities under lease revenue obligations substantially identical or similar to the Bonds. The City can provide no assurance about the outcome of the bankruptcy cases of other California municipalities of the nature of any adjustment plan it if were to file for bankruptcy. In addition, if the Lease Agreement is determined to constitute a “true lease” by the bankruptcy court (rather than a financing lease providing for the extension of credit), the City could choose not to perform under the Lease Agreement and the claim of the owners of the Bonds could be substantially limited. An allowable claim could be substantially less than the amount of the Bonds outstanding, resulting in the owners of the Bonds suffering a substantial loss. The opinions of counsel, including Bond Counsel, delivered in connection with the issuance and delivery of the Bonds will be so qualified. Bankruptcy proceedings, or the exercising of powers by the federal or state government, if initiated, could subject the owners of the Bonds 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. Lynwood Public Financing Authority - Page 187 of 242 Agenda Item # 3 -56- State Audits Pursuant to the California State Auditor’s “high-risk local government agency audit program,” the California State Auditor released its audit report 2018-803 regarding the City (the “State Audit Report”) in December 2018. According to the State Audit Report, the audit alleged that the City was a “high-risk city” due to its financial and organizational risks. Specifically, the State Audit Report alleged that the City’s general fund operating revenues were projected to exceed its operating expenditures in Fiscal Year 2018-19, that the City had violated State law by using restricted funds to pay for certain personnel costs, and that organizational inefficiencies (for example, high turnover in key leadership positions and an inability to effectively measure staffing needs) limited the City’s ability to provide public services. The State Audit Report also included several recommendations for improvements. A follow-on report for the City, Report 2021-808, was released by the California State Auditor in September 2021, and concluded the City remained high-risk. It acknowledged that the City had taken actions to address risk areas identified in the State Audit Report, but there was uncertainty regarding the City’s long-term fiscal outlook. It further alleged the City had violated State law by subsidizing the General Fund with restricted revenue from water and sewer fees. The City also failed to develop a strategic plan or other efforts to provide meaningful guidance to its departments on aligning resources with Citywide goals and priorities. Certain recommendations were proposed by the California State Auditor in the follow-up report. The City has reviewed the State Audit Report and follow-on report, and taken certain actions to address the alleged deficiencies included therein. More specifically, in response to the State Audit, the City Manager submitted a Corrective Action Plan on November 22, 2021, which outlined and itemized corrective actions towards the State Audit findings. These corrective actions include updating the City’s policies to beef up the City’s internal controls and preparing a new cost allocation to properly substantiate all inter-fund charges/transfers. Moreover, both the City Manager and the Finance Director of the City have been recently hired and were not employees of the City during the time periods described in the reports. State Law Limitations on Appropriations Article XIIIB of the California Constitution limits the amount that local governments can appropriate annually. The ability of the City to make Lease Payments may be affected if the City should exceed its appropriations limit. The State may increase the appropriation limit of cities in the State by decreasing the State’s own appropriation limit. The City does not anticipate exceeding its appropriations limit in the foreseeable future. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS – Limitations on Revenues – Expenditures and Appropriations.” Limitations on Taxes and Fees General. 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 Lynwood Public Financing Authority - Page 188 of 242 Agenda Item # 3 -57- 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.” Pension Tax Override. On April 9, 1946, the voters in the City approved the Pension Tax Override, which is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes. In furtherance of its authorized purposes, under the Lease Agreement, the City pledges the Pension Tax Override to the payment of the Lease Payments. In accordance with a settlement of a lawsuit relating to the Pension Tax Override, the City fixed the rate of tax at $0.125 per $100 of assessed valuation. See “CITY FINANCIAL INFORMATION – Pension Tax Override” for additional information regarding the City’s ability to levy and collect the Pension Tax Override. Additional Obligations of the City The City has existing obligations payable from its General Fund. See “APPENDIX A – “FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – Outstanding General Fund Lease Obligations.” The City is permitted to enter into other obligations which constitute additional charges against its revenues without the consent of Owners of the Bonds. To the extent that additional obligations are incurred by the City, the funds available to pay Lease Payments may decline. The Lease Payments and other payments due under the Lease Agreement (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, 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. Property Taxes Levy and Collection. 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 Lynwood Public Financing Authority - Page 189 of 242 Agenda Item # 3 -58- 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, in form prescribed by the State Board of Equalization, 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, 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. Lynwood Public Financing Authority - Page 190 of 242 Agenda Item # 3 -59- Public Health Emergencies In recent years, public health authorities have warned of threats posed by outbreaks of disease and other public health threats. The spread of the novel strain of coronavirus called COVID-19 is having significant negative impacts throughout the world, including within the City. The COVID-19 pandemic has negatively affected travel, commerce, and is widely expected to continue to negatively affect economic output worldwide and within the City. See “BOND OWNERS’ RISK – U.S. Economic Recession.” While federal and state governments (including California) have enacted legislation and taken executive actions seeking to mitigate the negative public health and economic impacts of the COVID-19 pandemic, the City offers no assurances that these interventions will have the intended effects. These negative economic impacts may reduce or otherwise negatively affect revenues to the City’s General Fund and result in unexpected increases in expenditures. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – CITY FINANCES – Management Discussion Regarding COVID-19 Impacts.” The City cannot predict the magnitude of these impacts on such revenues, but such impacts could be materially adverse. The financial and operating data contained in this Official Statement are the latest available, but unless otherwise indicated are as of dates and for periods before the economic impact of the COVID-19 pandemic and measures instituted to slow it. Accordingly, they are not necessarily indicative of the current financial condition or future prospects of the City and the region. While the overall potential impact of the COVID-19 pandemic on the City cannot be fully quantified at this time, the continued outbreak of COVID-19 could lead to additional or modified public health restrictions and have an adverse effect on the City’s operations and financial condition, and the effect could be material. Prospective investors should assume that the restrictions and limitations related to COVID-19, and the current disruption to the national and global economies, will increase at least over the near term, recovery may be prolonged and, therefore, may have an adverse impact on the City’s finances. Certain Risks Associated with Sales Tax and Other Local Tax Revenues For fiscal year 2020-21, sales tax revenues were the second largest source of revenue to the City. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – Sales 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. For example, 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. As described further below, there has been volatility in the United States and global financial markets associated with the COVID-19 outbreak, resulting in significant declines and a national and global recession. In addition, changes or amendments in the laws applicable to the City’s receipt of sales tax revenues or other local taxes, whether implemented by State legislative action or voter initiative, could have an adverse effect on sales tax revenues received by the City. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS – Proposition 218 – Article XIIIC and Article XIIID.” Lynwood Public Financing Authority - Page 191 of 242 Agenda Item # 3 -60- 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 California Department of Tax and Fee Administration for administering the City’s sales tax could also be changed. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – CITY FINANCES – Management Discussion Regarding COVID-19 Impacts.” Natural Calamities The City, like all California communities, may be subject to unpredictable seismic activity, wildfires, flood, or other natural disasters. Seismic activity, wildfires, floods and other natural disasters represent a potential risk for damage to buildings, roads, bridges and other property within the City. Such natural calamities may adversely affect economic activity in the City, which could have a negative impact on the City’s finances. Additionally, a natural calamity adversely affecting the Leased Property could have a negative impact on the City’s use of such property, which could result in abatement of Lease Payments. See “– Abatement” above. Fire Hazards. In recent years, wildfires have caused extensive damage throughout the State. Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes. In some instances, entire neighborhoods have been destroyed. Several fires which occurred in 2017 damaged or destroyed property in areas that were not previously considered to be at risk from such events. In November 2018, the Camp Fire occurred in Butte County, California. The Camp Fire is the deadliest and most destructive wildfire in the recorded history of the State burning more than 150,000 acres and destroying more than 11,500 structures, including most of the structures in the City of Paradise, California. Some commentators believe that climate change will lead to even more frequent and damaging wildfires in the future. In Los Angeles County, wildland fires historically have occurred in the brush-covered hills that frame many communities, including the Palos Verdes Hills, in the southern portion of the City, and south of the City, in what is now Rolling Hills, Rolling Hills Estates, and Palos Verdes Estates. Small vegetation fires occasionally still occur on these slopes, but the Fire Department is able to respond quickly and minimize threats to adjacent structures. To prevent fires in the City’s hillside areas, the City’s municipal code allows the Fire Chief broad authority to carry out preventive measures to minimize fire risks. Droughts. California is subject to droughts from time-to-time, including currently. 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%. After a few wet years which alleviated drought conditions, California is once again in a drought following a dry 2021-22 winter. The City cannot predict or make any representations regarding the effects that the recent (or future) droughts and related conditions had or may have on the value of taxable property within the City, or to what extent the effects the current (or future) droughts may have had or have on economic activity in the City. See also “– Potential Impact of Climate Change” below. Lynwood Public Financing Authority - Page 192 of 242 Agenda Item # 3 -61- Hazardous Substances Owners and operators of real property may be required by law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances area also stringent and similar. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly and adversely affect assessed values of property in the City and the operations and finances of the City. Potential Impact of Climate Change The issue of climate change has become an important factor in water resources planning in the State. There is evidence that increasing concentrations of greenhouse gases have caused and will continue to cause a rise in temperatures around the world, which will result in a wide range of changes in climate patterns. Moreover, there is evidence that a warming trend occurred during the latter part of the 20th century and will likely continue through the 21st century. These changes will have a direct effect on water resources in the State, and numerous studies on climate and water in the State have been conducted to determine the potential impacts. Based on these studies, global warming could result in the following types of water resources impacts in the State, including impacts on the City: • Changes in the timing, intensity, and variability of precipitation, and an increased amount of precipitation falling as rain instead of as snow, • Long-term changes in watershed vegetation and increased incidence of wildfires that could affect water quality, • Sea level rise and an increase in saltwater intrusion, • Increased water temperatures with accompanying adverse effects on some fisheries, • Increases in evaporation and concomitant increased irrigation need, and • Changes in urban and agricultural water demand. However, other than the general trends listed above, there is no clear scientific consensus on exactly how global warming will quantitatively affect the State’s water supplies. The City is unable to predict timing or magnitude of the impacts of climate change, if any, or whether they will have a material adverse effect on the business operations or financial condition of the City and the local economy. COVID-19 Pandemic Lynwood Public Financing Authority - Page 193 of 242 Agenda Item # 3 -62- The spread of COVID-19 has impacted governments, businesses and people in a manner that is having negative effects on global and local economies. In response to the pandemic, the City took actions to activate its emergency operations center, temporarily close all non-essential City services, introduced teleworking as and where appropriate, implemented daily screening of all employees, and abided by all state and federal guidelines and orders. The City actively monitors the COVID-19 situation in the community and acts swiftly to issue executive orders to mitigate the spread of the virus. Additionally, the City has forged a strong relationship with the Mendocino County Health Department and local medical clinics to ensure timely sharing of information and coordinated responses to issues. The City continues to monitor the spread of COVID-19 and is working with local, state, and national agencies to address the potential impact of the pandemic upon the City. 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. 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. 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 property taxes, and the Trustee. No assurance can be given that the City and the other entities the City relies on will not be affected by cyber threats and attacks in a manner that may affect the Bond owners. Litigation The City is and may become a party to litigation that has the potential to have an impact on the City’s General Fund. Although the City maintains certain insurance policies that provide coverage under certain circumstances and with respect to certain types of incidents, the City cannot predict what types of liabilities may arise in the future and whether these may adversely affect the ability of the City to pay Lease Payments under the Lease Agreement when due. Secondary Market for Bonds There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that any Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then-prevailing circumstances. Such prices could be substantially different from the original purchase price. Lynwood Public Financing Authority - Page 194 of 242 Agenda Item # 3 -63- TAX MATTERS The interest on the Bonds is not intended by the Authority to be excluded from gross income for federal income tax purposes. However, in the opinion of Jones Hall, A Professional Law Corporation (“Bond Counsel”), San Francisco, California, interest on the Bonds is exempt from California personal income taxes. The proposed form of opinion of Bond Counsel with respect to the Bonds to be delivered on the date of issuance of the Bonds is set forth in “APPENDIX D – PROPOSED FORM OF OPINION OF BOND COUNSEL.” 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 D – PROPOSED FORM OF OPINION OF BOND COUNSEL.” Certain legal matters will also be passed upon for the City and the Authority by Jones Hall, A Professional Law Corporation, as Disclosure Counsel. Certain legal matters will be passed upon for the City and the Authority by the City Attorney. In addition, certain legal matters will be passed on by Quint & Thimmig LLP, as Underwriter’s Counsel. Payment of the fees and expenses of Special Counsel, Disclosure Counsel and Underwriter’s counsel is contingent upon execution and delivery of the Bonds. NO LITIGATION 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 Agreement, the Site Lease or the Indenture, or upon the financial condition, assets, properties or operations of the City. Neither the City nor the Authority is in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially adversely affect the consummation of the transactions contemplated by the Lease Agreement, the Site Lease or the Lynwood Public Financing Authority - Page 195 of 242 Agenda Item # 3 -64- 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 Agreement. RATING[S] [Add Insured Rating, if applicable] S&P Global Ratings (“S&P”) has assigned a rating of “__” to the Bonds. The rating reflects only the views of S&P and any desired explanation of the significance of such 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 such rating will continue for any given period of time or that such 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 (on behalf of the Authority and itself) will covenant for the benefit of owners of the Bonds to provide certain financial information and operating data relating to the City (the “Annual Report”), by not later than nine months after the end of the City’s fiscal year (presently June 30) and commencing April 1, 2023 with the report for the fiscal year ending June 30, 2022, and to provide notices of the occurrence of certain listed events. These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5), as amended (the “Rule”). The specific nature of the information to be contained in the Annual Report or the notices of listed events is set forth in “APPENDIX E — FORM OF CONTINUING DISCLOSURE CERTIFICATE.” In the last five years, the City did not timely file audited financial statements in connection with various series of bonds and other long-term obligations for Fiscal Years 2015-16 and 2016- 17. The City also failed to timely file notices of a rating change and to timely file notices of late annual financial information in connection with certain of the bonds and other long-term obligations. In addition, the City has had continuing disclosure obligation in connection with certain bonds issued by the Lynwood Utility Authority, and within the past five years, the City failed to file in a timely manner its audited financial statements for Fiscal Year 2015-16, and timely notice of a rating change for these bonds. _________, serving as dissemination agent, will assist the City in timely filing the Annual Reports and notices of certain enumerated events in the future. UNDERWRITING The Bonds are being purchased pursuant a bond purchase agreement by and between the Authority, the City and Cabrera Capital Markets, LLC, as underwriter (the “Underwriter”). The Lynwood Public Financing Authority - Page 196 of 242 Agenda Item # 3 -65- Underwriter has agreed to purchase the Bonds at a purchase price of $________________ (which is equal to the par amount of the Bonds, less a purchaser’s discount of $_____________, and [plus/less] a [net] original issue [premium/discount] of $____________). The Underwriter may offer the Bonds to the public at the offering prices set forth on the cover page of this Official Statement. The Underwriter may offer and sell to certain dealers and others at a price lower than the offering prices stated on the cover page hereof. The offering price may be changed from time to time by the Underwriter. MUNICIPAL ADVISOR The Authority has retained Kosmont Transactions Services, Inc., Manhattan Beach, California, as the Authority’s Municipal Advisor in connection with the preparation of this Official Statement and with respect to the issuance of the Bonds. Kosmont Transactions Services, Inc. is not obligated to undertake, and has not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. Kosmont Transactions Services, Inc. is an independent registered municipal advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. Kosmont Transactions Services, Inc.’s compensation is contingent upon the delivery of the Bonds. 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. LYNWOOD PUBLIC FINANCING AUTHORITY By: Ernie Hernandez Executive Director CITY OF LYNWOOD By: Ernie Hernandez City Manager Lynwood Public Financing Authority - Page 197 of 242 Agenda Item # 3 A-66 APPENDIX A GENERAL INFORMATION ABOUT THE CITY OF LYNWOOD AND THE COUNTY OF LOS ANGELES The following information concerning the County of Los Angeles (the “County”) and the City of Lynwood (the “City”) is included only for the purpose of supplying general information regarding the area. The Bonds are not a debt of the County, the City, the State of California (the “State”) or any of its political subdivisions, and neither the County, the City, the State nor any of its political subdivisions is liable therefor. The City and the Underwriter take no responsibility for the accuracy or completeness of such information. General The City. The City of Lynwood (the “City”) was incorporated in 1921 under the general laws of the State of California (the “State”). The City is situated approximately 13 miles south of downtown Los Angeles at the intersection of two major freeways. The local economy represents a diverse blend of industrial, commercial, agricultural and residential development. The City covers 4.9 square miles and serves a population of 69,880. The County. The County of Los Angeles (the “County”) is located along the southern coast of California, Los Angeles County covers about 4,080 square miles. It measures approximately 75 miles from north to south and 70 miles from east to west. The county includes Santa Catalina and San Clemente Islands and is bordered by the Pacific Ocean and Ventura, San Bernardino and Orange Counties. Almost half of the county is mountainous and some 14 percent is a coastal plain known as the Los Angeles Basin. The low Santa Monica Mountains and Hollywood Hills run east and west and form the northern boundary of the Basin and the southern boundary of the San Fernando Valley. The San Fernando Valley terminates at the base of the San Gabriel Mountains whose highest peak is over 10,000 feet. Beyond this mountain range the rest of the county is a semi-dry plateau, the beginning of the vast Mojave Desert. According to the Los Angeles County Regional Planning Commission, the 86 incorporated cities in the county cover about 1,344 square miles or 27 percent of the total county. About 16 percent of the land in the County is devoted to residential use and over two thirds of the land is open space and vacant. Lynwood Public Financing Authority - Page 198 of 242 Agenda Item # 3 A-67 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 LYNWOOD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA Population Estimates Years 2017 through 2021, as of January 1 Year City of Lynwood Los Angeles County State of California 2017 71,864 10,181,162 39,352,398 2018 71,972 10,192,593 39,519,535 2019 71,726 10,163,139 39,605,361 2020 71,399 10,135,614 39,648,938 2021 69,880 10,044,458 39,466,855 Source: California Department of Finance, Demographic Research Unit. [Remainder of page intentionally left blank] Lynwood Public Financing Authority - Page 199 of 242 Agenda Item # 3 A-68 Industry and Employment The seasonally adjusted unemployment rate in Los Angeles County decreased over the month to 5.8 percent in March 2022, from a revised 6.3 percent in February 2022, and was below the rate of 10.5 percent one year ago. Civilian employment increased by 41,000 to 4,733,000 in March 2022, while unemployment decreased by 24,000 to 290,000. The civilian labor force increased by 16,000 over the month to 5,023,000 in March 2022. (All of the above figures are seasonally adjusted.) The unadjusted unemployment rate for the county was 4.9 percent in March 2022. The California seasonally adjusted unemployment rate was 4.9 percent in March 2022, 5.3 percent in February 2022, and 8.4 percent a year ago in March 2021. The comparable estimates for the nation were 3.6 percent in March 2022, 3.8 percent in February 2022, and 6.0 percent a year ago. The table below lists employment by industry group for the County for the past five years for which data is available. LOS ANGELES-LONG BEACH-GLENDALE MD (LOS ANGELES COUNTY) Annual Average Civilian Labor Force, Employment and Unemployment, Calendar Years 2017 through 2021 (March 2021 benchmark) 2017 2018 2019 2020 2021 Civilian Labor Force (1) 5,109,800 5,121,300 5,153,100 4,968,900 4,994,100 Employment 4,864,100 4,885,300 4,926,100 4,355,900 4,548,900 Unemployment 245,700 235,900 227,000 613,000 445,200 Unemployment Rate 4.8% 4.6% 4.4% 12.3% 8.9% Wage and Salary Employment:(2) Agriculture 5,700 4,600 4,400 4,400 4,600 Mining and Logging 2,000 1,900 1,900 1,700 1,600 Construction 138,700 146,300 149,800 146,500 149,800 Manufacturing 350,400 342,600 340,700 315,100 311,700 Wholesale Trade 221,500 223,200 220,500 200,000 202,000 Retail Trade 425,900 424,600 417,700 380,200 401,400 Transportation, Warehousing, Utilities 198,200 203,600 212,900 207,800 214,200 Information 214,000 214,700 215,300 191,000 213,200 Financial Activities 221,600 223,200 223,600 212,600 210,800 Professional and Business Services 613,200 632,300 647,000 599,800 629,500 Educational and Health Services 797,400 817,900 839,900 820,300 839,600 Leisure and Hospitality 524,600 536,500 547,200 393,500 429,300 Other Services 155,700 158,800 158,400 128,700 134,100 Federal Government 48,000 47,300 47,300 50,200 47,600 State Government 92,500 91,700 86,500 89,000 89,200 Local Government 445,600 451,600 453,000 431,000 421,400 Total all Industries (3) 4,455,000 4,520,700 4,566,100 4,171,700 4,300,000 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (3) Columns may not sum to totals due to rounding. Source: State of California Employment Development Department. Lynwood Public Financing Authority - Page 200 of 242 Agenda Item # 3 A-69 Principal Employers The following table lists the principal employers within the City for fiscal year 2020-21. CITY OF LYNWOOD Principal Employers Fiscal Year 2020-21 Employer Name No. of Employees St. Francis Medical Center 1,853 Lynwood Unified School District 1,468 LA County Sheriff Department 263 City of Lynwood 202 PL Development 175 California Post-Acute Care 174 Granada Post-Acute 145 El Super 130 Superior Warehouse Grocers Inc. 127 Earle M. Jorgensen Company 120 Source: City of Lynwood. [Remainder of page intentionally left blank] Lynwood Public Financing Authority - Page 201 of 242 Agenda Item # 3 A-70 The following table lists, in alphabetical order, the largest manufacturing and non- manufacturing employers within the County as of April 2022. COUNTY OF LOS ANGELES Major Employers As of April 2022 (In Alphabetical Order) Employer Name Location Industry AHMC Healthcare Inc Alhambra Health Care Management All Nations Church Sylmar Churches California State Univ NRTHRDG Northridge Schools-Universities & Colleges Academic Cedars-Sinai Health System West Hollywood Health Care Management Infineon Technologies Americas El Segundo Semiconductor Devices (mfrs) Kaiser Permanente Los Angeles Los Angeles Hospitals Live Nation Los Angeles Entertainment Bureaus Long Beach City Hall Long Beach City Hall Longshore Dispatch Wilmington Nonclassified Establishments Los Angeles County Sheriff Monterey Park Government Offices-County Los Angeles Intl Airport-Lax Los Angeles Airports Los Angeles Medical Ctr Los Angeles Pathologists Los Angeles Police Dept Los Angeles Police Departments National Institutes of Health Pasadena Physicians & Surgeons Security Industry Specialist Culver City Security Systems Consultants Six Flags Valencia Amusement & Theme Parks Sony Pictures Entrtn Inc Culver City Motion Picture Producers & Studios Space Exploration Tech Corp Hawthorne Aerospace Industries (mfrs) Twentieth Century Fox Los Angeles Motion Picture Producers & Studios UCLA Community Based Learning Los Angeles Junior-Community College-Tech Institutes University of Ca Los Angeles Los Angeles Schools-Universities & Colleges Academic University of Ca Los Angeles Los Angeles University-College Dept/Facility/Office Vision X Los Angeles Call Centers Walt Disney Co Burbank Water Parks Water Garden Management Santa Monica Office Buildings & Parks Source: State of California Employment Development Department, extracted from The America’s Labor Market Information System (ALMIS) Employer Database, 2022 2nd edition. [Remainder of page intentionally left blank] Lynwood Public Financing Authority - Page 202 of 242 Agenda Item # 3 A-71 Effective Buying Income “Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the total effective buying income for the City, the County, the State, and the United States for the period 2018 through 2022. CITY OF LYNWOOD, LOS ANGELES COUNTY, STATE OF CALIFORNIA AND UNITED STATES EFFECTIVE BUYING INCOME As of January 1, 2018 through 2022 Year Area Total Effective Buying Income (000’s Omitted) Median Household Effective Buying Income 2018 City of Lynwood $773,863 $43,143 Los Angeles County 271,483,825 56,831 California 1,183,264,399 62,637 United States 9,017,967,563 52,841 2019 City of Lynwood $811,764 $44,123 Los Angeles County 271,483,825 56,831 California 1,183,264,399 62,637 United States 9,017,967,563 52,841 2020 City of Lynwood $854,790 $46,137 Los Angeles County 281,835,290 60,174 California 1,243,564,816 65,870 United States 9,487,165,436 55,303 2021 City of Lynwood $894,319 $48,821 Los Angeles County 289,720,470 62,353 California 1,290,894,604 67,956 United States 9,809,944,764 56,790 2022 City of Lynwood $1,035,105 $57,406 Los Angeles County 327,445,237 71,404 California 1,452,426,153 77,058 United States 11,208,582,541 64,448 Source: The Nielsen Company (US), Inc for year 2018; Claritas, LLC for 2019 through 2022. Lynwood Public Financing Authority - Page 203 of 242 Agenda Item # 3 A-72 Commercial Activity A summary of historic taxable sales within the City and the County during the past five years in which data is available is shown in the following tables. Total taxable sales during the four quarters of calendar year 2021 in the City were reported to be $501,930,416, a 24.09% increase over the total taxable sales of $374,322,690 reported during the four quarters of calendar year 2020. CITY OF LYNWOOD 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 797 $288,480 1,159 $331,746 2017 837 307,586 1,199 351,191 2018 879 331,014 1,285 371,417 2019 925 342,942 1,384 387,448 2020 1,040 321,844 1,582 374,323 Source: State Department of Tax and Fee Administration. Total taxable sales during the four quarters of calendar year 2021 in the County were reported to be $191,825,807,206, a 21.61% increase over the total taxable sales of $157,737,984,456 reported during the four quarters of calendar year 2020. COUNTY OF LOS ANGELES 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 196,929 $109,997,043 311,295 $154,208,333 2017 197,452 113,280,347 313,226 159,259,356 2018 200,603 119,145,054 328,047 166,023,796 2019 206,732 122,137,664 342,359 171,776,327 2020 226,643 112,044,029 376,990 155,678,156 Source: State Department of Tax and Fee Administration. Lynwood Public Financing Authority - Page 204 of 242 Agenda Item # 3 A-73 Construction Activity Construction activity in the City and the County for the past five years for which data is available is shown in the following tables. CITY OF LYNWOOD Building Permit Valuation For Calendar Years 2016 through 2020 (Dollars in Thousands)(1) 2016 2017 2018 2019 2020 Permit Valuation New Single-family $1,260.0 $2,806.0 $1,587.0 $1,458.8 $0.0 New Multi-family 0.0 565.0 0.0 0.0 0.0 Res. Alterations/Additions 0.0 0.0 4,468.0 906.3 240.0 Total Residential 1,260.0 3,371.0 6,055.0 2,365.1 240.0 New Commercial 0.0 0.0 0.0 3,900.0 0.0 New Industrial 0.0 0.0 0.0 0.0 0.0 New Other 0.0 0.0 1,035.4 259.1 55.0 Com. Alterations/Additions 135.0 0.0 12,238.0 751.0 190.0 Total Nonresidential 135.0 0.0 13,273.4 4,910.1 245.0 New Dwelling Units Single Family 4 14 8 10 0 Multiple Family 0 3 0 0 0 TOTAL 4 17 8 10 0 (1) Totals may not foot due to rounding. Source: Construction Industry Research Board, Building Permit Summary. LOS ANGELES COUNTY Building Permit Valuation For Calendar Years 2016 through 2020 (Dollars in Thousands)(1) 2016 2017 2018 2019 2020 Permit Valuation New Single-family $2,162,018.2 $2,352,614.8 $2,277,101.5 $1,967,219.3 $1,874,304.5 New Multi-family 2,774,294.3 3,257,833.4 3,222,530.3 2,61,257.4 2,789,673.9 Res. Alterations/Additions 1,639,294.3 1,757,904.1 1,941,369.5 1,625,839.3 1,014,422.1 Total Residential 6,575,607.5 7,368,352.3 7,441,001.3 6,554,316.0 5,678,400.5 New Commercial 1,728,443.4 2,196,089.2 2,844,173.0 2,675,678.8 1,885,027.0 New Industrial 138,408.6 134,534.3 101,201.3 63,727.8 32,196.2 New Other 791,078.1 563,679.3 952,347.7 446,182.7 354,758.2 Com. Alterations/Additions 2,880,916.6 3,143,200.2 2,796,375.3 3,404,012.3 1,241,068.1 Total Nonresidential 2,657,930.1 6,037,503.0 6,694,097.3 6,589,601.6 3,513,049.5 New Dwelling Units Single Family 4,780 5,456 6,070 5,738 6,198 Multiple Family 15,589 17,023 17,152 15,884 14,056 TOTAL 20,369 22,479 23,222 21,622 20,254 (1) Totals may not foot due to rounding. Source: Construction Industry Research Board, Building Permit Summary. Lynwood Public Financing Authority - Page 205 of 242 Agenda Item # 3 B-1 APPENDIX B SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Lynwood Public Financing Authority - Page 206 of 242 Agenda Item # 3 C-1 APPENDIX C AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING JUNE 30, 2021 Lynwood Public Financing Authority - Page 207 of 242 Agenda Item # 3 D-1 APPENDIX D PROPOSED FORM OF OPINION OF BOND COUNSEL _______, 2022 Lynwood Public Financing Authority 11330 Bullis Road Lynwood, CA 90262 OPINION: $___________ Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) Members of the Governing Body of the Authority: We have acted as bond counsel to the Lynwood Public Financing Authority (the “Authority”) in connection with the issuance by the Authority of the captioned bonds dated the date hereof (the “Bonds”). In such capacity, we have examined such law and such certified proceedings, certifications and other documents as we have deemed necessary to render this opinion. The Bonds are issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”), the Indenture of Trust, dated as of July 1, 2022 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), and a resolution (the “Resolution”) of the governing body of the Authority adopted [May 17], 2022. Under the Indenture, the Authority has pledged certain revenues (the “Revenues”) for the payment of principal, premium (if any), and interest on the Bonds when due, including lease payments made by the City of Lynwood (the “City”) under a Lease Agreement dated as of July 1, 2022 (the “Lease Agreement”) between the Authority and the City. Regarding questions of fact material to our opinion, we have relied on representations of the Authority contained in the Indenture and the City contained in the Lease Agreement, and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Authority is a duly created and validly existing joint exercise of powers authority with the power to adopt the Resolution, enter into the Indenture and perform the agreements on its part contained therein, and issue the Bonds. 2. The City is a duly created and validly existing general law city and municipal corporation with the power to enter into the Lease Agreement and perform the agreements on its part contained therein. Lynwood Public Financing Authority - Page 208 of 242 Agenda Item # 3 D-2 3. The Indenture has been duly authorized, executed and delivered by the Authority, and constitutes a valid and binding obligation of the Authority, enforceable against the Authority. 4. The Lease Agreement has been duly authorized, executed and delivered by the Authority and the City, and constitutes a valid and binding obligation of the Authority and the City, enforceable against the Authority and the City. 5. The Indenture creates a valid lien on the Revenues and other funds pledged by the Indenture for the security of the Bonds, on a parity with other bonds (if any) issued or to be issued under the Indenture. 6. The Bonds have been duly authorized and executed by the Authority, and are valid and binding limited obligations of the Authority, payable solely from the Revenues and other funds provided therefor in the Indenture. 7. Interest on the Bonds is exempt from personal income taxation imposed by the State of California. We express no opinion regarding any other tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Bonds. The rights of the owners of the Bonds and the enforceability of the Bonds and the Indenture are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally, and by equitable principles, whether considered at law or in equity. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Our engagement with respect to this matter has terminated as of the date hereof. Respectfully submitted, A Professional Law Corporation Lynwood Public Financing Authority - Page 209 of 242 Agenda Item # 3 E-1 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE $_________ LYNWOOD PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2022 (FEDERALLY TAXABLE) This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the City of Lynwood (the “City”) in connection with the issuance by the Lynwood Public Financing Authority (the “Authority”) of the bonds captioned above (the “Bonds”). The Bonds are being issued under an Indenture of Trust dated as of July 1, 2022 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, 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 on behalf of itself and the Authority 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 nine months after the end of the City’s fiscal year (currently April 1, based on the City’s fiscal year-end of June 30). “Dissemination Agent” means, initially, ______________, and 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 executed by the City and the Authority in connection with the issuance of the Bonds. “Participating Underwriter” means, Cabrera Capital Markets, LLC, the original purchaser 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. Lynwood Public Financing Authority - Page 210 of 242 Agenda Item # 3 E-2 Section 3. Provision of Annual Reports. (a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing April 1, 2023, with the report for Fiscal Year 2021-22, 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 general fund 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) a notice to the MSRB, in an electronic format as prescribed by the MSRB. (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) Financial Statements. Audited financial statements of the City for the preceding fiscal year, prepared in accordance generally accepted accounting principles. If the City’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), 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) Other Annual Information. To the extent not included in the audited final statements of the City, the Annual Report shall also include financial and operating data with respect to the City for preceding fiscal year, substantially similar to that provided in the corresponding tables and charts in the Official Statement, as follows: Lynwood Public Financing Authority - Page 211 of 242 Agenda Item # 3 E-3 1. City of Lynwood General Fund Budget Summary in substantially the form of Table 1; 2. Statements of Revenues, Expenditures and Changes in General Fund Balance in substantially the form of Table 11; 3. General Fund Balance Sheets Five Year Comparison shown in Table 12; 4. General Fund Revenues by Revenue Source in substantially the form of Table 3; 5. Assessed Valuation of All Taxable Property in substantially the form of Table 6; 6. Secured Property Levies and Collections in substantially the form of Table 7; and 7. Principal Property Taxpayers in substantially the form of Table 10 (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 through the MSRB. The City shall clearly identify each such other document so included by reference. If the document included by reference is a final official statement, it must be available from the MSRB. Section 5. Reporting of Listed 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 Bonds, or other material events affecting the tax status of the Bonds. Lynwood Public Financing Authority - Page 212 of 242 Agenda Item # 3 E-4 (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 (without any obligation to provide any notices of changes in the outlook assigned to or associated with any rating). (12) Bankruptcy, insolvency, receivership or similar event of the City. (13) The consummation of a merger, consolidation, or acquisition involving the City, or the sale of all or substantially all of the assets of the City (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (14) Appointment of a successor or additional Trustee or the change of name of the 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. (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. (b) Upon 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. Upon 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. Lynwood Public Financing Authority - Page 213 of 242 Agenda Item # 3 E-5 (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. 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©. 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. The initial Dissemination Agent will be the City. 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 Lynwood Public Financing Authority - Page 214 of 242 Agenda Item # 3 E-6 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©. Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 11. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance. Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the Lynwood Public Financing Authority - Page 215 of 242 Agenda Item # 3 E-7 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. Date: _______, 2022 CITY OF LYNWOOD By: City Manager [_____________________], as Dissemination Agent By: Lynwood Public Financing Authority - Page 216 of 242 Agenda Item # 3 F-1 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 Authority (the “Issuer”) nor the Trustee (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 the holding Lynwood Public Financing Authority - Page 217 of 242 Agenda Item # 3 F-2 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 AA+. 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 and www.dtc.org. 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 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 Lynwood Public Financing Authority - Page 218 of 242 Agenda Item # 3 F-3 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. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to the Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book- entry credit of tendered Securities to the Agent’s DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to 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. 11. 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. 12. 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. Lynwood Public Financing Authority - Page 219 of 242 Agenda Item # 3 Quint & Thimmig LLP 04/27/22 03095.06 $__________ LYNWOOD PUBLIC FINANCING AUTHORITY Lease Revenue Bonds, Series 2022 (Federally Taxable) BOND PURCHASE AGREEMENT __________, 2022 Lynwood Public Financing Authority 11330 Bullis Road Lynwood, CA 90262 City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Ladies and Gentlemen: Cabrera Capital Markets, LLC (the “Underwriter) hereby offers to enter into this bond purchase agreement (the “Bond Purchase Agreement”) with the Lynwood Public Financing Authority (the “Authority”) and the City of Lynwood (the “City”). Upon the acceptance hereof by the Authority and the City, this offer will be binding upon the Authority, the City and the Underwriter. This offer is made subject to (a) the written acceptance hereof by the Authority and the City and (b) withdrawal by the Underwriter upon written notice (by telecopy or otherwise) delivered to the Authority and the City at any time prior to each of their acceptance hereof by the Authority and the City. 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase on the Closing Date (as defined herein), and the Authority and the City hereby agree to sell and deliver to the Underwriter on the Closing Date, $__________ principal amount of Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) (the “Bonds). The Bonds are being issued pursuant to Article 4, Chapter 5, Division 7, Title 1 of the California Government Code, a resolution of the Authority authorizing the issuance of the Bonds, adopted on May 17, 2022 (the “Authority Resolution”), and an Indenture of Trust, dated as of June 1, 2022 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The City will lease certain real property to the Authority, consisting of various streets throughout the boundaries of the City (collectively, the “Leased Property”) to the Authority pursuant to a Site Lease, dated as of June 1, 2022 (the “Site Lease”). The Leased Property will be leased by the Authority to the City pursuant to the Lease Agreement, dated as of June 1, 2022 (the “Lease Agreement”), by and between the Authority and the City. Pursuant to an Assignment Agreement, dated as of June 1, 2022 (the “Assignment Agreement”), by and between the Authority and the Trustee, the Authority will assign, for the benefit of the owners of the Bonds, its right to receive Lease Lynwood Public Financing Authority - Page 220 of 242 Agenda Item # 3 -2- Payments (the “Lease Payments”) made by the City under the Lease Agreement and its right to exercise rights and remedies of the Authority under the Lease Agreement. All capitalized terms not defined herein shall have the respective meaning specified in the Indenture. Under the Lease Agreement, the City is required to make Lease Payments and Additional Rental Payments from legally available funds in amounts calculated to be sufficient to pay principal of and interest on the Bonds when due. All of the Authority’s right, title and interest in and to the Lease Agreement (except for the right to receive Additional Rental Payments to the extent payable to the Authority and certain rights to indemnification), including the right to receive Lease Payments under the Lease Agreement, are assigned to the Trustee for the benefit of the Owners of the Bonds. The Bonds are being issued for the purposes of funding: (i) all or a portion of the City’s projected total unfunded accrued actuarial liability to the California Public Employees’ Retirement System for its Miscellaneous and Safety Plans; and (ii) the costs of issuing the Bonds. The purchase price to be paid by the Underwriter for the Bonds is hereby agreed to be $___________, which amount represents the principal amount of the Bonds of $__________.00, less $___________, representing the Underwriter’s discount (such payment and delivery of the Bonds and the other actions contemplated hereby to take place at the time of such payment and delivery being herein sometimes called the “Closing”). The Authority and the City acknowledge and agree that (i) the purchase and sale of the Bonds pursuant to this Bond Purchase Agreement is an arm’s-length commercial transaction between the Authority and the City and the Underwriter; (ii) in connection with such transaction, the Underwriter is acting solely as a principal and not as an agent or a fiduciary of the Authority or the City; (iii) the Underwriter has not assumed a fiduciary responsibility in favor of the Authority or the City with respect to the offering of the Bonds or the process leading thereto (whether or not the Underwriter, or any affiliates of the Underwriter, has advised or is currently advising the Authority or the City on other matters) nor has it assumed any other obligation to the Authority or the City except the obligations expressly set forth in this Bond Purchase Agreement, (iv) the Underwriter has financial and other interests that differ from those of the Authority and the City; and (v) the Authority and the City have consulted with their own legal and financial advisors to the extent they deemed appropriate in connection with the offering of the Bonds. The Authority and the City hereby acknowledge receipt from the Underwriter of disclosures required by the Municipal Securities Rulemaking Board (“MSRB”) Rule G-17 (as set forth in MSRB Notice 2012-25 (May 7, 2012), relating to disclosures concerning the Underwriter’s role in the transaction, disclosures concerning the Underwriter’s compensation, conflict disclosures, if any, and disclosures concerning complex municipal securities financing, if any. A Preliminary Official Statement of the City and the Authority, dated _______, 2022 (together with the Appendices thereto, any documents incorporated therein by reference and any supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially consistent with such physical form, the “Preliminary Official Statement”), has been prepared for use in marketing the Bonds, and a final Official Statement relating to the Bonds, to be dated the date hereof, as amended to conform to the terms of this Purchase Contract, and with such changes and amendments as are mutually agreed to by the Authority, the City and the Underwriter, including the cover page, inside cover Lynwood Public Financing Authority - Page 221 of 242 Agenda Item # 3 -3- page, the appendices and all information incorporated therein by reference, is herein collectively referred to as the “Official Statement,” which shall be in substantially the form of the Preliminary Official Statement, with such changes and amendments thereto as may be mutually agreed upon by the Underwriter, the Authority and the City. The Bonds shall be dated their date of delivery, and shall have the maturities, bear interest at the rates, have reoffering yields, and be subject to redemption as shown on Exhibit A hereto. It shall be a condition to the Authority’s obligation to sell and to deliver the Bonds to the Underwriter and to the obligation of the Underwriter to purchase, to accept delivery of and to pay for the Bonds that the entire $__________ principal amount of the Bonds as authorized by the Indenture shall be sold and delivered by the Authority and accepted and paid for by the Underwriter at the Closing. The Underwriter may change the offering prices (or yields) of the Bonds from time to time at any time. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices. The obligation of the Authority to sell and deliver the Bonds to the Underwriter shall also be conditioned upon the delivery by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel (“Bond Counsel”), of its approving legal opinion with respect to the Bonds. The Authority and the City hereby authorize the Underwriter to use and distribute the Site Lease, the Lease Agreement, the Assignment Agreement, the Indenture and the Preliminary Official Statement, and the information contained in such documents in connection with the public offering and sale of the Bonds. The Authority and the City have authorized the use of the Preliminary Official Statement in connection with the public offering of the Bonds by the Underwriter prior to the date hereof. The obligation of the City to make Lease Payments under the Lease Agreement 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. Neither the Bonds nor the obligation of the City to make Lease Payments under the Lease Agreement constitutes a debt of the Authority, the City, the State of California or any of its political subdivisions in contravention of any constitutional or statutory debt limitation or restriction. The obligation of the City to make Lease Payments, as set forth in the Lease Agreement, shall be deemed to be and shall be construed to be a ministerial duty imposed by law and it shall be the ministerial duty of each and every public official of the City to take such actions and do such things as are required by law in the performance of such duty, subject to abatement in the event of damage or destruction to, or condemnation of, the Leased Property or a portion thereof. 2. Bona Fide Public Offering. The Underwriter agrees to make a bona fide public offering of all of the Bonds, at prices not in excess of the initial public offering yields or prices set forth on the cover page of the Official Statement. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices; provided, however, that the Underwriter may offer a portion of the Bonds for sale to selected dealers who are members of the Financial Industry Regulatory Authority, and the Underwriter reserves the right to change such offering prices or yields as the Underwriter shall deem necessary in connection with the marketing of the Bonds and to offer and sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the initial offering prices or at yields higher than the initial yields set forth on Exhibit A attached hereto. The Underwriter also reserves the right to over-allot or effect transactions that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market and to discontinue such stabilizing, if commenced, at any time. None of such activities Lynwood Public Financing Authority - Page 222 of 242 Agenda Item # 3 -4- shall affect the principal amounts, maturity dates, interest rates, redemption or other provision of the Bonds or the amount to be paid by the Underwriter to the Authority for the Bonds. 3. The Bonds. The Bonds will be issued, executed and delivered pursuant to the Indenture. The City Council of the City has adopted a resolution on May 17, 2022, relating to the Bonds (the “City Resolution”). This Bond Purchase Agreement, the Site Lease, the Lease Agreement and the Continuing Disclosure Agreement (hereinafter defined) are collectively referred to as the “City Documents.” This Bond Purchase Agreement, the Indenture, the Site Lease, the Lease Agreement and the Assignment Agreement are collectively referred to as the “Authority Documents.” 4. Official Statement, Continuing Disclosure. (a) The Authority and the City represent that they have deemed the Preliminary Official Statement to be final as of its date, except for either revisions or additions to the offering price(s), interest rate(s), yield(s) to maturity, selling compensation, aggregate principal amount, principal amount per maturity, delivery date, rating(s) and other terms of the Bonds which depend upon the foregoing as provided in and pursuant to Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Rule”). (b) The Underwriter agrees that, prior to the time the final Official Statement is available, the Underwriter will send to any potential purchaser of the Bonds, upon the request of such potential purchaser, a copy of the most recent Preliminary Official Statement. Such Preliminary Official Statement shall be sent by first class mail (or other equally prompt means) not later than the second business day following the date upon which each such request is received. (c) The Authority agrees to deliver to the Underwriter, at such addresses as the Underwriter shall specify, as many copies of the final Official Statement relating to the Bonds as the Underwriter shall reasonably request as necessary to comply with paragraph (b)(4) of the Rule and with Rule G-32, Rule G-36 and all other applicable rules of the Municipal Securities Rulemaking Board. The Authority agrees to deliver such copies of the Official Statement within seven business days after the execution hereof. The Underwriter agrees to give notice to the Authority on the date after which the Underwriter shall no longer be obligated to deliver copies of the Official Statement pursuant to paragraph (b)(4) of the Rule, which date shall be no earlier than 25 days after the “end of the underwriting period,” as determined in accordance with Section 14 herein. (d) Prior to the earlier of (i) receipt of notice from the Underwriter that no participating underwriter, as such term is defined in the Rule, remains obligated to deliver Official Statements pursuant to paragraph (b)(4) of the Rule or (ii) 25 days after the date of the Closing (as defined below), the Authority and the City shall provide the Underwriter with such information regarding the Authority and the City, each of their current financial conditions and ongoing operations as the Underwriter may reasonably request. (e) The City hereby covenants and agrees that it will, on or prior to the Closing Date, execute a certificate for the benefit of the owners of the Bonds in which the City will undertake to provide financial information, operating data and notices of material events as required by paragraph (d)(2)(ii) of the Rule substantially in the form of Appendix D to the Official Statement (the “Continuing Disclosure Agreement”). Lynwood Public Financing Authority - Page 223 of 242 Agenda Item # 3 -5- 5. Representations, Warranties and Agreements of the City. The City represents, warrants and agrees as follows: (a) The City is a municipal corporation and general law city duly organized and validly existing under the Constitution and laws of the State of California. (b) The City has full legal right, power and authority (i) to enter into, execute and deliver the City Documents; and (ii) to carry out and consummate the transactions on its part contemplated by the City Documents and the Official Statement. (c) By all necessary official action, the City has duly authorized and approved the City Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement and approved the distribution thereof (including in electronic form), has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations in connection with the execution and delivery of the Bonds on its part contained in the City Documents, and the consummation by it of all other transactions contemplated by the City Documents in connection with the execution and delivery of the Bonds, all pursuant to the City Resolution adopted at a meeting duly called and held in accordance with the requirements of all applicable laws and at which a quorum of the members of the City Council was continuously present. The City Resolution has not been modified, amended or rescinded since the date of its adoption. (d) The City is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of California or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the City Documents) or other instrument to which the City is a party which breach or default has or may have an adverse effect on the ability of the City 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 such a default or event of default under any such instrument; and the execution and delivery of the Bonds and the City Documents, and compliance with the provisions on the City’s part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the Leased Property or assets of the City or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the City Documents. (e) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations in connection with the execution and delivery of the Bonds under the City Documents or the consummation by it of all other transactions contemplated by the City Documents have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition Lynwood Public Financing Authority - Page 224 of 242 Agenda Item # 3 -6- precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations under the City Documents have been duly obtained. (f) There is no action, suit, proceeding, inquiry or investigation, notice of which has been duly served on the City, at law or in equity before or by any court, government agency, public board or body, pending or to the best knowledge of the officer of the City executing this Bond Purchase Agreement, threatened against the City, affecting the existence of the City or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, execution or delivery of the Bonds pursuant to the Indenture, or contesting or affecting as to the City the validity or enforceability of the City Documents, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the City to cause the execution and delivery or adoption by the City of the City Documents, or in any way contesting or challenging the consummation of the transactions contemplated hereby or thereby; nor, to the best knowledge of the City, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the Bonds or the authorization, execution, delivery or performance by the City of the City Documents. (g) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (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 will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the City shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction, and the Underwriter shall bear all costs in connection with the foregoing. (h) As of the date thereof, the Preliminary Official Statement (other than information therein regarding DTC or its book-entry system or any information provided by the Underwriter) did not, except for the omission of certain information permitted to be omitted in accordance with the Rule, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) At the time of the City’s acceptance hereof, and (unless an event occurs of the nature described in paragraph (k) of this Section 5) at all times subsequent thereto up to and including the Closing Date, the Official Statement (other than information therein regarding DTC or its book-entry system or any information provided by the Underwriter) did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (j) If the Official Statement is supplemented or amended pursuant to paragraph (k) of this Section 5, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the Closing Date, the Official Statement (other than information therein provided by the Underwriter) as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Lynwood Public Financing Authority - Page 225 of 242 Agenda Item # 3 -7- (k) If between the date of this Bond Purchase Agreement and that date which is 25 days after the end of the underwriting period (as determined in accordance with Section 14 hereof) any event of which the officer of the City executing this Bond Purchase Agreement has knowledge shall occur affecting the City which might adversely affect the marketability of the Bonds or the market prices thereof, or which might cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City shall notify the Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will at its expense prepare and furnish to the Underwriter a reasonable number of copies of such supplement to, or amendment of, the Official Statement in a form and in a manner approved by the City, Bond Counsel, Disclosure Counsel and the Underwriter. (l) Any certificate signed by any officer of the City and delivered to the Underwriter pursuant to the City Documents or any document contemplated thereby or required for the valid execution and delivery of the Bonds shall be deemed a representation and warranty by the City to the Underwriter as to the statements made therein. (m) The City will cause the proceeds from the sale of the Bonds to be paid to the Trustee for the purposes specified in the Indenture and the Official Statement. So long as any of the Bonds are outstanding and except as may be authorized by the Indenture, the City will not issue or sell, or cause to be issued or sold, any bonds or other obligations, other than the Bonds delivered thereunder, the interest on and premium, if any, or principal of which will be payable from Lease Payments. 6. Representations, Warranties and Agreements of the Authority. The Authority represents, warrants and agrees as follows: (a) The Authority is a joint exercise of powers entity duly organized and validly existing under the laws of the State of California pursuant to a Joint Exercise of Powers Agreement between the City and the Lynwood Redevelopment Agency, dated March 16, 1993 (the “JPA Agreement”). (b) The Authority has full legal right, power and authority (i) to enter into, execute and deliver the Authority Documents and to sell and deliver the Bonds to the Underwriter as provided herein; and (ii) to carry out and consummate the transactions on its part contemplated by the Authority Documents and the Official Statement. (c) By all necessary official action, the Authority has duly authorized and approved the issuance of the Bonds and the Authority Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement and approved the distribution thereof (including in electronic form), has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations in connection with the execution and delivery of the Bonds on its part contained in the Bonds and the Authority Documents, and the consummation by it of all other transactions contemplated by the Authority Documents in connection with the execution and delivery of the Bonds, all pursuant to the Authority Resolution adopted at a meeting duly called and held in accordance with the requirements of all applicable laws and at which a quorum of the board members of the Authority was continuously present. The Authority Resolution has not been modified, amended or rescinded since the date of its adoption and each Authority Document is or will be, when delivered, as applicable, the valid and binding obligation of the Authority. Lynwood Public Financing Authority - Page 226 of 242 Agenda Item # 3 -8- (d) The Authority is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of California or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or the JPA Agreement, or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the Authority Documents) or other instrument to which the Authority is a party which breach or default has or may have an adverse effect on the ability of the Authority to perform its obligations under the Bonds or 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 such a default or event of default under any such instrument; and the execution and delivery of the Bonds and the Authority Documents, and compliance with the provisions on the Authority’s part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, Bond, note, resolution, agreement or other instrument to which the Authority is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the Leased Property or assets of the Authority or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Authority Documents. (e) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations in connection with the issuance of the Bonds under the Authority Documents or the consummation by it of all other transactions contemplated by the Authority Documents, including all filings with the California Secretary of State, have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations under the Bonds and the Authority Documents have been duly obtained. (f) The Bonds, when executed, issued, authenticated and delivered in accordance with the Indenture, and sold to the Underwriter as provided herein, will be validly executed and outstanding obligations, entitled to the benefits of the Indenture, and upon such execution and delivery, the Indenture will provide, for the benefit of the Owners from time to time of the Bonds, the legally valid and binding security interest it purports to create. (g) There is no action, suit, proceeding, inquiry or investigation, notice of which has been duly served on the Authority, at law or in equity before or by any court, government agency, public board or body, pending or to the best knowledge of the officer of the Authority executing this Bond Purchase Agreement, threatened against the Authority, affecting the existence of the Authority or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance, execution or delivery of the Bonds pursuant to the Indenture, or contesting or affecting as to the Authority the validity or enforceability of the Bonds or the Authority Documents, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the Authority to cause the issuance of the Bonds, or the execution and delivery or adoption by the Authority of the Authority Documents, or in any way contesting or challenging the consummation of the transactions contemplated hereby or thereby; nor, to the best Lynwood Public Financing Authority - Page 227 of 242 Agenda Item # 3 -9- knowledge of the Authority, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the Bonds or the authorization, execution, delivery or performance by the Authority of the Bonds or the Authority Documents. (h) 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 order (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 will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the Authority shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction, and the Underwriter shall bear all costs in connection with the foregoing. (i) As of the date thereof, the Preliminary Official Statement did not, except for the omission of certain information permitted to be omitted in accordance with the Rule, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (j) At the time of the Authority’s acceptance hereof, and (unless an event occurs of the nature described in paragraph (l) of this Section 6) at all times subsequent thereto up to and including the Closing Date, the information under the caption “THE AUTHORITY” in the Official Statement (other than information therein provided by the Underwriter) did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (k) If the Official Statement is supplemented or amended pursuant to paragraph (l) of this Section 6, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the Closing Date, the Official Statement (other than information therein provided by the Underwriter) as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (l) If between the date of this Bond Purchase Agreement and that date which is 25 days after the end of the underwriting period (as determined in accordance with Section 14 hereof) any event of which the officer of the Authority executing this Bond Purchase Agreement has knowledge shall occur affecting the Authority which might adversely affect the marketability of the Bonds or the market prices thereof, or which might cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Authority shall notify the Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Authority will at its expense prepare and furnish to the Underwriter a reasonable number of copies of such supplement to, or amendment of, the Official Statement in a form and in a manner approved by the City, Bond Counsel, Disclosure Counsel and the Underwriter. Lynwood Public Financing Authority - Page 228 of 242 Agenda Item # 3 -10- (m) Any certificate signed by any officer of the Authority and delivered to the Underwriter pursuant to the Authority Documents or any document contemplated thereby or required for the valid execution and delivery of the Bonds shall be deemed a representation and warranty by the Authority to the Underwriter as to the statements made therein. (n) The Authority will cause the proceeds from the sale of the Bonds to be paid to the Trustee for the purposes specified in the Indenture and the Official Statement. So long as any of the Bonds are outstanding and except as may be authorized by the Indenture, the Authority will not issue or sell any bonds or other obligations, other than the Bonds delivered thereunder, the interest on and premium, if any, or principal of which will be payable from the Revenues. (o) The Authority shall honor all other covenants on its part contained in the Indenture and the Lease Agreement which are incorporated herein and made a part of this Bond Purchase Agreement. 7. Closing. At 8:00 A.M., Pacific Daylight time, on _________, 2022, or on such other date time, as may be mutually agreed upon by the Authority, the City and the Underwriter (the “Closing Date”), the Authority will, subject to the terms and conditions hereof, deliver to the Underwriter, through the facilities of The Depository Trust Company (“DTC”), or at such other place as the Authority, the City and the Underwriter may mutually agree, the Bonds in definitive, fully registered form (one Bond for each maturity), duly executed and registered in the name of Cede & Co. as nominee of DTC; and, subject to the terms and conditions hereof, the Underwriter shall wire to the Trustee immediately available funds in the amount of the purchase price of the Bonds. 8. Closing Conditions. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and warranties of the Authority and the City contained herein, and in reliance upon the representations and warranties to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Authority and the City of its obligations hereunder, both as of the date hereof and as of the Closing Date. Accordingly, the Underwriter’s obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the Authority and the City of their respective obligations to be performed hereunder and under such documents and instruments at or prior to the Closing Date, shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the statements the officers and other officials of the Authority and of the City, as the Underwriter, authorized representatives of Bond Counsel, the Trustee, and the City Attorney made in any certification or other documents furnished pursuant to the provisions hereof, and shall also be subject to the following additional conditions: (a) The respective representations and warranties of the Authority and the City contained herein shall be true, complete and correct on the date hereof and on and as of the Closing Date, as if made on the Closing Date; (b) At the time of Closing, the City Documents and the Authority Documents shall be in full force and effect in accordance with their terms and shall not have been amended, modified or supplemented and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Underwriter; (c) All necessary official action of the Authority, the City and of the other parties thereto relating to the City Documents and the Authority Documents shall have been taken and shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect; Lynwood Public Financing Authority - Page 229 of 242 Agenda Item # 3 -11- (d) Subsequent to the date hereof, there shall not have occurred any change in or affecting particularly the Authority, the City or the Bonds, as the foregoing is described in the Official Statement, which in the reasonable opinion of the Underwriter materially impairs the investment quality of the Bonds; and (e) At or prior to the Closing Date, the Underwriter shall have received copies of each of the following documents: (i) The Official Statement and each supplement or amendment, if any, thereto, executed by authorized officers of the Authority and the City; (ii) A copy of the Indenture, executed by the parties thereto; (iii) A copy of the Lease Agreement, executed by the parties thereto; (iv) A copy of the Site Lease, executed by the parties thereto; (v) A copy of the Continuing Disclosure Agreement, executed by the City and ___________, as dissemination agent; (vi) A certified copy of the JPA Agreement; (vii) A certificate or certificates of the City, dated the Closing Date, to the effect that: (A) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date and the City has complied with all of the terms and conditions of this Purchase Agreement required to be complied with by the City at or prior to the Closing Date; (B) none of the proceedings or authority for (i) the authorization, sale, execution and delivery of the Bonds, (ii) the adoption of the City Resolution, or (iii) the execution and delivery of the City Documents and performance of its obligations thereunder, has been repealed, modified, amended, revoked or rescinded; (C) subsequent to June 30, 2019, and prior to Closing, other than as described in the Official Statement, there have been no material adverse changes in the financial position of the City; (D) no event affecting the City has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purposes for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (E) No consent is required for the inclusion of the City’s 2018-19 audited financial statements in the Official Statement. (viii) A certificate or certificates of the Authority, dated the Closing Date, to the effect that: Lynwood Public Financing Authority - Page 230 of 242 Agenda Item # 3 -12- (A) the representations and warranties of the Authority contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date and the Authority has complied with all of the terms and conditions of this Purchase Agreement required to be complied with by the Authority at or prior to Closing Date; (B) none of the proceedings or authority for (i) the authorization, sale, execution and delivery of the Bonds, (ii) the adoption of the Authority Resolution, or (iii) the execution and delivery of the Authority Documents, has been repealed, modified, amended, revoked or rescinded; and (C) no event affecting the Authority has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purposes for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect. (ix) An opinion or opinions, dated the Closing Date and addressed to the Underwriter and the Trustee, of Jones & Mayer, the City Attorney, to the effect that: (A) The City is a municipal corporation and general law city duly organized and validly existing under the Constitution and laws of the State of California; (B) The City Documents have been duly approved by a resolution of the City adopted at a meeting duly called and held in accordance with the requirements of all applicable laws, with all public notice required by law, and at which a quorum of the members of the City Council was continuously present and such resolution has not been modified, amended or rescinded since the date of its adoption; (C) Except as described in the Official Statement, there is no litigation, inquiry, or investigation pending or to the best of such counsel’s knowledge after due inquiry, threatened, which: (1) challenges the right or title of any member or officer of the City to hold his or her office or exercise or perform the powers and duties pertaining thereto; (2) challenges the validity or enforceability of the Bonds or the City Documents; (3) seeks to restrain or enjoin the sale of the Bonds or the execution and delivery by the City of, or the performance by the City of its legal obligations under, the City Documents or in which a final adverse decision could materially adversely affect the operations of the City with respect to the Leased Property; or (4) contests in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, nor, to the best of such counsel’s knowledge, is there any basis therefor; (D) The execution and delivery by the City of, and the performance by the City of its obligations under, the City Documents, do not conflict with, violate or constitute a default under any provision of any law, court order or decree or any contract, instrument or agreement to which the City is a party or by which it is bound and of which such counsel has knowledge; (E) As of the date hereof, the statements and information relating to the City contained in the Preliminary Official Statement and Official Statement did Lynwood Public Financing Authority - Page 231 of 242 Agenda Item # 3 -13- not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (F) The City Documents have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery of the City Documents by the parties thereto other than the City, the City Documents constitute legal, valid and binding agreements of the City, enforceable against the City in accordance with their respective terms except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights and remedies in general, or by the application of equitable principles if equitable remedies are sought. (G) Except as may be required under the “blue sky” or securities laws of the United States or any state, there is no authorization, approval, consent or other order of, or filing with, or certification by, the State or any other governmental authority or agency within the State having jurisdiction over the City required for the issuance of the Bonds or the consummation by the City of the other financial transactions contemplated by the Official Statement and the City Documents. (H) Based on the information made available to the City Attorney in its role as City Attorney to the City, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, nothing has come to its attention which would lead it to believe that the Official Statement as of its date and as of the date of Closing (excluding therefrom the financial and statistical data and forecasts included therein, as to which no opinion is expressed and information relating to the Authority and the Depository Trust Company and its book entry system) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (x) An opinion or opinions, dated the Closing Date and addressed to the Underwriter and the Trustee, of the City Attorney, as counsel for the Authority, to the effect that: (A) The Authority is a joint exercise of powers authority duly organized and validly existing under the laws of the State of California pursuant to the JPA Agreement; (B) The Authority Documents have been duly approved by the Authority Resolution adopted at a meeting duly called and held in accordance with the requirements of all applicable laws, with all public notice required by law, and at which a quorum of the members of the Board of the Authority was continuously present and such resolution has not been modified, amended or rescinded since the date of its adoption; (C) Except as described in the Official Statement, there is no litigation, inquiry, or investigation pending to the best of such counsel’s knowledge after due inquiry, or threatened, which: (1) challenges the right or title of any Board member or officer of the Authority to hold his or her office or exercise or perform Lynwood Public Financing Authority - Page 232 of 242 Agenda Item # 3 -14- the powers and duties pertaining thereto; (2) challenges the validity or enforceability of the Bonds or the Authority Documents; (3) seeks to restrain or enjoin the sale of the Bonds or the execution and delivery by the Authority of, or the performance by the Authority of its legal obligations under, the Authority Documents or in which a final adverse decision could materially adversely affect the operations of the Authority with respect to the Leased Property; or (4) contests in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, nor, to the best of such counsel’s knowledge, is there any basis therefor; (D) The execution and delivery by the Authority of, and the performance by the Authority of its obligations under, the Authority Documents, do not conflict with, violate or constitute a default under any provision of any law, court order or decree or any contract, instrument or agreement to which the Authority is a party or by which it is bound and of which such counsel has knowledge; and (E) The Authority Documents have been duly authorized, executed and delivered by the Authority and, assuming due authorization, execution and delivery of the Authority Documents by the parties thereto other than the Authority, the Authority Documents constitute legal, valid and binding agreements of the Authority, enforceable against the Authority in accordance with their respective terms except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights and remedies in general, or by the application of equitable principles if equitable remedies are sought. (F) Except as may be required under the “blue sky” or securities laws of the United States or any state, there is no authorization, approval, consent or other order of, or filing with, or certification by, the State or any other governmental authority or agency having jurisdiction over the Authority required for the issuance of the Bonds or the consummation by the Authority of the other financial transactions contemplated by the Official Statement and the Authority Documents. (G) Based on the information made available to such City Attorney in its role as counsel to the Authority, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement under the captions entitled “THE AUTHORITY,” and “LITIGATION”, nothing has come to such City Attorney’s attention that would lead it to believe that the statements contained in the above-referenced captions as of the date of the Official Statement and as of the date of Closing (excluding therefrom the financial and statistical data and forecasts included therein, as to which no opinion is expressed) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (xi) An opinion, dated the Closing Date and addressed to the Authority, of Bond Counsel, substantially in the form set forth in Appendix E to the Official Statement, together with a letter or letters from such counsel, dated the Closing Date and addressed to the Underwriter and the Trustee, to the effect that the foregoing opinion may be relied upon by the Underwriter and the Trustee to the same extent as if such opinion was addressed to them; Lynwood Public Financing Authority - Page 233 of 242 Agenda Item # 3 -15- (xii) A supplemental opinion, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, to the effect that: (A) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (B) the Bond Purchase Agreement has been duly executed and delivered by the Authority and the City and is a valid and binding agreement of the Authority and the City; and (C) the statements contained in the Official Statement under the captions “DESCRIPTION OF THE BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” and “TAX MATTERS” and in APPENDIX C–”SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS” and APPENDIX E—FORM OF OPINION OF BOND COUNSEL,” insofar as such statements expressly summarize certain provisions of the Indenture, the Lease Agreement, the Site Lease and the final opinion of Bond Counsel concerning certain tax matters relating to the Bonds, are accurate in all material respects; (xiii) A letter, dated the Closing Date and addressed to the Authority, the City and the Underwriter of Jones Hall, A Professional Law Corporation, San Francisco, California, as disclosure counsel (“Disclosure Counsel”), to the effect that, based on among other things, (i) inquiries and discussions of various legal matters, (ii) review of and reliance on certain documents, certificates, instructions, records and opinions of counsel, and (iii) participation in meetings and telephone conferences with representatives of the Authority and the City, Wolf & Company Inc. and NHA Advisors, as municipal advisors to the City, and others including the City Attorney and Underwriter’s counsel, during which the content of the Preliminary Official Statement and the Official Statement and related matters were discussed, no information has come to the attention of Disclosure Counsel with respect to the issuance of the Bonds which caused Disclosure Counsel to believe that (a) the Preliminary Official Statement as of its date (excluding therefrom financial, demographic and statistical data; forecasts, projections, estimates, assumptions and expressions of opinions; information relating to DTC and its book-entry only system; information under the captions “TAX MATTERS” and “UNDERWRITING”; and the Appendices to the Preliminary Official Statement (other than Appendices A and E) as to which we express no view) contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except for such information as is permitted to be excluded from the Preliminary Official Statement pursuant to Rule 15c2-12, including but not limited to information as to pricing, yields, interest rates, maturities, amortization, redemption provisions, ratings, debt service requirements, Underwriter’s discount and CUSIP numbers; or (b) the Official Statement as of its date and as of the Closing Date (excluding therefrom financial, demographic, statistical or economic or demographic data; forecasts, numbers, charts, tables, graphs, projections, estimates, assumptions and expressions of opinions; information relating to DTC and its book-entry only system or CUSIP numbers; information under the captions “TAX MATTERS” and “UNDERWRITING”; and the Appendices to the Official Statement (other than Appendices A and E) as to which we express no view) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were Lynwood Public Financing Authority - Page 234 of 242 Agenda Item # 3 -16- made, not misleading. However, in providing advice and assistance as Disclosure Counsel, Disclosure Counsel provided no independent diligence on the MSRB’s Electronic Municipal Market Access website, and we express no view regarding the City’s or the City’s related entities’ compliance with any obligation to file annual reports or provide notice of events, each as described in Rule 15c2-12; (xiv) the opinion of Quint & Thimmig LLP, as counsel to the Underwriter, dated the Closing Date and addressed to the Underwriter, in form and substance acceptable to the Underwriter. (xv) A certificate of an authorized officer of the Trustee satisfactory to the Underwriter, certifying substantially as follows: (A) The Trustee is a national banking association duly organized and in good standing under the laws of the United States of America and has all necessary power and authority to enter into the Indenture and to perform its duties under the Indenture; (B) The Trustee is duly authorized to enter into the Indenture and to authenticate and deliver the Bonds to the Underwriter pursuant to the terms of the Indenture and, when executed by the other parties thereto, the Indenture will constitute a legal, valid and binding obligation of the Trustee enforceable in accordance with its terms; (C) The Bonds have been duly authenticated and delivered to the Underwriter pursuant to direction from the Authority; (D) The Trustee is not in breach of or default under any law or administrative rule or regulation of the State of California or of any department, division, agency or instrumentality thereof, of any applicable court or administrative decree or order, or any other material instrument to which the Trustee is a party or is otherwise subject or bound and which would materially impair the ability of the Trustee to perform its obligations under the Indenture; (E) To its knowledge, 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 or threatened in any way against the Trustee affecting the existence of the Trustee or the titles of its directors or officers to their respective offices, or seeking to restrain or enjoin the execution, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Indenture, or in any way contesting or affecting the validity or enforceability of the Bonds or the Indenture; (F) The execution and delivery of the Indenture will not conflict with or constitute a breach of or default under the Trustee’s duties under such documents, or any law, administrative regulation, court decree, resolution, articles of association, bylaws or other material agreement to which the Trustee is subject or by which it is bound; and (G) No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the authentication and delivery of the Bonds, the execution and delivery of the Indenture, the performance of the Lynwood Public Financing Authority - Page 235 of 242 Agenda Item # 3 -17- Trustee’s duties under the Indenture or the consummation by the Trustee of the other transactions contemplated by the Indenture, except as such may be required under the state securities or blue sky laws in connection with the distribution of the Bonds by the Underwriter. (xvi) An opinion of counsel to the Trustee in form and substance acceptable to the Underwriter; (xvii) 15c2-12 certificates of City and the Authority; (xviii) Certified copies of the City Resolution and the Authority Resolution; (xix) Evidence, satisfactory to the Underwriter, that the Bonds have been assigned the rating of “___” by S&P Global Ratings, a Standard & Poor’s Financial Services LLC business; (xx) Transcripts of all proceedings relating to the authorization, issuance, execution and delivery of the Bonds certified by the City and the Authority as applicable; and (xxi) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the City’s representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the City and the Authority on or prior to the date of the Closing of all the agreements then to be performed and conditions then to be satisfied by each of them. All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to Bond Counsel, Disclosure Counsel and the Underwriter. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Bond Purchase Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and none of the Underwriter, the Authority or the City shall be under any further obligation hereunder. 9. Termination. The Underwriter shall have the right to terminate the Underwriter’s obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds by notifying the Authority and the City in writing, of its election to do so, if, after the execution hereof and prior to the Closing: (a) the United States has become engaged in, or there has been an escalation of, hostilities which, in the reasonable opinion of the Underwriter, materially adversely affects the marketability or market price of the Bonds; (b) there shall have occurred the declaration of a general banking moratorium by any authority of the United States or the State of New York or the State of California; Lynwood Public Financing Authority - Page 236 of 242 Agenda Item # 3 -18- (c) an event shall have occurred, or been discovered as described in paragraph (k) of Section 5 or paragraph (l) of Section 6 hereof, which in the opinion of the Underwriter requires the preparation and publication of disclosure material or a supplement or amendment to the Official Statement; (d) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency in the State of California, or a decision by any court of competent jurisdiction within the State of California shall be rendered which, in the Underwriter’s reasonable opinion, materially adversely affects the market price of the Bonds; (e) there shall have occurred or any notice shall have been given of any intended downgrading, suspension, withdrawal or negative change in credit watch status by any national rating service to any of the Authority’s or the City’s obligations; (f) legislation shall be introduced, by amendment or otherwise, or be enacted by the House of Representatives or the Senate of the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by or on behalf of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the execution, issuance, delivery, offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by the Official Statement, is or would be in violation of any provision of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the issuance, offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by the Official Statement; (g) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (h) the New York Stock Exchange, or other national securities exchange or association or any governmental authority, shall impose as to the Bonds, or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by or the charge to the net capital requirements of broker-dealers; (i) trading in securities on the New York Stock Exchange or other national securities exchange or association shall have been suspended or limited or minimum prices have been established on either such exchange; (j) any action shall have been taken by any government in respect of its monetary affairs which, in the reasonable opinion of the Underwriter, has a material adverse effect on the United States municipal securities market; or as of the date hereof that in the Underwriter’s reasonable opinion materially adversely affects the marketability or market price of the Bonds; or (k) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Underwriter, has been materially and adversely affected by disruptive events, occurrences or conditions in the securities or debt markets. If this Bond Purchase Agreement shall be terminated pursuant to this Section 9, or if the purchase provided for herein is not consummated because any condition to the Underwriter’s obligations hereunder is not satisfied or because of any refusal, inability or failure on the part of Lynwood Public Financing Authority - Page 237 of 242 Agenda Item # 3 -19- the City or the Authority to comply with any of the terms or to fulfill any of the conditions of this Bond Purchase Agreement, or if for any reason the City or the Authority shall be unable to perform all of its respective obligations under this Bond Purchase Agreement, neither the City nor the Authority shall be liable to the Underwriter for damages on account of loss of anticipated profits arising out of the transactions covered by this Bond Purchase Agreement. The Underwriter may, in its sole discretion, waive any of the conditions set forth in Section 9 or this Section 9. 10. Changes in Official Statement. After the Closing, neither the Authority nor the City will adopt any amendment of or supplement to the Official Statement to which the Underwriter shall reasonably object in writing. 11. Payment of Costs and Expenses. (a) All costs and expenses incident to the sale and delivery of the Bonds to the Underwriter shall be payable by the Authority from the proceeds of the Bonds, including, but not limited to: (i) the fees and expenses of the City, its counsel and consultants; (ii) the fees and expenses of the Authority, its counsel and consultants; (iii) the fees and expenses of Bond Counsel; (iv) the fees and expenses of Disclosure Counsel; (v) the fees and expenses of Wolf & Company, Inc. and NHA Advisors, the City’s municipal advisors; (vi) all expenses in connection with the preparation and printing of the Bonds; (vii) all expenses in connection with the preparation, printing, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto; (viii) the initial fees and expenses of the Trustee, including the reasonable fees and expenses of its counsel; (ix) the fees and expenses of any rating agency rating the Bonds; and (x) any credit enhancement costs for the Bonds. (b) The Underwriter shall pay all expenses incurred by it in connection with the public offering and distribution of the Bonds including, but not limited to: (i) all advertising expenses in connection with the offering of the Bonds; (ii) the fees and disbursements of Underwriter’s counsel, if any, and (iii) all out-of-pocket disbursements and expenses incurred by the Underwriter in connection with the offering and distribution of the Bonds, including, air travel and hotel accommodations in connection with the pricing of the Bonds; investor meetings, rating agency trips and meetings; the Closing; meals and transportation for the City, the Underwriter and other working group personnel during rating agency, investor meetings; pricing and Closing trips; expenses related to attending working group meetings, such as parking, meals and transportation and any other miscellaneous costs associated with the Closing; (iv) all other expenses incurred by the Underwriter in connection with the public offering and distribution of Bonds, except as provided in (a) above or as otherwise agreed to by the Underwriter and the City, and (v) the fees of the California Debt and Investment Advisory Commission. Lynwood Public Financing Authority - Page 238 of 242 Agenda Item # 3 -20- 12. Notices. Any notice or other communication to be given under this Bond Purchase Agreement may be given by delivering the same in writing: To the Authority: Lynwood Public Financing Authority c/o City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attention: City Manager To the City: City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attention: City Manager To the Underwriter: Cabrera Capital Markets, LLC 444 South Flower Street, 13th Floor Los Angeles, CA 90071 Attention: Mr. Brian Corley, Senior Vice President 13. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the Authority, the City and the Underwriter (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. All of the Authority’s and the City’s representations, warranties and agreements contained in this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of: (a) any investigations made by or on behalf of the Underwriter; (b) delivery of and payment for the Bonds pursuant to this Bond Purchase Agreement; and (c) any termination of this Bond Purchase Agreement. 14. Determination of End of the Underwriting Period. For purposes of this Bond Purchase Agreement, the end of the underwriting period for the Bonds shall mean the earlier of (a) the Closing Date unless the City and the Authority have been notified in writing by the Underwriter, on or prior to the Closing Date, that the “end of the underwriting period” for the Bonds for all purposes of the Rule will not occur on the Closing Date, or (b) the date on which notice is given to the City and the Authority by the Underwriter in accordance with the following sentence. In the event that the Underwriter has given notice to the City and the Authority pursuant to clause (a) above that the “end of the underwriting period” for the Bonds will not occur on the Closing Date, the Underwriter agrees to notify the City and the Authority in writing as soon as practicable following the “end of the underwriting period” for the Bonds for all purposes of the Rule. The Underwriter agrees to file a copy of the Official Statement with each of the nationally recognized municipal securities information repositories. 15. No Assignment. This Bond Purchase Agreement is entered into between the City, the Authority and the Underwriter, and is solely for the benefit of the City, the Authority, the Underwriter and their respective successors or assigns, and no person other than the foregoing shall acquire or have any right under or by virtue of this Bond Purchase Agreement. All of the representations, warranties and agreements contained in this Bond Purchase Agreement shall survive the delivery of and payment for the Bonds and any termination thereof. 16. Effectiveness. This Bond Purchase Agreement shall become effective upon the execution of the acceptance by an authorized representative of the City and an authorized representative of the Authority and shall be valid and enforceable at the time of such acceptance. 17. Headings. The headings of the sections of this Bond Purchase Agreement are inserted for convenience only and shall not be deemed to be a part hereof. Lynwood Public Financing Authority - Page 239 of 242 Agenda Item # 3 -21- 18. Governing Law. This Bond Purchase Agreement shall be interpreted, governed and enforced in accordance with the laws of the State of California. 19. Counterparts. This Bond Purchase Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. If the foregoing is in accordance with your understanding of this Bond Purchase Agreement please sign and return to us the enclosed duplicate copies hereof, whereupon it will become a binding agreement among the City, the Authority and the Underwriter in accordance with its terms. Very truly yours, CABRERA CAPITAL MARKETS, LLC, as Underwriter By Brian Corley Senior Vice President LYNWOOD PUBLIC FINANCING AUTHORITY By Ernie Hernandez Executive Director Time of Signature CITY OF LYNWOOD By Ernie Hernandez City Manager Time of Signature Lynwood Public Financing Authority - Page 240 of 242 Agenda Item # 3 Exhibit A Page 1 EXHIBIT A MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES AND YIELDS $__________ LYNWOOD PUBLIC FINANCING AUTHORITY Lease Revenue Bonds, Series 2022 (Federally Taxable) Principal Interest Maturity Amount Rate Yield Price Redemption Provisions Optional Redemption. The Bonds maturing on or after August 1, ____ shall be subject to redemption prior to their respective maturity dates as a whole or in part on any date on or after August 1, ____, in any order deemed reasonable by the Authority, and by lot within a maturity, from prepayments of Lease Payments made at the option of the City pursuant to the Lease Agreement, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued but unpaid interest to the date fixed for redemption, without premium. Mandatory Sinking Fund Redemption. The Bonds maturing on August 1, ____, is subject to mandatory redemption, in part by lot, from sinking account payments set forth in the following schedule commencing August 1, ____, and on August 1 in each year thereafter to and including August 1, ____ at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption. Sinking Fund Principal Amount Redemption Date to be Redeemed † Maturity The Bonds maturing on August 1, ____, is subject to mandatory redemption, in part by lot, from sinking account payments set forth in the following schedule commencing August 1, ____, and on August Lynwood Public Financing Authority - Page 241 of 242 Agenda Item # 3 Exhibit A Page 2 1 in each year thereafter to and including August 1, ____ at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption. Sinking Fund Principal Amount Redemption Date to be Redeemed † Maturity Extraordinary Mandatory Redemption. The Bonds are subject to redemption prior to their respective maturity dates, upon notice as hereinafter provided, as a whole or in part on any date, from prepayments of Lease Payments made by the City pursuant to the Lease Agreement from funds received by the City due to a taking of the Leased Property or any portion thereof under the power of eminent domain or from insurance proceeds received by the City due to damage to or destruction of the Leased Property or any portion thereof, under the circumstances and upon the conditions and terms prescribed in the Indenture and in the Lease Agreement. Lynwood Public Financing Authority - Page 242 of 242 Agenda Item # 3 This Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603-0220, ext. 200. Procedures for Addressing the Council IN ORDER TO EXPEDITE CITY COUNCIL BUSINESS, WE ASK THAT ALL PERSONS WISHING TO ADDRESS THE COUNCIL SUBMIT YOUR COMMENTS IN ADVANCE TO CITYCLERK@LYNWOOD.CA.US OR FILL OUT A FORM PROVIDED AT THE PODIUM, AND TO TURN IT IN TO THE CITY CLERK PRIOR TO THE START OF THE MEETING. FAILURE TO FILL OUT SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE COUNCIL IN THE ABSENCE OF THE UNANIMOUS CONSENT OF THE COUNCIL. AGENDA City of Lynwood as Successor Agency to the Lynwood Redevelopment Agency TO BE HELD ON May 17, 2022 COUNCIL CHAMBERS - 11350 BULLIS RD. LYNWOOD, CA 90262 or Web conference via ZOOM - To participate via Zoom or by telephone: 1-669-900-9128 or 1-253-215-8782 Meeting ID: 835 2029 8238 Duly Posted on 5/13/2022 By MQ 6:00 PM 1.CALL TO ORDER 2.CERTIFICATION OF AGENDA POSTING BY SECRETARY 3.ROLL CALL OF MEMBERS Jorge Casanova, Mayor Jose Luis Solache, Mayor Pro Tem Oscar Flores, Council Member Marisela Santana, Council Member Rita Soto, Council Member PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) NON-AGENDA PUBLIC ORAL COMMUNICATIONS THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE LYNWOOD SUCCESSOR AGENCY ON ITEMS WITHIN THE JURISDICTION OF THE LYNWOOD SUCCESSOR AGENCY AND NOT LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL DISCUSSION OF THE ISSUE BY LYNWOOD SUCCESSOR AGENCY, BUT LYNWOOD SUCCESSOR AGENCY MAY REFER THE Lynwood Successor Agency - Page 1 of 18 MATTER TO STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M. Brown Act, Government Code Section 54954.2 (a).) CONSENT CALENDAR ALL MATTERS LISTED UNDER THE CONSENT CALENDAR WILL BE ACTED UPON BY ONE MOTION AFFIRMING THE ACTION RECOMMENDED ON THE AGENDA. THERE WILL BE NO SEPARATE DISCUSSION ON THESE ITEMS PRIOR TO VOTING UNLESS MEMBERS OF THE COUNCIL OR STAFF REQUEST SPECIFIC ITEMS TO BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION. 4.TREASURER'S MONTHLY INVESTMENT REPORT Comments: The purpose of this item is to have the Honorable Mayor and the Lynwood City Council, as Successor to Lynwood Redevelopment Board review the Treasurer’s Monthly Investment Report as required by State Statutes. (CT) Recommendation: It is recommended that the Honorable Mayor and the Members of Lynwood City Council, as Successor to Lynwood Redevelopment Board receive and file the attached Monthly Investment Report. The following information is provided to ensure the City Council is informed of the cash balances and investment activities for City. ADJOURNMENT CITY OF LYNWOOD AS SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY MEETINGS WILL BE POSTED AS NEEDED. THE NEXT MEETING WILL BE HELD IN THE COUNCIL CHAMBERS OF CITY HALL ANNEX, 11350 BULLIS ROAD, CITY OF LYNWOOD, CALIFORNIA. Lynwood Successor Agency - Page 2 of 18 Agenda Item # 4. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of Lynwood City Council, as Successor to Lynwood Redevelopment Board APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Gabriela Camacho, City Treasurer Sheila Harding, Deputy City Treasurer SUBJECT: TREASURER'S MONTHLY INVESTMENT REPORT Recommendation: It is recommended that the Honorable Mayor and the Members of Lynwood City Council, as Successor to Lynwood Redevelopment Board receive and file the attached Monthly Investment Report. The following information is provided to ensure the City Council is informed of the cash balances and investment activities for City. Background: Government Code Section 53607, last amended 1996, with reference to the reporting of investment transactions states that the Treasurer shall make a monthly report of those transaction to the legislative body. Government Code Section 53646 (b) (1), last amended 2004, with reference to discussion related to establishment of an Investment Policy and investment reporting states that “the Treasurer may render a quarterly report”. To determine the applicable code inasmuch as reference to Government Code Section 53607 or non-compliance thereof has never been included in past audit findings. While Government Code Section 53646 (b) (1) which is the most current version related to Investment Reporting utilizes the word “may” indicating the reporting mechanism is optional, to err on the side of caution, and in order to ensure that we are in compliance with all Government Codes, a new procedure of submitting monthly reports to the Council/Agency agenda was implemented. Attached for Council/Agency review is the City’s/Agency’s Monthly Treasurer’s Report. Subsequent reports will be provided on a monthly basis at the second meeting of each month. Discussion and Analysis: The investment transactions were executed in accordance with the City's Investment Policy and the California State Government Code Section 5346(b)(3) that requires the general fund is able to meet its expenditure requirements for the next six months. Lynwood Successor Agency - Page 3 of 18 Fiscal Impact: The action recommended in this report will not have a fiscal impact on the City. Coordinated With: FHN Financial Main Street Advisors currently monitors the City’s investment activities. ATTACHMENTS: Description ACTIVITY & PERFORMANCE - APRIL 2022 FHN REPORT - APRIL 2022 ECONOMIC REPORT - APRIL 2022 Lynwood Successor Agency - Page 4 of 18 The following is the City’s cash flow and the monthly investment report. The monthly report includes a summary of the City’s investment portfolio, a monthly review of the investment market as prepared by the investment managers and detailed information on monthly transactions, cash flows and investments by issuer. FHN Investment Advisors manage the portion of investments not invested by LAIF (State Local Agency Investment Fund). The table below provide key statistics regarding the City’s cash flow and investment portfolio as of April 30, 2022. Type Balances Held Cash - US Bank $ 54,147,849.66 Cash - JPMorgan Chase Bank $ 7,518,250.93 Local Agency Investment Fund $ 9,537,751.55 FHN Investment Advisors/BNY $ 16,027,753.18 TOTAL $ 87,231,605.32 ACCOUNT SUMMARY 30-Apr-22 31-Mar-22 Market Value $25,573,021 $25,697,469 Book Value $26,227,898 $26,207,517 Variance ($654,878) ($510,048) Par Value $26,181,918 $26,159,477 Net Asset Value $97.50 $98.05 Book Yield 1.03% 0.96% Market Yield 1.80% 1.49% Years to Maturity 1.49 1.5 Effective Duration 1.44 1.45 INVESTMENT COMPLIANCE % % Company Book Value of Portfolio of Total US Treasuries 6,502,257.27 25% 100% US Federal Agencies 3,223,961.53 12% 100% Supranational Obligations 0.00 0% 30% LAIF 9,545,267.55 36% 100% Commercial Paper 349,786.09 1% 25% Money Market Funds 618,649.97 2% 20% Negotiable Certificates of Deposit 3,966,959.31 15% 30% Corporate Obligations 2,021,016.67 8% 30% State and Local Governments 0.00 0% 100% All of the City’s rated investments are rated “A” or higher by at least two rating agencies on April 30, 2022. The City’s investments comply with its current investment policy, which emphasizes the safety, liquidity, and return of its investments, allowing the city to meet its expenditures for the next six months. Lynwood Successor Agency - Page 5 of 18 Run Date: 5/10/2022 - 10:36 AM Amortizing Page 2 Portfolio Summary City of Lynwood 4/30/2022 SECTOR ALLOCATION MATURITY DISTRIBUTION CREDIT QUALITY (MOODY'S) ACCOUNT SUMMARY MONTH-END PORTFOLIO BOOK YIELD TOP ISSUERS 4/30/22 3/31/22 Issuer % Portfolio Market Value $25,573,021 $25,697,469 LAIF 36.4% Book Value $26,227,898 $26,207,517 U.S. Treasury 24.8% Variance -$654,878 -$510,048 FHLB 3.9% FNMA 3.8% Par Value $26,181,918 $26,159,477 FFCB 2.7% Goldman Sachs Govt MMF 2.4% Net Asset Value $97.50 $98.05 JPMorgan 1.9% FHLMC 1.9% Book Yield 1.03%0.96%Royal Bank of Canada 1.3% Exxon Mobil 1.0% Market Yield 1.80%1.49%Toyota 1.0% US Bancorp 1.0% Years to Maturity 1.49 1.50 Jackson National Life 1.0% New York Life 1.0% Effective Duration 1.44 1.45 Charles Schwab 1.0% Ma y - 2 1 Ju n - 2 1 Ju l - 2 1 Au g - 2 1 Se p - 2 1 Oc t - 2 1 No v - 2 1 De c - 2 1 Ja n - 2 2 Fe b - 2 2 Ma r - 2 2 Ap r - 2 2 0.60% 0.65% 0.70% 0.75% 0.80% 0.85% 0.90% 0.95% 1.00% 1.05% 1.10% 1.3% 2.4% 7.7% 12.3% 15.1% 24.8% 36.4% CP MMF CORP AGY CD TSY LAIF 100%75%50%25%0% 50.5% 12.3%13.4%13.2%10.5% 0-1Y 1-2Y 2-3Y 3-4Y 4-5Y+ 0% 10% 20% 30% 40% 50% 60% 70% 51.5% 3.8% 1.9% 1.0% 40.4% 1.3% NR A3 A2 A1 Aa3 Aa2 Aa1 Aaa P-1 100%75%50%25%0% 2Lynwood Successor Agency - Page 6 of 18 Run Date: 5/10/2022 - 10:36 AM Amortizing Page 3 Investment Policy Compliance City of Lynwood 4/30/2022 Category Book Value % of Portfolio % Allowed by Policy In ComplianceReserved row US Treasuries 6,502,257.27 24.79%100%Yes US Federal Agencies 3,223,961.53 12.29%100%Yes Supranational Obligations 0.00 0.00%30%Yes LAIF 9,545,267.55 36.39%100%Yes Commercial Paper 349,786.09 1.33%25%Yes Money Market Funds 618,649.97 2.36%20%Yes Negotiable Certificates of Deposit 3,966,959.31 15.12%30%Yes Corporate Obligations 2,021,016.67 7.71%30%Yes State and Local Governments 0.00 0.00%100%Yes Total 26,227,898.39 100.00% Other Metrics Portfolio Metric In Compliance Weighted Average Maturity 1.49 Less than 3.0 Years Yes Liquidity 50.53%30% Under 365 Days Yes Ratings Yes 3Lynwood Successor Agency - Page 7 of 18 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining Certificates of Deposit 27002YEM4 248,000.00EagleBank 05/10/2019 248,000.00 100.06 248,141.60 0.95% NR/NR 0.0305/10/2022 141.60 NR 0.03 370.98 2.60% 248,000.00 0.56%2.600% 33847E2J5 248,000.00Flagstar Bank 06/12/2019 248,000.00 100.22 248,546.05 0.95% NR/NR 0.1206/13/2022 546.05 NR 0.12 2,378.08 2.50% 248,000.00 0.67%2.500% 1404203Z1 248,000.00Capital One Bank USA 08/03/2017 247,417.20 100.31 248,759.37 0.95% NR/NR 0.2608/02/2022 789.39 NR 0.26 1,375.21 2.35% 247,969.98 1.11%2.300% 795450D36 248,000.00Sallie Mae Bank 08/24/2017 247,417.20 100.39 248,967.56 0.95% NR/NR 0.3208/23/2022 1,004.29 NR 0.31 1,069.80 2.40% 247,963.28 1.11%2.350% 61747MF63 248,000.00Morgan Stanley Bank 01/12/2018 247,417.20 100.39 248,959.16 0.95% NR/NR 0.7001/11/2023 1,040.91 NR 0.68 1,980.60 2.70% 247,918.25 2.09%2.650% 59013J5Z8 248,000.00Merrick Bank 12/19/2018 247,516.40 100.89 250,214.53 0.95% NR/NR 0.8102/21/2023 2,308.71 NR 0.79 295.90 3.41% 247,905.82 2.24%3.350% 20033AZK5 248,000.00Comenity Capital Bank 06/29/2018 247,427.12 100.71 249,748.40 0.95% NR/NR 1.1606/29/2023 1,881.74 NR 1.12 44.84 3.40% 247,866.66 2.68%3.300% 38148PR33 248,000.00Goldman Sachs Bank 07/09/2018 247,432.08 100.71 249,754.97 0.95% NR/NR 1.1807/06/2023 1,889.55 NR 1.14 2,578.52 3.35% 247,865.42 2.69%3.300% 949763TF3 248,000.00Wells Fargo Bank NA 08/31/2018 247,429.60 100.68 249,677.19 0.94% NR/NR 1.3308/30/2023 1,829.40 NR 1.29 717.50 3.35% 247,847.79 2.78%3.300% 29278TLY4 248,000.00EnerBank 09/30/2019 247,523.84 98.93 245,357.61 0.94% NR/NR 1.4109/27/2023 -2,474.19 NR 1.38 54.36 2.05% 247,831.81 2.77%2.000% 17312Q3B3 248,000.00Citibank 02/28/2019 247,427.12 100.14 248,335.38 0.94% NR/NR 1.8302/27/2024 545.07 NR 1.76 1,284.16 3.05% 247,790.31 2.92%3.000% 32100LCB9 248,000.00First Missouri State Bank 09/13/2019 248,000.00 97.26 241,203.07 0.95% NR/NR 2.3809/13/2024 -6,796.93 NR 2.31 615.92 1.85% 248,000.00 3.06%1.850% 05580AXF6 248,000.00BMW Bank 09/25/2020 248,000.00 91.66 227,312.58 0.95% NR/NR 3.4109/25/2025 -20,687.42 NR 3.37 125.70 0.50% 248,000.00 3.10%0.500% 856283S98 248,000.00State Bank of India 04/27/2021 248,000.00 92.26 228,793.19 0.95% NR/NR 3.9904/27/2026 -19,206.81 NR 3.91 27.18 1.00% 248,000.00 3.08%1.000% 89235MLC3 248,000.00Toyota Financial Savings Bank 07/15/2021 248,000.00 91.69 227,383.13 0.95% NR/NR 4.2107/15/2026 -20,616.87 NR 4.11 684.21 0.95% 248,000.00 3.07%0.950% 90348JR93 248,000.00UBS Bank USA 08/11/2021 248,000.00 91.51 226,956.55 0.95% NR/NR 4.2808/11/2026 -21,043.45 NR 4.18 129.10 0.95% 248,000.00 3.07%0.950% 3,963,007.76 3,888,110.34 15.12% 1.71 3,966,959.31 2.28% 3,968,000.00 2.31% 13,732.06 -78,848.96 1.67Total Certificates of Deposit Commercial Paper Run Date: 5/10/2022 - 10:37 AM Amortizing 16Lynwood Successor Agency - Page 8 of 18 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining Commercial Paper 78015DG61 350,000.00Royal Bank of Canada, NY 12/20/2021 349,364.75 99.82 349,374.38 1.33% P-1/A-1+ 0.1807/06/2022 -411.71 F1+ 0.19 0.00 0.33% 349,786.09 0.98%0.000% 349,364.75 349,374.38 1.33% 0.18 349,786.09 0.33% 350,000.00 0.98% 0.00 -411.71 0.19Total Commercial Paper Corporate Bonds 46849LSW2 250,000.00Jackson National Life 07/12/2017 247,795.00 100.13 250,322.50 0.95% A2/A 0.1606/27/2022 392.91 A 0.15 2,152.78 2.69% 249,929.59 1.67%2.500% 90331HNV1 250,000.00US Bank 03/01/2019 253,307.50 100.84 252,097.50 0.96% A1/AA- 1.2307/24/2023 1,169.81 AA- 1.15 2,290.28 3.08% 250,927.69 2.70%3.400%06/23/2023 89236TFS9 250,000.00Toyota Motor Credit 02/28/2019 253,545.00 100.58 251,455.00 0.96% A1/A+ 1.6901/08/2024 223.37 A+ 1.62 2,628.82 3.03% 251,231.63 2.99%3.350% 46625HJX9 500,000.00JPMorgan Chase & Co 05/13/2019 515,115.00 100.86 504,315.00 1.93% A2/A- 2.0405/13/2024 -1,840.16 AA- 1.92 8,458.33 2.97% 506,155.16 3.18%3.625% 64952WDL4 250,000.00New York Life 01/22/2020 249,102.50 96.09 240,217.50 0.95% Aaa/AA+ 2.7301/22/2025 -9,292.86 AAA 2.62 1,375.00 2.08% 249,510.36 3.52%2.000% 30231GBH4 250,000.00Exxon Mobil 06/22/2020 272,752.50 99.09 247,725.00 1.01% Aa2/AA- 2.8903/19/2025 -16,123.77 NR 2.72 872.67 0.99% 263,848.77 3.32%2.992%02/19/2025 808513BW4 250,000.00Charles Schwab 04/12/2022 249,407.50 98.21 245,520.00 0.95% A2/NR 4.9204/01/2027 -3,893.46 NR 4.43 687.50 3.35% 249,413.46 3.70%3.300% 2,041,025.00 1,991,652.50 7.71% 2.22 2,021,016.67 2.63% 2,000,000.00 3.04% 18,465.38 -29,364.16 2.07Total Corporate Bonds LAIF 9819499 9,545,267.55LAIF 04/15/2022 9,545,267.55 1.00 9,545,267.55 36.39% NR/NR 0.0005/01/2022 0.00 NR 0.00 0.00 0.52% 9,545,267.55 0.52%0.520% 9,545,267.55 9,545,267.55 36.39% 0.00 9,545,267.55 0.52% 9,545,267.55 0.52% 0.00 0.00 0.00Total LAIF Money Market Funds FGTXX 618,649.97Goldman Sachs Govt MMF 618,649.97 1.00 618,649.97 2.36% Aaa/AAA 0.0005/01/2022 0.00 NR 0.00 98.76 0.31% 618,649.97 0.31%0.308% Run Date: 5/10/2022 - 10:37 AM Amortizing 17Lynwood Successor Agency - Page 9 of 18 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining 618,649.97 618,649.97 2.36% 0.00 618,649.97 0.31% 618,649.97 0.31% 98.76 0.00 0.00Total Money Market Funds U.S. Agencies 3135G0T78 500,000.00FNMA 11/30/2017 497,400.00 100.28 501,415.00 1.91% Aaa/AA+ 0.4310/05/2022 1,645.95 AAA 0.42 722.22 2.11% 499,769.05 1.34%2.000% 3133EKTV8 500,000.00FFCB 07/02/2019 499,900.00 98.48 492,420.00 1.91% Aaa/AA+ 2.1707/01/2024 -7,536.59 AAA 2.10 3,166.67 1.90% 499,956.59 2.62%1.900% 3133EK3B0 200,000.00FFCB 10/17/2019 198,370.00 97.09 194,176.00 0.76% Aaa/AA+ 2.4710/16/2024 -5,021.23 AAA 2.40 125.00 1.67% 199,197.23 2.73%1.500% 3130A4CH3 500,000.00FHLB 10/07/2020 541,330.00 98.61 493,065.00 2.01% Aaa/AA+ 2.8703/14/2025 -33,694.69 AAA 2.75 1,550.35 0.49% 526,759.69 2.88%2.375% 3136G4H71 500,000.00FNMA 08/18/2020 500,000.00 92.52 462,580.00 1.91% Aaa/AA+ 3.2908/12/2025 -37,420.00 AAA 3.24 506.94 0.50% 500,000.00 2.91%0.500%02/18/2022 3137EAEX3 500,000.00FHLMC 10/20/2020 497,505.00 91.80 458,975.00 1.90% Aaa/AA+ 3.4009/23/2025 -39,303.97 AAA 3.34 197.92 0.48% 498,278.97 2.93%0.375% 3130AQEC3 500,000.00FHLB 12/30/2021 500,000.00 93.96 469,775.00 1.91% Aaa/AA+ 4.6712/30/2026 -30,225.00 AAA 4.31 2,302.36 1.37% 500,000.00 2.76%1.370%06/30/2022 3,234,505.00 3,072,406.00 12.29% 2.79 3,223,961.53 1.17% 3,200,000.00 2.58% 8,571.46 -151,555.53 2.68Total U.S. Agencies U.S. Treasuries 912828ZD5 500,000.00U.S. Treasury 12/16/2020 504,140.63 98.72 493,615.00 1.91% Aaa/AA+ 0.8703/15/2023 -7,997.77 AAA 0.86 319.29 0.13% 501,612.77 1.98%0.500% 91282CAW1 1,000,000.00U.S. Treasury 07/22/2021 999,960.94 96.58 965,820.00 3.81% Aaa/AA+ 1.5511/15/2023 -34,153.96 AAA 1.52 1,153.31 0.25% 999,973.96 2.52%0.250% 91282CBV2 500,000.00U.S. Treasury 11/22/2021 496,308.59 95.60 478,010.00 1.89% Aaa/AA+ 1.9604/15/2024 -18,969.37 AAA 1.93 81.97 0.69% 496,979.37 2.69%0.375% 912828YV6 1,000,000.00U.S. Treasury 07/22/2021 1,035,742.19 96.68 966,840.00 3.92% Aaa/AA+ 2.5911/30/2024 -60,687.60 AAA 2.50 6,263.74 0.43% 1,027,527.60 2.84%1.500% 912828ZT0 500,000.00U.S. Treasury 06/29/2021 491,542.97 92.25 461,270.00 1.88% Aaa/AA+ 3.0905/31/2025 -32,074.22 AAA 3.04 521.98 0.69% 493,344.22 2.89%0.250% 91282CAZ4 1,000,000.00U.S. Treasury 07/22/2021 989,492.19 91.36 913,590.00 3.78% Aaa/AA+ 3.5911/30/2025 -77,763.50 AAA 3.52 1,565.93 0.62% 991,353.50 2.93%0.375% 91282CBH3 500,000.00U.S. Treasury 02/25/2021 494,433.59 90.96 454,805.00 1.89% Aaa/AA+ 3.7601/31/2026 -40,954.51 AAA 3.68 466.16 0.60% 495,759.51 2.94%0.375% Run Date: 5/10/2022 - 10:37 AM Amortizing 18Lynwood Successor Agency - Page 10 of 18 Holdings Report City of Lynwood April 30, 2022 Call Date Maturity Date Par Value Settle Date Book Value Original Value Mkt YTM Mkt Price Gain/Loss % of Port Fitch Moody/S&P Eff. Dur. WAM Accrued Int. Market Value CUSIP Coupon Rate Issuer Book Yield Remaining U.S. Treasuries 91282CCF6 1,000,000.00U.S. Treasury 07/22/2021 1,002,382.81 91.61 916,130.00 3.82% Aaa/AA+ 4.0905/31/2026 -85,874.03 AAA 3.97 3,131.87 0.70% 1,002,004.03 2.94%0.750% 91282CCZ2 500,000.00U.S. Treasury 10/19/2021 492,949.22 91.50 457,480.00 1.88% Aaa/AA+ 4.4209/30/2026 -36,222.29 AAA 4.28 370.56 1.17% 493,702.29 2.94%0.875% 6,506,953.13 6,107,560.00 24.79% 2.90 6,502,257.27 0.56% 6,500,000.00 2.76% 13,874.81 -394,697.25 2.83Total U.S. Treasuries 26,258,773.16 25,573,020.73 100.00% 1.49 54,742.47 -654,877.61 1.45 1.80% 26,227,898.39 1.03% 26,181,917.52TOTAL PORTFOLIO TOTAL MARKET VALUE PLUS ACCRUED INTEREST 25,627,763.20 Run Date: 5/10/2022 - 10:37 AM Amortizing 19Lynwood Successor Agency - Page 11 of 18 Maturity Report City of Lynwood April 30, 2022 CUSIP Date Purchase Value Book Rate Coupon Date Maturity Par Remaining Term Value Market YTMIssuer Days to Maturity Book FGTXX 0.308% 1Goldman Sachs Govt MMF 618,649.97 05/01/2022 1 0.31% 618,649.97 618,649.97 9819499 0.520% 1LAIF05/18/2020 9,545,267.55 05/01/2022 1 0.52% 9,545,267.55 9,545,267.55 27002YEM4 2.600% 1,086EagleBank05/10/2019 248,000.00 05/10/2022 10 2.60% 248,000.00 248,141.60 33847E2J5 2.500% 1,053Flagstar Bank 06/12/2019 248,000.00 06/13/2022 44 2.50% 248,000.00 248,546.05 46849LSW2 2.500% 1,753Jackson National Life 07/12/2017 249,929.59 06/27/2022 58 2.69% 250,000.00 250,322.50 78015DG61 0.000% 131Royal Bank of Canada, NY 12/20/2021 349,786.09 07/06/2022 67 0.33% 350,000.00 349,374.38 1404203Z1 2.300% 1,731Capital One Bank USA 08/03/2017 247,969.98 08/02/2022 94 2.35% 248,000.00 248,759.37 795450D36 2.350% 1,710Sallie Mae Bank 08/24/2017 247,963.28 08/23/2022 115 2.40% 248,000.00 248,967.56 3135G0T78 2.000% 1,612FNMA11/30/2017 499,769.05 10/05/2022 158 2.11% 500,000.00 501,415.00 61747MF63 2.650% 1,569Morgan Stanley Bank 01/12/2018 247,918.25 01/11/2023 256 2.70% 248,000.00 248,959.16 59013J5Z8 3.350% 1,228Merrick Bank 12/19/2018 247,905.82 02/21/2023 297 3.41% 248,000.00 250,214.53 912828ZD5 0.500% 500U.S. Treasury 12/16/2020 501,612.77 03/15/2023 319 0.13% 500,000.00 493,615.00 20033AZK5 3.300% 1,401Comenity Capital Bank 06/29/2018 247,866.66 06/29/2023 425 3.40% 248,000.00 249,748.40 38148PR33 3.300% 1,391Goldman Sachs Bank 07/09/2018 247,865.42 07/06/2023 432 3.35% 248,000.00 249,754.97 90331HNV1 3.400% 1,156US Bank 03/01/2019 250,927.69 07/24/2023 450 3.08% 250,000.00 252,097.50 949763TF3 3.300% 1,338Wells Fargo Bank NA 08/31/2018 247,847.79 08/30/2023 487 3.35% 248,000.00 249,677.19 29278TLY4 2.000% 943EnerBank09/30/2019 247,831.81 09/27/2023 515 2.05% 248,000.00 245,357.61 91282CAW1 0.250% 282U.S. Treasury 07/22/2021 999,973.96 11/15/2023 564 0.25% 1,000,000.00 965,820.00 89236TFS9 3.350% 1,157Toyota Motor Credit 02/28/2019 251,231.63 01/08/2024 618 3.03% 250,000.00 251,455.00 17312Q3B3 3.000% 1,157Citibank02/28/2019 247,790.31 02/27/2024 668 3.05% 248,000.00 248,335.38 91282CBV2 0.375% 159U.S. Treasury 11/22/2021 496,979.37 04/15/2024 716 0.69% 500,000.00 478,010.00 46625HJX9 3.625% 1,083JPMorgan Chase & Co 05/13/2019 506,155.16 05/13/2024 744 2.97% 500,000.00 504,315.00 3133EKTV8 1.900% 1,033FFCB07/02/2019 499,956.59 07/01/2024 793 1.90% 500,000.00 492,420.00 32100LCB9 1.850% 960First Missouri State Bank 09/13/2019 248,000.00 09/13/2024 867 1.85% 248,000.00 241,203.07 3133EK3B0 1.500% 926FFCB10/17/2019 199,197.23 10/16/2024 900 1.67% 200,000.00 194,176.00 912828YV6 1.500% 282U.S. Treasury 07/22/2021 1,027,527.60 11/30/2024 945 0.43% 1,000,000.00 966,840.00 64952WDL4 2.000% 829New York Life 01/22/2020 249,510.36 01/22/2025 998 2.08% 250,000.00 240,217.50 3130A4CH3 2.375% 570FHLB10/07/2020 526,759.69 03/14/2025 1,049 0.49% 500,000.00 493,065.00 30231GBH4 2.992% 677Exxon Mobil 06/22/2020 263,848.77 03/19/2025 1,054 0.99% 250,000.00 247,725.00 912828ZT0 0.250% 305U.S. Treasury 06/29/2021 493,344.22 05/31/2025 1,127 0.69% 500,000.00 461,270.00 3136G4H71 0.500% 620FNMA08/18/2020 500,000.00 08/12/2025 1,200 0.50% 500,000.00 462,580.00 3137EAEX3 0.375% 557FHLMC10/20/2020 498,278.97 09/23/2025 1,242 0.48% 500,000.00 458,975.00 05580AXF6 0.500% 582BMW Bank 09/25/2020 248,000.00 09/25/2025 1,244 0.50% 248,000.00 227,312.58 91282CAZ4 0.375% 282U.S. Treasury 07/22/2021 991,353.50 11/30/2025 1,310 0.62% 1,000,000.00 913,590.00 91282CBH3 0.375% 429U.S. Treasury 02/25/2021 495,759.51 01/31/2026 1,372 0.60% 500,000.00 454,805.00 856283S98 1.000% 368State Bank of India 04/27/2021 248,000.00 04/27/2026 1,458 1.00% 248,000.00 228,793.19 Run Date: 5/10/2022 - 10:37 AM Amortizing 20Lynwood Successor Agency - Page 12 of 18 Maturity Report City of Lynwood April 30, 2022 CUSIP Date Purchase Value Book Rate Coupon Date Maturity Par Remaining Term Value Market YTMIssuer Days to Maturity Book 91282CCF6 0.750% 282U.S. Treasury 07/22/2021 1,002,004.03 05/31/2026 1,492 0.70% 1,000,000.00 916,130.00 89235MLC3 0.950% 289Toyota Financial Savings Bank 07/15/2021 248,000.00 07/15/2026 1,537 0.95% 248,000.00 227,383.13 90348JR93 0.950% 262UBS Bank USA 08/11/2021 248,000.00 08/11/2026 1,564 0.95% 248,000.00 226,956.55 91282CCZ2 0.875% 193U.S. Treasury 10/19/2021 493,702.29 09/30/2026 1,614 1.17% 500,000.00 457,480.00 3130AQEC3 1.370% 121FHLB12/30/2021 500,000.00 12/30/2026 1,705 1.37% 500,000.00 469,775.00 808513BW4 3.300% 18Charles Schwab 04/12/2022 249,413.46 04/01/2027 1,797 3.35% 250,000.00 245,520.00 Net Maturities and Averages 26,227,898.39 545 1.03% 25,573,020.73 26,181,917.52 Run Date: 5/10/2022 - 10:37 AM Amortizing 21Lynwood Successor Agency - Page 13 of 18 Income Earned City of Lynwood April 01, 2022 - April 30, 2022 CUSIP Value Ending Par Date Maturity Book Value Beginning Value Ending Book Accrued Beginning /Purchased Int.Received Accrued Ending Issuer Earned Interest Amortization/ Accretion Earned Net Income Certificates of Deposit 27002YEM4 05/10/2022 248,000.00EagleBank 248,000.00 248,000.00 388.65 547.64 370.98 529.97 0.00 529.97 33847E2J5 06/13/2022 248,000.00Flagstar Bank 248,000.00 248,000.00 1,868.49 0.00 2,378.08 509.59 0.00 509.59 1404203Z1 08/02/2022 248,000.00Capital One Bank USA 247,960.40 247,969.98 906.39 0.00 1,375.21 468.82 9.58 478.40 795450D36 08/23/2022 248,000.00Sallie Mae Bank 247,953.70 247,963.28 590.78 0.00 1,069.80 479.02 9.58 488.60 61747MF63 01/11/2023 248,000.00Morgan Stanley Bank 247,908.67 247,918.25 1,440.44 0.00 1,980.60 540.16 9.58 549.74 59013J5Z8 02/21/2023 248,000.00Merrick Bank 247,896.30 247,905.82 318.66 705.61 295.90 682.85 9.51 692.36 20033AZK5 06/29/2023 248,000.00Comenity Capital Bank 247,857.25 247,866.66 67.27 695.08 44.84 672.65 9.41 682.06 38148PR33 07/06/2023 248,000.00Goldman Sachs Bank 247,856.07 247,865.42 1,905.86 0.00 2,578.52 672.66 9.35 682.01 949763TF3 08/30/2023 248,000.00Wells Fargo Bank NA 247,838.41 247,847.79 44.84 0.00 717.50 672.66 9.38 682.04 29278TLY4 09/27/2023 248,000.00EnerBank 247,822.01 247,831.81 67.95 421.26 54.36 407.67 9.80 417.47 17312Q3B3 02/27/2024 248,000.00Citibank 247,780.89 247,790.31 672.66 0.00 1,284.16 611.50 9.42 620.92 32100LCB9 09/13/2024 248,000.00First Missouri State Bank 248,000.00 248,000.00 238.83 0.00 615.92 377.09 0.00 377.09 05580AXF6 09/25/2025 248,000.00BMW Bank 248,000.00 248,000.00 23.78 0.00 125.70 101.92 0.00 101.92 856283S98 04/27/2026 248,000.00State Bank of India 248,000.00 248,000.00 1,059.95 1,236.60 27.18 203.83 0.00 203.83 89235MLC3 07/15/2026 248,000.00Toyota Financial Savings Bank 248,000.00 248,000.00 490.56 0.00 684.21 193.65 0.00 193.65 90348JR93 08/11/2026 248,000.00UBS Bank USA 248,000.00 248,000.00 135.55 200.10 129.10 193.65 0.00 193.65 Certificates of Deposit - Sub Total 3,968,000.00 3,966,873.71 3,966,959.31 10,220.66 3,806.29 13,732.06 7,317.69 85.60 7,403.29 Commercial Paper 4497W1DM5 04/21/2022 0.00ING US Funding LLC 349,952.95 0.00 0.00 0.00 0.00 0.00 47.06 47.06 78015DG61 07/06/2022 350,000.00Royal Bank of Canada, NY 349,692.10 349,786.09 0.00 0.00 0.00 0.00 93.99 93.99 Commercial Paper - Sub Total 350,000.00 699,645.04 349,786.09 0.00 0.00 0.00 0.00 141.05 141.05 Corporate Bonds 59217GCD9 04/08/2022 0.00MetLife 250,008.78 0.00 3,183.68 3,312.50 0.00 128.82 -8.78 120.04 46849LSW2 06/27/2022 250,000.00Jackson National Life 249,893.76 249,929.59 1,631.94 0.00 2,152.78 520.84 35.82 556.66 90331HNV1 07/24/2023 250,000.00US Bank 250,988.28 250,927.69 1,581.94 0.00 2,290.28 708.34 -60.59 647.75 89236TFS9 01/08/2024 250,000.00Toyota Motor Credit 251,292.41 251,231.63 1,930.90 0.00 2,628.82 697.92 -60.77 637.15 46625HJX9 05/13/2024 500,000.00JPMorgan Chase & Co 506,398.68 506,155.16 6,947.92 0.00 8,458.33 1,510.41 -243.52 1,266.89 64952WDL4 01/22/2025 250,000.00New York Life 249,495.90 249,510.36 958.33 0.00 1,375.00 416.67 14.46 431.13 30231GBH4 03/19/2025 250,000.00Exxon Mobil 264,235.31 263,848.77 249.33 0.00 872.67 623.34 -386.54 236.80 808513BW4 04/01/2027 250,000.00Charles Schwab 0.00 249,413.46 0.00 -252.08 687.50 435.42 5.96 441.38 Corporate Bonds - Sub Total 2,000,000.00 2,022,313.13 2,021,016.67 16,484.04 3,060.42 18,465.38 5,041.76 -703.96 4,337.80 Run Date: 5/10/2022 - 10:37 AM Amortizing 24Lynwood Successor Agency - Page 14 of 18 Income Earned City of Lynwood April 01, 2022 - April 30, 2022 CUSIP Value Ending Par Date Maturity Book Value Beginning Value Ending Book Accrued Beginning /Purchased Int.Received Accrued Ending Issuer Earned Interest Amortization/ Accretion Earned Net Income LAIF 9819499 05/01/2022 9,545,267.55LAIF 9,537,751.55 9,545,267.55 7,516.00 7,516.00 0.00 0.00 0.00 0.00 LAIF - Sub Total 9,545,267.55 9,537,751.55 9,545,267.55 7,516.00 7,516.00 0.00 0.00 0.00 0.00 Money Market Funds FGTXX 05/01/2022 618,649.97Goldman Sachs Govt MMF 253,724.99 618,649.97 28.27 28.27 98.76 98.76 0.00 98.76 Money Market Funds - Sub Total 618,649.97 253,724.99 618,649.97 28.27 28.27 98.76 98.76 0.00 98.76 U.S. Agencies 3135G0T78 10/05/2022 500,000.00FNMA 499,724.36 499,769.05 4,888.89 5,000.00 722.22 833.33 44.70 878.03 3133EKTV8 07/01/2024 500,000.00FFCB 499,954.97 499,956.59 2,375.00 0.00 3,166.67 791.67 1.61 793.28 3133EK3B0 10/16/2024 200,000.00FFCB 199,170.96 199,197.23 1,375.00 1,500.00 125.00 250.00 26.28 276.28 3130A4CH3 03/14/2025 500,000.00FHLB 527,510.20 526,759.69 560.76 0.00 1,550.35 989.59 -750.51 239.08 3136G4H71 08/12/2025 500,000.00FNMA 500,000.00 500,000.00 298.61 0.00 506.94 208.33 0.00 208.33 3137EAEX3 09/23/2025 500,000.00FHLMC 498,238.16 498,278.97 41.67 0.00 197.92 156.25 40.81 197.06 3130AQEC3 12/30/2026 500,000.00FHLB 500,000.00 500,000.00 1,731.53 0.00 2,302.36 570.83 0.00 570.83 U.S. Agencies - Sub Total 3,200,000.00 3,224,598.65 3,223,961.53 11,271.46 6,500.00 8,571.46 3,800.00 -637.12 3,162.88 U.S. Treasuries 912828ZD5 03/15/2023 500,000.00U.S. Treasury 501,764.44 501,612.77 115.49 0.00 319.29 203.80 -151.67 52.13 91282CAW1 11/15/2023 1,000,000.00U.S. Treasury 999,972.57 999,973.96 946.13 0.00 1,153.31 207.18 1.39 208.57 91282CBV2 04/15/2024 500,000.00U.S. Treasury 496,852.81 496,979.37 865.38 937.50 81.97 154.09 126.56 280.65 912828YV6 11/30/2024 1,000,000.00U.S. Treasury 1,028,401.50 1,027,527.60 5,027.47 0.00 6,263.74 1,236.27 -873.89 362.38 912828ZT0 05/31/2025 500,000.00U.S. Treasury 493,167.05 493,344.22 418.96 0.00 521.98 103.02 177.17 280.19 91282CAZ4 11/30/2025 1,000,000.00U.S. Treasury 991,155.49 991,353.50 1,256.87 0.00 1,565.93 309.06 198.01 507.07 91282CBH3 01/31/2026 500,000.00U.S. Treasury 495,666.79 495,759.51 310.77 0.00 466.16 155.39 92.72 248.11 91282CCF6 05/31/2026 1,000,000.00U.S. Treasury 1,002,044.33 1,002,004.03 2,513.74 0.00 3,131.87 618.13 -40.30 577.83 91282CCZ2 09/30/2026 500,000.00U.S. Treasury 493,585.23 493,702.29 11.95 0.00 370.56 358.61 117.06 475.67 U.S. Treasuries - Sub Total 6,500,000.00 6,502,610.22 6,502,257.27 11,466.76 937.50 13,874.81 3,345.55 -352.95 2,992.60 26,181,917.52Grand Total 26,207,517.28 26,227,898.39 56,987.19 21,848.48 54,742.47 19,603.76 -1,467.38 18,136.38 Run Date: 5/10/2022 - 10:37 AM Amortizing 25Lynwood Successor Agency - Page 15 of 18 Realized Gains and Losses City of Lynwood April 01, 2022 - April 30, 2022 Par Value Sale Date Days Held Maturity/Sales RealizedCUSIP Coupon Rate Maturity Date Book Value Proceeds Gain/LossPurchase Date TermIssuer Commercial Paper 4497W1DM5 350,000.0012/21/2021 04/21/2022 121 350,000.00 0.00 350,000.00 04/21/2022 121ING US Funding LLC 0.000% Total Commercial Paper 0.00 350,000.00 350,000.00 Corporate Bonds 59217GCD9 250,000.0011/02/2017 04/08/2022 1,618 250,000.00 0.00 250,000.00 04/08/2022 1,618MetLife 2.650% Total Corporate Bonds 0.00 250,000.00 250,000.00 Grand Total 0.00 600,000.00 600,000.00 Run Date: 5/10/2022 - 10:37 AM Amortizing 26Lynwood Successor Agency - Page 16 of 18 Transaction Report City of Lynwood April 01, 2022 - April 30, 2022 Transaction Transaction Security Security Maturity Date Type ID Description Date Purchases Redemptions Interest Deposits Withdrawals 04/04/2022 Interest FGTXX GSGF - - 28.27 - - 04/05/2022 Interest 3135G0T78 FNMA 2 10/05/22 10/05/2022 - - 5,000.00 - - 04/08/2022 Interest 59217GCD9 MET 2.65 04/08/22 04/08/2022 - - 3,312.50 - - 04/08/2022 Maturity 59217GCD9 MET 2.65 04/08/22 04/08/2022 - 250,000.00 - - - 04/11/2022 Interest 27002YEM4 EGBN 2.6 05/10/22 05/10/2022 - - 547.64 - - 04/11/2022 Interest 90348JR93 UBS 0.95 08/11/26 08/11/2026 - - 200.10 - - 04/12/2022 Purchase 808513BW4 SCHW 3.3 04/01/27 04/01/2027 -249,407.50 - -252.08 - - 04/15/2022 Interest 9819499 LAIF - - 7,516.00 - - 04/18/2022 Interest 91282CBV2 T 0 3/8 04/15/24 04/15/2024 - - 937.50 - - 04/18/2022 Interest 59013J5Z8 MERICK 3.35 02/21/23 02/21/2023 - - 705.61 - - 04/18/2022 Interest 3133EK3B0 FFCB 1 1/2 10/16/24 10/16/2024 - - 1,500.00 - - 04/21/2022 Maturity 4497W1DM5 ING (US) FUNDING 04/21/2022 - 350,000.00 - - - 04/27/2022 Interest 856283S98 SBIIN 1 04/27/26 04/27/2026 - - 1,236.60 - - 04/27/2022 Interest 29278TLY4 CMS 2 09/27/23 09/27/2023 - - 421.26 - - 04/29/2022 Interest 20033AZK5 ADS 3.3 06/29/23 06/29/2023 - - 695.08 - - Grand Total:-249,407.50 600,000.00 21,848.48 0.00 0.00 Run Date: 5/10/2022 - 10:37 AM Amortizing 27Lynwood Successor Agency - Page 17 of 18 Consumer Prices Although U.S. consumer prices rose less than expected in March, inflation remained elevated at a 40-year high. The Consumer Price Index (CPI) was up 8.5% year-over-year in March, versus up 7.9% year-over-year in February. Core CPI (CPI less food and energy) was up 6.5% year-over-year in March, versus up 6.4% year-over-year in February. Gasoline costs drove half of the monthly increase, while food was also a sizable contributor. Used vehicle prices declined, resulting in lower than forecast core increases for the month. The Personal Consumption Expenditures (PCE) index was up 6.4% year-over-year in February, up from 6.0% in January. Core PCE was up 5.4% year-over-year in February, versus up 5.2% in January. Current inflation readings continue to run well above the Fed’s longer-run target of around 2.0%. While gas prices have started to decline in recent weeks in part due to COVID lockdowns in China, we believe pricing pressures may remain elevated longer than anticipated because of the conflict in Europe. Retail Sales Retail sales edged higher in February, but there are signs that higher gas prices are affecting discretionary spending. On a year-over-year basis, retail sales were up 17.6% in February versus 14% in January. On a month-over-month basis, retail sales moderated, rising 0.3% in February versus an upwardly revised increase of 4.9% in January. Excluding vehicles and gas, retail sales were down 0.4% month-over-month. Although inflation threatens to put a dent in expected growth, we believe high levels of consumer savings along with improvement in the health situation and continued improvement in the labor market should provide a healthy tailwind for consumer spending. The Consumer Confidence Index rebounded to 107.2 in March following declines in January and February, primarily driven by positive assessments of employment. However, while consumers’ evaluations of the present situation were strong, future expectations have been deteriorating. Labor Market The U.S. economy added 431,000 jobs in March, with upward revisions from the prior months totaling 95,000. Trends in employment remain strong, with the three-month moving average payrolls at 561,000 and the six-month moving average at 600,000. Job gains were broad based in March, led by leisure, hospitality, professional, and business services. The unemployment rate fell to 3.6% from 3.8%, the lowest level since February 2020. The labor participation rate increased marginally to 62.4% in March from 62.3% in February but remains lower than the pre-pandemic level of 63.4%. The U-6 underemployment rate, which includes those who are marginally attached to the labor force and employed part time for economic reasons, fell to 6.9% in March from 7.2% in February, declining below its pre-pandemic level of 7.0% in February 2020. Wage growth accelerated in March, with average hourly earnings rising 5.6% from 5.2% year-over-year. As more participants enter the labor force, wage inflation dynamics should start to moderate, helping to lower the current elevated inflation readings. Housing Starts Total housing starts rebounded 6.8% to an annual rate of 1,769,000 in February. Single-family starts increased 5.7%, and multi-family starts increased 9.3%, month-over-month. On a year-over-year basis, total housing starts were up 22.3% in February driven by multi-family starts. According to the Case-Shiller 20-City home price index, home prices were up 19.1% year-over-year in January versus up 18.6% year- over-year in December, suggesting tight supply may be continuing to support prices. Rising mortgage rates and affordability could be headwinds to further price growth. Lynwood Successor Agency - Page 18 of 18 This Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603-0220, ext. 200. Procedures for Addressing the Council IN ORDER TO EXPEDITE CITY COUNCIL BUSINESS, WE ASK THAT ALL PERSONS WISHING TO ADDRESS THE COUNCIL SUBMIT YOUR COMMENTS IN ADVANCE TO CITYCLERK@LYNWOOD.CA.US OR FILL OUT A FORM PROVIDED AT THE PODIUM, AND TO TURN IT IN TO THE CITY CLERK PRIOR TO THE START OF THE MEETING. FAILURE TO FILL OUT SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE COUNCIL IN THE ABSENCE OF THE UNANIMOUS CONSENT OF THE COUNCIL. AGENDA Lynwood Housing Authority TO BE HELD ON May 17, 2022 COUNCIL CHAMBERS - 11350 BULLIS RD. LYNWOOD, CA 90262 or Web conference via ZOOM - To participate via Zoom or by telephone: 1-669-900-9128 or 1-253-215-8782 Meeting ID: 835 2029 8238 Duly Posted on 5/13/2022 By MQ 6:00 PM 1.CALL TO ORDER 2.CERTIFICATION OF AGENDA POSTING BY SECRETARY 3.ROLL CALL OF MEMBERS Jorge Casanova, Chair Jose Luis Solache, Vice Chair Oscar Flores, Commissioner Marisela Santana, Commissioner Rita Soto, Commissioner PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) NON-AGENDA PUBLIC ORAL COMMUNICATIONS THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE LYNWOOD HOUSING AUTHORITY ON ITEMS WITHIN THE JURISDICTION OF THE LYNWOOD HOUSING AUTHORITY AND NOT LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL DISCUSSION OF THE ISSUE BY LYNWOOD HOUSING AUTHORITY, BUT LYNWOOD HOUSING AUTHORITY MAY REFER THE MATTER TO STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M. Brown Act, Government Code Section 54954.2 (a).) Lynwood Housing Authority - Page 1 of 7 CONSENT CALENDAR ALL MATTERS LISTED UNDER THE CONSENT CALENDAR WILL BE ACTED UPON BY ONE MOTION AFFIRMING THE ACTION RECOMMENDED ON THE AGENDA. THERE WILL BE NO SEPARATE DISCUSSION ON THESE ITEMS PRIOR TO VOTING UNLESS MEMBERS OF THE COUNCIL OR STAFF REQUEST SPECIFIC ITEMS TO BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION. 4.APPROVAL OF THE WARRANT REGISTER-LHA Comments: City of Lynwood Housing Authority warrant register dated May 17, 2022 for FY 2021-2022. (FIN) Recommendation: Staff respectfully recommends that the Lynwood Housing Authority approve the warrant register dated May 17, 2022 for FY 2021-2022. ADJOURNMENT THE LYNWOOD HOUSING AUTHORITY MEETINGS WILL BE POSTED AS NEEDED. THE NEXT MEETING WILL BE HELD IN THE COUNCIL CHAMBERS OF THE CITY HALL ANNEX, 11350 BULLIS ROAD, CITY OF LYNWOOD, CALIFORNIA. Lynwood Housing Authority - Page 2 of 7 Agenda Item # 4. AGENDA STAFF REPORT DATE: May 17, 2022 TO: Honorable Mayor and Members of the City Council APPROVED BY: Ernie Hernandez, City Manager PREPARED BY: Harry Wong, Director of Finance & Administration Lilly Hampton, Senior Accounting Technician SUBJECT: APPROVAL OF THE WARRANT REGISTER-LHA Recommendation: Staff respectfully recommends that the Lynwood Housing Authority approve the warrant register dated May 17, 2022 for FY 2021-2022. Background: N/A Discussion and Analysis: N/A Fiscal Impact: FY 2021-2022 Coordinated With: City Manager City Attorney ATTACHMENTS: Description WARRANT RUN 5 17 2022-LHA WARRANT RESOLUTION Lynwood Housing Authority - Page 3 of 7 vchlist 04/27/2022 Bank code: Voucher 10007 5:54:33PM lhaus2 Date Vendor Electronic Financial Transaction List Lynwood Housing Authority Invoice PO# ----------------- 3/2/2022 012364 LYNWOOD FAMILY APARTMENTS, LP DRAWS &6 11-002070 1 Vouchers for bank code : 1 Vouchers in this report lhaus2 Description/Account ATLANTIC AFFORDABLE HOUSING Total : Bank total : Total vouchers : Page: 1 Amount 1,012,047.00 1,012,047.00 1,012,047.00 1,012,047.00 Page: 1 Lynwood Housing Authority - Page 4 of 7 vchlist 05/11/2022 Bank code: Voucher 10275 10276 10277 4:02:19PM lhaus2 Date Vendor 5/17/2022 003372 CITY OF LYNWOOD 5/17/2022 003547 KANE, BALLMER & BERKMAN 5/17/2022 001329 U.S. BANK 3 Vouchers for bank code : 3 Vouchers in this report lhaus2 Voucher List Lynwood Housing Authority Invoice PO# B-010569 11-002083 27208 11-002085 100-1 11-002094 Page: 2 Description/Account Amount ATLANTIC PROJECT-BUILDING PERMIT 88,500.00 Total: 88,500.00 SPECIAL COUNSEL LEGAL SERVICES 3,500.00 Total: 3,500.00 LYNWOOD FAMILY APTS -ADMIN FEES 1,750.00 Total: 1,750.00 Bank total: 93,750.00 Total vouchers : 93,750.00 Page: 2 Lynwood Housing Authority - Page 5 of 7 1 RESOLUTION NO. 2022.XXX LHA - Warrant Register Dated 05-17-2022 PASSED, APPROVED and ADOPTED this 17th day of May, 2022. Jorge Casanova, Chair ATTEST: _________________________ Maria Quiňonez, Ernie Hernandez, Secretary Executive Director APPROVED AS TO FORM: Noel Tapia, Authority Counsel Lynwood Housing Authority - Page 6 of 7 2 STATE OF CALIFORNIA ) ) § COUNTY OF LOS ANGELES ) I, Maria Quiňonez, the undersigned, City Clerk of the City of Lynwood/Secretary to the Lynwood Housing Authority, do hereby certify that the foregoing Resolution was passed and adopted by the Lynwood Housing Authority of the City of Lynwood at a regular meeting held on the _17_th day of _May__, 2022, and passed by the following vote: AYES: COMMISSIONERS FLORES, SANTANA, SOTO, VICE CHAIR SOLACHE AND CHAIR CANANOVA NOES: NONE ABSENT: NONE ABSTAIN: NONE __________________________ Maria Quiňonez, Secretary STATE OF CALIFORNIA ) ) § COUNTY OF LOS ANGELES ) I, Maria Quiňonez, the undersigned, City Clerk of the City of Lynwood/Secretary to the Lynwood Housing Authority, do hereby certify that the above foregoing is a full, true and correct copy of Lynwood Housing Authority Resolution No. 2022.XXX on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this 17 th day of May, 2022. ____________________________ Maria Quiňonez, Secretary Lynwood Housing Authority - Page 7 of 7