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HomeMy WebLinkAboutAgenda packet - CC - 2019.10.21City Council City of Burlingame Meeting Agenda - Final-revised BURLINGAME CITY HALL 501 PRIMROSE ROAD BURLINGAME, CA 94010 Council Chambers7:00 PMMonday, October 21, 2019 Note: Public comment is permitted on all action items as noted on the agenda below and in the non-agenda public comment provided for in item 7. Speakers are asked to fill out a "request to speak" card located on the table by the door and hand it to staff, although the provision of a name, address or other identifying information is optional. Speakers are limited to three minutes each; the Mayor may adjust the time limit in light of the number of anticipated speakers. All votes are unanimous unless separately noted for the record. 1. CALL TO ORDER - 7:00 p.m. - Council Chambers 2. PLEDGE OF ALLEGIANCE TO THE FLAG 3. ROLL CALL 4. REPORT OUT FROM CLOSED SESSION 5. UPCOMING EVENTS 6. PRESENTATIONS Fire Prevention Month Presentation by Central County Fire Departmenta. Business Landscape Awardb. Sustainable Residential Awardc. 7. PUBLIC COMMENTS, NON-AGENDA Members of the public may speak about any item not on the agenda. Members of the public wishing to suggest an item for a future Council agenda may do so during this public comment period. The Ralph M . Brown Act (the State local agency open meeting law) prohibits the City Council from acting on any matter that is not on the agenda. 8. APPROVAL OF CONSENT CALENDAR Consent calendar items are usually approved in a single motion, unless pulled for separate discussion . Any member of the public wishing to comment on an item listed here may do so by submitting a speaker slip for that item in advance of the Council’s consideration of the consent calendar. Page 1 City of Burlingame Printed on 10/18/2019 October 21, 2019City Council Meeting Agenda - Final-revised Approval of City Council Meeting Minutes for October 7, 2019a. Meeting MinutesAttachments: Adoption of an Ordinance Amending Municipal Code Section 10.48.010 to Require Safe Storage of Firearms b. Staff Report Proposed Ordinance Attachments: Adoption of a Resolution Approving the City of Burlingame Response to the Grand Jury Report “Electrical Vehicle Adoption in the Cities and County of San Mateo” c. Staff Report Resolution Draft Response Letter Grand Jury Report Attachments: Adoption of a Resolution Awarding a Construction Contract to J .J.R. Construction, Inc. in the Amount of $786,698 for the 2019 Sidewalk Repair Program, City Project No. 85520 d. Staff Report Resolution Bid Summary Construction Contract Project Location Map Attachments: Adoption of a Resolution Approving the Vesting Tentative and Final Parcel Map (PM 18-08), Lot Merger of Parcels D and E, Block 6, Map of Millsdale Industrial Park No. 3 at One and 45 Adrian Court e. Staff Report Resolution Final Parcel Map September 23, 2019 Planning Commission Minutes Attachments: Adoption of a Resolution Accepting Grant Funds from the California Department of Justice’s Tobacco Grant Program f. Staff Report Resolution Attachments: Adoption of a Resolution Accepting Grant Funds from the California Office of Traffic Safety (OTS) g. Staff Report Resolution Attachments: Page 2 City of Burlingame Printed on 10/18/2019 October 21, 2019City Council Meeting Agenda - Final-revised Adoption of a Resolution Accepting Grant Funds from the U .S Department of Justice’s Bulletproof Vest Partnership h. Staff Report Resolution Attachments: 9. PUBLIC HEARINGS (Public Comment) Introduction of an Ordinance to Amend Title 17 and Title 18 of the Burlingame Municipal Code and Adoption by Reference of the 2019 California Building Standards Code and the 2018 Edition of the International Fire Code a. Staff Report Notable Changes - 2019 Ordinance Attachments: Adoption of a Resolution Approving the Issuance by the Burlingame Financing Authority of Not to Exceed $40,000,000 Aggregate Principal Amount of Lease Revenue Bonds to Finance the Burlingame Community Center; Authorizing Execution and Delivery of a Facilities Lease, a Facilities Sublease and a Notice of Sale; Approving the Form of the Official Statement; and Authorizing Execution of Documents and the Taking of All Necessary Actions Relating to the Financing with the Burlingame Financing Authority b. Staff Report Resolution Estimate of Bond Costs Attachments: 10. STAFF REPORTS AND COMMUNICATIONS (Public Comment) Update on “Sea Change Burlingame”a. Staff Report Bayfront Reaches Diagram Adaptation Photo Renderings Attachments: 11. COUNCIL COMMITTEE AND ACTIVITIES REPORTS AND ANNOUNCEMENTS Councilmembers report on committees and activities and make announcements. Mayor Colson's Committee Reporta. Committee ReportAttachments: 12. FUTURE AGENDA ITEMS Page 3 City of Burlingame Printed on 10/18/2019 October 21, 2019City Council Meeting Agenda - Final-revised 13. ACKNOWLEDGMENTS The agendas, packets, and meeting minutes for the Planning Commission, Traffic, Safety & Parking Commission, Beautification Commission, Parks & Recreation Commission, and Library Board of Trustees are available online at www.burlingame.org. 14. ADJOURNMENT TO BURLINGAME FINANCING AUTHORITY 1. Call to Order 2. Roll Call 3. Board Action Adoption of a Resolution Authorizing the Issuance and Sale of Lease Revenue Bonds to Finance the Burlingame Community Center; Approving the Forms of a Trust Agreement, a Facilities Lease, a Facilities Sublease and a Notice of Sale; Approving an Official Statement Describing Said Bonds; and Authorizing Execution of Documents and the Taking of All Necessary Actions Relating to the Issuance of the Bonds a. Staff Report Resolution Facilities Lease Facilities Sublease Trust Agreement Preliminary Official Statement Notice of Sale Estimated Costs of Bonds Attachments: 15. ADJOURNMENT Notice: Any attendees wishing accommodations for disabilities please contact the City Clerk at (650)558-7203 at least 24 hours before the meeting. A copy of the Agenda Packet is available for public review at the City Clerk's office, City Hall, 501 Primrose Road, from 8:00 a.m. to 5:00 p.m. before the meeting and at the meeting. Visit the City's website at www.burlingame.org. Agendas and minutes are available at this site. NEXT CITY COUNCIL MEETING - Next regular City Council Meeting Monday, November 4, 2019 VIEW REGULAR COUNCIL MEETING ONLINE AT www.burlingame.org/video Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at the Water Office counter at City Hall at 501 Primrose Road during normal business hours. Page 4 City of Burlingame Printed on 10/18/2019 Agenda Item 8a Meeting Date: 10/21/19 Burlingame City Council October 7, 2019 Unapproved Minutes 1 BURLINGAME CITY COUNCIL Unapproved Minutes Regular Meeting on October 7, 2019 1. CALL TO ORDER A duly noticed meeting of the Burlingame City Council was held on the above date in the City Hall Council Chambers at 7:00 p.m. 2. PLEDGE OF ALLEGIANCE TO THE FLAG The pledge of allegiance was led by members of Moms Demand Action. 3. ROLL CALL MEMBERS PRESENT: Beach, Brownrigg, Colson, Keighran, Ortiz MEMBERS ABSENT: None 4. REPORT OUT FROM CLOSED SESSION a. CONFERENCE WITH REAL PROPERTY NEGOTIATORS (CALIFORNIA GOVERNMENT CODE SECTION 54956.8) PROPERTY: CITY OF BURLINGAME PARKING LOTS F (APN 029 224 270) AND N (APN 029 231 240 AND 029 231 060) AGENCY NEGOTIATORS: CITY ATTORNEY KATHLEEN KANE, CITY MANAGER LISA K. GOLDMAN, COMMUNITY DEVELOPMENT DIRECTOR KEVIN GARDINER NEGOTIATING PARTIES: PACIFIC WEST COMMUNITIES, INC. UNDER NEGOTIATION: PRICE AND TERMS City Attorney Kane reported that direction was given but no reportable action was taken. 5. UPCOMING EVENTS Mayor Colson reviewed the upcoming events taking place in the city. 6. PRESENTATIONS a. CEC GREEN MONDAY PRESENTATION Agenda Item 8a Meeting Date: 10/21/19 Burlingame City Council October 7, 2019 Unapproved Minutes 2 Citizen Environmental Council (“CEC”) representative Marc Yelnik introduced Monica Chen from Green Monday. Green Monday representative Monica Chen began with a quote from National Geographic: “When we think about threats to the environment, we tend to picture cars and smokestacks, not dinner. But the truth is, our need for food poses one of the biggest dangers to the planet.” Ms. Chen explained that over nine billion animals are raised in the United States for food. She noted that this number is larger than the United States population. She discussed how livestock farming causes a drain on resources and causes more greenhouse gas emissions than the entire transportation sector combined. Ms. Chen discussed Project Drawdown. She explained that climate activist Paul Hawken and his team analyzed the top 100 solutions to addressing climate change. Then the group ranked the solutions in order of total atmospheric Co2-EQ reduction. She explained that reduced food waste and plant-rich diets ranked in the top five. She noted that she has focused on food solutions as they are things that everyone can do and have a large impact. Ms. Chen discussed the Green Monday program and the different options for reducing meat intake: 1. Routine-Based – giving up meat and cheese one day a week or for every lunch 2. Portion-Based – reducing the amount of intake (example instead of eating five slices of pepperoni pizza, eat three pepperoni slices and two veggie slices) 3. Impact-Based – cut high environmental impact food choices (such as red meat) She explained that more information could be found on their program at www.greenmonday.org. Vice Mayor Beach thanked CEC for organizing the presentation. She discussed an NPR piece on the mental health impact of climate change. She stated that the NPR piece outlined that people need to take positive action and thanked Ms. Chen for showcasing ways that citizens can take positive action. Councilmember Brownrigg suggested discussing the Green Monday program with the local schools and seeing what could be done. Ms. Chen replied in the affirmative. Mayor Colson opened the item up for public comment. Peninsula Food Runners representative Maria Yap discussed how their organization collects surplus food in order to alleviate hunger and minimize food waste. She stated that over the past two years, they have delivered over 3.8 million meals. Former Burlingame Mayor Terry Nagel encouraged the Council and community to get involved in the Green Monday program. Burlingame resident Kerry Bitner stated that she would like to see all the restaurants in Burlingame have vegan/vegetarian choices for people. Agenda Item 8a Meeting Date: 10/21/19 Burlingame City Council October 7, 2019 Unapproved Minutes 3 Mayor Colson closed public comment. Mayor Colson suggested that Councilmember Ortiz and she discuss the Green Monday program at their next City/School District Liaison Committee meeting. Councilmember Brownrigg suggested that he work with another Councilmember on drafting a nonbinding resolution promoting food solutions for climate change. Councilmember Ortiz and Councilmember Keighran voiced support for Councilmember Brownrigg’s suggestion stating that a nonbinding resolution could be used as an educational tool. Vice Mayor Beach stated that she would work with Councilmember Brownrigg on the resolution. 7. PUBLIC COMMENT There were no public comments. 8. CONSENT CALENDAR Mayor Colson asked the Councilmembers and the public if they wished to remove any item from the Consent Calendar. Councilmember Brownrigg pulled item 8c. Councilmember Ortiz made a motion to adopt items 8a, 8b, 8d, and 8e from the Consent Calendar; seconded by Councilmember Keighran. The motion passed unanimously by voice vote. a. ADOPTION OF CITY COUNCIL MEETING MINUTES FOR SEPTEMBER 16, 2019 City Clerk Hassel-Shearer requested Council adopt the City Council Meeting Minutes for September 16, 2019. b. ADOPTION OF A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A $12,000 AMENDMENT TO A $95,000 PROFESSIONAL SERVICES AGREEMENT WITH ESA TO ASSESS SEA LEVEL RISE ADAPTATION STRATEGIES FOR THE BURLINGAME BAYFRONT CDD Gardiner requested Council adopt Resolution Number 117-2019. c. ADOPTION OF A RESOLUTION REJECTING ALL BIDS RECEIVED FOR THE RAY PARK FIELD RENOVATION PROJECT, CITY PROJECT #85750 Councilmember Brownrigg stated that he understood that the project was being rebid in order to ensure that the timing of the project doesn’t interfere with girls’ softball. He asked if the bidders would be able to re- Agenda Item 8a Meeting Date: 10/21/19 Burlingame City Council October 7, 2019 Unapproved Minutes 4 submit their bids with only small changes to their proposals. Parks and Recreation Director Glomstad stated that the project would be changed to include the parking lot. Mayor Colson opened the item up for public comment. No one spoke. Mayor Colson thanked staff for taking into consideration girls’ softball. Vice Mayor Beach made a motion to adopt Resolution Number 118-2019; seconded by Councilmember Ortiz. The motion passed unanimously by voice vote, 5-0. d. ADOPTION OF A RESOLUTION AUTHORIZING THE DELETION OF ONE VACANT TREE WORKER AND THE ADDITION OF ONE TREE LEADWORKER HR Morrison requested Council adopt Resolution Number 119-2019. e. ADOPTION OF A RESOLUTION APPROVING THE CITY OF BURLINGAME RESPONSE LETTER TO THE 2018-2019 SAN MATEO COUNTY CIVIL GRAND JURY REPORT: “SOARING CITY PENSION COSTS – FOLLOW-UP ON GRAND JURY REPORT OF 2017- 2018” Finance Director Augustine requested Council adopt Resolution Number 120-2019. 9. PUBLIC HEARINGS a. INTRODUCTION OF AN ORDINANCE AMENDING MUNICIPAL CODE SECTION 10.48.010 TO REQUIRE SAFE STORAGE OF FIREARMS Councilmember Keighran recused herself because of her work with San Mateo County Supervisor Canepa on the County’s gun lock ordinance. City Attorney Kane explained that based on Council’s direction, staff is proposing a gun lock ordinance that is similar to the County’s ordinance. She stated that the ordinance is deliberately broad in terms of what devices satisfy the requirement for safe storage of firearms in a residence. Under the ordinance, an individual would be able to safely store their firearm using any device included on the State Department of Justice’s list of approved devices. City Attorney Kane explained that the proposed ordinance is enforced through the City’s administrative procedures. She noted that the goal of this ordinance is to educate the public on gun safety. She stated if adopted, staff and the Police Department will conduct extensive public outreach. Additionally, she explained that the Police Department will give members of the public locks for their firearms upon request. Mayor Colson asked the City Clerk to read the title of the proposed ordinance. City Clerk Hassel-Shearer read the title. Agenda Item 8a Meeting Date: 10/21/19 Burlingame City Council October 7, 2019 Unapproved Minutes 5 Vice Mayor Beach made a motion to waive further reading and introduce the proposed ordinance; seconded by Councilmember Brownrigg. The motion was approved by voice vote 4-0-1 (Councilmember Keighran recused herself). Mayor Colson opened the public hearing. Moms Demand Action representative Roberta Jurash discussed the statistics of accidental shootings and suicides in youth. She thanked the City for drafting the ordinance. Mayor Colson discussed how the proposed ordinance is about sensible gun legislation and doesn’t interfere with an individual’s Second Amendment rights. Burlingame resident Matt Feemster asked about the enforceability of the proposed ordinance and how people would be notified of this new requirement. City Attorney Kane stated that this ordinance is about public education and outreach versus criminal enforcement. She explained that staff would be working to determine how best to educate the public on the proposed ordinance. Councilmember Brownrigg encouraged staff to educate property owners and landlords in the same manner that was done for smoking regulations. Councilmember Ortiz discussed the Dayton and El Paso shootings. He thanked Moms Demand Action for working on this issue and staff for drafting the ordinance. Vice Mayor Beach thanked staff for thoughtfully crafting the ordinance and noted her support for the flexibility in the ordinance on how to safely store firearms. Burlingame students Aliyah and Mariana thanked the Council for taking up this issue. Mayor Colson closed the public hearing. Councilmember Brownrigg discussed the gun safety ordinances that former Sunnyvale Mayor Spitaleri presented at the August 19 Council meeting. He suggested that Council form a subcommittee to review legislation from neighboring cities and see if there are further steps the City could take. Councilmember Ortiz stated that he would be happy to work with Councilmember Brownrigg. The Council agreed that the two would look into the matter. Councilmember Keighran suggested that the City could also voice their support for gun safety legislation at the State level. Agenda Item 8a Meeting Date: 10/21/19 Burlingame City Council October 7, 2019 Unapproved Minutes 6 Council agreed that this was a good idea. Mayor Colson asked that the proposed ordinance be brought back for adoption at the next City Council meeting. 10. STAFF REPORTS a. CONSIDERATION OF PROPOSED AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT FOR CITY PARKING LOTS F AND N City Attorney Kane explained that in recognizing the need for affordable housing and better parking solutions in the downtown area, the Council requested proposals for the development of Lots F and N. She stated that after consideration, the City negotiated a disposition and development agreement (“DDA”) with Pacific West Communities, Inc. in 2016. City Attorney Kane explained that after entering into the original DDA, the Council made certain determinations about the project, and the project went through the Planning Commission and environmental review. She stated that as a result of these actions, it is necessary for the Council to consider an amended and restated DDA. City Attorney Kane discussed some of the changes to the DDA. She explained that there has been a potential change in the mix of affordability levels in the housing development. Originally, when the project went through the Planning Commission for review, it included 12 units at 50% AMI. However, now the developer is proposing 82 units at 50% AMI. Additionally, the developer is proposing that the units at the upper end of income levels allow for 120% AMI instead of 110% AMI. She noted that this provides for a significantly greater number of units at the lower levels of income. She stated that the amended and restated DDA includes both the original proposal and the developer’s new proposal. This is because the developer still needs to obtain the Planning Commission’s approval for the new proposal. City Attorney Kane stated that the City has a program to encourage developers to include below market rate units in their developments. However, the economics of that favor building those below market rate units at the higher levels of income. Therefore, this doesn’t incentivize building the low income units. She noted that the developer’s new proposal would greatly assist the City. City Attorney Kane stated that other amendments to the DDA include retaining title to Lot N. She explained that the developer is prepared to build and then convey to the City a parking garage on Lot N that would become a public parking garage. She noted that Lot F will be conveyed and sold to the developer and the City will be repaid over-time from the operating receipts of the project. City Attorney Kane explained that in order for this project to work in terms of its financing structure, if the City wanted to have the affordable units built, the City had to sell Lot F. However, the Council was reluctant to part with City-owned property. Therefore, at the end of the 55-year term, if there is money outstanding on the loan, the City can reclaim Lot F for the amount of the unclaimed balance. If the loan has been paid off, Agenda Item 8a Meeting Date: 10/21/19 Burlingame City Council October 7, 2019 Unapproved Minutes 7 the City can buy the housing parcel for the value that it would have as a continuing affordable project. She stated that this would be less than the market value of the property. Mayor Colson opened the item up for public comment. Pacific West Communities, Inc. CEO Caleb Roope stated that they are ready to go and that they will be breaking ground within the week on the parking garage. He noted that they will be breaking ground on the housing project in the spring; they need to wait until after the rainy season to dig the hole for the underground parking on Lot F. Mayor Colson asked when the parking garage will be finished. Mr. Roope stated that it will take about 14 months. Councilmember Ortiz asked when the housing development would be completed. Mr. Roope stated that it will take 18-24 months. Mayor Colson closed public comment. Vice Mayor Beach thanked staff and the developer for their work on bringing affordable units to the community. Mayor Colson thanked State Senator Jerry Hill and Assemblyman Kevin Mullin who had supported some changes in legislation that freed up tax credits that allowed for the financing of this project. She suggested writing a letter to the Legislators on how State legislation had helped create affordable housing in Burlingame. The Council agreed. Councilmember Brownrigg made a motion to adopt Resolution Number 121-2019; seconded by Councilmember Keighran. The motion passed unanimously by voice vote, 5-0. b. DISCUSSION OF REGIONAL HOUSING NEEDS ALLOCAITON – SUBREGION FORMATION Councilmember Keighran recused herself due to her work with San Mateo County Supervisor Canepa. CDD Gardiner explained that in the past, San Mateo County has formed a sub region as part of the Regional Housing Needs Allocation (“RHNA”) process. He stated that it has worked well, and going into the next cycle, many felt that it was worth it to create a sub region again. However, upon closer inspection, several jurisdictions have started to come to the conclusion that it might not work this time. He stated that this determination was due to changes in State law that are going to make the next Housing Element update more challenging with an anticipated large increase in the RHNA numbers. CDD Gardiner stated that a few of the larger municipalities have already indicated that they don’t want to participate in a sub region. Agenda Item 8a Meeting Date: 10/21/19 Burlingame City Council October 7, 2019 Unapproved Minutes 8 CDD Gardiner noted that the C/CAG Board will convene on October 10 to make a determination as to whether or not to proceed with forming a sub region. He stated that a staff report has been released for that meeting that doesn’t recommend a sub region for San Mateo County. He noted that the report recommends collaboration amongst jurisdictions through the 21 Elements framework. He explained that this has worked very well in the past and has been helpful for pooling data, resources, and polices. CDD Gardiner stated that jurisdictions can create smaller sub regions. However, these sub regions need to be contiguous cities, and the County has to be involved. Councilmember Ortiz (the City’s C/CAG representative) stated that if the City doesn’t form a sub region, then the City would be accepting the new RHNA numbers and would be fully responsible for those numbers. If the City forms a sub region, the City has an opportunity to talk to their neighbors about working together to meet the new numbers. Mayor Colson stated that in talking with a Hillsborough Councilmember, she learned that Hillsborough is able to build ADUs that meet low income levels, but the town is unable to meet more moderate income levels. She noted that if the City formed a sub region with Hillsborough, the City could take on some of Hillsborough’s moderate income needs in exchange for Hillsborough taking on some of the City’s low income needs. Councilmember Ortiz asked if he was correct that if the County opts out of forming a sub region, than the City wouldn’t have the option of forming a sub region. CDD Gardiner replied in the affirmative and stated that the County would announce its position at the October 10 meeting. Councilmember Brownrigg voiced support for the creation of a sub region. He discussed the need to work together as a region. He noted that when jurisdictions work together, they are able to identify where jobs are located and where housing can be located. Vice Mayor Beach noted that she defers to her colleagues that are on the frontline of the housing policies. She noted that it makes sense to collaborate with the neighboring cities. However, she stated that she was curious as to why other jurisdictions and the County might not be in favor of forming a sub region. Councilmember Ortiz stated that when the cities of San Mateo County previously formed a sub region, the County absorbed a lot of the numbers. He noted that he believed that 100 of the City’s units were taken care of by the County. Councilmember Brownrigg noted that for him, it isn’t about whether the City can trade numbers with other cities but more that the County should think of this as a regional issue. Councilmember Ortiz stated that C/CAG would continue to collaborate between the cities but that the cities wouldn’t be able to trade numbers without a sub region. Agenda Item 8a Meeting Date: 10/21/19 Burlingame City Council October 7, 2019 Unapproved Minutes 9 Mayor Colson suggested creating a smaller sub region with Millbrae and Hillsborough. Mayor Colson asked what would happen if the City gets its RHNA assignment and can’t meet the numbers. CDD Gardiner stated that meeting the numbers is based on building permits and that the certification of the housing element is a prerequisite for funding. Vice Mayor Beach asked if there would be penalties for not meeting the RHNA numbers. CDD Gardiner stated that the regulations are getting more stringent. He noted that he didn’t want to guess at what was coming. CDD Gardiner stated that that under the updated General Plan, even if the City’s RHNA numbers are doubled, the Plan allots for this growth. However, he noted that the new RHNA numbers will be harder to meet than in previous cycles. Mayor Colson discussed the County’s website that shows all the affordable units that are being built in the County. However, she noted that the affordable housing developments listed on the website are those that are receiving Measure K funds. Therefore, the website excludes all other units that are being built including the Lot F and N project or the SummerHill project. Councilmember Ortiz thanked the Council for their feedback. He stated that he understood the Council’s position that if the City is able to form a sub region, that the Council would like to do so. 11. COUNCIL COMMITTEE AND ACTIVITIES REPORTS AND ANNOUNCMENTS Council reported on their committees and activities in the previous two weeks. Mayor Colson asked that at the first meeting in December, the Council document the work that the committees they are on accomplished in 2019. 12. FUTURE AGENDA ITEMS There were no future agenda items. 13. ACKNOWLEDGEMENTS The agendas, packets, and meeting minutes for the Planning Commission, Traffic, Safety & Parking Commission, Beautification Commission, Parks and Recreation Commission, and Library Board of Trustees are available online at www.burlingame.org. 14. ADJOURNMENT Mayor Colson adjourned meeting at 8:43 p.m. Agenda Item 8a Meeting Date: 10/21/19 Burlingame City Council October 7, 2019 Unapproved Minutes 10 Respectfully submitted, Meaghan Hassel-Shearer City Clerk 1 STAFF REPORT AGENDA NO: 8b MEETING DATE: October 21, 2019 To: Honorable Mayor and City Council Date: October 21, 2019 From: Michael Matteucci, Chief of Police – (650) 777-4100 Kathleen Kane, City Attorney – (650) 558-7204 Subject: Adoption of an Ordinance Amending Municipal Code Section 10.48.010 to Require Safe Storage of Firearms RECOMMENDATION Staff recommends that the City Council consider adoption of a proposed ordinance amending Section 10.48.010 of the Municipal Code to require safe storage of firearms. In order to do so, the Council should: A. By motion, adopt the proposed ordinance. B. Direct the City Clerk to publish a summary of the ordinance within 15 days of adoption. BACKGROUND On February 26, 2019, the San Mateo County Board of Supervisors adopted an ordinance requiring that all firearms in the home be safely stored using a safety device approved by the California Department of Justice. On March 31, 2019, San Mateo County Supervisors Dave Pine and David Canepa sent a letter to the Mayors throughout the county encouraging all cities in San Mateo County to adopt an identical ordinance. On October 7, 2019, the Council introduced and held a public hearing on Burlingame’s own version of a safe storage ordinance. The Council directed staff to bring the ordinance back for adoption. DISCUSSION The attached draft ordinance reflects the Council’s prior direction. Based on public input from a gun safety advocacy group, it specifies that violations are to be handled as administrative issues rather than through the criminal process otherwise available under the City’s general code provisions. This approach is consistent with the Council’s stated goal of educating the public about safe gun storage and influencing behavior. FISCAL IMPACT There is no impact on the City General Fund associated with passing the attached ordinance. The Council may, as a separate action, consider allocating funds to education and outreach regarding gun safety. Safe Storage of Firearms Ordinance October 21, 2019 2 Exhibit:  Proposed Ordinance ORDINANCE NO. ____ AN ORDINANCE OF THE CITY OF BURLINGAME AMENDING SECTION 10.48.010 OF THE MUNICIPAL CODE REGARDING STORAGE OF FIREARMS WHEREAS, Sections 10.48.010 and 10.48.020 of the Burlingame Municipal Code govern the possession and use of firearms, inter alia; and WHEREAS, having a loaded and unlocked firearm in the home is associated with an increased risk of gun-related injury; and WHEREAS, gun-related injuries have a significant public health impact; and WHEREAS, the use of lock boxes and trigger or barrel locks for firearms reduces the risk of accidental discharge or injury by persons in the home other than the owner of the firearm; and WHEREAS, firearm owners have a constitutional right to carry their weapons in their homes and use them in lawful self defense; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BURLINGAME ORDAINS AS FOLLOWS: DIVISION 1: Section 1: Burlingame Municipal Code Section 10.48.010 is amended as follows: The following text is added to the end of existing Section 10.48.010 as a new paragraph: “Safe storage of firearms in a residence required: except when carried on the person, during use for cleaning and maintenance, or during use for lawful self defense, no person shall keep a firearm, as defined in California Penal Code Section 16520, in any residence unless the firearm is stored in a locked container or disabled with a trigger lock or similar mechanism appearing on the California Department of Justice’s roster of approved firearm safety devices. Violations of this safe storage requirement shall be enforced under Chapter 1.14 of this Code. A suspected violation of this safe storage requirement shall not, on its own, constitute probable cause for entry into a residence by City personnel.” DIVISION 2: If any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of this Ordinance. The Council declares that it would have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof, irrespective of the fact that any one or more sect ions, subsections, sentences, clauses or phrases be declared invalid. DIVISION 3: This Ordinance shall be published in a newspaper of general circulation in accordance with California Government Code Section 36933, published, and circulated in the City of Burlingame, and shall be in full force and effect thirty (30) days after its final passage. ________________________________ Donna Colson, Mayor I, Meaghan Hassel-Shearer, City Clerk of the City of Burlingame, certify that the foregoing ordinance was introduced at a public hearing at a regular meeting of the City Council held on the 7th day of October, 2019, and adopted thereafter at a regular meeting of the City Council held on the ______ day of ___________ 2019, by the following vote: AYES: Councilmembers: NOES: Councilmembers: ABSENT: Councilmembers: __________________________________ Meaghan Hassel-Shearer, City Clerk 1 STAFF REPORT AGENDA NO: 8c MEETING DATE: October 21, 2019 To: Honorable Mayor and City Council Date: October 21, 2019 From: Syed Murtuza, Director of Public Works – (650) 558-7230 Subject: Adoption of a Resolution Approving the City of Burlingame Response to the Grand Jury Report “Electrical Vehicle Adoption in the Cities and County of San Mateo” RECOMMENDATION Staff recommends that the City Council adopt a resolution approving the attached response letter to the San Mateo County Grand Jury report “Electrical Vehicle Adoption in the Cities and County of San Mateo”. BACKGROUND On August 12, 2019, the San Mateo County Civil Grand Jury released a report entitled “Electrical Vehicle Adoption in the Cities and County of San Mateo”. The report recommends that the County and each of the cities in San Mateo County review their government fleet procurement polices relating to electric vehicles, including analyses of the obstacles for fleet conversion. The report also recommends that the County and the cities review existing programs that could facilitate this analysis and the procurement of electric vehicles. The report mentions two programs that could be helpful—the Office of Sustainability’s Roadmap for Municipal Green Fleets, which is a toolkit to assist local governments in replacing national gas powered fleets with electric fleet vehicles, and the Climate Mayors EV Purchasing Collaborative, which allows the coordination of a highly competitive contract aimed at saving time and money by combining the buying power of more than 50,000 government, education, and non-profit organizations. DISCUSSION The Grand Jury report reviewed what steps San Mateo County and the 20 cities have taken to reduce their greenhouse gas emissions by converting their fleets to electric vehicles. As part of this work, the Grand Jury reviewed the Climate Action Plans (CAPs) for San Mateo County and the 16 cities within the county that have them. The report included 11 findings along with four recommendations to address those findings. The report directs each affected agency to submit a response to the findings and pertinent recommendations by November 12, 2019. Staff has reviewed the findings and recommendations, and has prepared the attached draft response letter for Council approval. Resolution Approving the City of Burlingame Response to Grand Jury Report October 21, 2019 “Electrical Vehicle Adoption in the Cities and County of San Mateo” 2 In general, the response letter indicates that the City agrees with the findings and recommendations. FISCAL IMPACT None. Exhibits:  Resolution  Draft Response Letter  Grand Jury Report RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME APPROVING A RESPONSE TO THE SAN MATEO COUNTY GRAND JURY REPORT “ELECTRICAL VEHICLE ADOPTION IN THE CITIES AND COUNY OF SAN MATEO” WHEREAS, On August 12, 2019, the San Mateo County Grand Jury released a report entitled “Electrical Vehicle Adoption in the Cities and County of San Mateo”; and WHEREAS, the report made certain findings and recommendations regarding the conversion of government fleets to electric vehicles for the County of San Mateo and the 20 cities within San Mateo County; and WHEREAS, the City agrees with the findings and recommendation, and either has already implemented or intends to implement them; and WHEREAS, the City Council has received the proposed draft response letter. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BURLINGAME RESOLVES AS FOLLOWS: That the letter in response to the San Mateo County Grand Jury entitled “Electrical Vehicle Adoption in the Cities and County of San Mateo” is approved, and the Mayor is authorized to sign and convey the letter on behalf of the City. _____________________________ Donna Colson, Mayor I, MEAGAN HASSEL-SHEARER, City Clerk of the City of Burlingame, certify that the foregoing Resolution was adopted at a regular meeting of the City Council held on the 21st day of October, 2019, and was adopted thereafter by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: _____________________________ Meaghan Hassel-Shearer, City Clerk DONNA COLSON, MAYOR EMILY BEACH, VICE MAYOR ANN KEIGHRAN RICARDO ORTIZ MICHAEL BROWNRIGG TEL: (650) 558-7200 FAX: (650) 566-9282 www.burlingame.org The City of Burlingame CITY HALL -- 501 PRIMROSE ROAD BURLINGAME, CALIFORNIA 94010-3997 October 21, 2019 Honorable Donald J Ayoob Judge of the Superior Court C/o Charlene Kresevich6 Hall of Justice 400 County Center; 2nd Floor Redwood City, CA 94063-1655 Subject: City of Burlingame Response to San Mateo County Grand Jury Report “Electrical Vehicle Adoption in the Cities and County of San Mateo” Dear Judge Ayoob: Thank you for the opportunity to review and comment on the above referenced Grand Jury report filed on August 12, 2019. After reviewing the Grand Jury Report and all available data pertaining to our community, the following are the City of Burlingame’s responses to the Grand Jury’s findings: F1. As of December 2018, eleven of the twenty cities in San Mateo County have no electric vehicles in their government fleets. These are:  Atherton  Belmont  Colma  Daly City  East Palo Alto  Half Moon Bay  Hillsborough  San Bruno  San Carlos  South San Francisco  Woodside Response: The City has no basis on which to agree or disagree with this finding as it has no knowledge about other cities’ fleets. F2. As of December 2018, in two of the twenty cities in San Mateo County approximately one percent of the city fleet are electric vehicles. These are: The Honorable Donald J. Ayoob October 21, 2019 Page 2  Register online with the City of Burlingame to receive regular City updates at www.Burlingame.org   Burlingame  Foster City Response: The City of Burlingame agrees with this finding with respect to the City of Burlingame. F3. As of December 2018, in three of the twenty cities in San Mateo County approximately three percent of the city fleet are electric vehicles. These are:  Pacifica  Redwood City  San Mateo Response: The City has no basis on which to agree or disagree with this finding as it has no knowledge about other cities’ fleets. F4. As of December 2018, in the City of Millbrae approximately seven percent of the city fleet is electric vehicles. Response: The City has no basis on which to agree or disagree with this finding as it has no knowledge about other cities’ fleets. F5. As of December 2018, in two of the twenty cities in San Mateo County approximately ten percent of the city fleet are electric vehicles. These are:  Brisbane  Menlo Park Response: The City has no basis on which to agree or disagree with this finding as it has no knowledge about other cities’ fleets. F6. As of December 2018, the Town of Portola Valley has converted two of its six city vehicles to electric vehicles, or approximately 33 percent. Response: The City has no basis on which to agree or disagree with this finding as it has no knowledge about other cities’ fleets. F7. San Mateo County has 709 fleet vehicles. Of those, 218 are Enhanced AT PZEVs and two are ZEVs (approximately 31 percent). Response: The City has no basis on which to agree or disagree with this finding as it has no knowledge about the County’s fleet. F8. The County and eleven of the cities in the county have Climate Action Plans that discuss adoption of sustainable purchasing policies for converting their fleets to fuel efficient vehicles (hybrid, electric, alternative fuel). The cities are:  Atherton  Belmont  Brisbane  Burlingame  East Palo Alto  Foster City The Honorable Donald J. Ayoob October 21, 2019 Page 3  Register online with the City of Burlingame to receive regular City updates at www.Burlingame.org   Menlo Park  Pacifica  Redwood City  San Carlos  San Mateo Response: The City of Burlingame agrees with this finding with respect to the City of Burlingame. F9. The San Mateo Office of Sustainability released a “Green Municipal Fleet Toolkit” in March of 2019. The purpose of this Toolkit is to assist jurisdictions on how to reduce greenhouse gas emissions from their municipal fleets. Response: The City of Burlingame agrees with this finding with respect to the City of Burlingame. F10. The San Mateo County Office of Sustainability technical support pilot program for municipal fleets, which is funded to assist up to four cities in converting their fleets to ZEVs, runs through December 2019. Response: The City of Burlingame agrees with this finding with respect to the City of Burlingame. F11. The Climate Mayors EV Purchasing Collaborative is available to assist the cities and the County in conversion of fleet vehicles to ZEVs through aggregate purchasing. Response: The City of Burlingame agrees with this finding with respect to the City of Burlingame. The following are the City of Burlingame’s responses to the Grand Jury’s recommendations: R1. By March 31, 2020, the County of San Mateo and each city within the county should conduct a review of its government fleet procurement policy relating to electric vehicles and present a report at a public meeting. At a minimum, the review should be based on an analysis that includes up-to-date life-cycle costs of commercially available electric vehicles and an up-to-date assessment of whether electric vehicles can meet the performance needs of local jurisdictions for power, range, battery life, and other relevant factors. If an agency has completed such a review within the last three years, then such review should be presented to its governing body at a public meeting on or before December 31, 2019. Response: The Burlingame City Council adopted a 2030 Climate Action Plan Update (CAP) on September 3, 2019. The CAP outlines the City’s strategy to cut greenhouse gas emissions and includes a measure for electrifying the City’s vehicle fleet. Measure 6, Electric Vehicle Instructure and Initiatives, commits the City to preparing an Electric Vehicle Strategy Plan that shall identify a strategy for electrifying the City’s existing municipal vehicle fleet. The strategy will include an analysis of available electric vehicles in relation to the City’s service and performance needs. The analysis will be completed by March 2020. R2. By March 31, 2020, the County of San Mateo and each city within the county should conduct an analysis of the obstacles, if any, to the implementation of an EV government fleet procurement policy and present a report at a public meeting. This could include, for example, the availability of electric vehicle charging stations to serve the vehicle fleet and training of vehicle maintenance staff. If an agency has completed such an analysis within the last three years, then such analysis should be presented to its governing body at a public meeting on or before December 31, 2019. Response: The City of Burlingame is committed to preparing an Electric Vehicle Strategy Plan to cut greenhouse gas The Honorable Donald J. Ayoob October 21, 2019 Page 4  Register online with the City of Burlingame to receive regular City updates at www.Burlingame.org  emissions and will work towards identifying a strategy for elec trifying the City’s existing municipal vehicle fleet. The strategy will explore an EV First Policy and/or other fleet procurement policy for electric vehicles. The analysis will be completed by March 2020. R3. By September 30, 2019, the County of San Mateo Department of Public Works and each city within the county should review the “Roadmap for Municipal Green Fleets” toolkit from the San Mateo County Office of Sustainability, including the information on the possibility of adopting an EV First Policy. Response: The recommendation was implemented by the City of Burlingame. The Office of Sustainability received the City of Burlingame’s Green Municipal Tool Kit on September 3, 2019. The City of Burlingame will coordinate with the County on the activities outlined in the “Roadmap for Green Municipal Fleets” as the City moves forward in preparing the EV Strategy Plan and an EV First Policy for the City’s vehicle fleet. R4. By September 30, 2019, the County of San Mateo and each city within the county, if they have not already initiated such a process, should investigate joining the Climate Mayors EV Purchasing Collaborative to take advantage of aggregate purchasing. Response: The City joined the Climate Mayors EV Purchasing Collaborative in 2019. The Fleet Division took advantage of the purchasing collaborative to acquire the City’s first PHEV. This vehicle is utilized by the Building Division in the City’s Community Development Department. The Burlingame City Council approved this response letter at its public meeting on October 21, 2019. Sincerely, Donna Colson Mayor Superior Court of California, County of San Mateo Hall of Justice and Records 400 County Center Redwood City, CA 94063-1655 NEAL TANIGUCHI COURT EXECUTIVE OFFICER CLERK & JURY COMMISSIONER (650) 26 I -s066 FAx (6s0) 26t-s147 www. sanmateocourt. org August 12,2019 City Council City of Burlingame 501 Primrose Road Burlingame, CA 94010 Re: Grand Jury Report: "Electric Vehicle Adoption in the Cities and County of San Mateo', Dear Councilmembers: The 2018-2019 Grand Jury filed a report on August l2.2}lg which contains findings and recommendations pertaining to your agency. Your agency must submit comments, within 90 days, to the Hon. Donald J. Ayoob. Your agency's response is due no laterthan November 12,2019. Please note t'hat the response should indicate that it was approved by your governing body at a public meeting. For all findings, your responding agency shall indicate one of the foilowing: l. The respondent agrees with the finding. 2. The responde-nt disagrees wholly or partially with the finding, in which case the response shall speciry the portion ofthe finding that is disputed and shall include an explanation ofthe reasons therefore. Additionally, as to each Grand Jury recommendation, your responding agency shall report one of the following actions: l. The recommendation has been implemented, with a summary regarding the implemented action. 2. The recommendation has not yet been implemented, but will be implemented in the future, with a time frame for implementation. 3. The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a time frame for the matter to be prepared for discusiion by ihe officer or director of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This time frame shall not exceed six monthj from thi dati of publication of the Grand Jury report. 4. The recommendation will not be implemented because it is not warranted or reasonable, with an explanation therefore. Please submit your responses in all of the following ways: l. Responses to be placed on file with the Clerk of the Court by the Court Executive Office. o Prepare original on your agency's letterhead, indicate the date of the public meeting that your goYerning body approved the response address and mail to Judge Ayoob. Hon. Donald J. Ayoob Judge of the Superior Court c/o Charlene Kresevich Hall of Justice 400 County Center; 2nd Floor Redwood City, CA 94063-1655. 2. Responses to be placed at the Grand Jury website. ' Copy response and send by e-mail to: grandiurv@sanmateocourt.org. (Insert agency nameif it is not indicated at the top of your response.) 3. Responses to be placed with the clerk ofyour agency. r File a copy of the response directly with the clerk of your agency. Do not send this copy to the Court. For up to 45 days after the end ofthe term, the foreperson and the foreperson's designees are available to clari$ the recommendations of the report. To reach the foreperson, please call the Grand Jury Clerk at (650) 261-5066. If you have any questions regarding these procedures, please do not hesitate to contact Paul Okada, Chief Deputy County Counsel, at (650) 363-4761. Very truly yours, lfuUa,rqd{) NealTaniguchi / Court Executive Officer NT:ck Enclosure cc:Hon. Donald J. Ayoob Paul Okada Information Copy: City Manager 2 ELECTRIC VEHICLE ADOPTION IN THE CITIES AND COUNTY OF SAN MATEO ISSUE What steps have San Mateo County and its cities taken to reduce their greenhouse gas emissions by replacing 100 percent fossil-fueled govemment fleet vehicles with electric vehicles? What resources are available to the County and the cities to assist in converting their fleets to zero emission vehicles (ZEY s)? SUMMARY Global warming and climate change are an everyday reality. California is a leader in trying to reduce greenhouse gas emissions. Sixty percent of greenhouse gas emissions in San Mateo County come from the transportation sector. Local government vehicle fleets are a relatively small part of that sector; however, the Grand Jury believes they are important in terms of setting an example for private industry and individuals to follow. The Grand Jury surveyed the County and each of the 20 cities within the county to determine theextent to which they are converting their fleets to electric vehicles. The results lf tnir survey show that approximately 3l percent of the County of San Mateo government fleet vehicles are electric vehicles. By comparison, the average of 20 cities in the County is about three percent. Eleven of the 20 cities have no electric vehicles in their fleets. Purchase of electric vehicles has been cost prohibitive in the past, making it difficult for governments to justifu the expense. Since 2009 when San Mateo County first discussed converting its fleet to electric vehicles, zero emissions vehicle technology has advanced, and costs of electric vehicles have dropped. As of 2019, the total life cycle Jost, based on five years ownership, of a zero emissions vehicle is less than that for a comparable 100 percent fossil- fueled car. The cost savings may be as great as $5,000 if the eleclric vehicle is eligible for certain rebates. The Grand Jury recommends that the County and each of the cities in San Mateo County conduct a review of their govemment fleet procurement policies relating to electric vehicles, inciuding an analysis of the obstacles to fleet conversion. The Grand Jury alio recommends that the city governments and the County Department of Public Works review existing programs that could facilitate this analysis and the procurement of electric vehicles, including tn" Offi." of Sustainability's Roadmap for Municipal Green Fleets, which is a toolkiito assist local governments in replacing traditional gas powered fleets with electric fleet vehicles, and the Climate Mayors EV Purchasing Collaborative, which allows the coordination of a highly competitive contract aimed at saving time and money by combining the buying po*.i of n,or. than 50,000 govemment, education, and non-profit organizations. 201 8-2019 San Mateo Counry Civil Grand Jury I GLOSSARY1 Greenhouse Gases (GHG): Any of various gaseous compounds, such as carbon dioxide and methane, that absorb infrared radiation and trap heat in the atmosphere contributing to the greenhouse effect and global warming. Govemment fleet: All vehicles owned or leased by a government entity for use by government employees including administrative, maintenance, police and emergency personnel. Fossil -Fueled Vehicles o PZEVs: 100 percent fossil-fueled, intemal combustion engine (ICE), partial Zero Emission Vehicles which are Super Ultra Low Emissions Vehicles ihat also have additional technology, such that their emissions are similar to a non-plug-in hybrid, such as the Honda civic, the Ford Fiesta, and the Subaru crosstrek. o AT PZEVs: Advanced Technology Partial Zero Emission Vehicles, which include non-plug-in hybrids, such as the Honda Accord Hybrid, the Toyota Camry Hybrid, and the Ford Fusion. Electric Vehicles o Enhanced AT PZEVs: Enhanced Advanced Technology Partial Zero Emissions Vehicles which include plug-in hybrid electric vehiclei such as the Toyota prius Prime, the Chevrolet Volt, and the Ford Fusion Energi. o ZEVs: Zero Emission Vehicles which include plug-in electric vehicles such as the Tesla Model 3, the Chevrolet Bolt, the Hyundai Ioniq, and electric carts. a a o o BACKGROUND California is a leader in trying to reduce greenhouse gas emissions (GHG) associated with global heating. Forty percent of Califomia's greenhouse gal emissions come from the transportation sector. In San Mateo County, the contribution from transportation is even higher at 6b percent, the largest contributor being solo driving.2 Local government vehicle fleets ire a relatively smallpart of that sector; however, the Grand Jury believes they are important in terms of settin[ an example for private industry and individuals to follow. I Definitions based on California Environmental Protection Agency, Air Resources Board, Frequently Asked Questions: The californi a Zero Emission veh icle Regulation, July 20 I I . 2 Time to Act on Climate Change, Twenty-second Ar"r"l R.port. www.SustainablesanMateo.org 2018-2019 San Mateo Counry Civil Grand Jury ") State Actions With nearly half of the state's greenhouse gas emissions coming from the transportation sector, California has made significant investments to encourage adoption of zero emiision vehicles, including expanding the network of charging stations ura prouiaing rebates that lower the price of new cars by thousands of dollars.3 In 2018, the Governor set a goal of reaching.five million ZEVs on California's roadways by 2030, and 250,000 public chargers by 2025.a As of mid-2018, Californians were driving over 400,000 ZEYs out of 25 million registered passenger vehicles in Califomia (1.6 p.r..nl;. Sun Mateo County has 26,894 electric vehicles (Enhanced AT PZEVs and ZEVs) ,.jirter"di, *t i.t is 4.2 percent of all registered vehicles; 8,229 were ZEVs.6 The state has passed the California Renewables Portfolio Standards Program SB 100 (201g) that mandates that all electricity be 100 percent renewable by 2045, ensuring-that electric vehicleswill be powered by clean energy sources. In October 2016, the Govemor of Califomia released the 201 6 ZEY Action plan, which in part established new goals for state government fleet ZEV purchases, so that 50 percent of annual light-duty fleet purchases will be ZEY by 2025.7 whil; the state is addressing greenhouse gases and electrification of state vehicle fleets, there have been few measures directed to electrification of county or municipal fleets. County Actions In 201l, the Grand Jury investigated the County's 2008 Vehicle Purchase program in which the San Mateo County Board of Supervisors resolved that "...all future [compact Ind midsize county] vehicle purchases will be hybrid models or other fuel-efficient mldek that are estimated by the manufacturer to achieve a minimum of thirty miles to the gallon.,'8.e This program includes a policy of replacing fleet vehicles after seven years or tOO,OOO miles.l0'Aclcording to the San Mateo County Department of Public Works, *hi.h oversees the County,s fleet, the- Board of Supervisors' resolution calls for an annual review of the 30 mpg staniard. The policy a Lazo, Alejandro, "california Gov. Jerry Brown calls for Five Million Zero-Emission Cars by 2030", Wall StreetJournal, January 26, 20 18. Report 20 I 8. 3 Koseff, Alexei, "Brown- deems Trump 'liar, criminal, fool' on environment, signs electric vehicle bills,,, TheSacramento Bee, September 13, 2018. https://www.sacbee.com/news/politics-gJvernment/capitol- alert/article2 I 83625 I 0.html hEEi://www.documents.des.ca. eov/osp/sam/mmemos/MM I 6_07.pdf8SanMateoCountyBoardofSup.',iio.@September9,2008. e San Mateo County Civil Grand Jury 2010-201 l, "San Mateo County's vehicle purchase program,,, 201 Illjtps://www.sanmar rs/grand iury/20l04rybrid vehicles.pdfIo tbid. 201 8-2019 San Mateo Counry Civil Grand Jury J 6 Sustainable San Mateo County " Time to Act on Climate Change", May 4,2018 Administrative Manual Memorandum MM l6-07. itself has not been updated and the fuel efficiency requirement has not been increased above 30mpg.ll Climate Action Plans Since enactment of the Califomia Global Warming Solutions Act of 2006 (AB 32), many localjurisdictions in California have adopted "Climate Action Plans" (CAps). CAps are documents that identify methods that local jurisdictions such as the cities and County can implement to significantly reduce GHG emissions as a first step toward meeting the requirements mandated byAB 32, which required a GHG reduction of 15 percent below 2005 levels by 2020. While such plans are not mandated, the County of San Mateo and 16 cities in the county have adopted them. Due to greenhouse gas emissions from transportation, CAPs include a section that discusses the status of greenhouse gas contribution from this sector and policies meant to reduce them. For purposes of this repo_rt, the Grand Jury reviewed the CAPs for the County and the cities that havethem to determine whether the electrification of government fleets *u, uid..rsed.l2 DISCUSSION The Grand Jury investigated what San Mateo County and the 20 cities within the county are doing to reduce their GHG emissions by converting their fleets to electric vehicles. Grand Jury Survey In December 2018, the Grand Jury surveyed each of the cities and the County (see Appendix Afor form of the survey). The responses are summarized in Table l. The ru*"y iesults show that, as of the date of the survey, I I of the 20 cities have no electric vehicles 1as defined in the glossary) in their fleets. These are: Atherton, Belmont, Colma, Daly City, East palo Alto, Half Moon Bay, Hillsborough, San Bruno, San Carlos, South San Francis.o, *d Woodside. In contrast, two of the cities (Burlingame and Foster City) have converted one petcent oflheir fleetto electric vehicles, three of the cities (Pacifica, Redwood City, and San MaLo) have reacheJ three percent, the City of Millbrae has reached seven percent, and two cities (Biisbane and Menlo Park) have reached ten percent. Of interest is that although not havinga Climate Action Plan, the Town of Portola Valley has moved forward with converting a third-(two out of six) ofits fleet to electric vehicles. rr Email from SMC Department of public Works 12 Links to each of the CAPs are given in the bibliography 4201 8-2019 San Mateo Counry Civil Grand Jury Table 1: Cities and County of San Mateo Electric Fleet Vehictes (December 2018) * Year shown is date of document that references electric vehicles, if any As noted in Table l, eleven of the cities and the County have as part of their CAp a section pertaining to converting their goverrunent fleets to fuel efficient vehicles (hybrid, electric, alternative fuel). These cities are: Atherton, Belmont, Brisbane, Burlingame, East palo Alto, Foster City, Menlo Park, Pacifica, Redwood City, San Carlos, and San Mateo. Five cities 5 # of Fleet Vehicles Have Climate Action Plan? (Year") Climate Action Plan Discusses Government Fleet Electric Vehicles Total Electric o/o Elec Atherton 20 0 0%Yes (2016)Yes Belmont 106 0 0o/o Yes (2017)Yes Brisbane 23 2 9o/o Yes (2015)Yes Burlingame 115 1 1%Yes (2009)Yes Colma 27 0 0%Yes (2013)No Daly City 26 0 0o/o Yes (2010)No East Palo Alto 73 0 0o/o Yes (2011)Yes Foster City 86 1 1o/o Yes (2015)Yes Half Moon Bay 8 0 0%No No Hillsborough 67 0 0%Yes (2010)No Menlo Park 110 11 10%Yes (2009)Yes Millbrae 58 4 7%No No Pacifica 96 2 2%Yes (2014)Yes Portola Valley b 2 33%No No Redwood City 240 6 3o/o Yes (2013)Yes San Bruno 129 0 0%No No San Carlos 49 o'0%Yes (2009)Yes San Mateo 243 8 3%Yes (2015)Yes South San Francisco 200 0 0%Yes (2014)No Woodside 3 0 0o/o Yes (2015)No Cities Total 1,685 37 2%16 Yes 11 Yes County of San Mateo 709 220 31%Yes (2012)Yes 2018-2019 San Mateo County Civil Grand Jury Combined, about two percent of the 20 municipalities' fleet vehicles are electric vehicles. By contrast, electric vehicles comprise approximately 3l percent of the total County of San Maieo govemment fleet. . Cites/ County of San Mateo (Colma, Daly City, Hillsborough, South San Francisco. and Woodside) have CAps that do not discuss conversion of fleet vehicles, to fuel-efficient vehicles and four cities (Half Moon Bay, Millbrae, Portola valley, and San Bruno) have no Climate Action plan. In reviewing the cities' and County's CAPs as related to the conversion of fleet vehicles to electric vehicles, the Grand Jury finds that those cities, and the County, that include this discussion in their CAP vary in the strength of their approach. As noted above, the County already had a Fuel Efficient County Vehicle Purchasing Policy prior to developing their CAp, and this is emphasized in their document. Four of the cities (Atherton, Belmont, Burlingame, and Pacifica) describe policies to prioritize purchase of electric and alternative fuel vehiiles, sometimes referred as a Sustainable Purchasing Policy, which are proposed for adoption by the city governments. For the remaining seven cities, the wording in the CAPs propose specific actions rather than an overall policy. The CAPs of the cities of Brisbane and East Palo Alto suggest that their cities participate in a car-sharing program that has electric vehicles. The CAP irom Menlo park says that "one or several neighborhood electric vehicles could be purchased or leased."l3 The CAirs from Foster City and San Mateo call for the cities to replace gasoline powered vehicles or conventional hybrids with low emissions vehicles, "as available and cost effective".l4 The 2009 CAP from San Carlos is specific about the number of vehicles to be replaced by 2020 stating that, "The City has approximately l8 vehicles between the Public Works, Parks and Recreation, and Building Departments that have the possibility of being replaced in the future with alternative fuel or hybrid technology."rs And the CAP from Redwood City mentions that by 2013,83 percent of all City sedans in Redwood City were hybrids and the Parks and police Departments had three fully electric.vehicles. Of particular note, the action recommended in Redwood City is headed. "Lead by Example - promote fuel-efficient and altemative fuel vehicles in the community by usin! the city's fleet as an example."16 As described above, there is a wide variation among local jurisdictions in San Mateo County in terms of their government fleet electric vehicle procurement policies. In this report, the Grand Jury has not investigated the reasons why local jurisdictions have adopted theii specific policies, or no policy. ' It should be noted that some CAPs were drafted and adopted prior to 20l0,when electric .. - . .vehicles were not widely available, some have been reviewed and revised since 2015, one city is currently working on an updated cAp, and one city has a draft 2030 plan. '3 City of Menlo Park, Climate Action plan Update and Starus Report,2009 !!tpl//wotldcat.orgarcviewerlT lCBG/2013/04117 /Hl3662382442t4tviewertfitet.pdf ra City of San Mateo, Climate Action Plan, April 2015. ItftPs://www.citvofsanmateo.ore/DocumentCenter/View/65426lSan-Mateo-CAp---Adopted?bidld '5 City of San Carlos, Climate Action plan, October lZ.ZOOS httPS://www.cif.vofsancarlos.o.rVgovernment/departments/citv-manager-s-office-communications/responsible- environment/c I imate-action-plan 16 Ciry of Redwood City Community Climate Action Plan hnps://www.ca-ile.orgsites/main/files/file- attachments/redwood_city-_community climate_actionJ:lan.pdf 2018-2019 San Mateo County Civil Grand Jury 6 Sources of Financial and TechnicalAssistance In October 2018, the San Mateo County Office of Sustainability received a grant for one year from Peninsula Clean Energy to develop a Roadmapfor Muniiipal Green iteets.rT This is a clean fuel toolkit to assist local governments in replacing traditi-onal gas powered fleets with electric fleet vehicles. This toolkit includes sources of technical assistance for local governments interested in strategic planning of their fleet electrification efforts.ls The grant incluJes funding to support up to four cities initially in utilizing the toolkit through Decemter 2}lg. The Office of Sustainability is currently soliciting feedback from cities on whether there is interest to adopt an EV First Policy.re If there is interest from the city and County leadership, the Office of Sustainability will draft a policy based on the one adoptedby the City;nd County of San Francisco in 2017. San Francisco's EV First policy "requires that any n"* purr.rger vehicle procured for the City fleet be aZero Emission Vehicle, absent a waiver, and thai allpa-ssenger vehicles in the City fleet be Zero Emission Vehicles by December 3 l, 2022; and to *.orr[. selection of Zero Emission Vehicles in other vehicle classes as technology improves.,,20 On September 1l ,2018,the Climate Mayors EV Purchasing Collaborative was launched. Cities from around the U.S. announced a large-scale commitment to electriff their municipal fleets. One founder stated, "This process allows the coordination of a highlycompetitive contract aimed at saving your fleet time and money by combining the buying power of more than 50,000 government, education, and non-profit organizations. The vehicles in your fleet need to meet the use needs of your company and staff, and the Cooperative EV Purchasing Collaborative is designed with products and services to fit your needs.,,2l "The Collaborative represents unprecedented cooperation among Climate Mayors cities across the country to leverage their collective buying power and acceleiate the conversion of public fleets to [electric vehicles]...It is a turnkey, one-stop, online procurement portal providing U.S. cities, counties, [and] state governments...equal access to competitively bid [electric vehicles] and charging infrastructure, innovative financing options, and best practices and other forms of expertise."22 The Califomia Air Resources Board (CARB) has the Clean Vehicle Rebate project (CVRp) which is designed to promote the purchase of battery electric, plug-in hybrid electric, and oiher electric vehicles. Rebates of up to $7,000 per light-duty vehicle u." uuuiluble for individuals, nonprofits, govemment entities, and business owners who purchase or lease an eligible vehicle. Public agencies are eligible for up to 30 vehicle rebates annually. Some fleets may qualify for n.Peninsula Clean Energy Pilot Program, https://www.peninsulacleanenerg-v.com/community-oilots/ peninsulaCleanEnergy(PCE)isSanMateoCounty'sofficiaIelectricityp'o,ia.''n@Community Pilot Program of up to $75,000 each for six innovative local pilot projects to reduce -greenhouse gas emissions.r8 Office of Sustainability, Roadmap for Municipal Green Fleets".'hnps://www.smcJustainabiliry.orgl9GrandJuryCorrespondencewithSanMateoCountyofficeorsuffi :0 City and Counfy of San Francisco Ordinance # I l5-17. 2l "comm 22 Ibid. itment to Electrification", https://driveevfleets.org/# 72018-2019 San Mateo County Civil Grand Jury increased incentives if located within a Califomia disadvantaged community census tract.23 Current rebate statistics are available on the website of the Center for Sustainable Energy (csE).24 Why Now is the Time to Convert Government FIeets to ZEVs Even those cities whose Climate Action Plans include proposed electric vehicle fleet procurement policies have not fully implemented them (see Table 1, last column vs. # of Fleet Vehicles). San Carlos, for example, has a strong and specific policy but has purchased no electric vehicles. In this report, the Grand Jury has not investigated the specific reasons each city may have for not implementing electric vehicle procurement policies. The following section reviews the general obstacles that local governments have encountered in the past and their current status in2019. "The Califomia Air Resources Board first adopte d the ZEY mandate in I 990 as part of the Low- Emission Vehicle regulation.. .whose goals were to accelerate industry investment in ZEy technology, discourage industry procrastination, establish initial supply chains, and signal to the many related companies and ^g_overnments that they should be engaging sooner and more deeply with the transition to ZEYs."2s This was 18 years before the firstiommercially successful ZEi was sold to the public.26'27 In2013, the National Research Council identified the main obstacles to public adoption of ZEVs AS: . Lack of Customer Knowledge about ZEys,. High Purchase Price, o Limited Driving Range, o Limited Model Choice, o Lack of DealerAvlechanic Knowledge about ZEys,o Lack of Charging lnfrastructure, o Lack of Standardization of Charging Infrastructure, ando Lack of Access to 100 percent Renewable Electricity.2s Since 2013, rnany of these obstacles have been greatly reduced. Several more ZEV models have been introduced to the market and costs have come down to a large extent due to a significant 82018-2019 San Mateo County Civil Grand Jury 25 Scott Hardman, et al.,"Driving the Market for Plug-in Vehicles:Understand in g ZEY Mandates". "The History of the Electric Car", September 20 I 4. Deployment", 2013. 26 U.S. Department of Energy, drop in battery prices.2e ln San Mateo County, both Pacific Gas & Electric and peninsula Clean Energy both offer 100 percent renewable electricity plans.30.3l "Most modem chargers and vehicles have a standard connector and receptacle, called the SAE J1772. Any vehicle_with this plug receptacle can use any Level I U20 vott eC] or Level 2l24Ovolt AC] EVSE. All major vehicle and charging system manufacturers supportihis standard.,,32 And recently, "SAE International, an engineering standards-setting organiiation, has passed a standard for fast charging that adds high-voltage DC power contact pins to the SAE J1772 connector,"33 so stand ardization of chirging inf.ustructrre should ,oo, .ro longer be a concem. As with individuals who purchase ZEVs, city and county governments will need to install charging infrastructure for their fleets. The cost of installing a charging facility ranges widely depending on the number of charging ports, the level of the charger; whether ihe units are networked for monitoring and/or billing purposes, and the proximity to existing electrical infrastructure.3a However, in considering the useful range of th"i, Z-EVs, cities"in San Mateo County should also take into account that there are currentl y 1,645 public charging stations in San Mateo County that could be used by government vehicies if they are in aaigei of running out of power before being able to return to their base charging location. 3s -- -- --' Even with all of these advances, in January 2019 Forbes Magazine listed the four lingering obstacles that purchasers of ZEVs, both public anrd private, contend with as perceiveJ .ori ,ung"anxiety, driver understanding, and dealer understanding.36 Driver and dealeiunderstanding of - ZEYs will come with greater education of the public, and the Grand Jury hopes that this rJportwill contribute to that education. Retraining of mechanics to work on ZiVsis also a consideration, especially for government employees. However, according to the San Mateo County Department of Public Works, "This doesn't present a problem and...mechanics are being trained on servicing of the EVs."37 o'By a margin, the largest reason that consumers have avoided purchasing an electric car is range anxiety. That is, 58 percent of drivers are afraid that they will run out of-power before being ab-le 2e Supra, Note 26 30 Pacific Gas & Electric website, "Solar Choice program costs". https://www.pge.com/en US/residential/solar-and- 3l Peninsula Clean Energy website, ,.Whe." pCE's power Comes From,,. 32 U.S. Department of Energy, Office of er"rgy Eff"i*cy and Renewable Energy, ,.Vehicle Charging,,. t,qr'{t***.e"ergy.33 Ibid. ins 9 37 Grand Jury communication. 2018-2019 San Mateo County Civil Grand Jury 3a New York State Energy Research and Development Authority, "Charging Counfy Plug-in Electric Vehic Ie Infrastructure Plan", San Mateo County Datahub, "Electrical Vehicle Charging Starions". 16 Jeff McMahon, .,The 4 Lingering Obstacles To Electric Vehicle Adoption (And What Might Overcome Them)",Forbes, January 27, 2019. to charge their vehicle, while another 49 percent fear the low availability of charging stations.,,38 In considering whether and when to convert government fleets in San Mut.o County, the Grand Jury directs attention to the large number of public charging stations in the County mentioned above. For all of the advances in technology, education, and infrastructure availability, a consistent theme in the CAPs and literature reviewed by the Grand Jury is the perceived cost of ZEVs versus 100 percent fossil-fueled cars and the importance of feasibiliiy and cost effectiveness. Choosing aZEY over a conventional, internal combustion engine (ICE) vehicle can result insignificant long term savings. ZEYs "cost less than half as much to opeiate as gas powered cars."3e "The average cost to operate aZEY in the US is $485 ayear while the average for a gasoline powered vehicle is $ l,l 17 .,,40 The average price for a gallon of gasoline in California is $3.95 (May 2019). The average costfor electricity per gallon equivalent during the daytime is $ 1.80.dr Fueling jectric vehicles atnight (off peak) would cost even less.a2'al Maintenance cost for ZEVs is also lower because they have "fewer moving parts, no exhaust system, Iess need for cooling, less abrasive braking options and no need to-ciange engine oil, coolant' transmission fluids, air filters, timing belts, head gaskets, cylinder headi andipark plugs''aa The largest maintenance expense of aZEY is thJbatte ry pack.as zni autt"ries are drained and recharged constantly but some manufacturers will cover replacement with a battery warranty (such as for the Nissan Leaf, chevrolet Bolt, and Tesla Modei sy.a6 In order to show how all of these factors result in a one-to-one cost comparison, an example lifecycle cost analysis of a ZEY as compared to a comparable intemal combustion engine vehicle of the size used by the County of San Mateo is provided in Table 2. This analysis is based on acalculation available on the website of PG&E, but the values have been modifred to reflect the rates and conditions that would be experienced by goverrrments in San Mateo County.47 Foi 38 Rob Stumpf, "Americans Cite Ran ge Anxiety, Cost as Largest Barriers for New EV purchases Study", TheDrive, February 26,2019 b.arri ers-for-new-e v-p urchases-stu dy 3e University of Michigan's Transportation 40 Ibid. Research Institute 201 8 Study Report No. SWT-201 g_ I ar "egallon: What it is and Why it is I mportant" Department of Energy's egallon. www.energy.qov42 lbid. a3 Note egall distance you based on the on and miles per gallon (MPGe) is a measurement of the cost to drive a comparable vehicle the same could go on a gallon of gasoline. MpGe is a measurement of how efficiently a vehicle uses energy number of British Thermal Units (BTUs) in the tuel.e Jeff McMahon, " Electric Vehicle Cost Less Than Half as Much to Drive", Forbes, January 14, 201g. drive/#45d1708e3ff-7 4s lbid. 46 "Costs and Benefits of Electric Cars vs. Conventional Vehicles',,, November I5, 2018 mpany, "Welcome to the EV Savings Calculator". https://ev.pee.com/ a7 Pacific Gas & Electric Co 2018-2019 San Mateo Counry Civil Grand Jury l0 purposes of this calculation, it is assumed that the vehicles would be driven 20,000 miles per year and resold after 100,000 miles (five years). This analysis shows that with rebates currently in place, the total life cycle cost over five years fot aZEY is up to $5,000 less than that of a comparable ICE driven cai, and that even if the electricity cost were to double or the rebate was not available the total cost would still be less than that of the ICE car. Cities are encouraged to perform their own analyses. Therefore, the Grand Jury believes that now is the time to convert government fleets to ZEVs. Table 2 S-Year (100,000 Mile) Life Cycle Cost Comparison of Chevrolet Bolt ZEV to Toyota Camry ICE XLE/XSE lon 20t9 Chevrolet Bolt EV XLE Comments TOTAL 5-Yr Cost $39,529 $45,712 2019 Chevrolet Bolt EV 2019 Toyota 20 I 9 Toyota XLE Comments 48 U'S. Department of Energy, office of Energy Efficiency and Renewable Energy, "How are Vehicle Size Classes Defi ned". https://www, fue leconomy. gov/feg/info.shtm I#s ize-c Iass 4e Califomia Environmental Protection Agency, nir n.r**r g*rd, Clean Vehicle Rebate project, .,For public Fleets". https://cleanvehiclerebate.orgy'engfleet Summa of Results Vehic le Purchase/Resale $22,676 $20,058 Vehicle MSRP * (1 + Sales Tax) - Rebate - Value Percent * MS Total Electricity Cost $s,040 NA Electricity Cost * Electricity Use * Mi/yr* Number of Years Total Gasoline Cost NA s r r,618 Gasoline Cost * Mi/Yr * Number of years MPG Total Maintenance Cost $3, r 74 $s,749 per Mile * (l - EV Cost Reduction)* Mi/Yr * Number of Years Maint. Cost Total Insurance Cost $8,63e $8,288 Insurance Cost per Year * Number of years t Parameters Seats 5 5 Manufacturer Specifi cation Passenger Volume (cu.ft .)94 I00 Manufacturer Spec ifi cation Interior Cargo Volume (cu.ft.)t6.9 t4.t Manufacturer Specifi cation Type Mid-Size Mid-Size Passenger+Cargo Volume I l0 to I l9 cu.ft.a8 MSRP s36,620 $29,t75 Manufacturer's Suggested Retail Price CARB EV Rebate $2,500 NA California Air Resource Board ae 201 8-2019 San Mateo County Civil Grand Jury ll Table 2 (continued) 2019 Chevrolet Bolt EV 20 I 9 Toyota XLE Comments s0 Pacific Gas & Electric Company, ,,pG&E - peninsula Clean Energy Joint Rate Comparisons" , "Find and Compare Cars" , "Compare Side-by-Side" Electric and Gas PoweredVehicles in Canada", September 20 l8 ehicles in canada.odf 57 California Department of Tax and Fee Administration, "California Sales and Use Tax Rates by County and Cify,., |n11t t, 20 I 9. hnps ://www. cdtfa. ca. gov/formspubs/cdtfa95.pdf s8 Charles Krome, "Car Depreciation: How tuucn vatue Will u N.* Car Lose?", Carfax, November g,2llg. https;//www. carfax. com/b loe/car-deprec iations Depreciation is an important factor in this analysis as is it difficult to predict the demand for used cars in thefuture. See Edmunds, "Edmunds Report Reveals a Car With 100,000 Miles ts More Valuable Than ShoppersThink", November 13,2017 . httPs://www.edmuqds.com/about/press/edmunds-report-reveals-a-car-with- i00000- m i les-is-more-valuable-than-shoppers-th ink.htm I Parameters con Electricity Cost ($/kWh)$0.1 8 NA E-I9 SV Rate from PCE. 100% ECOso Electricity Use (kWh/mile)0.28 NA EPA Efficiency Ratingsl Gasoline Cost ($/gal)NA $3.95 AAA, CA avg. for May 2019s2 Miles per Gallon (MPG)NA 34 EPA Ratingsl Maint. Cost per Mile s0.0599 $0.0575 Exponential cost curve based on MSRP of $37 and a base rate of $0.06/mi5a Insurance Cost per Year $ l,728 $ r,658 Exponential cost curve based on MSRp of $3 7,000 and a base rate of $ I .73 I EV Maint. Cost Reduction 47%NA 2o Institute Number of Years 5 5 Assumed for analysis Miles Driven Year 20.000 Assumed for Sales Tax 8.75%8.75%San Mateo Resale Value 100,000 mi 40%40%carFax5E.se 2018-2019 San Mareo County CivilGrand Jury l2 FINDINGS Fl. As of December 2018, eleven of the twenty cities in San Mateo County have no electric vehicles in their government fleets. These are:o Atherton o Belmont . Colma . Daly City o East Palo Alto . Half Moon Bay o Hillsborough o San Bruno o San Carlos o South San Francisco o Woodside F2. As of December 2018, in two of the twenty cities in San Mateo County approximately one percent of the city fleet are electric vehicles. These are:o Burlingame o Foster City F3. As of December 201 8, in three of the twenty cities in San Mateo County approximately three percent of the city fleet are electric vehicles. These are:o Pacifica o Redwood City . San Mateo F4.As of December 201 8, in the City of Millbrae approximately seven percent of the city fleet is electric vehicles. F5. As of December 2018, in two of the twenty cities in San Mateo County approximately ten percent of the city fleet are electric vehicles. These are:o Brisbane o Menlo Park F6. As of December 2018, the Town of Portola Valley has converted two of its six city vehicles to electric vehicles, or approximately 33 percent. F7. San Mateo County has 709 fleet vehicles. Of those,2l8 are Enhanced AT pZEVs and two are ZEYs (approximately 3l percent). 2018-2019 San Mateo County Civil Grand Jury l3 F8. The County and eleven of the cities in the county have Climate Action Plans that discuss adoption of sustainable purchasing policies for converting their fleets to fuel efficient vehicles (hybrid, electric, altemative fuel). The cities are:o Atherton o Belmont o Brisbane o Burlingame o East Palo Altoo Foster City o Menlo Park o Pacifica o Redwood City . San Carlos . San Mateo San Mateo Office of Sustainability released a "Green Municipal Fleet Toolkit" in March of 2019. The purpose of this Toolkit is to assist jurisdictions on how to reduce greenhouse gas emissions from their municipal fleets. F10. The San Mateo County Office of Sustainability technical support pilot program for municipal fleets, which is funded to assist up to four cities in converting their fleets to ZEYs, runs through December 2019. Fl l. The Climate Mayors EV Purchasing Collaborative is available to assist the cities and the County in conversion of fleet vehicles to ZEVs through aggregate purchasing. RECOMMENDATIONS F9 RI R2. By March 31,2020, the County of San Mateo and each city within the county should conduct a review of its government fleet procurement policy relating to electric vehicles and present a report at a public meeting. At a minimum, the review should be based on an analysis that includes up-to-date life-cycle costs of commercially available electric vehicles and an up-to-date assessment of whether electric vehicles can meet the performance needs of local jurisdictions for power, range, battery life, and other relevant fictors. If an agency has completed such a review within the last three years, then such review should be presented to its governing body at a public meeting on or before Decembe r 31,2019. By March 31,2020, the County of San Mateo and each city within the county should conduct an analysis of the obstacles, if any, to the implementation of an EV govemment fleet procurement policy and present a report at a public meeting. This could include, for example, the availability of electric vehicle charging stations to serve the vehicle fleet and training of vehicle maintenance staff. If an agency has completed such an analysis within the last three years, then such analysis should be presented to its governing body at a public meeting on or before December 31,2019. 2018-2019 San Mateo Counry CivilGrand Jury l4 R3. By September 30, 2019, the County of San Mateo Department of Public Works and each city within the county should review the "Roadmap for Municipal Green Fleets,'toolkit from the San Mateo County Office of Sustainability, includingihe information on thepossibility of adopting an EV First policy. R4. By September 30, 2019, the County of San Mateo and each city within the county, if they have not already_initiated such a process. should investigate joining the Climate Muyo.r' EV Purchasing collaborative to take advantage of aggregate purchising. REQUEST FOR RESPONSES Pursuant to penal Code section 933.05, the Grand Jury requests responses from the City Councilsof the following cities in San Mateo County: o Atherton, Belmont, Brisbane, Burlingame, Colma, Daly City, East palo Alto, Foster City,Half Moon Bay, Hillsborough, Menlo Park, Millbrae, Pacifica, Portola Valley, Redwoodcity, San Bruno, San carlos, san Mateo, South San Francisco, woodside. o The San Mateo County Board of Supervisors The governing bodies indicated above should be aware that the comment or response of thegoverning body must be conducted subject to the notice, agenda, and open ,..iing requirements of the Brown Act. METHODOLOGY The Grand Jury sent a survey/questionnaire to all the cities in San Mateo County. The same survey was sent to the County The Grand Jury interviewed representatives from The Office of Sustainability, C/CAG. The County Department of Public Works and non- profit electric vehicles orlanizations. The Grand Jury attended city sponsored Electric Vehicle Workshops, the Sustainable SanMateo County Indicators forum, a seminar on The Future of Transportation: Clean Energy & Transformation presented by Peninsula Family Service thougfrt Leader Series, and the San Francisco Global Climate Change Summit. The Grand Jury conducted research using over forty-five internet sites and newspaper articles pertaining to electric vehicles, government agencies dealing with electric vehicles and greenhouse gas reduction in the transportation ,..tor. a a a a 2018-2019 San Mateo County Civil Grand Jury l5 BIBLIOGRAPHY General References AAA, "Gas Prices", Accessed June 8,20lg,https://qasprices.aaa.com/state-qas-price- averages/ a a a a Acterra, "GoEV! 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Plan?bidld: (last viewed February 23,2019) City of Menlo Park, Climate Action Plan Update and Status Report, 2009 eL.pdf (last viewed May 30,2019) a 2018-2019 San Mateo County Civil Grand Jury 2t o a o City of Pacifica, Climate Action Plan, July 14,2014 http:/hwvw.cityofpacifica.org/civicax/filebank/blobdload.aspx?blobid:7490 (last viewed September 16,2018) City of San Carlos, Climate Action Plan, Octob er 12,2009 https://lwvw.cityofsancarlos.org/government/departments/city-manaqer-s-office- communications/responsible-environment/climate-action-plan (last viewed September 16,2018) City of San Mateo, Climate Action Plan, April 2015. a a Adopted?bidld (last viewed February 24,2019) City of Redwood City Community Climate Action Plan (no date). https://www.ca- il e. or g/sites/main/fi les/fi le-attachments/redwood_city- comrnunitv cli action olan.odf (last viewed June 2,2019) City of South San Francisco, Climate Action Plan, prepared by PMC, adopted February 13, 201 4 http ://www.ssf.net/home/showdocument?id:5 640 (last viewed September I 6, 201 8) Town of Woodside, Climate Action Plan, September22.20l5 https:/hwvw.woodsidetown.org/sites/default/files/fileattachments/planning/paee/4631/to wn olwoodside---;frnal-climate_actionJlan.pdf (last viewed February 24,2019) County of San Mateo, Energy Efficiency Climate Action Plan, June 2013. https:/hwvw.smcsustainability.ors/download/climate-change/Ener$/-Efficiencl/-Climate- Action-Plan.pdf (last viewed February 24,2019) a a 2018-2019 San Mateo County Civil Grand Jury 22 APPENDIXA CivilGrand Jury Survey The following is the text of the survey that was sent to the County and each of the cities. [Name of addressee] [Address] Re: Request for documents from San Mateo County 2018-19 Civil Grand Jury Dear In connection with an investigation being conducted by the San Mateo County 201 8- 19 Civil Grand Jury, we are interested in responses to the following questions: The number of Electric Vehicle charging stations your municipality has installed for government use The number of EV charging stations your city has installed for public use The number of vehicles in your cities fleet How many of those vehicles are electric? Does your city have a Climate Action Plan? If so does that plan include the reduction of Green House Gas emissions through eliminating fossil fuel driven vehicles and adopting the use of Electric vehicles for government employees? We would appreciate it if you could provide your answers to us within the next seven days. If any of the requests are unclear, or unduly burdensome to respond to, or if you need additional time to gather responsive documents, please let me know and we will be happy to clarify and/or work with you to make the request more manageable. As you may be aware, under California law, all matters relating to the Grand Jury's work including the nature or subject of any inquiries it makes and its requests for documents, are to be treated as confidential by you and not disclosed except as directed by a court of law. You are, of course, free to engage the assistance of other personnel in your office to gather information responsive to our requests, but we ask that, except to the extent absolutely necessary, you not disclose this letter or the fact that the documents are being gathered in response to a Grand Jury request. Any violation of your statutory confidentiality obligation is punishable as contempt of court. Thank you so much for your help. Very Truly Yours, Issued: August L2,20L9 2018-2019 San Mateo CoLrnty CivilCrand Jury 23 1 STAFF REPORT AGENDA NO: 8d MEETING DATE: October 21, 2019 To: Honorable Mayor and City Council Date: October 21, 2019 From: Syed Murtuza, Director of Public Works – (650) 558-7230 Subject: Adoption of a Resolution Awarding a Construction Contract to J.J.R. Construction, Inc. in the Amount of $786,698 for the 2019 Sidewalk Repair Program, City Project No. 85520 RECOMMENDATION Staff recommends that the City Council adopt the attached resolution awarding a construction contract to J.J.R. Construction, Inc. for the 2019 Sidewalk Repair Program in the amount of $786,698 and authorizing the City Manager to execute the construction contract. BACKGROUND On March 5, 2018, the City Council adopted Ordinance No. 2018-1949 to update Chapter 12.12 “Sidewalk and Parkway Maintenance.” The updated municipal code reversed the previous 50/50 sidewalk repair program, in which the affected property owners were required to contribute 50% of the sidewalk repair costs, and the City would contribute the remaining 50% of the costs. This year’s program will concentrate in two areas for sidewalk repairs. The first area is enclosed by Burlingame Avenue, Rollins Road, Oak Grove Avenue, Edgehill Drive, and El Camino Real. The second area is enclosed by Adeline Drive, Alvarado Avenue, Hillside Drive and El Camino Real. Please see the attached Project Location Map for more details. DISCUSSION The project was advertised for bids on September 10, 2019, and the bids were opened on October 1, 2019. The City received three bids ranging from $786,698 to $2,052,370. The apparent low bidder was J.J.R. Construction, Inc. J.J.R. Construction, Inc. submitted the lowest responsible bid in the amount of $786,698, which is 21.3% lower than the engineer’s estimate of $999,850. J.J.R. Construction, Inc. has met the project requirements and has successfully completed similar projects for other agencies. As a result, staff recommends Council award the contract to J.J.R. Construction, Inc. Due to favorable pricing, staff requests authorization to issue contract change orders up to 25% of the contract amount to perform additional sidewalk repairs, install curb and gutters, and install ADA (Americans with Disability Act) curb ramps. Award of Construction Contract for the 2019 Sidewalk Repair Program October 21, 2019 2 FISCAL IMPACT Estimated Project Expenditures: The following are the estimated project construction expenditures: Construction $ 786,698 Construction Contingency (25%) $ 196,674 Engineering Administration $ 78,628 Total $1,062,000 Funding Availability: The Project is funded by a combination of revenues from Measure I and General Fund. There are adequate funds available in the Capital Improvement Program for sidewalk, curb ramps, and curb and gutter to complete the project. Exhibits:  Resolution  Bid summary  Construction contract agreement  Project location map RESOLUTION NO. _______ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME AWARDING A CONSTRUCTION CONTRACT TO J.J.R. CONSTRUCTION, INC. IN THE AMOUNT OF $786,698 FOR THE 2019 SIDEWALK REPAIR PROGRAM, AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE CONSTRUCTION CONTRACT CITY PROJECT NO. 85520 WHEREAS, on September 10, 2019, the City issued a notice inviting bid proposals for the 2019 Sidewalk Repair Program, City Project No. 85520 and WHEREAS, on October 1, 2019, all proposals were received and opened before representatives of the City Clerk and Public Works Department; and WHEREAS, J.J.R. Construction, Inc., submitted the lowest responsible bid for the job in the amount of $786,698. NOW, THEREFORE, be it RESOLVED, and ORDERED, that: 1. The Plans and Specifications, including all addenda, are approved and adopted; and 2. The bid of J.J.R. Construction, Inc. for the 2019 Sidewalk Repair Program, City Project No. 85520, in the amount of $786,698 is accepted; and 3. Due to favorable pricing, contract change orders up to 25% of the contract are approved in order to perform additional sidewalk repairs, install curb and gutters, and install curb ramps; and 4. A contract be entered into between the successful bidder and the City of Burlingame for the performance of the work, and that the City Manager is authorized on behalf of the City of Burlingame to execute the contract and to approve the faithful performance bond and the labor materials bond required to be furnished by the contractor. ____________________ Mayor I, Meaghan Hassel Shearer, City Clerk of the City of Burlingame, certify that the foregoing Resolution was introduced at a regular meeting of the City Council held on the 21st day of October, 2019, and was adopted thereafter by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ____________________ City Clerk S:\A PUBLIC WORKS DIRECTORY\PROJECTS\8027\Bidsummary.xls 10/1/2019, 3:23 PM PAGE 1 OF 1 UNIT AREA UNIT ENGINEER'S UNIT BID UNIT BID UNIT BID UNIT BID UNIT BID UNIT BID PRICE QUANTITY SIZE ESTIMATE PRICE AMOUNT PRICE AMOUNT PRICE AMOUNT PRICE AMOUNT PRICE AMOUNT PRICE AMOUNT1REMOVE AND REPLACE SIDEWALK $16.00 29,000 S. F.$464,000.00 $13.38 $388,020.00 $16.00 $464,000.00 $16.85 $488,650.00 $16.75 $485,750.00 $19.66 $570,140.00 $40.00 $1,160,000.00 2 REMOVE AND REPLACE DRIVEWAY $20.00 3,500 S. F.$70,000.00 $20.29 $71,015.00 $16.50 $57,750.00 $19.00 $66,500.00 $17.00 $59,500.00 $22.12 $77,420.00 $45.00 $157,500.00 3 REMOVE AND REPLACE CURB AND GUTTER $70.00 2,000 L. F.$140,000.00 $50.81 $101,620.00 $65.00 $130,000.00 $63.00 $126,000.00 $78.00 $156,000.00 $102.34 $204,680.00 $70.00 $140,000.00 4 REMOVE AND REPLACE CURB $40.00 100 L. F.$4,000.00 $32.78 $3,278.00 $50.00 $5,000.00 $48.00 $4,800.00 $55.00 $5,500.00 $60.95 $6,095.00 $90.00 $9,000.00 5 CROSS GUTTER $40.00 1,000 S. F.$40,000.00 $27.32 $27,320.00 $28.00 $28,000.00 $20.00 $20,000.00 $18.00 $18,000.00 $22.90 $22,900.00 $50.00 $50,000.00 6 CONSTRUCT CURB RAMP $5,000.00 20 EACH $100,000.00 $3,550.00 $71,000.00 $4,500.00 $90,000.00 $4,800.00 $96,000.00 $3,000.00 $60,000.00 $3,807.65 $76,153.00 $9,100.00 $182,000.007INSTALL DETECTABLE WARNING SURFACE ON EXISTING RAMP $750.00 20 EACH $15,000.00 $375.00 $7,500.00 $500.00 $10,000.00 $650.00 $13,000.00 $1,500.00 $30,000.00 $1,562.28 $31,245.60 $800.00 $16,000.00 8 REMOVE SIDEWALK AND REPLACE WITH TOP SOIL $10.00 1,000 S.F.$10,000.00 $9.75 $9,750.00 $5.00 $5,000.00 $9.00 $9,000.00 $8.00 $8,000.00 $8.74 $8,740.00 $30.00 $30,000.00 9 AGGREGATE BASE $150.00 25 TONS $3,750.00 $155.00 $3,875.00 $185.00 $4,625.00 $175.00 $4,375.00 $80.00 $2,000.00 $63.25 $1,581.25 $100.00 $2,500.00 10 REMOVE ASPHALT CONCRETE AND CONCRETE BASE $10.00 2,500 S. F.$25,000.00 $7.80 $19,500.00 $6.00 $15,000.00 $6.00 $15,000.00 $5.50 $13,750.00 $16.56 $41,400.00 $28.00 $70,000.00 11 REMOVE ASPHALT CONCRETE ONLY $10.00 1,000 S.F.$10,000.00 $7.80 $7,800.00 $6.00 $6,000.00 $3.50 $3,500.00 $2.00 $2,000.00 $10.58 $10,580.00 $17.00 $17,000.0012NEW ASPHALT CONCRETE SURFACING $500.00 120 TONS $60,000.00 $311.00 $37,320.00 $320.00 $38,400.00 $320.00 $38,400.00 $250.00 $30,000.00 $1,609.86 $193,183.20 $1,011.00 $121,320.0013REPAIR IRRIGATION SYSTEM $3,000.00 1 L.S.$3,000.00 $8,050.00 $8,050.00 $5,000.00 $5,000.00 $4,001.00 $4,001.00 $1,500.00 $1,500.00 $5,750.00 $5,750.00 $21,350.00 $21,350.0014REMOVE TREE AND GRIND STUMP (≤24" DIAMETER)$3,000.00 2 EACH $6,000.00 $2,000.00 $4,000.00 $1,500.00 $3,000.00 $800.00 $1,600.00 $2,100.00 $4,200.00 $4,600.00 $9,200.00 $5,000.00 $10,000.00 15 REMOVE TREE AND GRIND STUMP (>24" DIAMETER)$4,500.00 10 EACH $45,000.00 $2,500.00 $25,000.00 $2,500.00 $25,000.00 $1,300.00 $13,000.00 $4,200.00 $42,000.00 $12,200.00 $122,000.00 $5,500.00 $55,000.0016NEW SEWER CLEAN-OUT FRAME AND COVER $500.00 1 EACH $500.00 $250.00 $250.00 $250.00 $250.00 $275.00 $275.00 $2,000.00 $2,000.00 $402.50 $402.50 $5,640.00 $5,640.00 17 REPAIR / REPLACE WATERLINE (10' MAX.)$2,000.00 1 EACH $2,000.00 $500.00 $500.00 $500.00 $500.00 $2,200.00 $2,200.00 $5,000.00 $5,000.00 $2,760.00 $2,760.00 $2,620.00 $2,620.0018ADJUST MANHOLES TO GRADE $1,000.00 1 EACH $1,000.00 $500.00 $500.00 $500.00 $500.00 $850.00 $850.00 $350.00 $350.00 $3,680.00 $3,680.00 $940.00 $940.0019SIGN POST $300.00 1 EACH $300.00 $200.00 $200.00 $250.00 $250.00 $315.00 $315.00 $350.00 $350.00 $3,680.00 $3,680.00 $750.00 $750.0020NEW PARKING METER POSTS $300.00 1 EACH $300.00 $200.00 $200.00 $250.00 $250.00 $315.00 $315.00 $1,000.00 $1,000.00 $1,840.00 $1,840.00 $750.00 $750.00 TOTAL=$999,850.00 TOTAL:$786,698.00 TOTAL:$888,525.00 TOTAL:$907,781.00 TOTAL:$926,900.00 TOTAL:$1,393,430.55 TOTAL:$2,052,370.00 Golden Bay Construction, Inc.R&S Construction Management Inc.Bastion Construction Services Inc.FBD Vanguard Construction, Inc. ITEMNO.ITEM DESCRIPTION CITY OF BURLINGAME 2019 SIDEWALK MAINTENANCE PROGRAM CITY PROJECT NO. 85520 ENGINEER'S ESTIMATE J.J.R Construction, Inc.Spencon Construction, Inc. AGREEMENT - 1 AGREEMENT FOR PUBLIC IMPROVEMENT 2019 SIDEWALK REPAIR PROGRAM CITY PROJECT NO. 85520 THIS AGREEMENT, made in duplicate and entered into in the City of Burlingame, County of San Mateo, State of California on , 2019 by and between the CITY OF BURLINGAME, a Municipal Corporation, hereinafter called "City", and J.J.R Construction, Inc., a California Corporation, hereinafter called "Contractor." WITNESSETH: WHEREAS, City has taken appropriate proceedings to authorize construction of the public work and improvements herein provided for and to authorize execution of this Contract; and WHEREAS, pursuant to State law and City requirements, a notice was duly published for bids for the contract for the improvement hereinafter described; and WHEREAS, on October 21, 2019, after notice duly given, the City Council of Burlingame awarded the contract for the construction of the improvements hereinafter described to Contractor, which the Council found to be the lowest responsive, responsible bidder for these improvements; and WHEREAS, City and Contractor desire to enter into this Agreement for the construction of said improvements. NOW, THEREFORE, IT IS AGREED by the parties hereto as follows: 1. Scope of work. Contractor shall perform the work described in those Contract Documents entitled: 2019 SIDWALK REPAIR PROGRAM, CITY PROJECT NO. 85520. 2. The Contract Documents. The complete contract between City and Contractor consists of the following documents: this Agreement; Notice Inviting Sealed Bids, attached hereto as Exhibit A; the accepted Bid Proposal, attached hereto as Exhibit B; the specifications, provisions, addenda, complete plans, profiles, and detailed drawings contained in the bid documents titled “2019 Sidewalk Repair Program, City Project No. 85520” attached as Exhibit C; the State of California Standard Specifications 2010, as promulgated by the California AGREEMENT - 2 Department of Transportation; prevailing wage rates of the State of California applicable to this project by State law; and all bonds; which are collectively hereinafter referred to as the Contract Documents. All rights and obligations of City and Contractor are fully set forth and described in the Contract Documents, which are hereby incorporated as if fully set forth herein. All of the above described documents are intended to cooperate so that any work called for in one, and not mentioned in the other, or vice versa, is to be executed the same as if mentioned in all said documents. 3. Contract Price. The City shall pay, and the Contractor shall accept, in full, payment of the work above agreed to be done, the sum of seven hundred, eighty-six thousand, six-hundred and ninety-eight dollars ($786,698), called the “Contract Price”. This price is determined by the lump sum and unit prices contained in Contractor's Bid. In the event authorized work is performed or materials furnished in addition to those set forth in Contractor's Bid and the Specifications, such work and materials will be paid for at the unit prices therein contained. Said amount shall be paid in progress payments as provided in the Contract Documents. 4. Termination At any time and with or without cause, the City may suspend the work or any portion of the work for a period of not more than 90 consecutive calendar days by notice in writing to Contractor that will fix the date on which work will be resumed. Contractor will be granted an adjustment to the Contract Price or an extension of the Time for Completion, or both, directly attributable to any such suspension if Contractor makes a claim therefor was provided in the Contract Documents. The occurrence of any one or more of the following events will justify termination of the contract by the City for cause: (1) Contractor’s persistent failure to perform the work in accordance with the Contract Documents; (2) Contractor’s disregard of Laws or Regulations of any public body having jurisdiction; (3) Contractor’s disregard of the authority of the Engineer; or (4) Contractor’s violation in any substantial way of any provision of the Contract Documents. In the case of any one or more of these events, the City, after giving Contractor and Contractor’s sureties seven calendar days written notice of the intent to terminate Contractor’s services, may initiate termination procedures. Such termination will not affect any rights or remedies of City against Contractor then existing or that accrue thereafter. Any retention or payment of moneys due Contractor will not release Contractor from liability. At the City’s sole discretion, Contractor’s services may AGREEMENT - 3 not be terminated if Contractor begins, within seven calendar days of receipt of such notice of intent to terminate, to correct its failure to perform and proceeds diligently to cure such failure within no more than 30 calendar days of such notice. Upon seven calendar days written notice to Contractor, City may, without cause and without prejudice to any other right or remedy of City, terminate the Contract for City’s convenience. In such case, Contractor will be paid for (1) work satisfactorily completed prior the effective date of such termination, (2) furnishing of labor, equipment, and materials in accordance with the Contract Documents in connection with uncompleted work, (3) reasonable expenses directly attributable to termination, and (4) fair and reasonable compensation for associated overhead and profit. No payment will be made on account of loss of anticipated profits or revenue or other economic loss arising out of or resulting from such termination. 5. Provisions Cumulative. The provisions of this Agreement are cumulative and in addition to and not in limitation of any other rights or remedies available to the City. 6. Notices. All notices shall be in writing and delivered in person or transmitted by certified mail, postage prepaid. Notices required to be given to the City shall be addressed as follows: Martin Quan Senior Engineer City of Burlingame 501 Primrose Road Burlingame, California 94010 Notices required to be given to Contractor shall be addressed as follows: Carlos Raposo Principal J.J.R Construction, Inc. 1120 North Avenue San Mateo, CA 94402 7. Interpretation As used herein, any gender includes the other gender and the singular includes the plural and vice versa. AGREEMENT - 4 8. Waiver or Amendment. No modification, waiver, mutual termination, or amendment of this Agreement is effective unless made in writing and signed by the City and the Contractor. One or more waivers of any term, condition, or other provision of this Agreement by either party shall not be construed as a waiver of a subsequent breach of the same or any other provision. 9. Controlling Law. This Agreement is to be governed by and interpreted in accordance with the laws of the State of California. 10. Successors and Assignees. This Agreement is to be binding on the heirs, successors, and assigns of the parties hereto but may not be assigned by either party without first obtaining the written consent of the other party. 11. Severability. If any term or provision of this Agreement is deemed invalid, void, or unenforceable by any court of lawful jurisdiction, the remaining terms and provisions of the Agreement shall not be affected thereby and shall remain in full force and effect. 12. Indemnification. Contractor shall indemnify, defend, and hold the City, its directors, officers, employees, agents, and volunteers harmless from and against any and all liability, claims, suits, actions, damages, and causes of action arising out of, pertaining or relating to the actual or alleged negligence, recklessness or willful misconduct of Contractor, its employees, subcontractors, or agents, or on account of the performance or character of the services, except for any such claim arising out of the sole negligence or willful misconduct of the City, its officers, employees, agents, or volunteers. It is understood that the duty of Contractor to indemnify and hold harmless includes the duty to defend as set forth in section 2778 of the California Civil Code. Notwithstanding the foregoing, for any design professional services, the duty to defend and indemnify City shall be limited to that allowed by state law. Acceptance of insurance certificates and endorsements required under this Agreement does not relieve Contractor from liability under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply whether or not such insurance policies shall have been determined to be applicable to any of such damages or claims for damages. AGREEMENT - 5 IN WITNESS WHEREOF, two identical counterparts of this Agreement, consisting of five pages, including this page, each of which counterparts shall for all purposes be deemed an original of this Agreement, have been duly executed by the parties hereinabove named on the day and year first hereinabove written. CITY OF BURLINGAME, a Municipal Corporation By Lisa K. Goldman, City Manager Approved as to form: Kathleen Kane, City Attorney ATTEST: Meaghan Hassel-Shearer, City Clerk "CONTRACTOR" By Print Name: J.J.R. Construction, Inc. 1 STAFF REPORT AGENDA NO: 8e MEETING DATE: October 21, 2019 To: Honorable Mayor and City Council Date: October 21, 2019 From: Syed Murtuza, Director of Public Works – (650) 558-7230 Subject: Adoption of a Resolution Approving the Vesting Tentative and Final Parcel Map (PM 18-08), Lot Merger of Parcels D and E, Block 6, Map of Millsdale Industrial Park No. 3 at One and 45 Adrian Court RECOMMENDATION Staff recommends that the City Council adopt the attached resolution approving the vesting tentative and final parcel map (PM 18-08) for the lot merger of parcels D and E, Block 6, Map of Millsdale Industrial Park No. 3 Subdivision, subject to the following conditions: 1. A final parcel map for the lot combination must be filed by the applicant within the two-year time period as allowed by the Subdivision Map Act and the City’s Subdivision Ordinance. 2. All property corners shall be set in the field and be shown on the map. 3. The final map shall show the widths of the right-of-way for Adrian Court and Adrian Road including the centerlines of right-of-way, bearings, and distances of centerline and any existing monuments in the roadway. 4. Project shall dedicate public park and public pedestrian access easements for the use and benefit of general public. Public park shall be constructed by the development. The ownership and maintenance of the public park and public pedestrian easement areas shall be the responsibility of the Project. 5. All frontage sidewalks, driveways, and curb and gutter within in the public right-of-way shall be replaced with new improvements. 6. All approved streetlight improvements must be installed. 7. No raised structures and private improvements shall be constructed in the public right-of-way. 8. Permanent stormwater treatment measures and maintenance agreements are required for each parcel. Agreements shall be recorded with the County prior to building permit sign-off. Adoption of a Resolution Approving the Vesting Tentative and Final Parcel Map October 21, 2019 (PM18-08) 1 and 45 Adrian Court 2 BACKGROUND The project consists of construction of a new seven-story, 265-unit mixed-use development at One and 45 Adrian Court. On September 23, 2019, the Planning Commission reviewed and approved the vesting tentative parcel map. Staff has reviewed the map and recommends its approval subject to the above conditions. Exhibits:  Resolution  Final Parcel Map  September 23, 2019 Planning Commission Minutes RESOLUTION NO. _______ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME APPROVING THE VESTING TENTATIVE AND FINAL PARCEL MAP (PM 18-08), LOT MERGER OF PARCELS D AND E, BLOCK 6, MAP OF MILLSDALE INDUSTRIAL PARK NO. 3 AT 1 AND 45 ADRIAN COURT The City Council of the City of Burlingame resolves as follows: WHEREAS, on September 23, 2019, the vesting tentative parcel map for the property described in this resolution’s title was approved by the Planning Commission; and WHEREAS, City staff recommends City Council approve the parcel map with the following conditions: 1. A final parcel map for the lot combination must be filed by the applicant within the two-year time period as allowed by the Subdivision Map Act and the City’s Subdivision Ordinance. 2. All property corners shall be set in the field and be shown on the map. 3. The final map shall show the widths of the right-of-way for Adrian Court and Adrian Road including the centerlines of right-of-way, bearings, and distances of centerline and any existing monuments in the roadway. 4. Project shall dedicate public park and public pedestrian access easements for the benefit of general public. Public park shall be constructed by the development. The ownership and maintenance of the public park and public pedestrian easement areas shall remain with the development. 5. All frontage sidewalks, driveways, and curb and gutter within in the public right -of- way shall be replaced with new improvements. 6. All approved streetlight improvements must be installed. 7. No raised structures shall be constructed in the public right-of-way. 8. Permanent stormwater treatment measures and maintenance agreements are required for each parcel. Agreements shall be recorded with the County prior to building permit sign-off. NOW, THEREFORE BE IT RESOLVED, DETERMINED AND ORDERED BY THE COUNCIL, AS FOLLOWS: 1. The Final Parcel Map (PM 18-08) with the conditions described above is approved. 2. Staff is directed to verify that all conditions of approval are met and arrange for the recording of the tentative and final parcel map. __________________________ Donna Colson, Mayor I, MEAGHAN HASSEL-SHEARER, City Clerk of the City of Burlingame, certify that the foregoing Resolution was introduced at a regular meeting of the City Council held on the 21st day of October, 2019, and was adopted thereafter by the following vote: AYES: Councilmembers: NOES: Councilmembers: ABSENT: Councilmembers: __________________________ Meaghan Hassel-Shearer, City Clerk ES//P05/01/2019 ES//P ES//P BURLINGAME CITY HALL 501 PRIMROSE ROAD BURLINGAME, CA 94010 City of Burlingame Meeting Minutes Planning Commission 7:00 PM Council ChambersMonday, September 23, 2019 d.1 & 45 Adrian Court, zoned RRMU - Application for Design Review, Density Bonus, Approval of Community Benefit Bonuses, and Vesting Tentative Parcel Map for lot combination for a new seven -story, 265-unit mixed-use development. The project is Categorically Exempt from review pursuant to the California Environmental Quality Act (CEQA), per Section 15332 of the CEQA Guidelines (Infill Exemption). (SummerHill Apartment Communities, applicant; Seidel Architects, architect; Helf Investments and Nicolet Family Partners, property owners) (73 noticed) Staff Contact: Ruben Hurin All Commissioners had visited the property. Commissioner Sargent noted that he had met with the applicant. Commissioners Loftis, Terrones and Tse noted that they each had a brief email exchange with the applicant. Planning Manager Hurin provided an overview of the staff report. Questions of staff: >Who is responsible for maintaining the public amenities and maintaining their accessibility in the future? As long as the project exists, they have to remain public, but what stops them from ten years down the road saying we're going to actually incorporate this into part of our building? Are there protections in place for that? (Hurin: There will be an agreement between the applicant and the City that would address those issues and concerns.) >Are there hours of operation restrictions to the public park? (Hurin: I don't think we've gotten to that level of detail yet; we'll probably look at our City hours for parks as a consideration.) (Kane: The park also has to be available to the residents of the project, and would probably be available to them for longer hours than to the general members of the public. We want to be sensitive to the location in terms of security issues, so we're looking at that as part of the agreement that would cover it.) Acting Chair Kelly opened the public hearing. Elaine Breeze and Alex Seidel, represented the applicant. Commission Questions/Comments: >Are the 38 affordable units distributed throughout the project? (Breeze: Yes, they will be. We'll enter into an affordable housing agreement with the City. They will be equally distributed by unit type.) > The affordable units are designated at the beginning and will remain designated affordable units throughout their life, is that correct? (Breeze: Yes, we have recently worked with other cities where once the program is established, there is some flexibility, but the goal is that you always have those 38 units that comprised the same unit mix we agreed upon. They are equally distributed.) > Is there any update on what the potential uses are or potential tenants are for the commercial space or is that still to be decided? (Breeze: That is still to be decided.) > Where is the plaster smooth finish verses the plaster sand float finish going to be used? (Seidel: The white rectangles that surrounds the wood would be the smooth finish, and then the sand float finish would be used on everything else.) Page 1City of Burlingame Printed on 10/11/2019 September 23, 2019Planning Commission Meeting Minutes > On the pool deck level, is there just one barbecue area that serves that pool deck? (Breeze: There are barbecues areas in the eastern and western courtyards, as well as on the far left side off the club room.) >On your renderings you show the trees along Adrian Court are lit. Is that the plan to light the trees along the sidewalk? (Breeze: That might be a little architectural license. That is within the public right-of-way and I don't think the City will allow that. There will be street lights above and lighting on the building that will need to comply with downcast requirements; there will be lighting on the building side of the sidewalk.) >You mentioned transitioning from one type of window along the Adrian Road and Adrian Court elevations to another window type on the remaining elevations. How would you transition the windows along those elevations? (Breeze: We would wrap the windows around the unit so that nobody has two different window types; we've identified where we would want to wrap so it's properly breaking.) Public Comments: There were no public comments. Acting Chair Kelly closed the public hearing. Commission Discussion/Direction: >This is an exciting project. It has to be really satisfying for the community based on how much work went into the General Plan. Changing the zoning of this area was a leap of faith and to see it realized so quickly, I think it's really exciting. The community benefits are a great addition to this area, project is approvable. >Agree, it is a really exciting project, astounding that it happened quickly while work was continuing on the General Plan. The project is extremely well articulated and the benefits are pretty remarkable. >The one concern I had was to make sure the affordable units were not shoved up against Highway 101, happy to hear they're distributed through the project. I'm in full support of the project as well. >Agree with my fellow Commissioners and am excited about the project. I think there's been so much thought put into every aspect of the design of this project, there are so many elements where you have exceeded requirements. >Adrian Court is going to be a special place to go and visit and use, like the paseo entrance to the park. Thank you for all the care that you have taken to articulate the design of this project, can support the project. Commissioner Terrones made a motion, seconded by Commissioner Sargent, to approve the application for Design Review, Density Bonus, and Community Benefit Bonuses and recommend approval of the Vesting Tentative Parcel map to City Council. Discussion of Motion: >When we were working on what would would like to see in the new zoning for this area, we identified public amenities as being an important element; think that this project has set a good standard for future projects; in support of project. The motion carried by the following vote: Aye:Sargent, Kelly, Terrones, Tse, and Loftis5 - Absent:Comaroto, and Gaul2 - Page 2City of Burlingame Printed on 10/11/2019 1 STAFF REPORT AGENDA ITEM NO: 8f MEETING DATE: October 21, 2019 To: Honorable Mayor and City Council Date: October 21, 2019 From: Mike Matteucci, Chief of Police – (650) 777-4123 Subject Adoption of a Resolution Accepting Grant Funds from the California Department of Justice’s Tobacco Grant Program RECOMMENDATION Staff recommends that the City Council adopt the attached resolution accepting $40,566 of grant funding from the California Department of Justice’s Tobacco Grant Program and amending the Police Department’s operating budget for fiscal year 2019-2020. BACKGROUND In July of 2019, the Police Department submitted a grant application to the California Department of Justice’s Tobacco Grant Program. The grant is designed to help reduce illegal sales and marketing of cigarettes and tobacco products to minors. DISCUSSION In September of 2019, the Police Department was notified that they were approved to receive funding in the amount of $40,566. The program will concentrate on retailer compliance checks and inspections, public education campaigns, parent engagement and education, and the prevention and deterrence of tobacco use on school premises. FISCAL IMPACT This grant funds the cost of materials and officer overtime associated with conducting the above-mentioned checks, inspections, and educational campaigns. There will be no fiscal impact to the City’s General Fund, other than staff time associated with administering this grant. Exhibit:  Resolution RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME AUTHORIZING AN AMENDMENT TO THE FISCAL YEAR 2019-20 ADOPTED BUDGET TO APPROPRIATE FUNDS FROM A CALIFORNIA DEPARTMENT OF JUSTICE TOBACCO GRANT WHEREAS, the Police Department was awarded funds in the amount of $40,566 from the California Department of Justice’s Tobacco Grant; and WHEREAS, the Police Department plans to use these funds toward activities designed to reduce illegal sales and marketing of cigarettes and tobacco products to minors; and WHEREAS, the City Council has determined there is a need to accept and appropriate the $40,566 from the California Department of Justice’s Tobacco Grant toward these activities. NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF BURLINGAME RESOLVES AS FOLLOWS: The City Manager is authorized to adjust the fiscal year 2019-20 budget to include the necessary appropriations for the expenditure of the grant funds described above. ______________________________ Donna Colson, Mayor I, Meaghan Hassel-Shearer, City Clerk of the City of Burlingame, certify that the foregoing resolution was adopted at a regular meeting of the City Council held on the 21st day of October, 2019, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ______________________________ Meaghan Hassel-Shearer, City Clerk 1 STAFF REPORT AGENDA ITEM NO: 8g MEETING DATE: October 21, 2019 To: Honorable Mayor and City Council Date: October 21, 2019 From: Mike Matteucci, Chief of Police – (650) 777-4123 Subject Adoption of a Resolution Accepting Grant Funds from the California Office of Traffic Safety (OTS) RECOMMENDATION Staff recommends that the City Council adopt the attached resolution accepting $40,000 of grant funding from the California Office of Traffic Safety and amending the Police Department’s operating budget for fiscal year 2019-2020. BACKGROUND In January of 2019, the Police Department submitted a grant application to the California Office of Traffic Safety. The grant is designed to reduce the number of persons killed and injured in crashes involving alcohol and other primary collision factors. DISCUSSION In September of 2019, the Police Department was notified that they were approved to receive funding in the amount of $40,000. Through saturation patrols and other enforcement operations, the program will concentrate on drunk and drugged driving, speed, distracted driving, seat belt use, intersections with disproportionate numbers of traffic-related crashes, and special operations that encourage traffic safety. These endeavors will help to increase traffic safety through heightened public awareness a nd increase traffic enforcement. In addition, the Police Department will participate in National Distracted Driving Awareness Month in April of 2020, and the Statewide Click It or Ticket mobilization in May of 2020. The Police Department’s Traffic Bureau will also facilitate training of officers in the areas of Standard Field Sobriety Testing, Advanced Roadside Impaired Driving Enforcement, and Drug Recognition. California Office of Traffic Safety Grant October 21, 2019 2 FISCAL IMPACT This grant funds the overtime costs associated with conducting the above -mentioned deployments and the costs associated with the above -mentioned training. There will be no fiscal impact to the City’s General Fund, other than staff time associated with administering this grant. Exhibit:  Resolution RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME AUTHORIZING AN AMENDMENT TO THE FISCAL YEAR 2019-20 ADOPTED BUDGET TO APPROPRIATE FUNDS FROM A CALIFORNIA OFFICE OF TRAFFIC SAFETY (OTS) GRANT WHEREAS, the Police Department was awarded funds in the amount of $40,000 from the California Office of Traffic Safety Grant; and WHEREAS, the Police Department plans to use these funds toward activities designed to reduce the number of persons killed and injured in crashes involving alcohol and other primary collision factors; and WHEREAS, the City Council has determined there is a need to accept and appropriate the $40,000 from the California Office of Traffic Safety Grant toward these activities. NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF BURLINGAME RESOLVES AS FOLLOWS: The City Manager is authorized to adjust the fiscal year 2019-20 budget to include the necessary appropriations for the expenditure of the grant funds. ________________________________ Donna Colson, Mayor I, Meaghan Hassel-Shearer, City Clerk of the City of Burlingame, certify that the foregoing Resolution was adopted at a regular meeting of the City Council held on the 21st day of October, 2019, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: _________________________________ Meaghan Hassel-Shearer, City Clerk 1 STAFF REPORT AGENDA ITEM NO: 8h MEETING DATE: October 21, 2019 To: Honorable Mayor and City Council Date: October 21, 2019 From: Mike Matteucci, Chief of Police – (650) 777-4123 Subject Adoption of a Resolution Accepting Grant Funds from the U.S Department of Justice’s Bulletproof Vest Partnership RECOMMENDATION Staff recommends that the City Council adopt the attached resolution accepting $3,528.56 of grant funding from the U.S. Department of Justice’s Bulletproof Vest Partnership and amending the Police Department’s operating budget for fiscal year 2019-2020. BACKGROUND In July of 2019, the Police Department submitted a grant application to the U.S. Department of Justice’s Bulletproof Vest Partnership. The grant, created by the Bulletproof Vest Partnership Grant Act of 1998, is designed to help provide bulletproof vests (a critical resource) to state and local law enforcement. DISCUSSION In September of 2019, the Police Department was notified that they were approved to receive funding in the amount of $3,528.56. The program reimburses half the cost of a bulletproof vest for new officers and/or officers whose vests have reached or exceeded their serviceable life. This funding will supplement the purchase of ten bulletproof vests. FISCAL IMPACT This grant will save approximately $3,528.56 from the City’s General Fund, which would otherwise have been used to purchase bulletproof vests for the City’s police officers. Exhibit:  Resolution RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME AUTHORIZING AN AMENDMENT TO THE FISCAL YEAR 2019-20 ADOPTED BUDGET TO APPROPRIATE FUNDS FROM A U.S. DEPARTMENT OF JUSTICE BULLETPROOF VEST PARTNERSHIP GRANT WHEREAS, the Police Department was awarded funds in the amount of $3,528.56 from the U.S. Department of Justice’s Bulletproof Vest Partnership Grant; and WHEREAS, the Police Department plans to use these funds toward the purchase of bulletproof vests for new officers and/or officers whose vests have reached or exceeded their serviceable life; and WHEREAS, the City Council has determined there is a need to accept and appropriate the $3,528.56 from the U.S. Department of Justice’s Bulletproof Vest Partnership Grant toward these purchases. NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF BURLINGAME RESOLVES AS FOLLOWS: The City Manager is authorized to adjust the fiscal year 2019-20 budget to include the necessary appropriations for the expenditure of the grant funds. ______________________________ Donna Colson, Mayor I, Meaghan Hassel-Shearer, City Clerk of the City of Burlingame, certify that the foregoing resolution was adopted at a regular meeting of the City Council held on the 21st day of October, 2019, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ______________________________ Meaghan Hassel-Shearer, City Clerk 1 STAFF REPORT AGENDA NO: 9a MEETING DATE: October 21, 2019 To: Honorable Mayor and City Council Date: October 21, 2019 From: John Kammeyer, Fire Chief (650) 558-7601 Kevin Gardiner, Community Development Director (650) 558-7253 Subject: Introduction of an Ordinance to Amend Title 17 and Title 18 of the Burlingame Municipal Code and Adoption by Reference of the 2019 California Building Standards Code and the 2018 Edition of the International Fire Code RECOMMENDATION Staff recommends that the City Council adopt revisions and amendments to Title 17 and Title 18 of the Burlingame Municipal Codes, the 2019 California Building Standards Codes, and the 2018 Edition of the International Fire Code. In its action, the Council should: A. Receive the staff report and ask any questions of staff. B. Request that the City Clerk read the title of the proposed ordinance. C. By motion, waive further reading and introduce the ordinance. D. Conduct a public hearing. E. Following the public hearing, discuss the ordinance and determine whether to bring it back for second reading and adoption. If the Council is in favor of the ordinance, direct the City Clerk to publish a summary of the ordinance at least five days before its proposed adoption. BACKGROUND In December 2018, the California Building Standards Commission (CBSC) adopted the above- referenced codes as the California Building Standards Code to be contained in Title 24 California Code of Regulations. All local jurisdictions are required by State law to adopt and to enforce the most recent codes reviewed and approved by the California Building Standards Commission. The new codes will become effective on January 1, 2020. The publication of this code was July 1, 2019, with a required enforcement date of January 1, 2020. The Central County Fire Department and the City of Burlingame Building Division shall coordinate the adoption to ensure such adoption is completed to match the effective date of enforcement with that of the State of California for January 1, 2020. Burlingame Municipal Code Amendments October 21, 2019 2 DISCUSSION Existing ordinances were researched and justified for continued enforcement. Some local ordinances have been codified by the newly adopted codes and/or minimum state regulations, while others have been removed or clarified for easier comprehensive of code requirements. The Central County Fire Department worked regionally with the Town of Hillsborough and the Cities of Millbrae and San Bruno to develop local ordinances that would streamline construction processes, provide consistency to ordinances intended to complement emergency response tactical needs, as well as promote economic development. Additionally, the Central County Fire Department and the City of Burlingame Building Division worked cooperatively to review all ordinances currently in existence and verify that they are in the best interest of the Burlingame community and based upon climatic, geological, or topographical conditions consistent with California State law. Notable Changes to Title 17 and Title 18 are attached. FISCAL IMPACT None. Exhibits:  Proposed Ordinance  Notable Changes to Title 17 – Burlingame Municipal Fire Code and Title 18 – Burlingame Building Construction Codes 1 EXHIBIT A Notable Changes to Title 17 – Burlingame Municipal Fire Code  Accessory Dwelling Unit (ADU) addressing. Clarification for applicants and designers to follow City specifications.  Exception for sprinkler installation: Canopy parking structures with a photovoltaic system. Created as an incentive to install PV systems.  Fire sprinkler design for vehicle stacking systems: Specific instruction for fire sprinkler designers in order to provide proper protection with these stacker systems.  Fire sprinkler hose connections in stairwells: Amendment to existing code to specify the connection be piped on intermediate landings instead of main landings. Safer and more efficient location for firefighting operations.  Mobile fueling operations: Amendment to existing code to include providing sufficient lighting while fueling vehicles in dark conditions. Notable Changes to Title 18 – Burlingame Building Construction Codes  Photovoltaic: Starting January 1, 2020, any new residential construction with less than three stories is mandated to have solar photovoltaic cells built. The square footage of the planned building and its number of bedrooms will determine the size of the solar system for guidance. The exemptions to the new law, namely buildings that have limited roof space, are provided.  Heating and Cooling: Duct sealing and testing: When space conditioning systems utilize forced air duct systems to supply conditioned air to an occupied space, the ducts shall be sealed, as confined through field verification and diagnostic testing, in accordance with all applicable procedures specified in Reference Residential Appendix and the leakage compliance criteria specified in Reference Residential Appendix Table RA3.1 and conforming to one of the following subsections A, B, or C as applicable. Maximum leakage of 6% allowed.  California Green Building Standards: The maximum flow rate of kitchen faucets shall not exceed 1.2 gallons per minute at 60 psi. Kitchen faucets may temporarily increase the flow above the maximum rate, but not to exceed 2.2 gallons per minute at 60 psi, and must default to a maximum flow rate of 1.5 gallons per minute at 60 psi. Note: Where complying faucets are unavailable, aerators or other means may be used to achieve flow rates. 2  HERS (Home Energy Rating System): The updated code will require HERS (Home Energy Rating System) tests for several items, including kitchen exhaust hoods, blower doors, insulation and HVAC systems.  Energy Efficiency Standards – Residential: The 2019 Code is ~ 7% more efficient than 2016. For reference, the 2016 Code was ~ 28% more efficient than the 2013 Standards, and the 2013 Code was ~ 30% more efficient than the 2010 Standards.  Energy Efficiency Standards – Nonresidential: The 2019 Code is ~ 30% more efficient than 2016. For reference, the 2016 Code was ~ 5% more efficient than the 2013 Standards.  Live/Work Units: Certain Live/Work units shall be permitted to be constructed as one- and two-family dwellings or townhouses in accordance with California Residential Code as applicable.  Tiny Houses: New requirements are provided for “tiny houses,” including minimum ceiling heights and dimensions for loft areas used for sleeping or living space.  Single Use Toilet Facilities: Single use toilet facilities and family assigned toilet facilities shall be identified with a sign indicating gender-neutral use.  Lighting Controls: Manual area controls, multi-level lighting controls, and automatic daylighting control requirements have been updated. New occupancy sensor requirements have been added for bathrooms. Automatic scheduling controls and motion sensing for outdoor lighting to reduce outdoor lighting power 50%-90%, turn the lighting off during times when not occupied, and have at least two scheduling options for each luminaire with a 2-hour override function.  EV Spaces, New Multi-Family Dwellings: 10%of the total number of parking spaces on a building site shall be EV spaces.  Car Stacking Systems: Car stacking systems will be required to include backup power to ensure ingress and egress in the event of power failure.  Shade Trees: In surface parking areas, shade trees shall be provided to shade over 50% of the parking area within 15 years. For landscape areas, shade tree planting shall be installed to provide shade of 20% of landscape within 15 years. For hardscape areas, shade trees shall be installed to provide shade of 20% of hardscape area within 15 years. 3  Stationary Storage Battery Systems: Provisions provided for stationary storage battery systems including requirements for equipment listings, installation, ventilation, and protection from impact.  2018 International Swimming Pool and Spa Code: Swimming pool enclosures and safety device requirements were removed from the 2016 California Building Code. The swimming pool and spa code provides the requirements to ensure minimum requirements for safety are being met. ORDINANCE NO.________ AN ORDINANCE OF THE CITY OF BURLINGAME AMENDING TITLE 18 OF THE BURLINGAME MUNICIPAL CODE; ADOPTING BY REFERENCE THE 2019 EDITIONS OF THE CALIFORNIA BUILDING STANDARDS CODE, CALIFORNIA CODE OF REGULATIONS, TITLE 24 (CCR-T24), STATE HOUSING LAW, THE CALIFORNIA CODE OF REGULATIONS, TITLE 25, DIVISION 1, CHAPTER 1, SUBCHAPTER 1, SECTION 32 (CCR, T-25), 2018 INTERNATIONAL SWIMMING POOL AND SPA CODE, 1997 UNIFORM ADMINISTRATIVE CODE, 1997 UNIFORM HOUSING CODE, 1997 UNIFORM CODE FOR THE ABATEMENT OF DANGEROUS BUILDINGS, AND AMENDMENTS AND MODIFICATIONS THERETO The City Council of the City of Burlingame finds and ordains as follows: DIVISION 1: Section 1. The City of Burlingame is located between the Santa Cruz Mountains foothills and San Francisco Bay, with a number of substantial creeks flowing through highly developed residential and industrial areas. It is surrounded by large areas of open space maintained in natural condition, as well as having a significant natural canyon in the center of the residential area. Strong winds come down the foothills during both the driest and the wettest parts of the year. The City is directly east of the San Andreas Fault, and much of the highly developed part of the City is located along the front of the Bay, much of it on fill. The United States Geologic Survey, the California Division of Mines and Geology, and the Association of Bay Area Governments have extensively mapped the area for such earthquake probabilities. The foothill areas have a variety of soil formations with steep canyons and heavy precipitation. Much of the City has a high water table. Fires in the community could quickly spread because of the extensive, natural vegetation throughout the City. The City has a number of highly developed commercial areas with older buildings, and an industrial area that is filled with mixed uses utilizing various materials that could be highly hazardous. In addition, heavily traveled approach and departure routes for San Francisco International Airport are immediately adjacent to or over the City. The City is also located in a national climate zone that is designated “Very High” on the Termite Infestation Probability Map. The City has worked with other jurisdictions on the San Francisco Peninsula to establish consistent standards to minimize the impact that varying standards might have on development and redevelopment of both residential and commercial buildings. It is only through strong building standards and effective fire prevention and containment programs that citizens will receive the protection they deserve, and that citizens will be able to obtain reasonably priced insurance for their homes and businesses. In seeking to attain these goals, the building standards in Title 18 have been and are adopted. Section 2. In addition, in order to provide appropriate, clear information to applicants for construction approvals, Section 18.07.050 is adopted to conform Title 18 to Zoning Code requirements established in the Municipal Code. It is the intent of the City Council to adopt by reference the 2019 editions of the California Building Standards Codes in its entirety except as specifically amended by this ordinance. Section 3. The City operates its own sanitary sewer system and water quality control plant and is subject to State and Federal laws regarding both point and non-point discharges. Sections 18.07.060, 18.08.010, 18.12.080, 18.12.090, 18.12.100, 18.12.110, 18.12.115, 18.12.120, and 18.12.125 are intended to assist the City in meeting its responsibilities regarding those laws as well as protecting the public safety and welfare. Section 4. The City also operates its own water supply system for its citizens. Sections 18.07.060, 18.12.050, 18.12.060, 18.12.070, and 18.12.100 are intended to provide consistent policy regarding water service installations and to protect the public’s water supply. Section 5. Chapter 18.05 is added and amended to read as follows: Chapter 18.05 International Swimming Pool and Spa Code Sections: 18.05.010 Adoption of the 2018 International Swimming Pool and Spa Code 18.05.020 Section 302.1 amended – Electrical 18.05.030 Section 302.2 amended – Water service and drainage 18.05.040 Section 303 amended - Energy 18.05.010 Adoption of the 2018 International Swimming Pool and Spa Code The rules, regulations and requirements published by the International Code Council (ICC) under the title “2018 International Swimming Pool and Spa Code, are adopted as and for the rules, regulations and standards for swimming pools and spas within this city as to all matters therein contained with the following amendments: 18.05.020 Section 302.1 amended – Electrical Section 302.1 of the International Swimming Pool and Spa Code is amended to read as follows: 302.1 Electrical. Electrical requirements for aquatic facilities, pools, and spas shall be in accordance with the 2019 California Electrical Code. Exception: Internal wiring for portable residential spas and portable residential exercise spas. 18.05.030 Section 302.2 amended – Water service and drainage. Section 302.2 of the International Swimming Pool and Spa Code is amended to read as follows: 302.2 Water service and drainage. Piping and fittings used for water service, makeup and drainage piping for pools and spas shall comply with the 2019 California Plumbing Code. Fittings shall be listed and approved by the International Association of Plumbing and Mechanical Official (IAPMO) or an equivalent recognized agency and be approved for installation with the piping installed. Section 302.5 of the International Swimming Pool and Spa Code is amended to read as follows: 18.05.040 Section 302.5 amended – Backflow protection. 302.5 Backflow protection. Water supplies for pools and spas shall be protected against backflow in accordance with the 2019 California Plumbing Code. Section 303 of the International Swimming Pool and Spa Code is amended to read as follows: 18.05.050 Section 303 amended – Energy. 303 Energy. The energy consumption of pools and permanent spas shall be controlled by the requirements in sections 303.1.1 through 303.1.3 and comply with the 2019 California Energy Code. Section 6. Chapter 18.06 is added incorporating the 1997 Uniform Housing Code. Chapter 18.06 UNIFORM HOUSING CODE 18.06.010 The 1997 Uniform Housing Code is hereby incorporated as part of the Burlingame Municipal Code. Section 7. Chapter 18.07 is amended by the addition of the following section: Chapter 18.07 UNIFORM ADMINISTRATIVE CODE 18.07.120 Section 108 added – Safety assessment placards Section 108 of the 1997 Uniform Administrative Code is added to read as follows: 108 Safety assessment placards. Intent. This section establishes standard placards to be used to indicate the condition of a structure for continued occupancy. The Section further authorizes the Chief Building Official and his or her authorized representatives to post the appropriate placard at each entry point to a building or structure upon completion of a safety assessment. Application of Provisions. The provisions of this chapter are applicable to all buildings and structures of all occupancies regulated by the City of Burlingame. The City Council may extend the provisions as necessary. Definition. Safety assessment is a visual, non-destructive examination of a building or structure for the purpose of determining the condition for continued occupancy. Placards. (a) The following are verbal descriptions of the official juris diction placards to be used to designate the condition for continued occupancy of buildings or structures . Copies of actual placards are attached. INSPECTED - Lawful Occupancy Permitted is to be posted on any building or structure wherein no apparent structural hazard has been found. This placard is not intended to mean that there is no damage to the building or structure. (Green) RESTRICTED USE is to be posted on each building or structure that has been damaged wherein the damage has resulted in some form of restriction to the continued occupancy. The individual who posts this placard will note in general terms the type of damage encountered and will clearly and concisely note the restrictions on continued occupancy. (Yellow) UNSAFE - Do Not Enter or Occupy is to be posted on each building or structure that has been damaged such that continued occupancy poses a threat to life safety. Buildings or structures posted with this placard shall not be entered under any circumstance except as authorized in writing by the Chief Building Official, or his or her authorized representative. Safety assessment teams shall be authorized to enter these buildings at any time. This placard is not to be used or considered as a demolition order. The individual who posts this placard will note in general terms the type of damage encountered. (Red or Orange) (b) The name of the jurisdiction, its address, and phone number shall be permanently affixed to each placard. (c) Once it has been attached to a building or structure, a pl acard is not to be removed, altered or covered until done so by an authorized representative of the Chief Building Official. It shall be unlawful for any person, firm or corporation to alter, remove, cover , or deface a placard unless authorized pursuant to this section. . INSPECTED LAWFUL OCCUPANCY PERMITTED This structure has been inspected, as indicated below, and no apparent structural hazard has been found. Inspected Exterior Only Inspected Exterior and Interior Report any unsafe condition to the City of Burlingame Building Division at 650-558-7260. Re-inspection may be required. Inspector comments: _______________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Site/Building Address: _________________________________________ Date: _________________ Time: ____________________________a.m./p.m. Caution: Post inspection conditions may increase damage and risk. This facility was inspected under emergency conditions for the City of Burlingame on the date and time noted. Inspected by: ______________________________ Identification #: __________________ Agency: __________________________________ _________________________________________ DO NOT REMOVE, ALTER, OR COVER THIS PLACARD UNTIL AUTHORIZED BY THE CITY OF BURLINGAME. (Burlingame Municipal Code, Section 18.07.120) This page blank 10 RESTRICTED USE WARNING: This structure has been inspected and found to be damaged as described below. Damage Comments: _____________________________ ______________________________________________ ______________________________________________ ______________________________________________ Report any unsafe condition to the City of Burlingame Building Division at 650-558-7260. Re-inspection may be required. Entry, occupancy, and lawful use are restricted as follows: _____________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ Site/Building Address: __________________________ _____________________________________________ Date: _________________ Time: ____________________________a.m./p.m. Caution: Post inspection conditions may increase damage and risk. This facility was inspected under emergency conditions for the City of Burlingame on the date and time noted. Inspected by: ______________________________ Identification #: __________________ Agency: __________________________________ DO NOT REMOVE, ALTER, OR COVER THIS PLACARD UNTIL AUTHORIZED BY THE CITY OF BURLINGAME. (Burlingame Municipal Code, Section 18.07.120) 11 This page blank UNSAFE DANGER – DO NOT ENTER OR OCCUPY! WARNING: This structure has been inspected, found to be seriously damaged, and is UNSAFE to enter or occupy as described below. Damage Comments: _____________________________ ______________________________________________ ______________________________________________ ______________________________________________ Report any unsafe condition to the City of Burlingame Building Division at 650-558-7260. Re-inspection may be required. Do not enter or remain in close proximity unless specifically authorized by the City of Burlingame. Entry may result in injury or death. Site/Building Address: __________________________ _____________________________________________ Date: _________________ Time: ____________________________a.m./p.m. Caution: Post inspection conditions may increase damage and risk. This facility was inspected under emergency conditions for the City of Burlingame on the date and time noted. Inspected by: ______________________________ Identification #: __________________ Agency: __________________________________ DO NOT REMOVE, ALTER, OR COVER THIS PLACARD UNTIL AUTHORIZED BY THE CITY OF BURLINGAME. (Burlingame Municipal Code, Section 18.07.120) 13 This page blank 14 Section 8. Chapter 18.08 is amended in its entirety to read as follows: Chapter 18.08 BUILDING CODE Sections: 18.08.005 Adoption of 2019 California Building Code, Part 2, Volume 1. 18.08.010 Section 406.1.1 added – Car stacking system backup power 18.08.015 Section 502.1 amended – Address identification. 18.08.020 Section 502.2 added – Utility identification. 18.08. 030 Section 903.1.2 added – Additions and alterations. 18.08. 035 Section 903.1.3 added – Applicable to all sprinklered buildings. 18.08. 040 Section 903.2 amended – Where required. 18.08. 045 Section 903.2.21 added – Existing buildings and structures. 18.08. 050 Section 903.2.22 added – Aggregate. 18.08. 055 Section 903.3.1.4 added – Inspector's test valves. 18.08. 060 Section 903.3.1.5 added – Additional residential sprinkler locations. 18.08.065 Section 903.4.1 amended – Fire Sprinkler Monitoring Systems 18.08.070 Section 1505.1 amended – Fire classification. 18.08.075 Table 1505.1 amended – Roof minimum fire retardant classes. 18.08.080 Section 1505.1.3 amended – Roof covering within all other areas. 18.08.085 Section 1502.4.1 added – Roof drainage requirements. 18.08.090 Section 1502.4.2 added – Surface drainage requirements. 18.08.095 Adoption of 2019 California Building Code, Part 2, Volume 2. 18.08.100 Section 1807.2.1 amended – Retaining walls. 18.08.105 Section 3005.5 amended – Shunt Trip 18.08.110 Section 3202 amended – Encroachments 18.08.115 Section 3202.1 amended – Encroachments below grade 18.08.120 Section 3202.2 amended – Encroachments above grade and below 8 feet in height 18.08.125 Section 3202.3 amended – Encroachments 8 feet or more above grade 18.08.130 Section 501.6 added – Suspended ceiling upgrade required. 15 18.08.005 Adoption of 2019 California Building Code, Part 2. Volume 1. The rules, regulations and requirements published by the International Code Council (ICC) under the title “2018 International Building Code Volume 1" and adopted as the “2019 California Building Code Volume 1" including Appendix Chapters I and J and State of California amendments thereto, are adopted as and for the rules, regulations and standards within this city as to all matters therein contained with the following amendments: 18.08.010 Section 406.1.1 added – Car stacking system back up power Section 406.1.1 of the 2019 California Building Code is added to read as follows: 406.1.1 Commercial and Multi-Family Dwelling car stacking systems shall be provided with back-up power to allow access to and egress from such systems during a power outage. The back-up power shall comply with the manufacture specifications and the 2019 California Electrical Code. 18.08.015 Sections 502.1 amended – Address identification. Section 502.1 of the 2019 California Building Code is added to read as follows: 502.1. Address identification. Address numbers. Size of numbers shall be as follows: 1. When the structure is thirty-six (36) to fifty (50) feet from the street or fire apparatus access, a minimum of one-half inch (½") stroke by six inches (6”) high 16 is required. 2. When the structure is more than fifty (50) feet from the street or fire apparatus access, a minimum of one inch (1") strike by nine inches (9”) high is required. Multi-Tenant Buildings. Numbers or letters shall be designated on all occupancies within a building. Size shall be a minimum of one-half inch (1/2”) stroke by four inches (4”) high and on a contrasting background. Directional address numbers or letters shall be provided. Said addresses or numbers shall be posted at a height no greater than 5 feet, 6 inches (5' 6") above the finished floor and shall be either internally or externally illuminated in all new construction. Rear addressing. When required by the chief, approved numbers or addresses shall be placed on all new and existing buildings in such a position as to be plainly visible and legible from the fire apparatus road at the back of a property or where rear parking lots or alleys provide and acceptable vehicular access. Number stroke and size shall comply with 502.1. ADU Addressing. Address for Residential Accessory Dwelling Units shall meet the City of Burlingame specifications. 18.08.020 Section 502.2 added – Utility identification. Section 502.2 of the 2019 California Building Code is added to read as follows: 502.2 Utility identification. In multi-unit commercial and residential buildings, gas and electric meters, service switches and shut off valves shall be clearly and legibly marked to identify the unit or space that they serve. 17 18.08. 030 Section 903.1.2 added – Additions and alterations. Section 903.1.2 of the 2019 California Building Code is added to read as follows: 903.1.2 Additions and alterations. The standard for determining the size of addition and/or alteration for determining the threshold for fire sprinkler systems shall be determined by the following: 1. The square footage of every room being added or altered shall be included in the calculation of total square footage of addition or alteration. 2. The entire square footage of an individual room shall be considered added or altered when at least fifty percent (50%) or greater of the linear length of interior wall sheeting or ceiling of any one wall within the room is new, removed, or replaced. 18.08. 035 Section 903.1.3 added – Applicable to all sprinklered buildings. Section 903.1.3 of the 2019 California Building Code is added to read as follows: 903.1.3 Applicable to all sprinklered buildings. 1. When a commercial building is partially retrofitted with an approved automatic sprinkler fire extinguishing system pursuant to this section, the building owner shall complete the fire extinguishing system retrofit throughout the unprotected building interior areas within six (6) years of completing the initial partial retrofit or within every tenant space where a building permit is obtained, whichever is less. 2. When a residential building is partially retrofitted with an approved automatic sprinkler fire extinguishing system pursuant to this section, the building fire 18 extinguishing system retrofit shall be completed throughout the unprotected building interior areas within two (2) years from completing the initial partial retrofit. 3. When a property owner or responsible party of a commercial or residential building chooses option 1 or 2 from above, the property owner shall file a deed restriction with San Mateo County Assessor’s Office and obtain a performance bond with Central County Fire Department to ensure compliance with Section 18.08.040. The bond shall be equal to or greater than the estimated cost of completion, as determined by Central County Fire Department. 18.08. 040 Section 903.2 amended –Where required. Section 903.2 of the 2019 California Building Code is deleted and replaced with the following: Section 903.2 Where required. Approved automatic fire sprinkler systems shall be installed in all new occupiable and/or habitable buildings and structures. In addition, approved automatic fire sprinkler systems shall be provided in locations described in Sections 903.2.1 through 903.2.21. Exceptions: 1. When approved by the fire chief, canopy structures used solely for vehicular parking which have a photovoltaic system attached are not required to be equipped with a fire sprinkler system as long as the structure meets distance requirements to other structures and property 19 lines. 2. Group U occupancies less than 1200 square feet. 18.08.045 Section 903.2.21 added – Existing buildings and structures. Section 903.2.21 of the 2019 California Building Code is added to read as follows: 903.2.21 Existing buildings and structures. All existing buildings and structures shall be retroactively protected by an approved automatic extinguishing system when the following conditions exist: 1. Commercial and multi-family residential buildings with a total building floor area in excess of 2,000 square feet or more than two stories in height, and when additions or alterations for which a building permit is required will exceed 1,200 square feet in area. Exception: Group U occupancies less than 1200 square feet. 2. Residential one- and two-family dwellings and structures with a total building floor area in excess of 2,000 square feet or more than two stories in height, and when additions or alterations for which a building permit is required will exceed 750 square feet in area. Exceptions: a. Additions or alterations of commercial and multi-family residential buildings that do not exceed 20% of the completed building’s total replacement cost calculation. The replacement cost calculations for the additions/alterations and the completed building shall be calculated utilizing the latest Building Valuation Data (BVD) published by the 20 International Code Council (ICC). b. Additions or alterations to residential one- and two-family dwellings and structures that do not exceed 20% of the total square footage of the entire completed building. c. The cost of additions and alterations used in calculating the replacement cost value formula shall be exclusive of the cost to design and install an automatic fire sprinkler extinguishing system pursuant to this section; building roof repair/replacement; fire damage repair; building heating and/or cooling unit repair/replacement; and any other federal, state and local construction code upgrade requirements including but not limited to the seismic retrofit requirements, asbestos, and other hazardous material abatement. 18.08. 050 Section 903.2.22 added – Aggregate. Section 903.2.22 of the 2019 California Building Code is added to read as follows: 903.2.22 Aggregate. The size or cost of additions and alterations used in calculating the size or replacement cost value formula shall not be cumulative with regard to individual additions or alterations in a building unless the following circumstance applies: 1. Where more than one (1) addition or alteration for which building permits are required are made within a two (2) year period from the final date of the initial permit, the sum of the square footage or replacement costs of these additions or alterations during this two (2) year period shall be aggregated for the purpose of 21 determining calculations in Section 18.08.050. 18.08. 055 Section 903.3.1.4 added – Inspector's test valves. Section 903.3.1.4 of the 2019 California Building Code is added to read as follows: 903.3.1.4 Inspector’s test valves. Single-family residential fire sprinkler systems within buildings greater than 3600 square feet shall be equipped with an inspector’s test valve for each system and located the furthest point away from the sprinkler riser. 18.08. 060 Section 903.3.1.5 and 903.3.1.6 added – Additional sprinkler locations. Section 903.3.1.5 of the 2019 California Building Code is added to read as follows: 903.3.1.5 Additional residential sprinkler locations. The installation of a residential fire sprinkler system shall conform to the following: 1. Sprinklers shall be required throughout carports and garages. Exception: Detached carports and garages less than 2,000 square feet in area and separated from residential buildings complying with Section 503.1.2 and Table 602 of the building code and assuming a property line between all other structures. 2. Sprinkler coverage shall be provided in the following locations: a. Attic access openings b. Areas of attics and crawl spaces containing storage, mechanical and/or electrical equipment. 22 Section 903.3.1.6, CFC is added to read as follows: 903.3.1.6 Additional Commercial and Multi-family Dwelling Sprinkler Locations. Rooms or spaces which contain vehicle parking lifts or stacking systems shall be designed as an Extra Hazard Classification. Sprinkler design to include sidewall sprinkler heads designed at minimum Ordinary Group 2 in between each level. Exception: Buildings classified as single-family dwellings. 18.08.065 Section 903.4.1 Amended - Monitoring. Section 903.4.1 CBC is amended by adding the following: Section 903.4.1 Monitoring. For new fire sprinkler monitoring systems, the approved supervisory station shall be defined as a UL approved central receiving station. 18.08.070 Section 1505.1 amended – Fire classification. The first paragraph of Section 1505.1 of the 2019 California Building Code is amended to read as follows: 1505.1 General. Roof assemblies shall be divided into the classes defined below. Class A or Class B roof assemblies and roof coverings required to be listed by this section shall be tested in accordance with ASTM E 108 or UL 790. In addition, fire-retardant-treated wood roof coverings shall be tested in accordance with ASTM D 2898. The minimum roof coverings installed on buildings shall comply with the Table 1505.1 as amended. 18.08.075 Table 1505.1 amended – Roof minimum fire retardant classes. 23 Table No. 1505.1 of the 2019 California Building Code is amended to read as follows: Table 1505.1 Roof minimum fire retardant classes. TABLE NO. 1505.1a MINIMUM ROOF COVERING CLASSIFICATION FOR TYPES OF CONSTRUCTION Type IA IB IIA IIB IIIA IIIB IV VA VB Roof Covering B B B B B B B B B a. Unless otherwise required in accordance with Chapter 7A. 18.08.080 Section 1505.1.3 amended – Roof covering within all other areas. Section 1505.1.3 of the 2019 California Building Code is amended to read as follows: 1505.1.3 Roof covering within all other areas. The entire roof covering of every existing structure where more than 50 percent of the total roof area is replaced within any one-year period, the entire roof covering of every new structure, and any roof covering applied in the alteration, repair or replacement of the roof of every existing structure, shall be a fire-retardant roof covering that is at least Class B. 18.08.085 Section 1502.4.1 added – Roof drainage requirements. Section 1502.4.1 of the 2019 California Building Code is added to read as follows: 1502.4.1 Roof drainage requirements. In all zones other than R-1, the water from the 24 roof of any building and from any paved area which would flow by gravity over public sidewalk shall be carried by means of conductors under the sidewalk and through the curb to the gutter, or other approved location. 18.08.090 Section 1502.4.2 added – Surface drainage requirements. Section 1502.4.2 of the 2019 California Building Code is added to read as follows: 1502.4.2 Surface drainage requirements. No storm water or underground water draining from any lot, building, or paved area shall be allowed to drain to adjacent properties nor shall this water be connected to the city's sanitary sewer system. Regardless of the slope of the source property, such water shall drain to either artificial or natural storm drainage facilities by gravity or pumping. 1808.095 Adoption of 2019 California Building Code, Part 2, Volume 2. The rules, regulations and requirements published by the International Code Council under the title “2018 International Building Code Volume 2” and adopted as the “2019 California Building Code Volume 2" are adopted as and for the rules, regulations and standards within this city and as to all matters therein contained with the following amendments: 18.08.100 Section 1807.2.1 amended – Retaining walls. 25 Section 1807.2.1 of the 2019 California Building Code is amended by adding the following paragraphs at the end of the section: 1807.2.1 General. When a structure is to support a lateral load which retains fill which supports another structure, supports the toe of a slope which is over four feet in height measured from the bottom of the footing, or is required by the city engineer, it shall be designed by a licensed architect or engineer and approved by the city engineer. The following types of retaining walls shall be of concrete or other material which shall have a minimum service life of 75 years for all major support systems and 50 years for all replaceable support systems: Walls that are engineered, support a lateral load over 18" at property line, support an engineered surcharge, support a structure, or support a toe of a slope. A fence structure may not be substituted for a retaining wall. 18.08.105 Section 3005.5 amended – Shunt Trip Section 3005.5 of the 2019 California Building Code is amended by adding the following: 3005.5 Shunt Trip Prohibited. Where elevator hoist ways and/or elevator machine rooms containing elevator control equipment are located within buildings equipped with automatic fire sprinklers, the following is required in lieu of a shunt trip: 1. The elevator machine room shall be constructed with the minimum fire rating as the hoist way. 2. Fire sprinklers at the top of the hoist way and inside the elevator machine room shall not be installed. 26 3. Means for elevator shutdown shall not be installed. 18.08.110 Section 3202 amended Encroachments Section 3202 of the 2019 California Building Code is deleted and replaced with the following: 18.08.115 3202.1 – Encroachments below grade 3201.1 Encroachments below grade. Encroachments below grade that act as temporary support to build the structure shall be allowed per the City Fee Schedule under “Special Encroachment Permits” at the time of the building permit issuance. An agreement for the encroachments shall be in place prior to the commencement of the construction work. 18.08.120 Section 3202.2 is amended – Encroachments above grade and below 8 feet in height 3202.2 Encroachments above grade and below 8 feet in height. Encroachments into the public right-of-way above grade and below 8 feet in height shall comply with the City Municipal Code Chapter 22.26 Awning, Canopy and Marquee signs. Doors and windows shall not open or project into the public right-of-way. 18.08.125 Section 3202.3 is amended - Encroachments 8 feet or more above grade. 3202.3 Encroachments 8 feet or more above grade. Encroachments into the public right-of-way 8 feet or more above grade shall comply with the City Municipal Code Chapter 22.26 Awning, Canopy and Marquee signs. All other encroachments such as, but not limited to, windows, balconies, architectural features and mechanical equipment shall not project into the public right-of-way. 27 18.08.130 Section 501.6 added – Suspended ceiling upgrade required. Section 501.6 of the 2019 California Existing Building Code is added to read as follows: 501.6 Suspended ceiling upgrade required. When an addition, alteration or repair is performed on an occupancy in which there is an existing suspended ceiling, such suspended ceilings shall be modified throughout to comply with the provisions of ASTM C 635 and ASTM C 636. Section 9. Section 18.09.010 is amended to read as follows: Chapter 18.09 Mechanical Code Section: 18.09.010 Adoption of 2019 California Mechanical Code. The rules, regulations and standards printed in one volume and published by the International Association of Plumbing and Mechanical Officials (IAPMO), under the title "2018 Uniform Mechanical Code" and adopted as the "2019 California Mechanical Code," including the appendices and State of California amendments thereto, hereinafter called "mechanical code," is adopted as and for the rules, regulations and standards within this city as to all matters therein contained, except as otherwise provided in this chapter. The appendices to the mechanical code shall be enforceable to the same extent as if contained in the body of the code. 28 Section 10. Chapter 18.10 is added to read as follows: Chapter 18.10 RESIDENTIAL CODE Sections: 18.10.010 Adoption of 2019 California Residential Code. 18.10.015 Section R111.4 added – Utility identification. 18.10.020 Section R309.5 deleted – Fire sprinklers. 18.10.025 Section R313.1 amended – Townhouse automatic fire sprinkler systems. 18.10.030 Section R313.2 amended – One- and two-family dwellings automatic fire systems. 18.10.035 Section R313.3.1.1 amended – Required sprinkler locations. 18.10.040 Section R313.3.2.7 added – Additions and alterations. 18.10.045 Section R313.3.2.8 added – All sprinklered buildings. 18.10.050 Section R313.3.3.1 amended – Nonmetallic pipe and tubing. 18.10.055 Table R313.3.6.2 (9) deleted – Table R313.3.6.2 (9) Allowable Pipe Length for 1-inch PEX tubing 18.10.060 Section R313.3.6.2.2 amended – Calculation procedure. Step 8 – Determine the maximum allowable pipe length 18.10.065 Section R313.3.8.1 amended – Pre-concealment inspection. #4 18.10.070 Section R313.3.8.1 amended – Pre-concealment inspection. #5 18.10.075 Section R319.1 amended – Address numbers. 18.10.080 Section R902.1 amended – Roof covering materials. 18.10.085 Section R902.1.3 amended – Roof covering in all other areas. 18.10.090 Section R903.4.2 added – Roof and surface drainage. 18.10.095 Section R1003.9.2.1 added – Spark arrestors. 18.10.010 Adoption of 2019 California Residential Code. The rules, regulations and standards printed in one volume and published by the International Code Council under the title “2018 International 29 Residential Code" and adopted as the “2019 California Residential Code", including appendices H, J, K, O, Q, S, V, and X are adopted as and for the rules, regulations and standards within this city as to matters therein contained except as provided in this chapter. The mandatory requirements of any adopted appendices to the code shall be enforceable to the same extent as if contained in the body of the code. 18.10.015 Section R111.4 added – Utility identification. Section R111.4 of the 2019 California Residential Code is added to read as follows: R111.4 Utility identification. In all residential buildings, gas and electric meters, service switches and shut off valves shall be clearly and legibly marked to identify the unit or space that they serve. 18.10.020 Section R309.6 deleted – Fire sprinklers Exception. Section R309.6 Exception of the 2019 California Residential Code is deleted in its entirety. R309.6 Fire sprinklers. The exception for fire sprinklers in garages and carports is deleted in its entirety. 18.10.025 Section R313.1 amended – Townhouse automatic fire sprinkler systems. Section R313.1 Exception of the 2019 California Residential Code is amended by 30 replacing with the following paragraph: R313.1. Townhouse automatic fire sprinkler systems. An automatic residential fire sprinkler system shall be installed in townhouses. R.313.1.1 Existing Townhouse automatic fire sprinkler systems. An automatic residential fire sprinkler system is required when additions and/or alterations to existing townhouse buildings with a total building floor area more than 2,000 square feet or more than two stories in height, and when additions or alterations for which a building permit is required exceeds 750 square feet in area or 20% of the total square footage of the entire completed building. Exception: Detached structures classified as an Accessory Dwelling Unit in accordance with Burlingame Municipal Code Chapter 25.59 and no work has occurred in the main residence to require an automatic residential fire sprinkler system. 18.10.030 Section R313.2 amended – One- and two-family dwellings automatic fire systems. Section R313.2 Exception of the 2019 California Residential Code is amended by replacing with the following: R313.2. One- and two-family dwellings automatic fire systems. An automatic residential fire sprinkler system shall be installed in one- and two-family dwellings. Exception: Detached structures located in excess of 10 feet from the main 31 house. For the purposes of fire sprinklers, detached structures shall be considered as portions of the main home when buildings are not separated in accordance with Section 705.3 of the California Building Code. R313.2.1 Existing One- and two-family dwellings automatic fire systems. An automatic residential fire sprinkler system is required when additions and/or alterations to existing townhouse buildings with a total building floor area more than 2,000 square feet or more than two stories in height, and when additions or alterations for which a building permit is required exceeds 750 square feet in area or 20% of the total square footage of the entire completed building. Exception: 1. Detached structures located in excess of 10 feet from the main house. For the purposes of fire sprinklers, detached structures shall be considered as portions of the main home when buildings are not separated in accordance with Section 705.3 of the California Building Code. 2. Detached structures classified as an Accessory Dwelling Unit in accordance with Burlingame Municipal Code Chapter 25.59 when no work has occurred in the main house in a two-year period in excess of 750 square feet in area or 20% of the total square footage of the entire completed building as determined by Section R313.3.2.7 18.10.035 Section R313.3.1.2 amended – Required sprinkler locations. 32 Section R313.3.1.2 of the 2019 California Residential Code is amended by replacing with the following: R313.3.1.1 Required sprinkler locations. 1. Sprinklers shall be installed to protect all areas of a dwelling unit. Exceptions: a. Clothes closets, linen closets and pantries not exceeding 24 square feet (2.2m2) in area, with the smallest dimension not greater than 3 feet (915 mm) and having wall and ceiling surfaces of gypsum board. b. Detached carports and garages less than 2,000 square feet in area and separated from residential buildings complying with Section R302.1. 2. Sprinkler coverage shall be provided in the following locations: a. Attic access openings b. Areas of attics and crawl spaces containing storage, mechanical and/or electrical equipment. 3. Inspector Test Valves shall be provided for each system and located the furthest point away from the sprinkler riser for buildings greater than 3,600 square feet. 18.10.040 Section R313.3.2.7 added – Additions and alterations. Section R313.3.2.7 of the 2019 California Residential Code is added to read as follows: R313.3.2.7 Additions and Alterations. 33 1. The standard for determining the size of addition and/or alteration for determining the threshold for fire sprinkler systems shall be determined by the following: a. The square footage of every room being added or altered shall be included in the calculation of total square footage of addition or alteration. b. The entire square footage of an individual room shall be considered added or altered when at least fifty percent (50%) or greater of the linear length of interior wall sheeting or ceiling of any one wall within the room is new, removed, or replaced. 2. The size or cost of additions and alterations used in calculating the size shall not be cumulative with regard to individual additions or alterations in a building unless the following circumstance applies: Where more than one (1) addition or alteration for which building permits are required are made within a two (2) year period from the final date of the initial permit, the sum of the size of these additions or alterations during this two (2) year period shall be aggregated for the purpose of determining calculations in Section 18.10.025 or Section 18.10.030. 3. The cost of additions and alterations used in calculating the replacement cost value formula shall be exclusive of the cost to design and install an automatic fire sprinkler extinguishing system pursuant to this section; building roof repair/replacement; fire damage repair; building heating and/or cooling unit repair/replacement; and any other federal, state and local construction code upgrade requirements including but not limited to the seismic retrofit 34 requirements, asbestos, and other hazardous material abatement. 18.10.045 Section R313.3.2.8 added – All sprinklered buildings. Section R313.3.2.8 of the 2019 California Residential Code is added to read as follows: R313.3.2.8 All sprinklered buildings. 1. When a building is partially retrofitted with an approved automatic sprinkler fire extinguishing system pursuant to this section, the building fire extinguishing system retrofit shall be completed throughout the unprotected building interior areas within two (2) years from completing the initial partial retrofit. 2. When a property owner or responsible party of a residential building chooses option 1 above, the property owner shall file a deed restriction with San Mateo County Assessor’s Office and obtain a performance bond with Central County Fire Department to ensure compliance with Section 18.10.025 or 18.10.030. The bond shall be equal to or greater than the estimated cost of completion, as determined by Central County Fire Department. 18.10.050 Section R313.3.3.1 amended – Nonmetallic pipe and tubing. Section R313.3.3.1 of the 2019 California Residential Code is amended to read as follows: R313.3.3.1 Nonmetallic pipe and tubing. Nonmetallic piping and tubing, such as CPVC, shall be listed for use in residential 35 fire sprinkler systems. 18.10.055 Table R313.3.6.2 (9) deleted – Table R313.3.6.2 (9) Allowable Pipe Length for 1-inch PEX tubing Table R313.3.6.2 (9) of the 2019 California Residential Code is deleted in its entirety. Table R313.3.6.2 (9) Allowable Pipe Length for 1-inch PEX tubing is deleted. 18.10.060 Section R313.3.6.2.2 amended – Calculation procedure. Step 8 – Determine the maximum allowable pipe length Section R313.3.6.2.2 – Calculation procedure. Step 8 of the 2019 California Residential Code is replaced with the following: R313.3.6.2.2 – Calculation procedure. Step 8 – Determine the maximum allowable pipe length Use Tables R313.3.6.2 (4) through R313.3.6.2 (8) to select a material and size for water distribution piping. The piping material and size shall be acceptable if the developed length of pipe between the service valve and the most remote sprinkler does not exceed the maximum allowable length specified by the applicable table. Interpolation of Pt between the tabular values shall be permitted. The maximum allowable length of piping in Tables R313.3.6.2(4) through R313.3.6.2(8) incorporates an adjustment for pipe fittings, and no additional consideration of friction losses associated with pipe fittings shall be required. ` 18.10.065 Section R313.3.8.1 amended – Pre-concealment inspection. #4 36 Section R313.3.8.1 – Pre-concealment inspection. #4 of the 2019 California Residential Code is amended by replacing with the following: R313.3.8.1 #4. The pipe size equals or exceeds the size used in applying Tables R313.3.6.2(4) through R313.3.6.2(8) or, if the piping system was hydraulically calculated in accordance with Section R313.3.6.1, the size used in the hydraulic calculation. 18.10.070 Section R313.3.8.1 amended – Pre-concealment inspection. #5 Section R313.3.8.1 – Pre-concealment inspection. #5 of the 2019 California Residential Code is amended by replacing with the following: R313.3.8.1 #5 The pipe length does not exceed the length permitted by Tables R313.3.6.2 (4) through R313.3.6.2 (8) or, if the piping system was hydraulically calculated in accordance with Section R313.3.6.1, pipe lengths and fittings do not exceed those used in the hydraulic calculation 18.10.075 Section R319.1 amended – Address numbers. Section R319.1 of the 2019 California Residential Code is amended to read as follows: R319.1 Address numbers. Size of numbers shall be as follows: 1. When the structure is thirty-six (36) to fifty (50) feet from the street or fire apparatus access, a minimum of one-half inch (½") stroke by six inches (6”) high is required. 37 2. When the structure is more than fifty (50) feet from the street or fire apparatus access, a minimum of one inch (1") strike by nine inches (9”) high is required. Multi-tenant buildings. Numbers or letters shall be designated on all occupancies within a building. Size shall be a minimum of one-half inch (1/2”) stroke by four inches (4”) high and on a contrasting background. Directional address numbers or letters shall be provided. Said addresses or numbers shall be posted at a height no greater than 5 feet, 6 inches (5' 6") above the finished floor and shall be either internally or externally illuminated in all new construction. Rear addressing. When required by the chief, approved numbers or addresses shall be placed on all new and existing buildings in such a position as to be plainly visible and legible from the fire apparatus road at the back of a property or where rear parking lots or alleys provide and acceptable vehicular access. Number stroke and size shall comply with R319.1. ADU Addressing. Address for Residential Accessory Dwelling Units shall meet City of Burlingame specifications. 18.10.080 Section R902.1 amended – Roof covering materials. Section R902.1 of the 2019 California Residential Code is amended to read as follows: R902.1 Roof covering materials. Roofs shall be covered with materials as set forth in Sections R904 and R905. A minimum Class A or B roofing shall be installed in areas designated by this section. Class C roofs shall not be allowed 38 in the City of Burlingame. Classes A and B roofing required by this section to be listed shall be tested in accordance with UL 790 or ASTM E 108. 18.10.085 Section R902.1.3 amended – Roof covering in all other areas. Section R902.1.3 of the 2019 California Residential Code is amended to read as follows: R902.1.3 Roof covering in all other areas. The entire roof covering of every existing structure where more than 50 percent of the total roof area is replaced within any one-year period, the entire roof covering of every new structure, and any roof covering applied in the alteration, repair or replacement of the roof of every existing structure, shall be a fire-retardant roof covering that is at least Class B. 18.10.090 Section R903.4.2 added – Roof and surface drainage. Section R903.4.2 of the 2019 California Residential Code is added to read as follows: R903.4.2 Roof and surface drainage. 1. In all zones other than R-1, the water from the roof of any building and from any paved area which would flow by gravity over public 39 sidewalk shall be carried by means of conductors under the sidewalk and through the curb to the gutter, or other approved location. 2. No storm water or underground water draining from any lot, building, or paved area shall be allowed to drain to adjacent properties nor shall this water be connected to the city's sanitary sewer system. Regardless of the slope of the source property, such water shall drain to either artificial or natural storm drainage facilities by gravity or pumping. 18.10.095 Section R1003.9.2.1 added – Spark arrestors. Section R1003.9.2.1 of the 2019 California Residential Code is added to read as follows: R1003.9.2.1 Spark arrestors. Every chimney shall have a spark arrestor, either internally or externally mounted. Any spark arrestor to be mounted internally shall not be installed until installation plans for such arrestor have been submitted to and approved by the building division. All chimneys as described in section 603.6 of the 2019 California Fire Code shall be retroactively protected when one or more of the following conditions exist: 1. Upon the sale or transfer of the real property on which any chimney is located the transfer of title shall not be made until each such chimney contains the required spark arrestor, properly installed and in proper working order. 40 2. In the event of any construction on such property for which a building permit is required the final building permit signoff shall not be made until each such chimney a spark arrestor has been installed and is in proper working order. Section 11. Chapter 18.12 is amended to read as follows: Chapter 18.12 PLUMBING CODE Sections: 18.12.010 Adoption of 2019 California Plumbing Code. 18.12.020 Section 310.13 added – Exterior pipes. 18.12.030 Section 507.5 amended – Water heater safety pans. 18.12.040 Section 606.3.1 added – Water supply shutoff valves. 18.12.050 Section 609.3 amended – Water piping installed in or under a concrete slab. 18.12.060 Section 610.8.1 added – Water service over two inches. 18.12.070 Section 710.1 amended – Drainage of fixtures below the next upstream manhole or below the main sewer level. 18.12.080 Section 719.7 added – Building sewer cleanout. 18.12.090 Section 807.2 amended – Condensate waste water disposal. 18.12.100 Section 812.2 added – Disposal of rainwater drainage. 18.12.110 Section 812.3 added – Rainwater drainage to paved gutter. 18.12.120 Section 812.4 added – Rainwater drainage across public sidewalk prohibited. 18.12.130 Section 812.5 added – Elimination of nonconforming rainwater drainage required. 18.12.010 Adoption of 2019 California Plumbing Code. The rules, regulations and standards printed in one volume and published by the International Association of Plumbing and Mechanical Officials (IAPMO), under the title 8/13/2019 41 “2018 Uniform Plumbing Code" and adopted as the "2019 California Plumbing Code" including the appendices A, D, H, I and State of California amendments thereto, hereinafter called "plumbing code," is adopted as and for the rules, regulations and standards within this city as to all matters therein contained, except as otherwise provided in this chapter. The appendices specified herein shall be enforceable to the same extent as if contained in the body of the plumbing code. 18.12.020 Section 310.13 added – Exterior pipes. Section 310.13 of the 2019 California Plumbing Code is added to read as follows: 310.13 Exterior pipes. No plumbing drain vent pipe nor water, soil, waste, or gas pipe shall be installed on, or attached to, the outside face of an exterior wall of a residential building without the prior written permission of the building official. Such installation shall be enclosed in such a way as to be obscured from view. 18.12.030 Section 507.5 amended – Water heater safety pans. Section 507.5 of the 2019 California Plumbing Code is amended to read as follows: 507.5 Water heater safety pans. Each water heater located in an attic, furred space, living area or other location where leakage would result in damage to the building or its contents shall have a safety pan with drain. Safety pans shall be metal and be nominal two inches in diameter larger than the water heater, with a minimum depth of two inches. The drain pipe shall be three-quarter inch trade size minimum; shall terminate outside the building 8/13/2019 42 foundation or, where this is not practical or possible, at another location approved by the building inspector; and shall have a continuous minimum slope throughout its length of one-quarter inch, per foot away from the water heater. 18.12.040 Section 606.3.1 added – Water supply shutoff valves. Section 606.3.1 of the 2019 California Plumbing Code is added to read as follows: 606.3.1 Water supply shutoff valves. A gate shutoff valve shall be installed on each water supply pipe at an accessible point where such supply enters a building. In multi-unit residential buildings, a gate shutoff valve shall be installed on each water supply pipe at an accessible point where such supply enters each apartment or dwelling unit; or, where an apartment or dwelling unit is supplied by a vertical riser, a separate accessible shutoff valve may be provided at each plumbing fixture in the unit in lieu of the shutoff valve on the main supply to the unit. 18.12.050 Section 609.3 amended – Water piping installed in or under a concrete slab. The first paragraph of Section 609.3 of the 2019 California Plumbing Code is amended to read as follows: 609.3 Water piping installed in or under a concrete slab. Water piping shall not be installed in or under a concrete floor slab within a building without prior written approval of the building official. When such approval is obtained, such piping shall be installed in accordance with requirements (1) and (2). 8/13/2019 43 18.12.060 Section 610.8.1 added – Water service over two inches. Section 610.8.1 of the 2019 California Plumbing Code is added to read as follows: 610.8.1 Water services over two inches. Design details, methods and materials for construction of water services over 2 inches in diameter shall conform with the specifications for the construction of such work as compiled by the city engineer. These specifications may be changed from time to time at the option of the city engineer, but such changes shall in no way effect the validity of the regulations or requirements contained therein or the regulations and requirements of this code. 18.12.070 Section 710.1 amended – Drainage of fixtures below the next upstream manhole or below the main sewer level. Section 710.1 of the 2019 California Plumbing Code is amended to read as follows: 710.1 Drainage of fixtures below the next upstream manhole or below the main sewer level. 1. Drainage piping serving fixture(s) which have flood level rim(s) less than twelve inches (12″) above the elevation of the next upstream manhole and/or flushing inlet cover at the public sewer system serving such drainage piping shall be protected from backflow of sewage as follows: a. In new buildings and in buildings modified to the extent described in Burlingame Municipal Code section 18.07.020, these fixtures shall discharge by means of a sewage ejector or pump in accordance with Section 710.2. 8/13/2019 44 b. In existing buildings, protection from backflow shall be by means of a backwater valve approved by the building official supplemented by an approved sewer relief valve installed with its outlet at least six inches (6″) below the flood level rim of the lowest installed drainage unit fixture. Fixtures above that elevation shall not discharge through the backwater valve without prior written approval of the building official. As an alternative, the system may be protected by installation of an approved sewage ejector or pump. c. Cleanouts for drains that pass through a backwater valve shall be clearly identified with a permanent label stating “Backwater Valve Downstream”. 18.12.080 Section 719.7 added – Building sewer cleanout. Section 719.7 of the 2019 California Plumbing Code is amended by adding a second paragraph to read as follows: 719.7 Building sewer cleanout. When a building sewer is located under a street, alley or easement, there shall be provided a cleanout, installed flush with the sidewalk level next to curb; or, if no curb or sidewalk exist, then the cleanout must be located outside of the lot line. The cleanout riser shall be of materials specified by the city engineer, shall be the same size as the drain it serves, shall be connected to the building drain by a wye, shall be brought up to the level of the ground, and shall be terminated at the top with a cleanout fitting as specified by the city engineer. If the riser terminates at concrete sidewalk a cast iron sidewalk box with loose cover fitting with brass screws shall be installed. The minimum size for a cleanout riser shall be four inch trade size pipe. 8/13/2019 45 18.12.090 Section 807.4 Added – Condensate waste water disposal. Section 807.4 of the 2019 California Plumbing Code is added to read as follows: 807.4 Condensate wastewater disposal. Condensate from air cooling coils and comfort cooling equipment not intended to be used for the storage or handling of food or drink shall be collected and discharged to a storm sewer or other point of disposal approved by the building official. Termination of such drains shall be made by an air break. Condensate drain lines in sizes of one and one-quarter inch and larger shall be assembled using approved drainage pipe and fittings. Condensate waste water shall not drain over or upon a sidewalk, pedestrian ramp or the like, or a public way. 18.12.100 Section 812.2 added – Disposal of rainwater drainage. Section 812.2 of the 2019 California Plumbing Code is added to read as follows: 812.2 Disposal of rainwater drainage. Rainwater from roof or other approved areas exposed to rainwater may be drained into the storm drainage system, but shall not drain into any sewer intended for sanitary sewage. 18.12.110 Section 812.3 added – Rainwater drainage to paved gutter. Section 812.3 of the 2019 California Plumbing Code is added to read as follows: 8/13/2019 46 812.3 Rainwater drainage to paved gutter. Rainwater from roofs and other approved areas exposed to rainwater may drain into a public street gutter, provided that such gutter is paved and runs to a catch basin connected to a public storm drain, and provided further that such drainage has the approval of the city engineer or other public authority having jurisdiction over public streets or public storm drains. 18.12.120 Section 812.4 added – Rainwater drainage across public sidewalk prohibited. Section 812.4 of the 2019 California Plumbing Code is added to read as follows: 812.4 Rainwater drainage across public sidewalk prohibited. No rainwater from roofs, or other rainwater drainage of premises, shall discharge upon a public sidewalk. When it is desired to conduct rainwater from a building or premises to a public street gutter, the outside underground drainage piping shall be vitrified clay pipe, ABS, PVC, galvanized wrought iron pipe, galvanized steel pipe, approved concrete pipe, asbestos cement sewer pipe, cast iron pipe or other materials approved by the building official. When clay pipe, ABS, PVC, asbestos cement sewer pipe or approved concrete pipe is used, such pipe shall be a minimum of two feet horizontally from the building and one foot below the official grade. Water leaders connected to such background drainage pipe which are on the outside of the building wall that abuts on a public thoroughfare, shall be constructed of galvanized wrought iron pipe, galvanized steel pipe, or cast iron pipe for a distance of not less than five feet vertically above the Official grade. See Section 18.08.090 for exception for such drainage in R-1 districts. 8/13/2019 47 18.12.130 Section 812.5 added – Elimination of nonconforming rainwater drainage required. Section 812.5 of the 2019 California Plumbing Code is added to read as follows: 812.5 Elimination of nonconforming rainwater drainage required. Every existing system that allows the drainage of rainwater into a sanitary sewer in violation of the provisions of this chapter shall be altered or terminated or replaced so as to conform to the provisions of this chapter. Section 12. Section 18.13.010 is added to read as follows: Chapter 18.13 Existing Building Code Section: 18.13.010 Adoption of 2019 California Existing Building Code. The rules, regulations and requirements published by the International Code Council (ICC) under the title “2015 International Existing Building Code” and adopted as the “2019 California Existing Building Code” including Appendix Chapters 1, 2, 3, 5, 6, 13, 15, 16 and State of California amendments thereto, are adopted as and for the rules, regulations and standards within this city as to all matters therein contained. Section 13. Chapter 18.16 is amended to read as follows: 8/13/2019 48 Chapter 18.16 ELECTRICAL CODE Sections: 18.16.010 Adoption of 2019 California Electrical Code. 18.16.020 Section 230.70 (A) (1) amended – Main switch accessible from exterior. 18.16.030 Section 410.10(G) added – Exterior lighting restricted. 18.16.010 Adoption of 2019 California Electrical Code. The rules, regulations and standards printed in one volume and published by the National Fire Protection Association (NFPA), under the title "2017 National Electrical Code" with amendments as contained in the “2019 California Electrical Code”, including the appendices, are adopted as and for the rules, regulations and standards within this city as to matters therein contained except as provided in this chapter. The mandatory requirements of the appendices to the code shall be enforceable to the same extent as if contained in the body of the code. 18.16.020 Section 230.70 (A) (1) amended – Main switch accessible from exterior. Section 230.70 (A) (1) of the 2019 California Electrical Code is amended to read as follows: 230.70 (A) (1) Main switch accessible from exterior. The service disconnecting means 8/13/2019 49 location shall be accessible from the exterior of a building. If, due to structural or architectural conditions, it is not possible to make the service disconnecting means accessible from the building exterior a shunt trip disconnecting all active electrical conductors shall be installed at an accessible exterior location. 18.16.030 Section 410.10(G) added – Exterior lighting restricted. Section 410.10(G) of the 2019 California Electrical Code is added to read as follows: 410.10(G) Exterior lighting restricted. 1. Exterior lighting on all residential and commercial properties shall be designed and located so that the cone of light and/or glare from the lighting element is kept entirely on the property or below the top of any fence, edge or wall. 2. On all residential properties exterior lighting outlets and fixtures shall not be located more than nine (9) feet above adjacent grade or required landing; walls or portions of walls shall not be floodlit; only shielded light fixtures which focus light downward shall be allowed, except for illuminated street numbers required by the fire department. 3. Variances to the provisions of this section may be approved by the planning commission, pursuant to the provisions of Chapter 25.16 of this code, except that notice of the application for the variance shall only be given to property owners within fifty feet. 8/13/2019 50 4. This section shall not apply to signs having an approved permit for an illuminated sign pursuant to Title 22 of this code. Chapter 18.30 Green Building Standards Code Section: 18.30.010 Adoption of 2019 California Green Building Standards Code. The rules, regulations and standards printed in one volume and published by the International Code Council (ICC), under the title "2019 California Green Building Standards Code" adopted as the 2019 California Green Building Standards Code," including appendix chapter A4 and the State of California amendments thereto, is adopted as and for the rules, regulations and standards within this city as to all matters therein contained, except as otherwise provided in this chapter. Appendix chapter A4 of the Green Building Standards Code shall be enforceable to the same extent as if contained in the body of the code. Section 14. An application for a building permit received after December 31, 2019 must comply with this Ordinance unless specific land use provisions for the project were approved by the City of Burlingame prior to 5:00 p.m. on December 31, 2019. If the Planning Commission approves the project prior to the effective date of this ordinance, then the building permit application for that project may use the provisions found in the 2016 California Building Codes including all amendments as adopted in Ordinance 1856- 2010, 1889-2013 and 1933-2016 as applicable. 8/13/2019 51 Section 15. This ordinance shall be effective DIVISION 2: If any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of this Ordinance. The Council declares that it would have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. DIVISION 3: This Ordinance shall be published in a newspaper of general circulation in accordance with California Government Code Section 36933, published, and circulated in the City of Burlingame, and shall be in full force and effect on January 1, 2020, or when the ordinance is filed with the Building Standards Commission, whichever occurs later. I, Meaghan Hassel-Shearer, City Clerk of the City of Burlingame, certify that the foregoing ordinance was introduced at a public hearing at a regular meeting of the City Council held on the 21st day of October, 2019, and adopted thereafter at a regular meeting of the City Council held on the ______ day of ___________ 2019, by the following vote: 8/13/2019 52 AYES: Councilmembers: NOES: Councilmembers: ABSENT: Councilmembers: __________________________________ Meaghan Hassel-Shearer, City Clerk 1 STAFF REPORT AGENDA NO: 9b MEETING DATE: October 21, 2019 To: Honorable Mayor and City Council Date: October 21, 2019 From: Carol Augustine, Finance Director – (650) 558-7222 Subject: Adoption of a Resolution Approving the Issuance by the Burlingame Financing Authority of Not to Exceed $40,000,000 Aggregate Principal Amount of Lease Revenue Bonds to Finance the Burlingame Community Center; Authorizing Execution and Delivery of a Facilities Lease, a Facilities Sublease and a Notice of Sale; Approving the Form of the Official Statement; and Authorizing Execution of Documents and the Taking of All Necessary Actions Relating to the Financing with the Burlingame Financing Authority RECOMMENDATION Staff recommends that the City Council adopt the resolution approving all actions relating to the issuance of the Lease Revenue Bonds, Series 2019. BACKGROUND The replacement of the Recreation Center in Washington Park has long been one of the City’s top infrastructure priorities. Since 2012, City staff has been working in collaboration with Group 4 Architecture, a Citizens’ Advisory Committee, and community members to develop plans for a new community center to replace the 1940s-era facility at the same location. After extensive outreach, the City Council approved the Community Center Master Plan in July 2014, the schematic design and phasing for the new Community Center in November 2018, and an Initial Study/Mitigated Negative Declaration in December 2018. While a budget in the range of $50 million was established for construction of the facility, the City funded the $2.7 million needed for construction of the relocated children’s playground and sports court and a new picnic area (the early site package) in the fiscal year 2018-19 budget. And though strategies to reduce the costs for the building were explored, in the current climate of escalating construction costs, the total budget was determined to be just shy of $52,000,000. Since developing and prioritizing an initial list of unfunded needs in fiscal year 2014-15, staff has explored various options to finance the new Community Center and other public facilities. As an initial step, the City established a Capital Investment Reserve (initially the Renewal and Replacement Reserve) in 2015 to accumulate reserves for capital project needs for which the funding had not yet been identified. In November 2017, Burlingame’s voters approved Measure I, a quarter -cent transactions and use tax measure that is estimated to raise $2 million a year. In February 2018, the City Council Lease Revenue Bonds, Series 2019 – City Council October 21, 2019 2 approved a Measure I spending plan that included an annual pledge of $1 million toward debt service on the issuance of lease revenue bonds to finance the new Community Center. An additional $1 million annual General Fund transfer was approved in the 2018-19 fiscal year budget, also intended to fund the anticipated debt service. Note that the total costs of the Community Center project were always expected to exceed the amount of the bond issuance. To the extent the project costs exceed the available bond proceeds and any other resources dedicated to the project, funds will be drawn from the Capital Investment Reserve. In September 2019, staff initiated the process of prequalifying contractors for the project; contractor prequalification submissions were due October 16, 2019, and bidding on the project is tentatively scheduled for January 2020. The scope of work includes demolition of the current Recreation Center and site work; and construction of a new 36,000 square foot two-story above ground community center building, adjacent surface parking, a single level 22,000 sf. underground parking garage that is partially under the community center building and surface parking lot, as well as associated site work including the outdoor terraces, fencing, pedestrian and vehicular hardscape, softscape, and trash/stair enclosure structure. The groundbreaking is anticipated to occur in spring 2020. DISCUSSION Staff has worked with its Financial Advisor, PFM Financial Advisors, LLC (Public Financial Management, Inc.) over the past few months to schedule the 2019 lease revenue bond issuance. Orrick, Herrington & Sutcliffe LLP was chosen to provide the City with bond and disclosure counsel services, and U.S. Bank was selected to serve as the trustee. The determination to issue lease revenue bonds to finance the City’s Community Center project is based on the City’s intent to distribute the cost of building an essential facility over its useful life. Supporting this decision is the City’s access to lower-cost financing through lease revenue bonds, and the City’s relatively low level of existing debt. At the same time, the amount of the project financed through long-term debt has been limited to a specific level of annual debt-service costs, in order to maintain the City’s strong financial balance sheet position. Bonds will be secured by a lease agreement between the City and the Burlingame Financing Authority utilizing the Main Library and adjacent parking garage as the security for the lease and payments. The 2019 bonds will finance approximately $37 million of the project costs, though the stated maximum principal amount of $40 million allows for flexibility in what is currently a very favorable bond market. The bond documents reflect a final maturity date of July 1, 2049 and a maximum true interest cost of 5.00%. The blanks in the Preliminary Official Statement, Trust Agreement, Facilities Lease and Sublease are intentional and will be filled in once the issuance moves forward and the pricing and sale are completed. It is expected that the bonds will be sold on or about November 18, 2019, and the transaction is expected to close the week of December 2nd. The proceeds will be deposited in U.S. Bank, the City’s trustee bank for this bond series. Lease Revenue Bonds, Series 2019 – City Council October 21, 2019 3 Copies of the Resolutions, Preliminary Official Statement, and Notice of Sale are available for public inspection at the Office of the City Clerk and are also attached to the Financing Authority agenda for today’s meeting. FISCAL IMPACT The not-to-exceed interest rate on the proposed bonds is set at 5.0%, but the actual interest rate is likely to be much lower. (The not-to-exceed parameter limits interest rates for any particular maturity, which is different than the total interest cost across the spectrum of maturities.) If a bond insurance policy is made available, the decision to purchase it will depend on the potential economic benefit it provides (if any). In addition, a good-faith estimate of bond costs is attached to this staff report. The debt payment for the 2019 bonds is estimated at $2,000,000 annually. To the extent that the bond proceeds are insufficient to finance the entire Community Center budget, the City’s Capital Investment Reserve funds will be utilized. Exhibits:  Resolution of the City Council of the City of Burlingame Approving the Issuance by the Burlingame Financing Authority of Not To Exceed $40,000,000 Aggregate Principal Amount of Lease Revenue Bonds, Series 2019 to Finance the Burlingame Community Center; Authorizing Execution and Delivery of a Facilities Leas, a Facilities Sublease and a Notice of Sale; Approving Form of Official Statement; and Authorizing Execution of Documents and the Taking of All Necessary Actions Relating to the Financing with the Burlingame Financing Authority  Estimated Cost of Lease Revenue Bonds (Series 2019) 4131-4213-0463.4 RESOLUTION NO. ____ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME APPROVING THE ISSUANCE BY THE BURLINGAME FINANCING AUTHORITY OF NOT TO EXCEED $40,000,000 AGGREGATE PRINCIPAL AMOUNT OF LEASE REVENUE BONDS, SERIES 2019 TO FINANCE THE BURLINGAME COMMUNITY CENTER; AUTHORIZING EXECUTION AND DELIVERY OF A FACILITIES LEASE, A FACILITIES SUBLEASE AND A NOTICE OF SALE; APPROVING FORM OF OFFICIAL STATEMENT; AND AUTHORIZING EXECUTION OF DOCUMENTS AND THE TAKING OF ALL NECESSARY ACTIONS RELATING TO THE FINANCING WITH THE BURLINGAME FINANCING AUTHORITY WHEREAS, the City of Burlingame (the “City”) and the Redevelopment Agency of the City of Burlingame (the “Agency”) have heretofore executed a Joint Exercise of Powers Agreement, dated as of May 15, 1995 (the “Joint Powers Agreement”), by and between the City and the Agency, which Joint Powers Agreement creates and establishes the Burlingame Financing Authority (the “Authority”); and WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Marks-Roos Local Bond Pooling Act of 1985”) and the Joint Powers Agreement, the Authority is authorized to issue bonds for financing and refinancing public capital improvements whenever there are significant pu blic benefits to be realized; and WHEREAS, in accordance with Government Code Section 6586.5, the City has published notice of a public hearing in a newspaper of general circulation and on the date hereof held a public hearing concerning the financing of the Project by the Authority through the issuance of the Bonds as required by Government Code Section 6586.5(a)(2); and WHEREAS, the City desires to approve the Authority's issuance of not to exceed $40,000,000 in aggregate principal amount of Burlingame Financing Authority Lease Revenue Bonds, Series 2019 (the “Bonds”) for the purpose of financing the Burlingame Community Center (the “Project”); and WHEREAS, in order to finance the Project, the City desires to lease to the Authority certain facilities (the “Facilities”) pursuant to a facilities lease (the “Facilities Lease”) between the City and the Authority, and the City desires to lease back from the Authority the Facilities pursuant to a facilities sublease (the “Facilities Sublease”) between the Authori ty and the City; and WHEREAS, the Authority will award the Bonds to the lowest responsible bidder (the “Purchaser”) pursuant to the Official Notice of Sale (the “Notice of Sale”); and WHEREAS, there have been submitted and are on file with the City Clerk proposed forms of the Facilities Lease, Facilities Sublease and Official Notice of Sale, an -2- 4131-4213-0463.4 Official Statement with respect to the Bonds proposed to be sold by the Authority, and a Trust Agreement by and between the Authority and U.S. Bank National Association, as trustee (the “Trust Agreement”); and WHEREAS, the issuance of the Bonds by the Authority and the execution and delivery of the Facilities Lease and Facilities Sublease will result in significant public benefits through demonstrable savings in the effective interest rates and bond issuance costs, and that it furthers the public purpose to assist in such financing; NOW THEREFORE, the City Council of the City of Burlingame hereby finds, determines, declares and resolves as follows: Section 1. All of the recitals set forth above are true and correct, and the City Council so finds and determines. Section 2. The City Council hereby approves the issuance of the Bonds by the Authority, in an aggregate principal amount not to exceed $40,000,000, to finance the Burlingame Community Center. The City Manager and Finance Director/Treasurer of the City are hereby directed to perform the duties, if any, imposed upon each of them by the provisions of the financing documents approved herein, including the Trust Agreement, the Facilities Sublease and the Facilities Lease. Section 3. The proposed form of Facilities Lease, by and between the City and the Authority, on file with the City Clerk, is hereby approved. The City Manager and the Finance Director/Treasurer, jointly and severally, are hereby aut horized and directed, for and in the name and on behalf of the City, to execute and deliver a facilities lease in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the term of said facilities lease shall end no later than July 1, 2050, plus an extension period of not to exceed ten (10) years. Section 4. The proposed form of Facilities Sublease, by and between the Authority and City, on file with the City Clerk, is hereby approved. The City Manager and Finance Director/Treasurer, jointly and severally, are hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver a facilities subl ease in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the term of said facilities sublease shall end no later than July 1, 2050, plus an extension period of not to exceed ten (10) years. Section 5. The proposed form of Official Notice of Sale, in substantially the form on file with the City Clerk, is hereby approved. Section 6. The proposed form of Official Statement (the “Official Statement”) is hereby approved in substantially the form on file with the City Clerk. The Purchaser is hereby directed to distribute copies of the Official Statement to all actual purchasers of the Bonds. Distribution by the Authority of a preliminary Official Statement relating to the Bonds is hereby approved and the City Manager and Finance Director/Treasurer, jointly and severally, are hereby -3- 4131-4213-0463.4 authorized and directed, to execute a certificate confirming that the preliminary Official Statement has been “deemed final” by the City for purposes of Securities and Exchange Commission Rule 15c2-12. Section 7. The City Manager and Finance Director/Treasurer, jointly and severally, are hereby authorized on behalf of the City to execute a Continuing Disclosure Certificate containing such covenants of the City as shall be necessary to comply with the requirements of Securities and Exchange Commission Rule 15c2-12. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of such Co ntinuing Disclosure Certificate. Section 8. The officers and City Council members of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents and certificates which they deem necessary or advisable in order to consummate the execution and delivery of the documents mentioned herein and otherwise to effectuate the purposes of this Resolution and the transactions contemplated hereby, including but not limited to obtaining bond insurance. Section 9. All actions heretofore taken by the officers and agents of the Council of the City with respect to the financing are hereby ratified, confirmed and approved. Section 10. This Resolution shall take effect from and after its adoption and approval. -4- 4131-4213-0463.4 I hereby certify that the foregoing is a full, true and correct copy of a resolution duly passed and adopted by the City Council of the City of Burlingame at a regular meeting thereof held on the 21st day of October, 2019, by the following vote of the members thereof: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ATTEST: City Clerk 4131-4213-0463.4 CLERK'S CERTIFICATE I, ________________________, City Clerk of the City of Burlingame, do hereby certify as follows: The foregoing resolution is a full, true and correct copy of a resolution duly adopted by a vote of a majority of the City Council of the City of Burlingame at a regular meeting of said Council duly and regularly and legally held at the Council Chambers, 501 Primrose Road, Burlingame, California, on October 21, 2019, of which all of such members had due notice, as follows: AYES: NOES: ABSTAIN: ABSENT: An agenda of said meeting was posted at least 72 hours before said meeting at 501 Primrose Road, Burlingame, California, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda. I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes. Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect. Dated: __________, 2019. City Clerk of the City of Burlingame [Seal] 4164-3388-9823.1 EXHIBIT A TO STAFF REPORT GOOD FAITH ESTIMATES BURLINGAME FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2019 The following information was obtained from PFM Financial Advisors LLC, as the municipal advisor of the bonds defined above (the “Bonds”): 1. True Interest Cost of the Bonds. Assuming an aggregate principal amount of the Bonds in the amount of $37,524,619 is sold to effectuate the financing with annual debt service savings and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 3.52%. 2. Finance Charge of the Bonds. Assuming such a principal amount of the proposed Bonds is sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the Finance Charge of the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the issuance of the Bonds), is $501,480. 3. Amount of Proceeds to be received. Assuming such aggregate principal amount of the proposed Bonds required to effectuate the financing is sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the amount of proceeds expected to be received by the issuer for sale of the Bonds less the Finance Charge of the Bonds described in 2 above and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $ 37,023,139. 4. Total Payment Amount. Assuming such aggregate principal amount of the proposed Bonds ($37,524,619) are sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the total payment amount, which means the sum total of all payments the issuer will make to pay debt service on the Bonds plus the Finance Charge of the Bonds described in paragraph 2 above not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $59,916,089. Attention is directed to the fact that the foregoing information constitutes good faith estimates only. The actual interest cost, finance charges, amount of proceeds and total payment amount may vary from the estimates above due to variations from these estimates in the timing of Bond sales, the amount of Bonds sold, the amortization of the Bonds sold and market interest rates at the time of each sale. The date or dates of sale and the amount of Bonds sold will be determined by the issuer based on need for funds and other factors. The actual interest rates at which the Bonds will be sold will depend on the bond market at the time of sale. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of each sale. Market interest rates are affected by economic and other factors beyond the issuer’s control. 1 STAFF REPORT AGENDA NO: 10a MEETING DATE: October 21, 2019 To: Honorable Mayor and City Council Date: October 21, 2019 From: Lisa K. Goldman, City Manager – (650) 558-7243 Kevin Gardiner, Community Development Director – (650) 558-7253 Subject: Update on “Sea Change Burlingame” RECOMMENDATION Staff recommends that the City Council receive an update on the City’s “Sea Change Burlingame” sea level rise study. BACKGROUND During the City Council’s goal-setting session in January 2019, the Council identified five infrastructure initiatives for special focus over the next year. The Mayor then assigned two Councilmembers to champion each initiative. One of the initiatives is sea level rise shoreline protection improvements, and Mayor Colson and Councilmember Brownrigg are the assigned Councilmembers. Separately, the City received a grant from San Mateo County to evaluate sea level rise as it relates to Burlingame and identify potential near-term and long-term adaptation strategies that would be applicable to the particular site conditions of the Bayfront. The study, known as “Sea Change Burlingame,” will provide a high-level assessment that will inform policies and future planning efforts. DISCUSSION Sea Change Burlingame builds upon the San Mateo County Sea Level Rise Vulnerability Assessment (accessible at www.seachangesmc.org/). As a first step, the work plan combines the findings of the Vulnerability Assessment together with analysis prepared separately by the Stanford University Sustainable Urban Systems Initiative classes last year to create a consolidated “existing conditions” risk and vulnerabilities overview. Building upon that assessment, the work plan then includes an identification of potential near-term and long-term adaptation strategies that would be applicable to the particular site conditions of the Bayfront. The goal of the study is to develop an implementable sea-level rise adaptation plan for Burlingame’s shoreline and residents. Objectives include: • Assessing baseline flood risk that includes future sea-level rise projections; “Sea Change Burlingame” Update October 21, 2019 2 • Developing reasonable and feasible sea level rise adaptations appropriate to Burlingame’s setting; • Evaluating a range of adaptation measures to inform the selection of recommended measures; and • Integrating recommended measures into a phased adaptation plan to guide implementation The study is ongoing and on schedule. To date, the consultant for the study, ESA, has prepared the risk and vulnerabilities analysis and memorandum, a decision-making framework, and a series of conceptual adaptation strategies. These initial deliverables were shared with Bayfront area stakeholders at a meeting on July 10th, as well as with a Technical Advisory Committee (TAC) comprised of staff from the City and neighboring communities. The presentation and the risk and vulnerabilities memorandum from that meeting can be downloaded from the project page at www.burlingame.org/seachangeburlingame. More recently, the conceptual options have been refined and were presented to the TAC and to the broader community at a meeting on October 16th. The approach presented in the meetings organizes the Bayfront into a series of subareas, or “reaches,” each of which share common physical characteristics (refer to attached diagram). The adaptation approach within each reach may vary, based on the variations in characteristics, as well as existing and future development patterns. In some instances, a levee may be appropriate, whereas in other areas a floodwall may be more feasible given space constraints. Other areas, such as the land owned by the Transportation Authority along the shore at the eastern end of Broadway, may be suitable to “nature-based” adaptation measures that combine engineering and naturalistic elements. Some of these approaches have been illustrated in photo renderings (attached). The result of the study will be a general approach to sea level rise adaptation, to be further studied in future years. Additional analysis will be required to further evaluate detailed engineering and financing matters, and develop specific capital projects. However, the current Sea Change Burlingame study will serve to identify an initial approach to how the City and its neighbors will be able to adapt to sea level rise in the future. In coordination with the ongoing study, in June the City Council discussed imposing a temporary moratorium on modifications to or demolition of the sea wall on Burlingame’s Bayfront while the City develops its long-term plan to address sea level rise. Should the Council indicate a continued interest in the moratorium, staff will develop an ordinance to be introduced at a future date. T he Sea Change Burlingame study is anticipated to be completed by the end of this year, and a final presentation to the City Council is anticipated in late 2019 or early 2020. “Sea Change Burlingame” Update October 21, 2019 3 FISCAL IMPACT There is no fiscal impact associated with this discussion and direction item. Exhibits:  Bayfront Reaches Diagram  Adaptation Photo Renderings Burlingame Shoreline Reaches Floodwall is removed One row of parking may be eliminated Built levee includes public access trail at peak SEA CHANGE BURLINGAME ADAPTATION Floodwall removed and replaced with levee Existing Marriott Old Bayshore Highway Vagabond Inn Proposed Existing Levee raised. (approx 4ft shown) Existing floodwall removed Proposed 4 ft Proposed Levee Detail Extended levee may eliminate a row of parking Existing floodwall in front of building is raised multiple feet Trail is enhanced with additional plantingsBuilt levee includes public access trail at peak SEA CHANGE BURLINGAME ADAPTATION Floodwall transition to levee At transition, floodwall is embedded into levee for 50 ft Detail At transition, floodwall is embedded into levee for 50 ft Floodwall is raised 2ft min Levee slopes down- ward behind floodwall Marriott Old Bayshore Highway Vagabond Inn Proposed Existing Transition from Levee to Floodwall Detail SEA CHANGE BURLINGAME ADAPTATION Nature Based Solutions Beach comprised of coarse sand and/or oyster shell hash Levee transition to beachOpportunity for revitalizing public space Holiday Inn ExpressBridge Club Bayshore Highway Grand Harbor Existing Proposed Levee raised in concert with beach construction 1 Memorandum Agenda Item: 11a Meeting Date: October 21, 2019 To: City Council Date: October 21, 2019 From: Mayor Donna Colson Subject: Committee Report Wednesday September 18, 2019 Candidate Debate Thursday September 19, 2019 Home For All Steering Committee  Discussion of how we can update Home For All Task Forces  Internet portal coming for teacher and educator housing working with HIP Housing and will be available for all teachers/educators in the County as a comprehensive site that can be used to determine housing options in San Mateo County  Funding from the County Measure K - Had $29 mm to award - Got 15 applications and had 12 grants awarded for 1,332 units all affordable units (homeless, veterans, very low and low income) and seven of the projects were new to the county. The developers are saying that this is the best county in which to work.  New Department of Housing Affordable Dashboard - Shows number of affordable units since 2014 - leverage is more than $1 billion dollars, then includes the RHNA page - ONLY includes housing that is funded by Measure K funds - we do need to include data for prior years and for cities that DID NOT use Measure K funding. We do need to include our data - it is only not there bc we did not use Measure K funds.  Second Units - ADU - won award American Planning Association for California Award. ADU fair Sunday October 13th from 1:00 - 5:00 PM in Redwood City - you can learn about building a second unit. Developing a marketing plan to share this information as well.  Community Engagement Manual - we are presenting at the Non-Profit Housing Association of Northern California conference for all local affordable housing developers. Burlingame is presenting at this conference with the Home For All people. We are also presenting October 15 at the MMANC and the again on October 22nd at International City Managers Association meeting and doing.  Learning Networks Meeting on October 17 and November 18  Received a CSCA Challenge Award for Housing, Land Use and Development  Communications Committee - Focus is to bring awareness across the County, Bay Area and in Sacramento about progress toward meeting housing goals in San Mateo County. Effie is leading the effort.  HFA - Goal #1 - How do we close the Jobs/Housing Ration - we have decreased from 24:1 to 12:1 (data is back 2017) and the data shows that job growth is growing. Goal # 2 - Colson Committee Report October 21, 2019 2 16,500 units for the county of RHNA - we have done really well at above moderate, the harder part is the low and very low. Approach - four key areas Funding, Housing Policies, Land, Community Support = New Housing  Task Forces - Housing/Parking/Traffic, Second Units, Funding and Housing Climate Readiness, Educator Housing and Rental Housing Conversations  Deliverables - o Funding - Focus on pipeline concept to get every city to the table in some way and how we can strategically use Measure K and some of the state buckets of funding. The State funding comes with regulation so the County with be focused on this - preservation strategies, missing middle (cap and trade example - and GHG reduction and the things that we had jobs, lack of housing did not score well - so we were ignored - but we have worked with the County to fix this). Measure W and SamTrans finally coming together. Need to bring public works together and we can get funding from that if we have bike lanes, and now the per project funding is up to $30 million. o Housing, Parking, and Traffic Solutions Task Force - Biggest push back is traffic and parking, what can HFA offer and find gaps - messaging and community engagement to ease transportation concerns. Need to bring the community engagement to the transportation conversation. Change in lifestyle which has a different demand on cars, so we do need to create understanding of new generation lifestyle. o Housing and Climate Readiness Task Force - Entirely new task force and in the county and region we have work happening in the climate change and housing space. What is happening today in the community and seek out best practices to increase resilience and allow housing not contribute to GHG, but improve it. o Second Unit Task Force - Interest in naturally affordable way to increase housing in the county, but still formidable challenges to build these in terms of construction resources, conformance, and then how to disseminate the information. Also using term “naturally affordable” to define units over 50 years old which are generally lower rent than market - this would be virtually all of Burlingame. o Educator Housing Task Force - Bring the group of voices together and determine how schools can build housing on their facilities for teachers. Invited school districts and city partners to determine how to move forward. o Rental Housing Conversation - The group made it clear that elected officials should be included in this conversation. Legislation * CASA * Governor Newsom State of the State * Over 200 Housing Bills State Funding for Homeless and Housing: AB 101 and AB 113  $ 1 billion to fund programs to facilitate the construction of affordable housing - state’s commitment  $650 million to assist homelessness  $250 million in planning grants Colson Committee Report October 21, 2019 3  New process for Housing Element Compliance - Carrot and stick approach new rules about how cities are responsible for housing production  New incentives for cities to adopt “Pro-Housing” policies Production - ADU AB 68 Ting, AB 881 Bloom and SB 13 Wieskowki Streamlining AG 1485, SB 277, SB 330 Surplus Lands: AB 1255 Rivas, AB 1486 Ting and SB 6 Beal Protections - Rent Control AB 1482 Source of Income SB 222 Hill and SB 329 - Section 8 tenant rights Noticing: New rules around noticing for evictions Reporting AB 1483 Funding SB 5 - BEALL - State uses ERAF funding to provide $2 billion annual for state to backfill affordable housing BAHFA - MTC/ABAG Group that will produce affordable housing as a region and they have all sorts of powers to raise revenues and put taxes on the Two year bills - SB 50, SB 4, AB 1279 New Housing State Funds - 1. New State Housing Funds 2. Bay Area Regional Housing Finance Authority 3. RHNA with more strict 4. Plan Bay Area 2050 Process is Underway 5. Second Year of Legislative Cycle = What can we expect? March 19 June 18, September17 for future September 23, 2019 Mercy Housing Brain - helping and driving the housing project Sisters of Mercy and the Mercy Housing team met to see what was possible. Last met 2017 and needed to work through the planning MOU very close to signature and public phase would be January and February September 28, 2019 Colson Committee Report October 21, 2019 4 PCE Annual Retreat Focus on risk and management of these scenarios  Regulatory  Legislative  Procurement  Financial PCE Strategic Plan 10 Goals and we should move this down to a tighter and smaller group  Goal 1 - Design a diverse power portfolio that is GHG free by 2021 - 2019 should be 90% GHG free on our base product and signed LT contracts for 300 MW of new solar and another contract coming soon.  Goal 2 - EcoPlus at rates lower than PGE - Done  Goal 3 - Stimulate development of new renewable energy generation and storage in MC, working on 300 MW, negotiating new PPA’s working with other locals to update CCA.  Goal 4 - Benefits with hiring local and inclusionary Strategic Planning Annie Gallagher - Review of the new strategic planning process and how it will work. Joseph Wiedman Dir. Regulatory Affairs Four Bills we are going to assess -  SB520 Before the Gov - Changes IOUs as providers of last support - this already happens. So oppose this bill.  AB 56 - Established state agency as central buyer for all RA and renewable, CCA oppose this bill and other broad coalition of energy members - this bill died, barely made it pass the Assembly  AB 684 EV charging at MUD and requires - Support  AB 1054 - Wildlife Liability Bill - DWR Bond Funds = Bill has been signed. Some customers are exempt like NEM, and long-term DA. This is meant to fund the grid and as set up 14% of the users are exempted from the fees and this shifts costs to our customers. PGE bankruptcy has deferred this and people in Sacramento are a bit tired of talking about all this and so the job becomes harder. Risk and Opportunities Jeremy Waen - Regulatory Affairs  Power Charge Indifference Adjustment (PCIA) Constant changes to how this is calculated, the proceedings take 6 months and it is very hard to estimate. Our focus is to make sure that the numbers are correct and reasonable - but makes it very hard to estimate PCIA rates. Risk mitigation. We challenged $820 mm in revenue areas, but PGE agreed with three points and reduced the number by $600 mm.  Understanding capacity V Energy - in 2020 nearly short-fall of energy production from in- state resources and in 2022 we are exhausting the amount of energy that we can pull from out of state. Back to the rolling brownouts and this potential is happening. More of a supply discussion right now and if we continue to decline/retire energy resources that will tighten the supply. Conversation is around storage - how does this get counted in the Colson Committee Report October 21, 2019 5 commission rules? The out of state backfill is disappearing and they are trying to use their own supplies or they are retiring their own assets. IRP - Risk and Opportunities Doug Karpa - Integrated Resource Plan - What are these and what is the risk? Only 3 of the 19 submitted IRPs were approved by the state and so it begins to seem like this is a problem. How do we keep supply with natural gas plants shutting and then the electricity flowing? 1. Risk is if all the CCAs if they do not hit their actual benchmarks. The 24/7 coincident can we meet demand when solar goes down and are we hitting GHG benchmarks. Renewables at night? 2. Need to bring the other CCAs along bc the others cannot fall short. 3. Issues around the CPUC and does not show how the grid actually functions throughout the year. Neither CASIO nor CPUC have done this for the last 3 years. 4. Statewide mandates vs. Local Control (procurement and policy directions) Due to returning Diablo Canyon and gas plants. IF a shortfall how do we pay and how does it all work - this is in the procurement track. 5. Does the legislature step in to change regulatory requirements if the process is not working? This work is done in the statewide process to keep autonomy - have to solve the problems. What are we doing? 1. Ensure the IRPs are state gold standard 2. Ensure the CPUC is modeling and does not have serious errors 3. Getting data from other CCAs to model collectively and we know the impact and can forecast what we need to do to backfill. Power Resources - What we should be buying. 1. Reg Requirements - cost, timing, and mix 2. By October 31 - we must produce 90% of our system need and 100% of our local requirements, but assignment is not until September 20 and want to make sure we are not scrambling or over-procuring. This year, we have to procure for 3 years out RA. Managing risks - 1. Limit term length for contracts, credit rating has made us more attractive and we do not have to post collateral, then joint procurement with 4 CCAs 2. Integrated Resource Plan - Next IRP is due May 1, 2020 Strategic IRP becomes Procurement Risk Policy 3. Renewable Portfolio Standards - at least 75% from inside CA - PCE PTS mandate 2030 is 60% and PCE Target is 100% so we are ahead on this. 4. Drivers of power market prices, but natural gas drives power market prices and these will spike in correlation. 5. Hedging Strategies - finically hedge and renewable power purchase agreement and dollar cost average procurement on a quarterly basis 6. 2 pilot analytical options - Ascend Analytics - Runs thousands of iterations and then the other is Innovate that allows us to use AI to determine the patterns of use. Colson Committee Report October 21, 2019 6 Current Procurement Goals 1. 100% GHG Free and 100% renewable (not fossil or nuclear) - some of these biomass and thermal (operate 24 hours, but not GHG) and these are going to be in conflict. 2. Risks to 100% GHG free 3. Will work on this during the strategic planning process. 4. How does the board want to look at renewable vs GHG free? 5. Similarly on the 100% renewable - the demand fluctuates and how do we manage that - do we need a band or tolerances. Marketing - 1. Brand identity and we need to meet or exceed our product and programs and allow people to take action. Establish measurable objectives and four main areas of marketing: 1. Story telling 2. Improved understanding 3. Integrated marketing plans 4. Community Relations Monday September 30, 2019 Enterprise Meeting Presented new plans for updated rental car area on bay front. Provided feedback to Enterprise and look forward to a revised final plan and ideas for how to engage the city. Wednesday, October 9th Sea Change Burlingame  Working with TAC which now includes staff from Colma, South City, San Bruno, Millbrae, Burlingame, the County, SFO, and BCDC.  Type of habitats appropriate for the settings - which vary all over the bay.  Came up with 5 reaches that change over time. North area reaches have wave shadow of SFO so get different exposure. As you move south - there is actually more exposure to flooding.  Reach 1 - Low points in shoreline create flooding situation and looked for actual pathways - looked at depths and extents. For Reach 1 - want to raise the short line and reduce exposure to overtopping. Raise where we can raise it and in some areas we do have development right on the shoreline. Collaborate with Millbrae to determine if we can manage the north creek boundary.  Reach 2 - Shorebird park to about the for sale parcel. Creeks enter bay here and there may need to be upstream look at creek banks. Creeks should increase sediment delivery as it protects levy as it breaks the waves.  Reach 3 - from Broadway to edge of fisherman’s park. Wastewater treatment plant is vulnerable.  Reach 4 - Inner shoreline of the lagoon. Focus on providing long-term protection to the highway. With vegetation bring out a horizontal levy that could mitigate the wave energy. Raising shoreline and then give protection to highway 101.  Reach 5 - Around Fisherman’s park and to side of the new Oculus site and coordinate in with the location to San Mateo Colson Committee Report October 21, 2019 7 PCE Meeting Tuesday, October 15, 2019  Chairperson report - Update on Reach Code = This was complex and hard to implement for each city and the building officials thought the process was hard to understand and explain.  Visited council’s in the Central Valley to advocate for PCE  Power shut off - thinking about working with other CCAs and investing some funding into helping vulnerable communities - hospitals, senior centers etc. PGE has been holding these workshops on how to manage these power shutdowns. Leslie had attended a few of these meetings and had concern over PCE getting into the middle of this conversation since we cannot control the outage schedule.  Draft CCA Agenda - Rick D is speaking for the elected officials lunch  Meetings with Senator Hill and Assembly Member Mullin regarding EV Charging infrastructure program - Board approved $16 million over four years, $12 million for charging infrastructure, $2 million in outreach and technical, $1 million in workforce development and $1 million program administration. Strategic Planning  Looking forward to staff and board meeting agendas Legislative and other education opportunities for Strategic Planning  How do we work with legislature to move agenda forward  Thinking about if we want to take over responsibility for the lines in San Mateo County?  Renewable and GHG free - should CA revise definitions? Rate Adjustments for future  Pre-Approval for staff to execute rate changes as need to maintain our 5% adjustment. Historically, they did all on Jan 1 and now there are a number of adjustments, so we need to be more responsive at the staff level. October 15, 2019 Flood and Sea Level Rise Resiliency District Meeting  SF Estuary Institute (SFEI) - Formed in 1986 to monitor SF Bay Water Quality developed the Adaptation Atlas - Jeremy Lowe JeremyL@sfei.org  Clean Water, Environmental Informatics, Resilient Landscapes  Works or Federal agencies, state and regional regulators  Land use and resource agencies  Business and NGO leaders (Google Ecology Program)  A science-based framework to identify effective adaptation strategies  Different types of shoreline and what and how to do it - varies by area  Developed the Adaptation Atlas that divided the bay up into manageable units to respond to physical and ecological processes s  Mapping suitability for nature based adaptation measures Colson Committee Report October 21, 2019 8  Integrating across the land-water divide - connecting bayside and land  Nature-based measures: nearshore reefs, submerged vegetation, beaches, tidal marshes, older management, ecotone levees, migration space, creek to bay land connections, green stormwater infrastructure  Regulatory, financial, policy tools - zoning and overplay, setbacks, buffers, clustering, building codes, redevelopment restrictions, conservation easements, tax incentives, etc.  Most places will need some type of wall structure and can enhance with natural elements.  Constrained by development and other physical features.  Erika Powell - SMC Public Works - goal is to provide updates and feedback. Work is important bc it keeps people and property from flooding and safe.  County-Wide Flood Warning System - Working on this with CalOES Flood Emergency Response Grant  Dave Pine - Resource Legacy Fund meeting in September - they work to pass ballot measures at the state level and helped AA measure. Supporters of the Adaptation Atlas and open to help us find funding opportunities. Also, met with Juan Raigoza - Comptroller and the County can play the fiscal management role. Big Faster Bay Transportation Measure - asking for 1C sales tax increase for the next 40 years for $1 billion in funding and hoping some of this might be open for mitigation funding and SLR funding. Tuesday, Wednesday October 16, 2019 C/CAG Resource Management and Climate Protection Committee (RMCP)  Regional Climate action Template - Transportation and Electrification are things we can do together and working to make sure the metrics are the same and work to coordinate and message from a regional perspective.  Qualified Water Efficient Landscaper Trainings (QWEL) and will be taught in 20 hours over three days. Then you will be certified and on the northern CA state website. BAWSCA - What we are doing here in SMC and at the agency?  New Demand Study to look at demand and conservation savings through 2045.  Regional Smart Controller Program - provides rebates and installation services for smart irrigation controllers. All BAWSCA agencies will have option to participate. Cost structure - Customers pay $00 of $175 total and agencies can pay remaining $75, installation service is $195 and can be paid by the agency or customer. Automatically adjusts watering schedule based on local weather DTA, designed to help better understand and monitor water use in the garden. Then you get a wifi based SMART app irrigation controller that can help reduce.  Lawn Be Gone - provides rebates for replacing lawn with more water-efficient landscapes. New program launch by July 1, 2020 for FY 2020-21.  Working with each agency to comply with efficiency targets set by new state laws. Looking at a commercial audit tool to determine how to audit without city staff. Developed a pilot program to set baseline assessments for residential and commercial use and self- audit program and how it all fits together Colson Committee Report October 21, 2019 9 Clean Coalition - Establishing a Community Micro-grid  Way for cities to determine if they can create their own micro-grid using solar and energy storage to maintain system - selected sites and then placed the panels on them and knitted them together into a city grid.  Savings is significant each year is good, but 8-25 year payback for these systems.  Company is Introducing V2X for Everyone dcbel - First solar inverter in the world - Solar Inverter and Bi-Directional Fast Charging, fastest EV charger in the world 60 miles range with 60 minutes at home. Sea Change Burlingame October 16, 2019  Community meeting for update on sea change and climate action work around bay front and our plan for defense. Home For All Learning Network October 17, 2019  Principals of how to manage a learning oriented meeting  Want people to learn and experience - design meeting through dialogue and balance with lived experience  Questions are valued  Set expectations of what we are doing - provide invitation through newsletters, flyers, and social media.  Emphasize community and include many languages  RSVP and then intentional seating so that we are strategic about how we place people on the table  Provide “just enough” context for conversation and then supply supplemental information color coded, icons, etc.  Gathering input - sometimes before the meeting even starts 1 STAFF REPORT AGENDA NO: 14a MEETING DATE: October 21, 2019 To: Burlingame Financing Authority Date: October 21, 2019 From: Carol Augustine, Finance Director – (650) 558-7222 Subject: Adoption of a Resolution Authorizing the Issuance and Sale of Lease Revenue Bonds to Finance the Burlingame Community Center; Approving the Forms of a Trust Agreement, a Facilities Lease, a Facilities Sublease and a Notice of Sale; Approving an Official Statement Describing Said Bonds; and Authorizing Execution of Documents and the Taking of All Necessary Actions Relating to the Issuance of the Bonds RECOMMENDATION Staff recommends that the Financing Authority Board adopt a resolution authorizing the issuance of the Lease Revenue Bonds, Series 2019. BACKGROUND The replacement of the Recreation Center in Washington Park has long been one of the City’s top infrastructure priorities. Since 2012, City staff has been working to develop plans for a new community center to replace the 1940s-era facility. The City Council approved the Community Center Master Plan in July 2014 and approved the schematic design and phasing for the new Community Center in November 2018. The total cost for construction of the new Community Center has been determined to be approximately $52,000,000. With the passage of a quarter cent transactions and use tax measure (Measure I) by the voters in November 2017, the City Council subsequently approved the Measure I spending plan that includes an annual pledge of $1 million toward debt service on the issuance of lease revenue bonds to finance the new Community Center. An additional $1 million annual General Fund transfer was approved in the 2018-19 fiscal year budget, also intended to fund the anticipated debt service. Note that the total costs of the Community Center project were always expected to exceed the amount of the bond issuance. To the extent the project costs exceed the available bond proceeds and any other resources dedicated to the project, funds will be drawn from the Capital Investment Reserve. DISCUSSION City staff has worked with the City’s Financial Advisor, PFM Financial Advisors, LLC (Public Financial Management, Inc.) over the past few months to schedule the 2019 lease revenue bond Lease Revenue Bonds, Series 2019 – Financing Authority October 21, 2019 2 issuance. Orrick, Herrington & Sutcliffe LLP was chosen to provide the City with bond and disclosure counsel services, and U.S. Bank was selected to serve as the trustee. The determination to issue lease revenue bonds to finance the City’s Community Center project is based on the City’s intent to distribute the cost of building an essential facility over its useful life. Supporting this decision is the City’s access to lower-cost financing through lease revenue bonds, and the City’s relatively low level of existing debt. At the same time, the amount of the project financed through long-term debt has been limited to a specific level of annual debt-service costs in order to maintain the City’s strong financial balance sheet position. Bonds will be secured by a lease agreement between the City and the Burlingame Financing Authority utilizing the Main Library and adjacent parking garage as the security for the lease and payments. The 2019 bonds will finance approximately $37 million of the project costs, though the stated maximum principal amount is $40 million to allow for flexibility in what is currently a very favorable bond market. The bond documents reflect a final maturity date of July 1, 2049 and a maximum true interest cost of 5.00%. The blanks in the Preliminary Official Statement, Trust Agreement, Facilities Lease, and Sublease are intentional and will be filled in once the issuance moves forward and the pricing and sale are completed. It is expected that the bonds will be sold on or about November 18, 2019, and the transaction is expected to close the week of December 2nd. The proceeds will be deposited in U.S. Bank, the City’s trustee bank for this bond series. Copies of the Resolutions, Preliminary Official Statement, and Notice of Sale are available for public inspection at the Office of the City Clerk and are also attached to this staff report. FISCAL IMPACT The not-to-exceed interest rate on the proposed bonds is set at 5.0%, but the actual interest rate is likely to be much lower. (The not-to-exceed parameter limits interest rates for any particular maturity, which is different than the total interest cost across the spectrum of maturities.) If a bond insurance policy is made available, the decision to purchase it will depend on the potential economic benefit it provides (if any). In addition, a good-faith estimate of bond costs is attached to this staff report. The debt payment for the 2019 bonds is estimated at $2,000,000 annually. To the extent that the bond proceeds are insufficient to finance the entire Community Center budget, the City’s Capital Investment Reserve funds will be utilized. Exhibits:  Resolution Authorizing the Issuance and Sale of Lease Revenue Bonds to Finance the Burlingame Community Center; Approving the Forms of a Trust Agreement, A Facilities Lease, a Facilities Sublease and a Notice of Sale; Approving an Official Statement Describing Said Bonds; and Authorizing Execution of Documents and the Taking of All Necessary Actions Relating to the Issuance of the Bonds  Facilities Lease Between the City of Burlingame and the Burlingame Financing Authority  Facilities Sublease Between the Burlingame Financing Authority and the City of Burlingame Lease Revenue Bonds, Series 2019 – Financing Authority October 21, 2019 3  Trust Agreement between the Burlingame Financing Authority and U.S. Bank National Association, Dated as of October 21, 2019.  Preliminary Official Statement  Notice of Sale  Estimated Cost of Lease Revenue Bonds (Series 2019) 4155-7371-2671.3 BURLINGAME FINANCING AUTHORITY RESOLUTION NO. ____ RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF LEASE REVENUE BONDS TO FINANCE THE BURLINGAME COMMUNITY CENTER; APPROVING THE FORMS OF A TRUST AGREEMENT, A FACILITIES LEASE, A FACILITIES SUBLEASE AND A NOTICE OF SALE; APPROVING AN OFFICIAL STATEMENT DESCRIBING SAID BONDS; AND AUTHORIZING EXECUTION OF DOCUMENTS AND THE TAKING OF ALL NECESSARY ACTIONS RELATING TO THE ISSUANCE OF THE BONDS WHEREAS, the City of Burlingame (the "City") and the Redevelopment Agency of the City of Burlingame (the "Agency") have heretofore executed a Joint Exercise of Powers Agreement, dated as of May 15, 1995 (the "Joint Powers Agreement"), by and between the City and the Agency, which Joint Powers Agreement creates and establishes the Burlingame Financing Authority (the "Authority"); and WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Marks-Roos Local Bond Pooling Act of 1985") and the Joint Powers Agreement, the Authority is authorized to issue bonds for financing and refinancing public capital improvements whenever there are significant public benefits; and WHEREAS, the Authority desires to issue bonds for the purpose of financing the Burlingame Community Center (the "Project"); and WHEREAS, this Board of the Authority hereby determines that there are significant public benefits, including through demonstrable savings in the effective interest rates and bond issuance costs expected to be paid for the Bonds, and that it furthers the public purpose to assist in such financing; and WHEREAS, in order to achieve such significant public benefits and public purpose, this Board of the Authority desires to authorize the issuance and sale of not to exceed $40,000,000 in aggregate principal amount of its Burlingame Financing Authority Lease Revenue Bonds, Series 2019 (the "Bonds"); and WHEREAS, the Authority desires to sell the Bonds pursuant to a public sale; and WHEREAS, the Authority desires to enter into a Trust Agreement (the "Trust Agreement") with U.S. Bank National Association, as trustee (the "Trustee"), for the purpose of securing the Bonds; and WHEREAS, in order to finance the Project, the Authority desires to lease from the City certain facilities (the "Facilities") pursuant to a facilities lease (the "Facilities Lease") between the City and the Authority, and the Authority desires to lease back to the City the -2- 4155-7371-2671.3 Facilities pursuant to a facilities sublease (the "Facilities Sublease") between the Authority and the City; and WHEREAS, proposed forms of the Trust Agreement, Facilities Lease, Facilities Sublease and Official Notice of Sale are on file with the Secretary of the Authority; NOW THEREFORE, the Governing Board of the Burlingame Financing Authority hereby finds, determines, declares and resolves, as follows: Section 1. The foregoing recitals are true and correct and the Authority hereby so finds and determines. Section 2. The issuance and sale of the Burlingame Financing Authority Lease Revenue Bonds, Series 2019, in an aggregate principal amount not to exceed $40,000,000, are hereby approved. Section 3. (a) The proposed form of Trust Agreement, by and between the Authority and Trustee, on file with the Secretary of the Authority, is hereby approved. The Executive Director of the Authority (or other officer designated by the Executive Director) is hereby authorized and directed for and in the name and on behalf of the Authority, to execute and deliver a trust agreement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. The date, maturity date or dates (not to exceed July 1, 2050), interest rate or rates (not to exceed a true interest cost of five percent (5%) per annum), interest payment dates, series, denominations, forms, registration privileges, manner of execution, place or places of payment, terms of redemption and other terms of the Bonds shall be as provided in said Trust Agreement, as finally executed. (b) U.S. Bank National Association is hereby approved and appointed as Trustee of the Authority with respect to the Bonds, and shall be authorized to act as Trustee in accordance with the terms of the Trust Agreement. Section 4. The proposed form of Facilities Lease, by and between the City and the Authority, on file with the Secretary of the Authority, is hereby approved. The Executive Director (or other officer designated by the Executive Director) is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver a facilities lease in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the term of said facilities lease shall end no later than July 1, 2050, plus an extension period of not to exceed ten (10) years. Section 5. The proposed form of Facilities Sublease, by and between the Authority and City, on file with the Secretary of the Authority, is hereby approved. The Executive Director (or other officer designated by the Executive Director) is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver a facilities sublease in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery -3- 4155-7371-2671.3 thereof; provided, however, that the term of said facilities sublease shall end no later than July 1, 2050, plus an extension period of not to exceed ten (10) years. Section 6. The proposed form of Official Notice of Sale, is hereby approved. Bids for the purchase of the Bonds shall be received and awarded to the lowest responsible bidder (the “Purchaser”) by the Executive Director of the Authority, or an designee of such official, provided that the true interest cost of the Bonds shall not exceed 5% per annum. Section 7. The proposed form of Official Statement relating to the Bonds (the "Official Statement"), on file with the Secretary of the Authority and incorporated into this Resolution by reference, is hereby approved. The Executive Director (or other officer designated by the Executive Director) is each hereby authorized and directed, for the Authority, to execute and deliver an Official Statement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. The Purchaser is hereby directed to distribute copies of the Official Statement to all actual purchasers of the Bonds. Distribution by the Authority of a preliminary Official Statement relating to the Bonds is hereby approved and the Executive Director (or other officer designated by the Executive Director) is hereby authorized and directed, to execute a certificate confirming that the preliminary Official Statement has been "deemed final" by the Authority for purposes of Securities and Exchange Commission Rule 15c2-12. Section 8. The Board hereby designates Orrick, Herrington & Sutcliffe, LLP as Bond and Disclosure Counsel and PFM Financial Advisors LLC as Municipal Advisor. Section 9. The officers and directors of the Authority are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents and certificates which they deem necessary or advisable in order to consummate the issuance, sale and delivery of the Bonds and otherwise to effectuate the purposes of this Resolution and the transactions contemplated hereby, including but not limited to the publication of a Notice of Intention to Sell. Section 10. The officers and board members of the Authority are hereby authorized and directed, jointly and severally, to execute and deliver any Certificate of the Authority or Written Request of the Authority required to be delivered pursuant to the Trust Agreement. Section 11. This Resolution shall take effect from and after its adoption. -4- 4155-7371-2671.3 I hereby certify that the foregoing is a full, true and correct copy of a resolution duly passed and adopted by the Burlingame Financing Authority at a regular meeting thereof held on the 21st day of October, 2019, by the following vote of the members thereof: AYES: BOARDMEMBERS: NOES: BOARDMEMBERS: ABSENT: BOARDMEMBERS: Secretary -5- 4155-7371-2671.3 SECRETARY'S CERTIFICATE I, ________________________, Secretary of the Burlingame Financing Authority, do hereby certify as follows: The foregoing resolution is a full, true and correct copy of a resolution duly adopted by a vote of a majority of the members of the Governing Board of said Authority at a regular meeting of the Governing Board of said Authority duly and legally held at City Hall, Burlingame, California, on October 21, 2019, of which meeting all of such members had due notice, as follows: AYES: NOES: ABSTAIN: ABSENT: An agenda of said meeting was posted at least 72 hours before said meeting at 501 Primrose Road, Burlingame, California, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda. I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes. Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect. Dated: __________, 2019. Secretary of the Burlingame Financing Authority DRAFT 10/10/2019 4133-5227-4710.4 Recording requested by and return to: CITY OF BURLINGAME c/o Orrick, Herrington & Sutcliffe LLP The Orrick Building 405 Howard Street San Francisco, California 94105 Attention: Pursuant to Section 27383 of the Government Code of the State of California, recording of this document is Exempt from any fees charged by the recorder. Transfer tax: None, exempt per R&T 11922, Lessee is governmental entity. FACILITIES LEASE between the CITY OF BURLINGAME and BURLINGAME FINANCING AUTHORITY Dated as of ________ 1, 2019 4133-5227-4710.4 FACILITIES LEASE This Facilities Lease (the “Lease”), dated as of _________ 1, 2019, by and between the CITY OF BURLINGAME, a general law city organized and existing under and by virtue of the laws of the State of California (the “City”), as lessor, and the BURLINGAME FINANCING AUTHORITY, a public entity and agency (the “Authority”), duly organized and existing pursuant to an Agreement entitled “Joint Exercise of Powers Agreement” by and between the City of Burlingame and the Redevelopment Agency of the City of Burlingame, as lessee; W I T N E S S E T H: WHEREAS, the City intends to lease the Facilities (as defined herein) to the Authority pursuant to this Lease; and WHEREAS, the Authority intends to sublease the Facilities back to the City pursuant to a Facilities Sublease, dated as of ___________ 1, 2019 (the “Sublease”) by and between the Authority, as lessor, and the City, as lessee; and WHEREAS, the Authority intends to issue its Lease Revenue Bonds, Series 2019 (the “Series 2019 Bonds”, and together with any bonds issued on a parity therewith, the “Bonds”) pursuant to a trust agreement and in accordance with the Joint Exercise of Powers Agreement and its powers thereunder and under the laws of the State of California; and WHEREAS, the proceeds of the Series 2019 Bonds will be applied by the City to finance the City’s Community Center; NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED as follows: SECTION 1. Facilities. The City hereby leases to the Authority and the Authority hereby leases from the City, on the terms and conditions hereinafter set forth, the real property and improvements situated in the City of Burlingame, State of California, and described in Exhibit A attached hereto and made a part hereof, including removal or substitution or addition of any additional real property by any supplement or amendment hereto, in accordance with Section 2.04 of the Sublease and the Trust Agreement (herein collectively called the “Facilities”). SECTION 2. Term. The term of this Lease shall commence on the date of recordation of this Lease in the office of the County Recorder of San Mateo County, State of California, or on _______ 1, 2019, whichever is earlier, and shall end on _________ 1, ____, unless such term is extended or sooner terminated as hereinafter provided, including as such term may be extended in connection with the issuance of additional Bonds. If on _________ 1, ____ (or such later date established in connection with the issuance of additional Bonds), the Bonds and all other amounts due under the Trust Agreement shall not be fully paid, or if the rental or other amounts payable under the Sublease shall have been abated at any time and for any reason or shall not have been fully paid, 2 4133-5227-4710.4 then the term of this Lease shall be extended until ten (10) days after the Bonds and all other amounts due under the Trust Agreement and the Sublease shall be fully paid, except that the term of this Lease shall in no event be extended beyond _________ 1, ____ (or such later date established in connection with the issuance of additional Bonds). If prior to _________ 1, ____, the Bonds and all other amounts due under the Trust Agreement shall be fully paid, the term of this Lease shall end ten (10) days thereafter or ten (10) days after written notice by the City to the Authority, whichever is earlier. SECTION 3. Rental. The Authority shall pay to the City as and for rental hereunder, including but not limited to the payment of rent for the Facilities, the sum of $_________, which amount shall be deposited pursuant to the Trust Agreement in the funds and accounts thereunder, and which amount the City finds and determines is full and fair rental for the Facilities. SECTION 4. Purpose. The Authority shall use the Facilities solely for the purpose of leasing the Facilities to the City pursuant to the Sublease and for such purposes as may be incidental thereto; provided, that in the event of default by the City under the Sublease the Authority may exercise the remedies provided in the Sublease or in the Trust Agreement. SECTION 5. Owner in Fee. The City covenants that it is the owner in fee of the Facilities, as described in Exhibit A hereto. The City further covenants and agrees that if for any reason this covenant proves to be incorrect, the City will either institute eminent domain proceedings to condemn the property or institute a quiet title action to clarify the City’s title, and will diligently pursue such action to completion. The City further covenants and agrees that it will hold the Authority and the Bondowners harmless from any loss, cost or damages resulting from any breach by the City of the covenants contained in this Section. SECTION 6. Assignments and Subleases. Unless the City shall be in default under the Sublease, the Authority may not assign its rights under this Lease or sublet the Facilities, except pursuant to the Subleas e, without the written consent of the City, which consent may be withheld in the City’s sole and absolute discretion. Upon the occurrence of a default by the City under the Sublease, the Authority may assign or sell its rights under this Lease or sublet the Facilities without the consent of the City. SECTION 7. Right of Entry; Easements. The City reserves the right for any of its duly authorized representatives to enter upon the Facilities at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof. 3 4133-5227-4710.4 SECTION 8. Termination. The Authority agrees, upon the termination of this Lease, to quit and surrender the Facilities in the same good order and condition as the same were in at the time of commencement of the term hereunder, reasonable wear and tear excepted, and the Authority further agrees that any permanent improvements to and structures existing upon the Facilities at the time of the termination of this Lease shall remain thereon and title thereto shall vest in the City. Upon the exercise of the option to purchase set forth in Section 7.03 of the Sublease and upon payment of the option price required by said section, the term of this Lease shall terminate as to the portion of the Facilities being so purchased is situated. SECTION 9. Default. In the event the Authority shall be in default in the performance of any obligation on its part to be performed under the terms of this Lease, which default continues for one hundred and eighty (180) 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 Lease and of the Sublease shall be deemed to occur as a result thereof; provided, however, that the City shall have no power to terminate this Lease by reason of any default on the part of the Authority if such termination would affect or impair any assi gnment or sublease of all or any part of the Facilities then in effect between the Authority and any assignee or subtenant of the Authority (other than the City under the Sublease). So long as any such assignee or subtenant of the Authority shall duly perform the terms and conditions of this Lease, such assignee or subtenant shall be deemed to be and shall become the tenant of the City hereunder and shall be entitled to all of the rights and privileges granted under any such assignment; provided, further, that so long as any Bonds are outstanding and unpaid in accordance with the terms thereof, the rentals or any part thereof payable to the Authority or Trustee shall continue to be paid to the Trustee on behalf of the Bondowners. SECTION 10. Quiet Enjoyment. The Authority at all times during the term of this Lease, shall peaceably and quietly have, hold and enjoy all of the Facilities. SECTION 11. Waiver of Personal Liability. All liabilities under this Lease on the part of the Authority shall be solely liabilities of the Authority, as a public entity and agency, and the City hereby releases each and every member, director, officer, agent or employee of the Authority of and from an y personal or individual liability under this Lease. No member, director, officer, agent or employee of the Authority shall at any time or under any circumstances be individually or personally liable under this Lease to the City or to any other party whom soever for anything done or omitted to be done by the Authority hereunder. The Authority and its members, directors, officers, agents, employees and assignees shall not be liable to the City or to any other party whomsoever for any death, injury or 4 4133-5227-4710.4 damage that may result to any person or property by or from any cause whatsoever in, on or about the Facilities. The City, to the extent permitted by law, shall indemnify and hold the Authority and its members, directors, officers, agents, employees and assignees, harmless from, and defend each of them against, any and all claims, liens and judgments arising from the operation of the Facilities, including, without limitation, death of or injury to any person or damage to property whatsoever occurring in, on or about the Facilities regardless of responsibility for negligence, but excepting the active negligence of the person or entity seeking indemnity. SECTION 12. Taxes. The City covenants and agrees to pay any and all assessments of any kin d or character and also all taxes, including possessory interest taxes, levied or assessed upon the Facilities (including both land and improvements). SECTION 13. Eminent Domain. In the event the whole or any part of the Facilities 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 or outstanding Bonds and all other amounts due under the Trust Agreement and the Sublease attributable to the whole or part of the Facilities taken, and such amount shall be paid to the Trustee, 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 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 Lease shall be affected thereby, and each provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. SECTION 15. Notices. All notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon the other party if delivered personally or if mailed by United States registered or certified mail, return receipt requested, postage prepaid, and, if to the City, addressed to the City in care of the Finance Director, 501 Primrose Road, Burlingame, CA 94010, or if to the Authority, addressed to the Authority in care of the City Clerk, 501 Primrose Road, Burlingame, CA 94010, in all cases with a copy to the Trustee, or to such other addresses as the respective parties may from time to time designate by notice in writing. 5 4133-5227-4710.4 SECTION 16. 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 Lease. SECTION 17. Amendment. The Authority and the City may at any time agree to the amendment of this Lease; provided, however, that the Authority and the City agree and recognize that this Lease is entered into in accordance with the terms of the Trust Agreement, and accordingl y, that any such amendment shall only be made or effected in accordance with and subject to the terms of the Trust Agreement. SECTION 18. Execution. This 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 Lease may separately be executed by the City and the Authority, all with the same force and effect as though the same counterpart had been executed by both the City and the Authority. 6 4133-5227-4710.4 IN WITNESS WHEREOF, the City and the Authority have caused this Facilities Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF BURLINGAME, Lessor By City Manager BURLINGAME FINANCING AUTHORITY, Lessee By Executive Director A-1 4133-5227-4710.4 EXHIBIT A DESCRIPTION OF THE FACILITIES All that certain property in the City of Burlingame, County of San Mateo, State of California, including the buildings, other improvements, and facilities located thereon, described as follows: [Library and Adjacent Parking Facility] TABLE OF CONTENTS Page -i- 4133-5227-4710.4 SECTION 1. FACILITIES .................................................................................................... 1 SECTION 2. TERM .............................................................................................................. 1 SECTION 3. RENTAL .......................................................................................................... 2 SECTION 4. PURPOSE ........................................................................................................ 2 SECTION 5. OWNER IN FEE.............................................................................................. 2 SECTION 6. ASSIGNMENTS AND SUBLEASES ............................................................ 2 SECTION 7. RIGHT OF ENTRY; EASEMENTS ............................................................... 2 SECTION 8. TERMINATION .............................................................................................. 3 SECTION 9. DEFAULT ....................................................................................................... 3 SECTION 10. QUIET ENJOYMENT..................................................................................... 3 SECTION 11. WAIVER OF PERSONAL LIABILITY ......................................................... 3 SECTION 12. TAXES ............................................................................................................. 4 SECTION 13. EMINENT DOMAIN ...................................................................................... 4 SECTION 14. PARTIAL INVALIDITY ................................................................................ 4 SECTION 15. NOTICES ......................................................................................................... 4 SECTION 16. SECTION HEADINGS ................................................................................... 5 SECTION 17. AMENDMENT................................................................................................ 5 SECTION 18. EXECUTION ................................................................................................... 5 EXHIBIT A DESCRIPTION OF THE FACILITIES ............................................................... A-1 DRAFT 10/10/2019 4139-4052-5846.4 Recording requested by and return to: CITY OF BURLINGAME c/o Orrick, Herrington & Sutcliffe LLP The Orrick Building 405 Howard Street San Francisco, California 94105 Attention: Pursuant to Section 27383 of the Government Code of the State of California, recording of this document is exempt from any fees charged by the recorder. Transfer tax: None, exempt per R&T 11922, Lessee is governmental entity. FACILITIES SUBLEASE between the BURLINGAME FINANCING AUTHORITY and CITY OF BURLINGAME Dated as of __________1, 2019 4139-4052-5846.4 FACILITIES SUBLEASE This FACILITIES SUBLEASE, dated as of _________ 1, 2019 (the “Sublease”), between the BURLINGAME FINANCING AUTHORITY (the “Authority”), a public entity and agency (duly organized and existing pursuant to an Agreement entitled “Joint Exercise of Powers Agreement” by and between the City of Burlingame and the Redevelopment Agency of the City of Burlingame), as lessor, and the CITY OF BURLINGAME (the “City”), a city organized and validly existing under the Constitution and general laws of the State of California, as lessee; W I T N E S S E T H: WHEREAS, the City intends to lease the Facilities (as defined herein) to the Authority pursuant to the Lease (as defined herein); and WHEREAS, the Authority intends to sublease the Facilities back to the City pursuant to this Sublease; and WHEREAS, the Authority intends to issue its Lease Revenue Bonds, Series 2019 (the “Series 2019 Bonds”, and together with any bonds issued on a parity therewith, the “Bonds”) pursuant to a trust agreement and in accordance with the Joint Exercise of Powers Agreement and its powers thereunder and under the laws of the State of California; and WHEREAS, the proceeds of the Series 2019 Bonds will be applied by the City to finance the [Project]; NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED as follows: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Sublease, have the meanings herein specified, which meanings shall be equally applicable to both the singular and plural forms of any of the terms herein defined. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement. Additional Bonds The term “Additional Bonds” means bonds issued pursuant to Article III of the Trust Agreement. 2 4139-4052-5846.4 Additional Payments The term “Additional Payments” means all amounts payable to the Authority or the Trustee or any other person from the City as Additional Payments pursuant to Section 3.02 hereof. Authority The term “Authority” means (i) the Burlingame Financing Authority, acting as lessor hereunder; (ii) any surviving, resulting or transferee entity; and (iii) except where the context requires otherwise, any assignee of the Authority. Base Rental Payments The term “Base Rental Payments” means all amounts payable to the Authority from the City as Base Rental Payments pursuant to Section 3.01 hereof. Base Rental Payment Schedule The term “Base Rental Payment Schedule” means the schedule of Base Rental Payments payable to the Authority from the City pursuant to Section 3.01 hereof and attached hereto as Exhibit B. Bonds The term “Bonds” means the bonds issued by the Authority under and pursuant to the Trust Agreement. Code The term “Code” means the Internal Revenue Code of 1986, as amended. City The term “City” means the City of Burlingame, California, a city organized and validly existing under the Constitution and general laws of the State of California. Event of Default The term “Event of Default” shall have the meaning specified in Section 6.01 hereof. Facilities The term “Facilities” means the buildings, other improvements and facilities described in Exhibit A attached hereto, including all real property on which such buildings, other improvements and facilities are located, or any portion thereof, or any City buildings, other improvements and facilities substituted therefor or added thereto, or any portion thereof, in 3 4139-4052-5846.4 accordance with this Sublease and the Trust Agreement; subject, however, to any conditions, reservations and easements of record known to the City. Insurance Consultant The term “Insurance Consultant” means an individual or firm employed by the City, including the Risk Manager of the City, that has actuarial experienced personnel in the field of risk management. Lease The term “Lease” means that lease, entitled “Facilities Lease,” dated as of ____________ 1, 2019, between the City, as lessor, and the Authority, as lessee, as originally executed and recorded or as it may from time to time be supplemented, modified or amended pursuant to the provisions thereof and of the Trust Agreement. Outstanding The term “Outstanding,” when applied to Bonds, shall have the meaning ascribed to such term in the Trust Agreement. Permitted Encumbrances “Permitted Encumbrances” means (1) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to this Sublease, permit to remain unpaid; (2) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the date of recordation of this Sublease in the office of the County Recorder of the County of San Mateo and which the City certifies in writing will not materially impair the use of the Facilities; (3) the Lease, as it may be amended from time to time; (4) this Sublease, as it may be amended from time to time; (5) the Trust Agreement, as it may be amended from time to time; (6) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (7) easements, rights of way, mineral rights, drilling rights and ot her rights, reservations, covenants, conditions or restrictions to which the Authority and the City consent in writing and certify to the Trustee will not materially impair the leasehold interests of the Authority or use of the Facilities by the City; and (8) subleases and assignments of the City which will not adversely affect the exclusion from gross income of interest on the Bonds. Permitted Investments The term “Permitted Investments” shall have the meaning ascribed to such term in the Trust Agreement. Rental Payment Period The term “Rental Payment Period” means the twelve month period commencing _________ 2 of each year and ending the following _________ 1. 4 4139-4052-5846.4 Series 2019 Bonds The term “Series 2019 Bonds” means the bonds issued and so designated by the Authority under and pursuant to the Trust Agreement. State The term “State” means the State of California. Sublease The term “Sublease” means this Facilities Sublease, as originally executed and recorded or as it may from time to time be supplemented, modified or amended pursuant to the provisions hereof and of the Trust Agreement. Supplemental Trust Agreement The term “Supplemental Trust Agreement” means any supplement or amendment to the Trust Agreement hereafter duly authorized and entered into between the Authority and the Trustee in accordance with the provisions of the Trust Agreement. Tax Certificate The term “Tax Certificate” shall have the meaning ascribed to such term in the Trust Agreement. Trust Agreement The term “Trust Agreement” means the trust agreement, entitled “Trust Agreement” and dated as of ____________ 1, 2019, by and between the Authority and the Trustee, pursuant to which the Trustee will deliver the Series 2019 Bonds, as originally executed or as it may from time to time be supplemented or amended by a Supplemental Trust Agreement entered into pursuant to the provisions of the Trust Agreement. Trustee The term “Trustee” means U.S. Bank National Association, appointed as trustee pursuant to the Trust Agreement, and any successor appointed under the Trust Agreement. Written Request of the Authority The term “Written Request of the Authority” means an instrument in writing signed by or on behalf of the Authority by its Chair, Vice-Chair, Secretary, Executive Director or Treasurer or by any other person (whether or not an officer of the Authority) who is specifically authorized by resolution of the Authority for that purpose. 5 4139-4052-5846.4 Written Request of the City The term “Written Request of the City” means an instrument in writing signed by the Mayor, Vice-Mayor, City Manager, or the Finance Director/Treasurer of the City or any such official’s duly authorized designee, or by any other officer or employee of the City duly authorized by the City for that purpose. ARTICLE II LEASE OF FACILITIES; TERM; SUBSTITUTION; RELEASE; ADDITION OF PROPERTY SECTION 2.01. Lease of Facilities. The Authority hereby leases to the City and the City hereby leases from the Authority the Facilities, subject, however, to all easements, encumbrances and restrictions that exist at the time of the commencement of the term of this Sublease. The City hereby agrees and covenants during the term of this Sublease that it will use the Facilities for public and City purposes. The leasing by the City to the Authority of the Facilities shall not effect or result in a merger of the City’s leasehold estate pursuant to this Sublease and its fee estate as lessor under the Lease, and the Authority shall continue to have and hold a leasehold estate in said Facilities pursuant to the Lease throughout the term thereof. As to said Facilities this Sublease shall be deemed and constitute a sublease. SECTION 2.02. Term; Occupancy. (A) Term. The term of this Sublease shall commence on the date of recordation of this Sublease in the office of the County Recorder of the County of San Mateo, or on __________ 1, 2019 whichever is earlier, and shall end on _________ 1, ____, unless such term is extended or sooner terminated as hereinafter provided (including as such term may be extended in connection with the issuance of Additional Bonds). If on _________ 1, ____ (or such later date established in connection with the issuance of Additional Bonds), the Bonds and all amounts due hereunder and under the Trust Agreement shall not be fully paid, or if the rental or other amounts payable hereunder shall have been abated at any time and for any reason, then the term of this Sublease shall be extended until all Bonds and all amounts due hereunder and under the Trust Agreement shall be fully paid, except that the term of this Sublease shall in no event be extended beyond _________ 1, ____ (or such later date established in connection with the issuance of Additional Bonds). If prior to _________ 1, ____, all Bonds and all amounts due hereunder and under the Trust Agreement shall be fully paid, or provision therefor made in accordance with the terms and provisions of the Trust Agreement, the term of this Sublease shall end immediately. SECTION 2.03. The Facilities. The City and the Authority hereby agree to lease the Facilities hereunder. The annual Base Rental Payments for the Facilities as set forth in Exhibit B hereto shall be the fair rental value for the Facilities, as hereby determined by the City. The Base Rental Payments for the Facilities shall be due and payable on the dates set forth in Section 3.01 hereof. 6 4139-4052-5846.4 SECTION 2.04. Substitution; Release; Addition of Property. (A) The City and the Authority may add, substitute or release real property for all or part of, or may release a part of, the Facilities for purposes of the Lease and this Sublease, but only after the City shall have filed with the Authority and the Trustee, with copies to each rating agency then providing a rating for the Bonds, all of the following: (i) Executed copies of the Lease and this Sublease or amendments thereto containing the amended description of the Facilities, including the legal description of any real property component of the Facilities as modified, if necessary. (ii) A Written Certificate of the City, certifying that the annual fair rental value (which may be based on, but not limited to, the construction or acquisition cost or replacement cost of such facility to the City) of the Facilities that will constitute the Facilities after such addition, substitution or withdrawal will be at least equal to 100% of the maximum amount of Base Rental Payments becoming due in the then current fiscal year or in any subsequent fiscal year. At the sole discretion of the City, in the alternative, in the event of a substitution only, the Written Certificate of the City will certify that the annual fair rental value of the new Facility is at least equal to that of the substituted Facility. (iii) With respect to an addition or substitution of property, a leasehold owner’s title insurance policy or policies or a commitment for such policy or policies or an amendment or endorsement to an existing title insurance policy or policies resulting in title insurance with respect to the Facilities after such addition or substitution in an amount at least equal to the aggregate principal amount of Bonds Outstanding; each such insurance instrument, when issued, shall name the Trustee as the insured, and shall insure the leasehold estate of the Authority in such property subject only to such exceptions as do not substantially interfere with the City’s right to use and occupy such property and as will not result in an abatement of Base Rental Payments payable by the City under this Sublease. (iv) A Written Certificate of the City stating that such addition, substitution or withdrawal, as applicable, does not adversely affect the City’s use and occupancy of the Facilities. (v) With respect to the substitution of property, a Written Certificate of the City stating that the useful life of the property to be substituted is at least equal to the useful life of the property being released. (vi) An opinion of bond counsel stating that any amendment executed in connection with such addition, substitution or withdrawal, as the case may be, (i) is authorized or permitted under this Sublease; (ii) will, upon the execution and delivery thereof, be valid and binding upon the Authority and the City; and (iii) will not cause the interest on any tax -exempt Bonds to be included in gross income for federal income tax purposes. (B) The City and the Authority hereby agree that the Facilities or portion thereof for which other real property is substituted, pursuant to Section 2.04(A), shall be released from the Lease and this Sublease, and shall no longer be encumbered thereby and hereby or by the Trust Agreement at such time as the City shall have caused said substitution. 7 4139-4052-5846.4 ARTICLE III BASE RENTAL PAYMENTS SECTION 3.01. Base Rental Payments. The City agrees to pay to the Authority, as Base Rental Payments for the use and occupancy of the Facilities (subject to the provisions of Sections 3.04, 3.06 and 7.01 of this Sublease), annual rental payments, all in accordance with the Base Rental Payment Schedule attached hereto as Exhibit B and made a part hereof. The Base Rental Payments payable hereunder shall be due and payable on _______ 25 and ________ 25 as set forth in Exhibit B hereto and shall be for the use and occupancy of the Facilities during the one-year period ending on the 1st day of each June. If the term of this Sublease shall have been extended pursuant to Section 2.02 hereof, Base Rental Payment installments shall continue to be payable on ________ 25 and _________ 25 in each year, and payable as hereinabove described, continuing to and including the date of termination of this Sublease, in an amount equal to the amount of Base Rental payable for the twelve-month period commencing _________ 2, ____. The City agrees that all Base Rental Payments for the Facilities shall be paid by the City from lawfully available funds of the City. SECTION 3.02. Additional Payments. The City shall also pay such amounts (herein called the “Additional Payments”) as shall be required by the Authority for the payment of all amounts, costs and expenses incurred by the Authority in connection with the execution, performance or enforcement of this Sublease or any assignment hereof, the Trust Agreement, the Authority’s interest in the Facilities and the lease of the Facilities to the City, including but not limited to payment of all fees, costs and expenses and all administrative costs of the Authority related to the Bonds, the Facilities, including, without limiting the generality of the foregoing, salaries and wages of employees, all expenses, compensation and indemnification payable by the Authority to the Trustee under the Trust Agreement, fees of auditors, accountants, attorneys or architects, and all other necessary administrative costs of the Authority or charg es required to be paid by it in order to maintain its existence or to comply with the terms of the Bonds or of the Trust Agreement; but not including in such Additional Payments amounts required to pay the principal of or interest on the Bonds. Such Additional Payments shall be billed to the City by the Authority or the Trustee from time to time, together with a statement certifying that the amount billed has been paid by the Authority or by the Trustee on behalf of the Authority, for one or more of the ite ms above described, or that such amount is then payable by the Authority or the Trustee for such items. Amounts so billed shall be paid by the City within sixty (60) days after receipt of the bill by the City. The City reserves the right to audit billings for Additional Payments although exercise of such right shall in no way affect the duty of the City to make full and timely payment for all Additional Payments. The Authority may in the future issue bonds to finance facilities, and may in the future enter into leases with respect to other facilities. The administrative costs of the Authority shall be allocated among such other facilities and the Facilities as hereinafter in this paragraph 8 4139-4052-5846.4 provided. The fees of the Trustee under the Trust Agreement, and any other expenses directly attributable to the Facilities shall be included in the Additional Payments payable hereunder. The fees of any trustee or paying agent under any indenture securing bonds of the Authority or any trust agreement other than the Trust Agreement, and any other expenses directly attributable to any facilities other than the Facilities, shall not be included in the administrative costs of the Facilities, and shall not be paid from the Additional Payments payable hereunder. Any expenses of the Authority not directly attributable to any particular project of the Authority shall be equitably allocated among all such projects, including the Facilities in accordance with sound accounting practice. In the event of any question or dispute as to such allocation, the written opinion of an independent firm of certified public accountants, employed by the Authority to consider the question and render an opinion thereon, shall be a final and conclusive determination as to such allocation. The Trustee may conclusively rely upon the Written Request of the Authority, with the approval of the Mayor, Vice-Mayor, City Manager or Finance Director of the City or any such officer’s duly authorized designee, or a duly authorized representative of the City, endorsed thereon, in making any determination that costs relating to the Authority are payable as Additional Payments hereunder, and shall not be required to make any investigation as to whether or not the items so requested to be paid are expenses of oper ation of the Facilities. SECTION 3.03. Fair Rental Value. Such payments of Base Rental Payments and Additional Payments for each Rental Payment Period during the term of this Sublease shall constitute the total rental for said Rental Payment Period and shall be paid by the City in each Rental Payment Period for and in consideration of the right of use and occupancy of the Facilities during each such period for which said rental is to be paid. The parties hereto have agreed and determined that such total rental payable for each Rental Payment Period represents no more than the fair rental value of the Facilities for each such period. In making such determination, consideration has been given to the cost of acquisition of the Facilities, other obligations of the parties under this Sublease, the uses and purposes which may be served by the Facilities and the benefits therefrom which will accrue to the City and the general public. SECTION 3.04. Payment Provisions. Each Base Rental Payment installment or Additional Payment payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Authority at the corporate trust office of the Trustee or such other place as the Authority shall designate. Any such Base Rental Payment installment or Additional Payment accruing hereunder which shall not be paid when due and payable under the terms of this Sublease shall bear interest at the rate of twelve percent (12%) per annum, or such lesser rate of interest as may be the maximum rate permitted by law, from the date when the same is due hereunder until the same shall be paid (provided that the foregoing shall not apply to payments following an abatement). Notwithstanding any dispute between the Authority and the City, the City shall make all Base Rental Payments, Additional Payments and other payments when due without deduction or offset of any kind and shall not withhold any rental or other payments pending the final resolution of such dispute. In the event of a determination that the City was not liable for said payments or any portion thereof, said payments or excess of payments, as the case may be, shall be credited against subsequent payments due hereunder or refunded at the time of such determination. Amounts required to be deposited by the City with the Trustee pursuant to this Section for payment of Base Rental 9 4139-4052-5846.4 Payments on any date shall be reduced to the extent of amounts on deposit in the Revenue Fund and available therefor. Rental is subject to abatement as provided in Section 3.06 hereof. SECTION 3.05. Appropriations Covenant; Base Rental Payments and Additional Payments to Constitute a Current Expense of the City. The City covenants to take such action as may be necessary to include all such Base Rental Payments and Additional Payments due hereunder in its annual budgets, and to make necessary annual appropriations for all such Base Rental Payments and Additional Payments. The City will deliver to the Authority and the Trustee copies of the portion of each annual City budget relating to the payment of Base Rental Payments and Additional Payments hereunder within thirty (30) days after the filing or adoption thereof. The covenants on the part of the City herein contained shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of e ach and every public official of the City to take such action and do such things as are 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 Sublease agreed to be carried out and performed by the City. The Authority and the City understand and intend that the obligation of the City to pay Base Rental Payments and Additional Payments hereunder shall constitute a current expense of the City and shall not in any way be construed to be a debt of the City in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by the City, nor shall anything contained herein constitute a pledge of the general tax revenues, funds or monies of the City, Base Rental Payments and Additional Payments due hereunder shall be payable only from current funds which are budgeted and appropriated or otherwise legally available for the purpose of paying Base Rental Payments and Additional Payments or other payments due hereunder as consideration for the use of the Facilities. The City has not pledged the full faith and credit of the City, the State or any agency or department thereof to the payment of the Base Rental Payments and Additional Payments or any other payments due hereunder. SECTION 3.06. Rental Abatement. The Base Rental Payments and Additional Payments shall be abated proportionately, during any period in which by reason of any material damage or destruction (other than by condemnation which is hereinafter provided for) there is substantial interference with the use and occupancy of the Facilities by the City, in the proportion in which the cost of that portion of the Facilities rendered unusable bears to the cost of the whole of the Facilities. Such abatement shall 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 Sublease shall continue in full force and effect and the City waives the benefits of California Civil Code Section 1932(2) and 1933(4) and of Title 11 of the United States Code, Section 365(h) and any and all other rights to terminate this Sublease by virtue of any such damage or destruction or interference. 10 4139-4052-5846.4 ARTICLE IV USE OF PROCEEDS; MAINTENANCE OF, ALTERATIONS OF, AND ADDITIONS TO FACILITIES SECTION 4.01. Use of Proceeds. The parties hereto agree that the proceeds of the Series 2019 Bonds will be used to finance the Project. Proceeds of any Additional Bonds will be applied in accordance with a supplement to this Sublease. SECTION 4.02. Maintenance and Utilities. Throughout the term of this Sublease, all maintenance and repair, both ordinary and extraordinary, of the Facilities shall be the responsibility of the City, which shall at all times maintain or otherwise arrange for the maintenance of the Facilities in first class condition, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Faciliti es, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, ventilation, air conditioning, water and all other utility services, and shall pay for or otherwise arrange for payment of the cost of the repair and replacement of the Facilities resulting from ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof or any other cause and shall pay for or otherwise arrange for the payment of all insurance policies required to be maintained with respect to the Facilities. SECTION 4.03. Changes to the Facilities. Subject to Section 8.02 hereof, the City shall, at its own expense, have the right to remodel the Facilities or to make additions, modifications and improvements to the Facilities. All such additions, modifications and improvements shall thereafter comprise part of the Facilities and be subject to the provisions of this Sublease. Such additions, modifications and improvements shall not in any way damage the Facilities or cause either to be used for purposes other than those authorized under the provisions of State and federal law; and the Facilities, upon completion of any additions, modifications and improvements made pursuant to this Section, shall be of a value which is at least equal to the value of the Facilities immediately prior to the making of such additions, modifications and improvements. SECTION 4.04. Installation of City’s Equipment. The City and any sublessee 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 Facilities. All such items shall remain the sole property of such party, in which neither the Authority nor the Trustee shall have any interest, and may be modified or removed by such party at any time provided that such party shall repair and restore any and all damage to the Facilities resulting from the installation, modification or removal of any such items. Nothing in this Sublease shall prevent the City from purchasing items to be installed pursuant to this Section under a conditional sale or lease purchase contract, or subject to a vendor’s lien or security agreement as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shall attach to any part of the Facilities. 11 4139-4052-5846.4 ARTICLE V INSURANCE SECTION 5.01. Fire and Extended Coverage. The City shall procure or cause to be procured and maintain or cause to be maintained, throughout the term of this Sublease, insurance against loss or damage to any structures constituting any part of the Facilities by fire and lightning, with extended coverage insurance, vandalism and malicious mischief insurance and sprinkler system leakage insurance. Said extended coverage insurance shall, 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. Such insurance shall be in an amount equal to the replacement cost (without deduction for depreciation) of all structures constituting any part of the Facilities, excluding the cost of excavations, of grading and filling, and of the land, or, in the alternative, shall be in an amount and in a form sufficient, in the event of total or partial loss, to enable all Bonds then Outstanding to be redeemed. As an alternative to providing the insurance required by the first paragraph of this Section, or any portion thereof, the City may provide a self-insurance method or plan of protection if and to the extent such self-insurance method or plan of protection shall afford reasonable protection to the Authority, the Holders and the Trustee, in light of all circumstances, giving consideration to cost, availability and similar plans or methods of protection adopted by public entities in the State other than the City. Before such other method or plan may be provided by the City, and annually thereafter so long as such method or plan is being provided to satisfy the requirements of this Sublease, there shall be filed with th e Trustee a certificate of an Insurance Consultant or other qualified person, stating that, in the opinion of the signer, the substitute method or plan of protection is in accordance with the requirements of this Section and, when effective, would afford reasonable protection to the Authority, its members, directors, officers, agents and employees and the Trustee against loss and damage from the hazards and risks covered thereby. There shall also be filed a certificate of the City setting forth the details of such substitute method or plan. In the event of any damage to or destruction of any part of the Facilities caused by the perils covered by such insurance, the Authority, except as hereinafter provided, shall cause the proceeds of such insurance to be used for the repair, reconstruction or replacement of the damaged or destroyed portion of the Facilities, and the Trustee shall hold said proceeds separate and apart from all other funds in a special fund to be designated the “Insurance and Condemnation Fund,” to the end that such proceeds shall be applied to the repair, reconstruction or replacement of the Facilities to at least the same good order, repair and condition as it was in prior to the damage or destruction, insofar as the same may be accomplished by the use of said proceeds. The Trustee shall withdraw said proceeds from time to time upon receiving the Written Request of the Authority, stating that the Authority has expended monies or incurred liabilities in an amount equal to the amount therein requested to be paid over to it for the purpose of repair, reconstruction or replacement, and specifying the items for which such monies were expended, or such liabilities were incurred, and containing the additional information required to be included in a Written Request of the Authority prepared pursuant to Section 5.04 of the Trust Agreement. Any balance of said proceeds not required for such repair, reconstruction or 12 4139-4052-5846.4 replacement shall be transferred to the Trustee and treated by the Trustee as Base Rental Payments and applied in the manner provided by Section 5.04 of the Trust Agreement. Alternatively, if the proceeds of such insurance, together with any other monies then available for the purpose, are at least sufficient to redeem an aggregate princip al amount of Outstanding Bonds equal to the amount of Outstanding Bonds attributable to the portion of the Facilities so destroyed or damaged, the City may elect not to repair, reconstruct or replace the damaged or destroyed portion of the Facilities and thereupon shall cause said proceeds to be used for the redemption of Outstanding Bonds pursuant to the provisions of the Trust Agreement. The Authority and the City shall promptly apply for federal disaster aid or State disaster aid for which either may be eligible in the event that the Facilities are damaged or destroyed as a result of an earthquake or other declared disaster occurring at any time. Any proceeds received as a result of such disaster aid shall be used to repair, reconstruct, restore or replace the damaged or destroyed portions of the Facilities, or to redeem Outstanding Bonds if such use of such disaster aid is permitted. SECTION 5.02. Liability Insurance. Except as hereinafter provided, the City shall procure or cause to be procured and maintain or cause to be maintained, throughout the term of this Sublease, a standard comprehensive general liability insurance policy or policies in protection of the Authority and its members, directors, officers, agents and employees and the Trustee, indemnifying said parties against all direct or contingent loss or liability for damages for personal injury, death or property damage occasioned by reason of the operation of the Facilities, with minimum liability limits of one million dollars ($1,000,000) for personal injury or death of each person and three million dollars ($3,000,000) for personal injury or deaths of two or more persons in each accident or event, and in a minimum amount of two hundred thousand dollars ($200,000) for damage to property resulting from each accident or event. Such public liability and property damage insurance may, however, be in the form of a single limit policy in the amount of three million dollars ($3,000,000) covering all such risks. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance carried by the City. As an alternative to providing the insurance required by the first paragraph of this Section, or any portion thereof, the City may provide a self-insurance method or plan of protection if and to the extent such self-insurance method or plan of protection shall afford reasonable protection to the Authority, its members, directors, officers, agents and employees and the Trustee, in light of all circumstances, giving consideration to cost, availability and similar plans or methods of protection adopted by public entities in the State other than the City. Before such other method or plan may be provided by the City, and annually thereaft er so long as such method or plan is being provided to satisfy the requirements of this Sublease, there shall be filed with the Trustee a certificate of an Insurance Consultant or other qualified person, stating that, in the opinion of the signer, the substitute method or plan of protection is in accordance with the requirements of this Section and, when effective, would afford reasonable protection to the Authority, its members, directors, officers, agents and employees and the Trustee against loss and damage from the hazards and risks covered thereby. There shall also be filed a certificate of the City setting forth the details of such substitute method or plan. 13 4139-4052-5846.4 SECTION 5.03. Rental Interruption or Use and Occupancy Insurance. The City shall procure or cause to be procured and maintain or cause to be maintained throughout the term of this Sublease, rental interruption or use and occupancy insurance to cover loss, total or partial, of the rental income from or the use of the Facilities as the result of any of the hazards covered by the insurance required by Section 5.01 hereof, in an amount sufficient to pay the maximum annual Base Rental Payments hereunder for any two year period except th at such insurance may be subject to a deductible clause of not to exceed twenty-five thousand dollars ($25,000). Any proceeds of such insurance shall be used by the Trustee to reimburse to the City any rental theretofore paid by the City under this Sublease attributable to such structure for a period of time during which the payment of rental under this Sublease is abated, and any proceeds of such insurance not so used shall be applied as provided in Section 3.01 (to the extent required for the payment of Base Rental Payments) and in Section 3.02 hereof (to the extent required for the payment of Additional Payments). SECTION 5.04. Worker’s Compensation. The City shall also maintain worker’s compensation insurance issued by a responsible carrier authorized under the laws of the State to insure its employees against liability for compensation under the Worker’s Compensation Insurance and Safety Act now in force in California, or any act hereafter enacted as an amendment or supplement thereto. As an alternative, such insurance may be maintained as part of or in conjunction with any other insurance carried by the City. Such insurance may be maintained by the City in the form of self-insurance. SECTION 5.05. Title Insurance. The City shall obtain a leasehold owner's policy or policies or a commitment for such policy or policies or an amendment or endorsement to an existing policy or policies resulting in title insurance with respect to the Facilities in an amount at least equal to the principal amount of the Bonds. Such insurance instrument, when issued, shall name the Trustee as the insured, and shall insure the leasehold estate of the Authority subject only to such exceptions as do not substantially interfere with the City's right to use and occupy the property and as will not result in an abatement of Base Rental Payments payable by the City under this Sublease. SECTION 5.06. Insurance Proceeds; Form of Policies. All policies of insurance required by Sections 5.01 and 5.03 hereof shall provide that all proceeds thereunder shall be payable to the Trustee for the benefit of the Holders pursuant to a lender’s loss payable endorsement substantially in accordance with the form approved by the Insurance Services Office and the California Bankers Association. The Trustee shall collect, and receive all monies which may become due and payable under any such policies, may compromise any and all claims thereunder and shall apply the proceeds of such insurance as provided in Sections 5.01 and 5.03 hereof. All policies of insurance required by this Sublease shall provide that the Trustee shall be given thirty (30) days’ notice of each expiration thereof or any intended cancellation thereof or reduction of the coverage provided thereby. The Trustee shall not be responsible for the sufficiency of any insurance herein required or if forms of endorsement or policies comply with the provisions of this Sublease and shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee. The City shall pay when due the premiums for all insurance policies required by this Sublease, and shall promptly furnish evidence of such payments to the Authority. 14 4139-4052-5846.4 The City will deliver to the Authority and the Trustee in the month of August in each year a written certificate of an officer of the City stating that such policies satisfy t he requirements of this Sublease, setting forth the insurance policies then in force pursuant to this Section, the names of the insurers which have issued the policies, the amounts thereof and the property and risks covered thereby, and, if any self-insurance program is being provided, the annual report of an Insurance Consultant or other qualified person containing the information required for such self-insurance program and described in Sections 5.01, 5.02, 5.03 and 5.04 hereof. Delivery to the Trustee of the certificate under the provisions of this Section shall not confer responsibility upon the Trustee as to the sufficiency of coverage or amounts of such policies. ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.01. Defaults and Remedies. (A) If the City shall fail to pay any Base Rental Payment, Additional Payment or other amount payable hereunder when the same becomes due and payable, time being expressly declared to be of the essence of this Sublease, or the City shall fail to keep, observe or perform any other term, covenant or condition contained herein or in the Trust Agreement to be kept or performed by the City for a period of thirty (30) days after notice of the same has been given to the City by the Authority or the Trustee or for such additional time as is reasonably required, in the discretion of the Trustee, to correct the same, or upon the happening of any of the events specified in subsection (B) of this Section (any such case above being an “Event of Default”), the City shall be deemed to be in default hereunder and it shall be lawful for the Authority to exercise any and all remedies available pursuant to law or granted pursuant to this Sublease. Upon any such default, the Authority, in addition to all other rights and remedies it may have at law, may do any of the following: (1) To terminate this Sublease in the manner hereinafter provided on account of default by the City, notwithstanding any re-entry or re-letting of the Facilities as hereinafter provided for in subparagraph (2) hereof, and to re-enter the Facilities and remove all persons in possession thereof and all personal property whatsoever situated upon the Facilities and place such personal property in storage in any warehouse or other suitable place located within the City. In the event of such termination, the City agrees to surrender immediately possession of the Facilities without let or hindrance, and to pay the Authority all damages recoverable at law that the Authority may incur by reason of default by the City, including, without limitation, any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re- entry upon the Facilities and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. Neither notice to pay rent or to deliver up possession of the Facilities given pursuant to law nor any entry or re-entry by the Authority nor any proceeding in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Facilities nor the appointment of a receiver upon initiative of the Authority to protect the Authority’s interest under this Sublease shall of itself operate to terminate this Sublease, and no termination of this Sublease on account of default by the City shall be or become effective by operation of law or acts of the parties hereto, or otherwise, unless and until the Authority shall have given written notice to the 15 4139-4052-5846.4 City of the election on the part of the Authority to terminate this Sublease. The City covenants and agrees that no surrender of the Facilities or of the remainder of the term hereof or any termination of this Sublease shall be valid in any manner or for any purpose whatsoever unless stated or accepted by the Authority by such written notice. (2) Without terminating this Sublease, (i) to collect each Base Rental Payment installment and other amounts as they become due and enforce any other terms or provision hereof to be kept or performed by the City, regardless of whether or not the City has abandoned the Facilities, or (ii) to exercise any and all rights of re -entry upon the Facilities. In the event th e Authority does not elect to terminate this Sublease in the manner provided for in subparagraph (1) hereof, the City shall remain liable and agrees to keep or perform all covenants and conditions herein contained to be kept or performed by the City and, if the Facilities are not re- let, to pay the full amount of the Base Rental Payments, Additional Payments and other amounts to the end of the term of this Sublease or, in the event that the Facilities are re -let, to pay any deficiency in rent and other amounts that result therefrom; and further agrees to pay said rent and other amounts and/or deficiency rent and other amounts punctually at the same time and in the same manner as hereinabove provided for the payment of Base Rental Payments, Additional Payments and other amounts hereunder (without acceleration), notwithstanding the fact that the Authority may have received in previous years or may receive thereafter in subsequent years rental or other amounts in excess of the rental or other amounts herein specified, and notwithstanding any entry or re-entry by the Authority or suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such entry or re-entry or obtaining possession of the Facilities. Should the Authority elect to enter or re-enter as herein provided, the City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to re-let the Facilities or any part thereof, from time to time, either in the Authority’s name or otherwise, upon such terms and conditions and for such use and period as the Authority may deem advisable, and to remove all persons in possession thereof and all personal property whatsoever situated upon the Facilities and to place such personal property in storage in an y warehouse or other suitable place located in the City, for the account of and at the expense of the City, and the City hereby exempts and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon and re-letting of the Facilities and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. The City agrees that the terms of this Sublease constitute full and sufficient notice of the right of the Authority to re- let the Facilities and to do all other acts to maintain or preserve the Facilities as the Authority deems necessary or desirable in the event of such re-entry without effecting a surrender of this Sublease, and further agrees that no acts of the Authority in effecting such re-letting shall constitute a surrender or termination of this Sublease irrespective of the use or the term for which such re-letting is made or the terms and conditions of such re-letting, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Sublease shall vest in the Authority to be effected in the sole and exclusive manner provided for in sub- paragraph (1) hereof. The City further waives the right to any Base Rental Payment or other amounts obtained by the Authority in excess of such rental and other amounts herein specified and hereby conveys and releases such excess to the Authority as compensation to the Authority for its services in re-letting the Facilities or any part thereof. 16 4139-4052-5846.4 The City hereby waives any and all claims for damages caused or which may be caused by the Authority in re-entering and taking possession of the Facilities as herein provided and all claims for damages that may result from the destruction of the Facilities and all claims for damages to or loss of any property belonging to the City, or any other person, that may be in or upon the Facilities. (B) If (1) the City’s interest in this Sublease or any part thereof be assigned or transferred, either voluntarily or by operation of law or otherwise, as hereinafter provided for, or (2) the City or any assignee shall file any petition or institute any proceeding under any act or acts, State or federal, dealing with or relating to the subject or subjects of bankruptcy or insolvency, or under any amendment of such act or acts, either as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby the City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of the City’s debts or obligations, or offers to the City’s creditors to effect a composition or extension of time to pay the City’s debts or asks, seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of the City’s debts, or for any other similar relief, or if any such petition or any such proceedings of the same or similar kind or character be filed or be instituted or taken against the City, or if a receiver of the business or of the property or assets of the City shall be appointed by any court, except a receiver appointed at the instance or request of the Authority, or if the City shall make a general or any assignment for the benefit of the City’s creditors, or if (3) the City shall abandon or vacate the Facilities, then the City shall be deemed to be in default hereunder. (C) The Authority shall in no event be in default in the performance of any of its obligations hereunder or imposed by any statute or rule of law unless and until the Authority shall have failed to perform such obligations within thirty (30) days or such additional time as is reasonably required to correct any such default after notice by the City to the Autho rity properly specifying wherein the Authority has failed to perform any such obligation. In the event of default by the Authority, the City shall be entitled to pursue any remedy provided by law. (D) In addition to the other remedies set forth in this Section, upon the occurrence of an event of default as described in this Section, the Authority shall proceed to protect and enforce the rights vested in the Authority by this Sublease or by law. The provisions of this Sublease and the duties of the City and of its trustees, officers or employees shall be enforceable by the Authority by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Without limiting the generality of the foregoing, the Authority may bring the following actions: (1) Accounting. By action or suit in equity to require the City and its trustees, officers and employees and its assigns to account as the trustee of an express trust. (2) Injunction. By action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of the Authority. (3) Mandamus. By mandamus or other suit, action or proceeding at law or in equity to enforce the Authority’s rights against the City (and its council, officers and employees) 17 4139-4052-5846.4 and to compel the City to perform and carry out its duties and obligations under the law and its covenants and agreements with the Authority as provided herein. The exercise of any rights or remedies under this Sublease shall not permit acceleration of Base Rental Payments. Each and all of the remedies given to the Authority hereunder or by any law now or hereafter enacted are cumulative and the single or partial exercise of any right, power or privilege hereunder shall not impair the right of the Authority t o other or further exercise thereof or the exercise of any or all other rights, powers or privileges. The term “re-let” or “re-letting” as used in this Section shall include, but not be limited to, re-letting by means of the operation by the Authority of the Facilities. If any statute or rule of law validly shall limit the remedies given to the Authority hereunder, the Authority nevertheless shall be entitled to whatever remedies are allowable under any statute or rule of law. In the event the Authority shall prevail in any action brought to enforce any of the terms and provisions of this Sublease, the City agrees to pay a reasonable amount as and for attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to the Authority hereunder, whether or not a lawsuit has been filed and whether or not any lawsuit culminates in a judgment. SECTION 6.02. Waiver. Failure of the Authority to take advantage of any default on the part of the City shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may grow up between the parties in the course of administering this instrument be construed to waive or to lessen the right of the Authority to insist upon performance by the City of any term, covenant or condition hereof, or to exercise any rights given the Authority on account of such default. A waiver of a particular default shall not be deemed to be a waiver of the same or any subsequent default. The acceptance of rent her eunder shall not be, or be construed to be, a waiver of any term, covenant or condition of this Sublease. ARTICLE VII EMINENT DOMAIN; PREPAYMENT SECTION 7.01. Eminent Domain. If the whole of the Facilities or so much thereof as to render the remainder unusable for the purposes for which it was used by the City shall be taken under the power or threat of eminent domain, the term of this Sublease shall cease as of the day that possession shall be so taken. If less than the whole of the Facilities shall be taken under the power or threat of eminent domain and the remainder is usable for the purposes for which it was used by the City at the time of such taking, then this Sublease sha ll continue in full force and effect as to such remainder, and the parties waive the benefits of any law to the contrary, and in such event there shall be a partial abatement of the rental due hereunder in an amount equivalent to the amount by which the annual payments of principal of and interest on the Bonds then Outstanding will be reduced by the application of the award in eminent domain to the redemption of Outstanding Bonds. So long as any of the Bonds shall be Outstanding, any award made in eminent domain proceedings for taking the Facilities or any portion thereof shall be paid to the Trustee and applied to the prepayment of the Base Rental 18 4139-4052-5846.4 Payments as provided in Section 7.02 hereof. Any such award made after all of the Base Rental Payments and Additional Payments have been fully paid, or provision therefor made, shall be paid to the City. SECTION 7.02. Prepayment. (A) The City shall prepay on any date from insurance and eminent domain proceeds, to the extent provided in Sections 5.01, 5.05, and 7.01 hereof (provided, however, that in the event of partial damage to or destruction of the Facilities caused by perils covered by insurance, if in the judgment of the Authority the insurance proceeds are sufficient to repair, reconstruct or replace the damaged or destroyed portion of the Facilities, such proceeds shall be held by the Trustee and used to repair, reconstruct or replace the damaged or destroyed portion of the Facilities, pursuant to the procedure set forth in Section 5.01 hereof for proceeds of insurance), all or any part (in an integral multiple of $5,000 principal component) of Base Rental Payments then unpaid so that the aggregate annual amounts of Base Rental Payments which shall be payable after such prepayment date shall be as nearly proportional as practicable to the aggregate annual amounts of Base Rental Payments unpaid prior to the prepayment date, at a prepayment amount equal to the principal of and interest on the Bonds to the date of redemption of the Bonds. (B) The City may prepay, from any source of available funds, all or any portion of Base Rental Payments by (i) depositing with the Trustee monies or securities as provided in Section 4.02 or 10.01 of the Trust Agreement sufficient to retire or redeem Bonds corresponding to such Base Rental Payments when due or redeemable, and (ii) satisfying the other requirements of Section 10.01 of the Trust Agreement. The City agrees that if following such prepayment the Facilities are damaged or destroyed or taken by eminent domain, it is not entitled to, and by such prepayment waives the right of, abatement of such prepaid Base Rental Payments and shall not be entitled to any reimbursement of such Base Rental Payments. (C) Before making any prepayment pursuant to this Article, the City shall, within five (5) days following the event creating such right or obligation to prepay, give written notice to the Authority and the Trustee describing such event and specifying the date on which the prepayment will be made, which date shall be not less than sixty (60) days from the date such notice is given. (D) When (1) there shall have been deposited with the Trustee at or prior to the due dates of the Base Rental Payments or date when the City may exercise its option to purchase the Facilities or any portion or item thereof, in trust for the benefit of the Owners of the Bonds and irrevocably appropriated and set aside to the payment of the Base Rental Payments or option price, sufficient monies and Permitted Investments described in subsection (1) of the definition thereof in the Trust Agreement, not redeemable prior to maturity, the principal of and interest on which when due will provide money sufficient to pay all principal of and interest on the Bonds to the due date of the Bonds or date when the City may exercise its option to purchase the Facilities, as the case may be, and to the payment in full of all other amounts due hereunder or under the Trust Agreement; (2) all of the requirements set forth in Section 10.01 of the Trust Agreement have been satisfied; and (3) an agreement shall have been entered into with the Trustee for the payment of its fees and expenses so long as any of the Bonds shall remain unpaid; then and in that event the right, title and interest of the Authority herein and the obligations of the City hereunder shall thereupon cease, terminate, become void and be completely discharged 19 4139-4052-5846.4 and satisfied (except for the right of the Authority and the obligation of the City to have such monies and such Permitted Investments applied to the payment of the Base Rental Payments or option price) and the Authority’s interest in and title to the Facilities or applicable portion or item thereof shall be transferred and conveyed to the City. In such event, the Authority sh all cause an accounting for such period or periods as may be requested by the City to be prepared and filed with the Authority (and accompanied by a verification report of a certified public accountant) and evidence such discharge and satisfaction, and the Authority shall pay over to the City as an overpayment of Base Rental Payments all such monies or Permitted Investments held by it pursuant hereto other than such monies and such Permitted Investments as are required for the payment or prepayment of the Base Rental Payments or the option price and the fees and expenses of the Trustee, which monies and Permitted Investments shall continue to be held by the Trustee in trust for the payment of Base Rental Payments or the option price and the fees and expenses of the Trustee, and shall be applied by the Authority to the payment and redemption of the Bonds and the fees and expenses of the Trustee. SECTION 7.03. Option to Purchase; Sale of Personal Property. The City shall have the option to purchase the Authority’s interest in any part of the Facilities upon payment of an option price consisting of monies or securities of the category specified in clause (1) of the definition of the term “Permitted Investments” contained in Section 1.01 of the Trust Agreement (not callable by the issuer thereof prior to maturity) in an amount sufficient (together with the earnings and interest on such securities) to provide funds to pay the aggregate amount for the entire remaining term of this Sublease of the part of the total rent hereunder attributable to such part of the Facilities (determined by reference to the proportion which the cost of such part of the Facilities bears to the cost of all of the Facilities). Any such payment shall be made to the Trustee and shall be treated as Base Rental Payments and shall be applied by the Trustee to pay the principal of and interest on the Bonds and to redeem Bonds if such Bonds are subject to redemption pursuant to the terms of the Trust Agreement. Upon the making of such payment to the Trustee and the satisfaction of all requirements set forth in Section 10.01 of the Trust Agreement, (a) the Base Rental Payments thereafter payable under this Sublease shall be reduced by the amount thereof attributable to such part of the Facilities and theretofore paid pursuant to this Section; (b) Section 3.06 and this Section of this Sublease shall not thereafter be applicable to such part of the Facilities; (c) the insurance required by Sections 5.01, 5.02 and 5.03 of this Sublease need not be maintained as to such part of the Facilities; and (d) title to such part of the Facilities shall vest in the City and the term of this Sublease shall end as to such part of the Facilities. The City, in its discretion may request the Authority to sell or exchange any personal property which may at any time constitute a part of the Facilities, and to release said personal property from this Sublease, if (a) in the opinion of the City the property so sold or exchanged is no longer required or useful in connection with the operation of the Facilities; (b) the consideration to be received from the property is of a value substantially equal to the value of the property to be released; and (c) if the value of any such property shall, in the opinion of the Authority, exceed the amount of $25,000, the Authority shall have been furnished a certificate of an independent engineer or other qualified independent professional consultant (satisfactory to the Authority) certifying the value thereof and further certifying that such property is no longer required or useful in connection with the operation of the Facilities. In the event of any such sale, the full amount of the money or consideration received for the personal property so sold and 20 4139-4052-5846.4 released shall be paid to the Authority. Any money so paid to the Authority may, so long as the City is not in default under any of the provisions of this Sublease, be used upon the Written Request of the City to purchase personal property, which property shall become a part of the Facilities leased hereunder. The Authority may require such opinions, certificates and other documents as it may deem necessary before permitting any sale or exchange of personal property subject to this Sublease or before releasing for the purchase of new personal property money received by it for personal property so sold. ARTICLE VIII COVENANTS SECTION 8.01. Right of Entry. The Authority and its assignees shall have the right (but not the duty) to enter upon and to examine and inspect the Facilities during reasonable business hours (and in emergencies at all times) (a) to inspect the same, (b) for any purpose connected with the Authority’s or the City’s rights or obligations under this Sublease, and (c) for all other lawful purposes. SECTION 8.02. Liens. In the event the City shall at any time during the term of this Sublease cause any changes, alterations, additions , improvements or other work to be done or performed or materials to be supplied, in or upon the Facilities, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Facilities and shall keep the Facilities free of any and all mechanics’ or materialmen’s liens or other liens against the Facilities or the Authority’s interest therein. In the event any such lien attaches to or is filed against the Facilities or the Authority’s interest therein, the City shall cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that if the City desires to contest any such lien it may do so in good faith. If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment. The City agrees to and shall, to the maximum extent permitted by law, indemnify and hold the Authority and the Trustee and their respective members, directors, agents, successors and assigns, harmless from and against, and defend each of them against, any claim, demand, loss, damage, liability or expense (including attorney’s fees) as a result of any such lien or claim of lien against the Facilities or the Authority’s interest therein. SECTION 8.03. Quiet Enjoyment. The parties hereto mutually covenant that the City, by keeping and performing the covenants and agreements herein contained and if not in default hereunder, shall at all times during the term of this Sublease peaceably and quietly have, hold and enjoy the Facilities without suit, trouble or hindrance from the Authority. SECTION 8.04. Authority Not Liable. The Authority and its members, directors, officers, agents, employees and assignees shall not be liable to the City or to any other party whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in, on or about the Facilities. 21 4139-4052-5846.4 The City, to the extent permitted by law, shall indemnify and hold the Authority and its members, directors, officers, agents, employees and assignees, harmless from, and defend each of them against, any and all claims, liens and judgments arising from (i) the construction or operation of the Facilities, including, without limitation, death of or injury to any person or damage to property whatsoever occurring in, on or about the Facilities regardless of responsibility for negligence, but excepting the active negligence of the person or entity seeking indemnity, and (ii) the issuance of the Bonds and any other action of the Authority taken pursuant to the Trust Agreement including, but not limited to, any liability of the Authori ty incurred pursuant to Section 8.03 of the Trust Agreement. SECTION 8.05. Assignment and Subleasing. Neither this Sublease or any interest of the City hereunder may be mortgaged, pledged, assigned, sublet or transferred by the City without the prior written consent of the Authority, and provided that such subletting shall not cause interest on the Bonds to be included in gross income for federal income tax purposes. No such mortgage, pledge, assignment, sublease or transfer shall in any event affect or reduce the obligation of the City to make the Base Rental Payments and Additional Payments required hereunder. SECTION 8.06. Title to Facilities. During the term of this Sublease, the Authority shall hold a leasehold title to the Facilities and any and all additions which comprise fixtures, repairs, replacements or modifications thereof, except for those fixtures, repairs, replacements or modifications which are added thereto by the City and which may be removed without damaging the Facilities, and except for any items added to the Facilities by the City pursuant to Section 4.04 hereof. This provision shall not operate to the benefit of any insurance company if there is a rental interruption covered by insurance pursuant to Section 5.03 hereof. During the term of this Sublease, the Authority shall have a leasehold interest in the Facilities pursuant to the Lease. Upon the termination or expiration of this Sublease (other than as provided in Sections 6.01 and 7.01 of this Sublease), title to the Facilities shall vest in the City pursuant to the Lease. Upon any such termination or expiration, the Authority shall execute such conveyances, deeds and other documents as may be necessary to effect such vesting of record. SECTION 8.07. Tax Covenants. The City and the Authority shall at all times do and perform all acts and things permitted by law which are necessary or desirable in order to assure that the interest on the Bonds will be excluded from gross income for federal income tax purposes under Section 103 of the Code and shall take no action that would result in such interest not being excluded from gross income for federal income tax purposes. The City further covenants that it will not use or permit the use of the Facilities by any person not an “exempt person” within the meaning of Section 141(a) of the Code or by an “exempt person” (including the City) in an “unrelated trade or business”, in such m anner or to such extent as would result in the inclusion of interest on the Bonds in gross income for federal income tax purposes under Section 103 of the Code. If at any time the City is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on or change in any way the investment of any monies held 22 4139-4052-5846.4 by the Trustee or the City or the Authority under this Sublease or the Trust Agreement, the City shall so instruct the Trustee or the appropriate officials of the City in writing, and the Trustee or the appropriate officials of the City, as the case may be, shall take such actions as may be necessary in accordance with such instructions. In furtherance of the covenants of the City set forth above, the City and the Authority will comply with the Tax Certificate and will cause the Trustee to comply with the Tax Certificate. The Trustee and the Authority may conclusively rely on any such written instructions, and the City hereby agrees to hold harmless the Trustee and the Authority for any loss, claim, damage, liability or expense incurred by the Authority or Trustee for any actions taken by the Authority or the Trustee in accordance with such instructions. SECTION 8.08. Purpose of Lease. The City covenants that during the term of this Sublease, (a) it will use, or cause the use of, the Facilities for public purposes and for the purposes for which the Facilities are customarily used, (b) it will not vacate or abandon the Facilities or any part thereof, and (c) it will not make any use of the Facilities which would jeopardize in any way the insurance coverage required to be maintained pursuant to Article V hereof. SECTION 8.09. Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Sublease, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default hereunder; however, the Trustee may (and, at the request of any Participating Underwriter (as defined in the Continuing Disclosure Certificate) or the Holders of at least 25% aggregate principal amount in Outstanding Bonds and upon receipt of indemnification satisfactory to it, shall) or any Bondholder or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the City to comply with its obligations under this Section. For purposes of this Section, “Beneficial Owner” means any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). SECTION 8.10. Net-Net-Net Lease. This Sublease shall be deemed and construed to be a “net-net-net lease” and the City hereby agrees that the rentals and other payments provided for herein shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever. SECTION 8.11. Taxes. The City shall pay or cause to be paid all taxes and assessments of any type or nature charged to the Authority or affecting the Facilities 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 be obligated to pay only such installments as are required to be paid during the term of this Sublease as and when the same become due. The City shall also pay directly such amounts, if any, in each yea r as shall be required by the Authority for the payment of all license and registration fees and all taxes 23 4139-4052-5846.4 (including, without limitation, income, excise, license, franchise, capital stock, recording, sales, use, value-added, property, occupational, excess profits and stamp taxes), levies, imposts, duties, charges, withholdings, assessments and governmental charges of any nature whatsoever, together with any additions to tax, penalties, fines or interest thereon, including, without limitation, penalties, fines or interest arising out of any delay or failure by the City to pay any of the foregoing or failure to file or furnish to the Authority or the Trustee for filing in a timely manner any returns, hereinafter levied or imposed against the Authority or the Facilities, the rentals and other payments required hereunder or any parts thereof or interests of the City or the Authority or the Trustee therein by any governmental authority. The City may, at the City’s expense and in its name, in good faith contest an y such taxes, assessments 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 or the Trustee shall notify the City that, in the opinion of independent counsel, by nonpayment of any such items, the interest of the Authority in the Facilities will be materially endangered or the Facilities, 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. ARTICLE IX DISCLAIMER OF WARRANTIES; USE OF THE FACILITIES SECTION 9.01. Disclaimer of Warranties. THE AUTHORITY MAKES NO AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF THE FACILITIES, OR WARRANTY WITH RESPECT THERETO. THE CITY ACKNOWLEDGES THAT THE AUTHORITY IS NOT A MANUFACTURER OF THE FACILITIES OR A DEALER THEREIN, THAT THE CITY LEASES THE FACILITIES AS-IS, IT BEING AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. In no event shall the Authority and Trustee be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Sublease or the existence, furnishing, functioning or the City’s use of any item or products or services provided for in this Sublease. SECTION 9.02. Use of the Facilities. The City will not install, use, operate or maintain the Facilities improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Sublease. The City shall provide all permits and licenses, if any, necessary for the installation and operation of the Facilities. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of the Facilities) with all laws of the jurisdictions in which its operations may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Facilities; provided, however, that the City may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not adversely affect the estate of the Authority in and to the Facilities or its interest or rights under this Sublease. 24 4139-4052-5846.4 ARTICLE X MISCELLANEOUS SECTION 10.01. Law Governing. This Sublease shall be governed exclusively by the provisions hereof and by the laws of the State as the same from time to time exist. SECTION 10.02. Notices. All notices, statements, demands, consents, approvals, authorizations, offers, designations, requests, agreements or promises or other communications hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon the other party if delivered personally, by confirmed facsimile transmission or if mailed by United States first class mail, return receipt requested, postage prepaid: If to the City: City of Burlingame 501 Primrose Road Burlingame, CA 94010-3997 Attention: Finance Director Fax: (650) 556-9260 If to the Authority: Burlingame Financing Authority c/o City of Burlingame-Dept. of Finance 501 Primrose Road Burlingame, CA 94010-3997 Attention: Executive Director Fax: (650) 556-9260 If to the Trustee: U.S. Bank National Association One California Street, Suite 1000 San Francisco, CA 94111 Attention: Global Corporate Trust Fax: (415) ________ or to such other addresses as the respective parties may from time to time designate by notice in writing. A copy of any such notice or other document herein referred to shall also be delivered to the Trustee. SECTION 10.03. Validity and Severability. If for any reason this Sublease shall be held by a court of competent jurisdiction to be void, voidable or unenforceable by the Authority or by the City, or if for any reason it is held by such a court that any of the covenants and conditions of the City hereunder, including the covenant to pay rentals hereunder, is unenforceable for the full term hereof, then and in such event this Sublease is and shall be deemed to be a lease under which the rentals are to be paid by the City annually in consideration of the right of the City to possess, occupy and use the Facilities, and all of the rental and other terms, provisions and conditions of this Sublease, except to the extent that such terms, provisions 25 4139-4052-5846.4 and conditions are contrary to or inconsistent with such holding, shall remain in full force and effect. SECTION 10.04. 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 Sublease. SECTION 10.05. Amendment or Termination. The Authority and the City may at any time agree to the amendment or termination of this Sublease; provided, however, that the Authority and the City agree and recognize that this Sublease is entered into in accordance with the terms of the Trust Agreement, and accordingly, that any such amendment or termination shall only be made or effected in accordance with and subject to the terms of the Trust Agreement. SECTION 10.06. Execution. This Sublease 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 Sublease. It is also agreed that separate counterparts of this Sublease may separately be 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. 26 4139-4052-5846.4 IN WITNESS WHEREOF, the Authority and the City have caused this Facilities Sublease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. BURLINGAME FINANCING AUTHORITY, Lessor By Executive Director CITY OF BURLINGAME, Lessee By City Manager A-1 4139-4052-5846.4 EXHIBIT A DESCRIPTION OF THE FACILITIES All that certain property in the City of Burlingame, County of San Mateo, State of California, including the buildings, other improvements, and facilities located thereon, described as follows: [Library and Adjacent Parking Facility] B-1 4139-4052-5846.4 EXHIBIT B BASE RENTAL PAYMENT SCHEDULE Date Principal Interest Total [to come] TABLE OF CONTENTS Page -i- 4139-4052-5846.4 ARTICLE I DEFINITIONS ................................................................................................. 1 SECTION 1.01. Definitions...................................................................................... 1 ARTICLE II LEASE OF FACILITIES; TERM; SUBSTITUTION; RELEASE; ADDITION OF PROPERTY .......................................................................... 5 SECTION 2.01. Lease of Facilities .......................................................................... 5 SECTION 2.02. Term; Occupancy ........................................................................... 5 SECTION 2.03. The Facilities .................................................................................. 5 SECTION 2.04. Substitution; Release; Addition of Property .................................. 6 ARTICLE III BASE RENTAL PAYMENTS ........................................................................ 7 SECTION 3.01. Base Rental Payments .................................................................... 7 SECTION 3.02. Additional Payments ...................................................................... 7 SECTION 3.03. Fair Rental Value ........................................................................... 8 SECTION 3.04. Payment Provisions ........................................................................ 8 SECTION 3.05. Appropriations Covenant; Base Rental Payments and Additional Payments to Constitute a Current Expense of the City ................................................................................................. 9 SECTION 3.06. Rental Abatement........................................................................... 9 ARTICLE IV USE OF PROCEEDS; MAINTENANCE OF, ALTERATIONS OF, AND ADDITIONS TO FACILITIES ........................................................... 10 SECTION 4.01. Use of Proceeds............................................................................ 10 SECTION 4.02. Maintenance and Utilities ............................................................ 10 SECTION 4.03. Changes to the Facilities .............................................................. 10 SECTION 4.04. Installation of City’s Equipment .................................................. 10 ARTICLE V INSURANCE ................................................................................................. 11 SECTION 5.01. Fire and Extended Coverage ........................................................ 11 SECTION 5.02. Liability Insurance ....................................................................... 12 SECTION 5.03. Rental Interruption or Use and Occupancy Insurance ................. 13 SECTION 5.04. Worker’s Compensation .............................................................. 13 SECTION 5.05. Title Insurance ............................................................................. 13 SECTION 5.06. Insurance Proceeds; Form of Policies .......................................... 13 ARTICLE VI DEFAULTS AND REMEDIES .................................................................... 14 SECTION 6.01. Defaults and Remedies ................................................................ 14 SECTION 6.02. Waiver .......................................................................................... 17 TABLE OF CONTENTS Page -ii- 4139-4052-5846.4 ARTICLE VII EMINENT DOMAIN; PREPAYMENT ....................................................... 17 SECTION 7.01. Eminent Domain .......................................................................... 17 SECTION 7.02. Prepayment .................................................................................. 18 SECTION 7.03. Option to Purchase; Sale of Personal Property ............................ 19 ARTICLE VIII COVENANTS ............................................................................................... 20 SECTION 8.01. Right of Entry .............................................................................. 20 SECTION 8.02. Liens ............................................................................................. 20 SECTION 8.03. Quiet Enjoyment .......................................................................... 20 SECTION 8.04. Authority Not Liable .................................................................... 20 SECTION 8.05. Assignment and Subleasing ......................................................... 21 SECTION 8.06. Title to Facilities .......................................................................... 21 SECTION 8.07. Tax Covenants ............................................................................. 21 SECTION 8.08. Purpose of Lease .......................................................................... 22 SECTION 8.09. Continuing Disclosure Certificate................................................ 22 SECTION 8.10. Net-Net-Net Lease ....................................................................... 22 SECTION 8.11. Taxes ............................................................................................ 22 ARTICLE IX DISCLAIMER OF WARRANTIES; USE OF THE FACILITIES ............... 23 SECTION 9.01. Disclaimer of Warranties ............................................................. 23 SECTION 9.02. Use of the Facilities ..................................................................... 23 ARTICLE X MISCELLANEOUS ...................................................................................... 24 SECTION 10.01. Law Governing ............................................................................ 24 SECTION 10.02. Notices ......................................................................................... 24 SECTION 10.03. Validity and Severability ............................................................. 24 SECTION 10.04. Section Headings ......................................................................... 25 SECTION 10.05. Amendment or Termination ......................................................... 25 SECTION 10.06. Execution ..................................................................................... 25 EXHIBIT A DESCRIPTION OF THE FACILITIES ............................................................... A-1 EXHIBIT B BASE RENTAL PAYMENT SCHEDULE .......................................................... B-1 4132-5580-5718.4 TRUST AGREEMENT THIS TRUST AGREEMENT dated as of __________ 1, 2019 (the “Trust Agreement”), by and between the BURLINGAME FINANCING AUTHORITY (the “Authority”), a public entity and agency (duly organized and existing pursuant to an Agreement entitled “Joint Exercise of Powers Agreement” by and between the City of Burlingame and the Redevelopment Agency of the City of Burlingame), and U.S. Bank National Association a national banking association duly organized and existing under the laws of the United States, as trustee (the “Trustee”); W I T N E S S E T H: WHEREAS, the Authority is a joint exercise of powers authority duly organized and operating pursuant to Article 1 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (hereinafter, the “Act”); WHEREAS, Article 4 of the Act authorizes and empowers the Authority to issue bonds to assist local agencies in financing projects and programs consisting of certain public improvements or working capital or liability and other insurance needs whenever a local agency determines that there are significant public benefits from so doing; WHEREAS, the City of Burlingame has determined that the consummation of the transactions contemplated in the Facilities Sublease, Facilities Lease (as such terms are hereinafter defined) and this Trust Agreement will result in significant public benefits; WHEREAS, the Authority is empowered pursuant to the Facilities Lease, the Facilities Sublease, and the aforementioned Article 4 of the Act to cause the lease of the Facilities (as hereinafter defined), and to cause the financing of the Project (as hereinafter defined) through the issuance of its bonds; WHEREAS, the Authority has authorized the issuance of its Lease Revenue Bonds, Series 2019 (the “Series 2019 Bonds”), in an aggregate principal amount of ______________________ dollars ($_________) to assist in financing the Project; WHEREAS, to provide for the authentication and delivery of the Bonds (as hereinafter defined), to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the full and timely payment of the principal thereof and premium, if any, and interest thereon, the Authority has authorized the execution and delivery of this Trust Agreement; WHEREAS, the Authority has determined 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 obligations of the Authority payable in accordance with their terms, and to constitute this Trust Agreement a valid and binding agreement of the parties hereto for the uses and purposes herein set forth, have been done and taken, and have been in all respects duly authorized; 2 4132-5580-5718.4 NOW, THEREFORE, THIS TRUST AGREEMENT WITNESSETH, that in order to secure the full and timely payment of the principal of, premium, if any, and the interest on all Bonds at any time issued and outstanding under this Trust Agreement, 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 holders thereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the respective holders from time to time of the Bonds, as follows: ARTICLE I DEFINITIONS; EQUAL SECURITY SECTION 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any Supplemental Trust Agreement and of any certificate, opinion, request or other document herein or therein mentioned have the meanings herein specified, unless otherwise defined in such other document. Capitalized terms not otherwise defined herein shall have the meaning assigned to such terms in the Facilities Sublease. Acquisition and Construction Fund The term “Acquisition and Construction Fund” means the fund held by the Trustee pursuant to Section 3.01. Act The term “Act” means the Joint Exercise of Powers Act (being Chapter 5 of Division 7 of Title 1 of the Government Code of the State, as amended) and all laws amendatory thereof or supplemental thereto. Additional Projects The term “Additional Projects” means public capital improvements, including equipment, located within the City and financed in whole or in part with the proceeds of Additional Bonds. Authority The term “Authority” means the Burlingame Financing Authority created pursuant to the Act and its successors and assigns in accordance herewith. Authorized Denominations The term “Authorized Denominations” means $5,000 or any integral multiple thereof. 3 4132-5580-5718.4 Base Rental Payments The term “Base Rental Payments” shall have the meaning ascribed to such term in the Facilities Sublease. Bond Counsel The term “Bond Counsel” means counsel of recognized national standing in the field of law relating to municipal bonds, appointed by the Authority. Bonds, Series 2019 Bonds, Additional Bonds, Serial Bonds, Term Bonds The term “Bonds” means the Series 2019 Bonds and all Additional Bonds. The term “Series 2019 Bonds” means all bonds of the Authority authorized by and at any time Outstanding pursuant hereto and executed, issued and delivered in accordance with Section 2.02(a) and Section 3.01. The term “Additional Bonds” means all bonds of the Authority authorized by and at any time Outstanding pursuant hereto and executed, issued and delivered in accordance with Article III. The term “Serial Bonds” means Bonds for which no sinking fund payments are provided. The term “Term Bonds” means Bonds which are payable on or before their specified maturity dates from sinking fund payments established for that purpose and calculated to retire such Bonds on or before their specified maturity dates. Bond Year The term “Bond Year” means the twelve (12)-month period ending on _________ 1 of each year to which reference is made, provided that the first Bond Year shall end on _________ 1, 2020. Bondholder; Holder; Owner The term “Bondholder,” “Holder” or “Owner” means any person who shall be the registered owner of any Outstanding Bond. Business Day The term “Business Day” means a day that is not a Saturday, Sunday or legal holiday on which banking institutions in the State of New York, Minnesota or California are authorized to remain closed, or a day on which the Federal Reserve system is closed. Certificate of the Authority The term “Certificate of the Authority” means an instrument in writing signed by the Chair, Vice-Chair, Executive Director, Secretary or Treasurer of the Authority, or by any other person (whether or not an officer of the Authority) who is specifically authorized by resolution of the Authority for that purpose. 4 4132-5580-5718.4 Certificate of the City The term “Certificate of the City” means an instrument in writing signed by the Mayor, Vice-Mayor, City Manager or Finance Director/Treasurer of the City, or by any such officials’ duly appointed designee, or by any other officer or employee of the City duly authorized by the City Council of the City for that purpose. City The term “City” means the City of Burlingame, a city organized and validly existing under the Constitution and general laws of the State. Code The term “Code” means the Internal Revenue Code of 1986, as amended. Continuing Disclosure Certificate The term Continuing Disclosure Certificate shall mean that certain Continuing Disclosure Certificate executed by the City dated the date of issuance and delivery of the Series 2019 Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Costs of Issuance The term “Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City or the Authority and related to the authorization, execution and delivery of the Facilities Lease, the F acilities Sublease, this Trust Agreement and the issuance and sale of the Bonds, including, but not limited to, costs of preparation and reproduction of documents, costs of rating agencies and costs to provide information required by rating agencies, filing and recording fees, fees and charges of the Trustee, legal fees and charges, fees and disbursements of consultants and professionals, fees and charges for preparation, execution and safekeeping of the Bonds, fees of the Authority and any other authorized cost, charge or fee in connection with the issuance of the Bonds. Costs of Issuance Fund The term “Costs of Issuance Fund” means the fund by that name established pursuant to Section 3.01. Debt Service The term “Debt Service” means, for any Fiscal Year or other period, the sum of (1) the interest accruing during such Fiscal Year or other period on all Outstanding Bonds, assuming that all Outstanding Serial Bonds are retired as scheduled and that all Outstanding Term Bonds are redeemed or paid from sinking fund payments as scheduled (except to the extent that such interest is to be paid from the proceeds of sale of any Bonds so long as such funded interest is in an amount equal to the gross amount necessary to pay such interest on the Bonds 5 4132-5580-5718.4 and is invested in direct obligations of the United States which mature no later than the related Interest Payment Date), (2) the principal amount of all Outstanding Serial Bonds maturing during such Fiscal Year or other period, and (3) the principal amount of all Outstanding Term Bonds required to be redeemed or paid (together with the redemption premiums, if any, thereon) during such Fiscal Year or other period. Depository The term “Depository” shall mean DTC or another recognized securities depository selected by the Authority which maintains a book-entry system for the Bonds. DTC The term “DTC” means The Depository Trust Company, New York, New York. Event of Default The term “Event of Default” shall have the meaning specified in Section 7.01. Facilities The term “Facilities” means the buildings, other improvements and facilities described in Exhibit A to the Facilities Sublease, including all real property on which such buildings, other improvements and facilities are located, or any portion thereof, or any City buildings, other improvements and facilities added thereto or substituted therefor, or any portion thereof, in accordance with the Facilities Sublease and this Trust Agreement; subject, however, to any conditions, reservations and easements of record known to the City. Facilities Lease The term “Facilities Lease” means that certain lease, entitled “Facilities Lease”, by and between the City and the Authority, dated as of ___________ 1, 2019, which lease or a memorandum thereof was recorded in the office of the County Recorder of the County of San Mateo on _________ 1, 2019 as document No. __________, as originally executed and recorded or as it may from time to time be supplemented, modified or amended pursuant to the provisions hereof and thereof. Facilities Sublease The term “Facilities Sublease” means that certain lease, entitled “Facilities Sublease”, by and between the Authority and the City, dated as of ___________ 1, 2019, which lease or a memorandum thereof was recorded in the office of the County Recorder of the County of San Mateo on _________ 1, 2019 as document No. ________, as originally executed and recorded or as it may from time to time be supplemented, modified or amended pursuant to the provisions hereof and thereof. 6 4132-5580-5718.4 Financial Newspaper The term “Financial Newspaper” means The Wall Street Journal or The Bond Buyer, or any other newspaper or journal printed in the English language, publishing financial news, and selected by the Authority. Fiscal Year The term “Fiscal Year” means the twelve (12) month period terminating on June 30 of each year, or any other annual accounting period hereafter selected and designated by the Authority as its Fiscal Year in accordance with applicable law. Government Securities The term “Government Securities” means United States of America Treasury bills, notes, bonds or certificates of indebtedness, or obligations the timely payment of which is guaranteed directly by the United States of America, including evidences of direct ownership of proportionate interests in future interest or principal payments of such obligations; provided that investments in such proportionate interests must be limited to circumstances wherein (a) a bank or trust company acts as custodian and holds the underlying United States obligations; (b) the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor of the underlying United States obligations; (c) the underlying obligations are not redeemable prior to maturity, and (d) the underlying United States obligations are held in a special account, segregated from the custodian’s general assets, and are not available to satisfy any claim of the custodian, any person claiming through the custodian, or any person to whom the custodian may be obligated. Independent Certified Public Accountant The term “Independent Certified Public Accountant” means any certified public accountant or firm of such accountants duly licensed and entitled to practice and practicing as such under the laws of the State or a comparable successor, appointed and paid by the Authority, and who, or each of whom -- (1) is in fact independent according to the Statement of Auditing Standards No. 1 and not under the domination of the Authority or the City; (2) does not have a substantial financial interest, direct or indirect, in the operations of the Authority or the City; and (3) is not connected with the Authority or the City as a member, officer or employee of the Authority or the City, but who may be regularly retained to audit the accounting records of and make reports thereon to the Authority or the City. Information Services The term “Information Services” means the Electronic Municipal Market Access System of the Municipal Rulemaking Board; and in accordance with then current guidelines of 7 4132-5580-5718.4 the Securities and Exchange Commission, such other addresses and/or such other services providing information with respect to called bonds, or such services as the Authority may designate in a Certificate of the Authority delivered to the Trustee. Interest Payment Date The term “Interest Payment Date” means January 1 and July 1 in each year, commencing _________ 1, ____. Joint Powers Agreement The term “Joint Powers Agreement” means the Joint Exercise of Powers Agreement by and between the City and the Redevelopment Agency of the City of Burlingame, dated May 15, 1995, as originally executed and as it may from time to time be amended or supplemented pursuant to the provisions hereof and thereof. Moody’s The term “Moody’s” means Moody’s Investors Service, Inc. a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the City. Opinion of Counsel The term “Opinion of Counsel” means a written opinion of Bond Counsel. Outstanding The term “Outstanding,” when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 9.02) all Bonds except (1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (2) Bonds paid or deemed to have been paid within the meaning of Section 10.01; and (3) Bonds in lieu of or in substitution for which other Bonds shall have been executed, issued and delivered by the Authority pursuant hereto. Permitted Encumbrances The term “Permitted Encumbrances” means (1) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to the Facilities Sublease, permit to remain unpaid; (2) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the 8 4132-5580-5718.4 date of recordation of the Facilities Sublease in the office of the County Recorder of the County of San Mateo and which the City certifi es in writing will not materially impair the use of the Facilities; (3) the Facilities Lease, as it may be amended from time to time; (4) the Facilities Sublease, as it may be amended from time to time; (5) this Trust Agreement, as it may be amended from time to time; (6) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (7) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions to which the Authority and the City consent in writing and certify to the Trustee will not materially impair the ownership interests of the Authority or use of the Facilities by the City; and (8) subleases and assignments of the City which will not adversely affect the exclusion from gross income of interest on the Bonds. Permitted Investments The term “Permitted Investments” means any of the following, if and to the extent each is permissible for investment of funds of the Authority, as stated in its current investment policy and pursuant to applicable laws: (1) Government Securities; (2) Any obligations which are then legal investments for moneys of the City under the laws of the State of California; provided that such investments shall be rated in the highest short-term or one of the three highest long-term Rating Categories by the Rating Agencies or deposits which are fully insured by the FDIC; (3) Debentures of the Federal Housing Administration; or obligations of the following agencies which are not guaranteed by the United States of America: (i) participation certificates or debt obligations of the Federal Home Loan Mortgage Corporation; (ii) consolidated system-wide bonds and notes of the Farm Credit Banks (consisting of Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives); (iii) consolidated debt obligations or letter of credit-backed issues of the Federal Home Loan Banks; (iv) mortgage-backed securities (excluding stripped mortgage securities which are valued greater than par on the portion of unpaid principal or debt obligations of the Federal National Mortgage Association; or (v) letter of credit-backed issues or debt obligations of the Student Loan Marketing Association; (4) Money markets or mutual funds which are rated by S&P “AAAm-G” or “AAAm” or higher and, if rated by Moody’s, are rated “Aaa” or higher, which funds may include funds for which the Trustee, its affiliates or subsidiaries provide investment advisory or other management services; (5) Any investment agreement with, or guaranteed by, a financial institution the long-term unsecured obligations or the claims paying ability of which are rated in any of the three highest Rating Categories by the Rating Agencies at the time of initial i nvestment, by the terms of which all amounts invested thereunder are required to be withdrawn and paid to the Trustee in the event such rating at any time falls below any of the three highest Rating 9 4132-5580-5718.4 Categories of the Rating Agencies; provided that any such investment agreement shall have been provided to the Rating Agencies; (6) The Local Agency Investment Fund of the State of California; (7) U.S. denominated deposit account, certificates of deposit and banker’s acceptances of any bank, trust company, or savings and loan association, including the Trustee or their affiliates, which have a rating on their short-term certificates of deposit on the date of purchase in one of the two highest short-term rating categories (without regard to any refinement or gradation of rating category by numerical modifier or otherwise) assigned by any rating agency, and which mature not more than 365 days after the date of purchase; and (8) Any other investment selected by the Authority which does not adversely affect the then-current rating on the Bonds. The Trustee may conclusively rely on the written instructions of the Authority and the City that such investment is a Permitted Investment hereunder. Person The term “Person” means a corporation, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. Principal Office The term “Principal Office” refers to the office of the Trustee noted in Section 12.12 and such other offices as the Trustee may designate from time to time except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted, initially in St. Paul, Minnesota. Principal Payment Date The term “Principal Payment Date” means any date on which principal of the Bonds is required to be paid (whether by reason of maturity, redemption or acceleration). Projects The term “Projects” means the Series 2019 Project and all Additional Projects. Project Costs The term “Project Costs” means all costs of acquisition and construction of the Project and of expenses incident thereto (or for making reimbursements to the Authority or the City or any other person, firm or corporation for such costs theretofore paid by him or it), including, but not limited to, architectural and engineering fees and expenses, interest during construction, furnishings and equipment, tests and inspection, surveys, land acquisition, 10 4132-5580-5718.4 insurance premiums, losses during construction not insured against because of deductible amounts, costs related to the Trustee during construction, costs of accounting, feasibility, environmental and other reports, inspection costs, permit fees, filing and recording costs, printing costs, reproduction and binding costs. Rating Agencies The term “Rating Agencies” means, as of any date, (a) Moody’s, if Moody’s then maintains a rating on the Bonds, and (b) S&P, if S&P then maintains a rating on the Bonds. Rating Category The term “Rating Category” means one of the general long-term (or short-term, if so specifically provided) rating categories of either Moody’s and S&P, without regard to any refinement or gradation of such rating category by a numerical modifier or otherwise. Record Date The term “Record Date” means the close of business on the fifteenth (15th) calendar day (whether or not a Business Day) of the month preceding any Interest Payment Date. Redemption Date The term “Redemption Date” shall mean the date fixed for redemption of any Bonds. Redemption Price The term “Redemption Price” means, with respect to any Bond (or portion thereof), the principal amount of such Bond (or portion) plus the applicable premium, if any, payable upon redemption thereof pursuant to the provisions of such Bond and this Trust Agreement. Representation Letter The term “Representation Letter” means the blanket letter of representation of the Authority to DTC or any similar letter to a substitute depository. Responsible Officer The term “Responsible Officer” means any officer of the Trustee assigned to administer its duties under this Trust Agreement. Revenues The term “Revenues” means (i) all Base Rental Payments and other payments paid by the City and received by the Authority pursuant to the Facilities Sublease (but not Additional Payments), and (ii) all interest or other income from any investment, pursuant to 11 4132-5580-5718.4 Section 5.05, of any money in any fund or account (other than the Rebate Fund) established pursuant to this Trust Agreement or the Facilities Sublease. Securities Depositories The term “Securities Depositories” means: The Depository Trust Company or such other securities depositories as the Authority may designate to the Trustee. Series The term “Series,” whenever used herein with respect to Bonds, means all of the Bonds designated as being of the same series, authenticated and delivered in a simultaneous transaction, regardless of variations in maturity, interest rate, redemption and other provisions, and any Bonds thereafter authenticated and delivered upon transfer or exchange of or in lieu of or in substitution for (but not to refund) such Bonds as herein provided. Series 2019 Project The term “Series 2019 Project” means the acquisition and construction of the Burlingame Community Center, or such other public capital improvements as shall be identified in a Certificate of the City. S&P The term “S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term S&P shall be deemed to refer to any other nationally recognized securities rating agency selected by the City. State The term “State” means the State of California. Supplemental Trust Agreement The term “Supplemental Trust Agreement” means any trust agreement then in full force and effect which has been duly executed and delivered by the Authority and the Trustee amendatory hereof or supplemental hereto; but only if and to the extent that such Supplemental Trust Agreement is executed and delivered pursuant to the provisions hereof. Tax Certificate The term “Tax Certificate” means the Tax Certificate delivered by the Authority at the time of the issuance and delivery of a Series of Bonds, as the same may be amended or supplemented in accordance with its terms. 12 4132-5580-5718.4 Treasurer The term “Treasurer” means the Treasurer and Controller of the Authority designated pursuant to the Joint Powers Agreement. Trust Agreement The term “Trust Agreement” means this Trust Agreement, dated as of ___________ 1, 2019 between the Authority and the Trustee, as originally executed and as it may from time to time be amended or supplemented by all Supplemental Trust Agreements executed pursuant to the provisions hereof. Trustee The term “Trustee” means U.S. Bank National Association or any other association or corporation which may at any time be substituted in its place as provided in Section 8.01. Written Request of the Authority The term “Written Request of the Authority” means an instrument in writing signed by or on behalf of the Authority by its Chair, Vice-Chair, Executive Director or Treasurer or by any other person (whether or not an officer of the Authority) who is specifically authorized by resolution of the Authority for that purpose. Written Request of the City The term “Written Request of the City” means an instrument in writing to the Trustee signed by the Mayor, Vice-Mayor, City Manager, or the Finance Director/Treasurer of the City, or by any such officer’s duly appointed designee, or by any other officer or employee of the City duly authorized by the City for that purpose. SECTION 1.02 Equal Security. In consideration of the acceptance of the Bonds by the Bondholders thereof, this Trust Agreement shall be deemed to be and shall constitute a contract among the Authority, the Trustee and the Bondholders from time to time of all Bonds authorized, executed, issued and delivered hereunder and then Outstanding to secure the full, timely and final payment of the interest on and principal of and redemption premiums, if any, on all Bonds which may from time to time be authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Authority shall be for the equal and proportionate benefit, protection and security of all Bondholders of the Bonds without distinction, preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the time of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein. 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, 13 4132-5580-5718.4 masculine, or feminine gender is for convenience only and shall be deemed to mean or 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. ARTICLE II THE BONDS SECTION 2.01 Authorization of Bonds; Series 2019 Bonds. (a) Bonds may be issued hereunder from time to time in order to obtain moneys to carry out the purposes of the Authority. The maximum principal amount of Bonds which may be issued hereunder is not limited. The Bonds are designated generally as “Burlingame Financing Authority Lease Revenue Bonds,” each Series thereof to bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Bonds. The Bonds may be issued in such Series as from time to time shall be established and authorized by the Authority, subject to the covenants, provisions and conditions herein contained. (b) An initial Series of Bonds is hereby created and designated “Burlingame Financing Authority Lease Revenue Bonds, Series 2019.” The aggregate principal amount of Series 2019 Bonds which may be issued and Outstanding under this Trust Agreement shall not exceed ________________ dollars ($_________). (c) The Authority has reviewed all proceedings heretofore taken relative to the authorization of the Series 2019 Bonds and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of the Series 2019 Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and that the Authority is now duly authorized, pursuant to each and every requirement of the Act, to issue the Series 2019 Bonds in the form and manner provided herein and that the Series 2019 Bonds shall be entitled to the benefit, protection and security of the provisions hereof. (d) The validity of the issuance of the Series 2019 Bonds shall not be dependent on or affected in any way by the proceedings taken by the Authority for the financing of a cap ital improvement or by any contracts made by the Authority or its agents in connection therewith, and shall not be dependent upon the completion of a capital improvement or upon the performance by any person, firm or corporation of his or its obligation with respect thereto. The recital contained in the Series 2019 Bonds that the same are issued pursuant to the Act and pursuant hereto shall be conclusive evidence of their validity and of the regularity of their issuance, and all Series 2019 Bonds shall be incontestable from and after their issuance. The Series 2019 Bonds shall be deemed to be issued, within the meaning hereof, whenever the definitive Series 2019 Bonds (or any temporary Series 2019 Bonds exchangeable therefor) shall have been delivered to the purchaser thereof and the proceeds of sale thereof received. 14 4132-5580-5718.4 SECTION 2.02 Terms of the Series 2019 Bonds. (a) The Series 2019 Bonds shall be issued in the aggregate principal amount of _____________ dollars ($_________). The Series 2019 Bonds shall be dated as of the date of initial delivery, shall be issued only in fully registered form in Authorized Denominations (not exceeding the principal amount of Series 2019 Bonds maturing at any one time), and shall mature in the years and in the principal am ounts and bear interest at the rates as set forth in the following schedule, subject to prior redemption as described in Article IV hereof: Series 2019 Bonds Maturity Date ( 1) Principal Amount Interest Rate ____________ * Term Bond The Series 2019 Bonds shall bear interest at the rates set forth above, payable commencing ___________ 1, ____, and semiannually thereafter on ___________ 1 and ___________ 1 in each year. The Series 2019 Bonds shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless such date of authentication is an Interest Payment Date, in which event they shall bear interest from such date, or unless such date of authentication is prior to the first Interest Payment Date, in which event they shall bear interest from their dated date. The amount of interest so payable on any 15 4132-5580-5718.4 Interest Payment Date shall be computed on the basis of a 360-day year consisting of twelve 30- day months. (b) Payment of interest on the Series 2019 Bonds due on or before the maturity or prior redemption thereof shall be paid by check mailed by first class mail on each Interest Payment Date to the person in whose name the Bond is registered as of the applicable Record Date for such Interest Payment Date at the address shown on the registration books maintained by the Trustee pursuant to Section 2.09; provided, however, that interest on any Series of Bonds shall be paid by wire transfer or other means to provide immediately available funds to any Holder of at least $1,000,000 in aggregate principal amount of such Series of Bonds, at its option, according to wire instructions given to the Trustee in writing for such purpose and on file prior to the applicable Record Date preceding the Interest Payment Date. (c) Interest on any Bond shall cease to accrue (i) on the maturity date thereof, provided that there has been irrevocably deposited with the Trustee an amount sufficient to pay the principal amount thereof, plus interest accrued thereon to such date; or (ii) on the redemption date thereof, provided there has been irrevocably deposited with the Trustee an amount sufficient to pay the Redemption Price thereof, plus interest accrued thereon to such date. The Holder of such Bond shall not be entitled to any other payment, and such Bond shall no longer be Outstanding and entitled to the benefits of this Trust Agreement, except for the payment of the principal amount or Redemption Price, of such Bond, as appropriate, from moneys held by the Trustee for such payment. (d) The principal of the Bonds shall be payable by check in lawful money of the United States of America at the Principal Office of the Trustee. No payment of principal shall be made on any Bond unless and until such Bond is surrendered to the Trustee for cancellation. (e) The Trustee shall identify all payments (whether made by check or by wire transfer) of interest, principal, and premium by CUSIP number of the related Bonds. SECTION 2.03 Form of Series 2019 Bonds. The Series 2019 Bonds and the authentication and registration endorsement and assignment to appear thereon shall be substantially in the forms set forth in Exhibit A hereto attached and by this reference herein incorporated. SECTION 2.04 [Reserved]. SECTION 2.05 [Reserved]. SECTION 2.06 Execution of Series 2019 Bonds. The Executive Director of the Authority is hereby authorized and directed to execute each of the Series 2019 Bonds on behalf of the Authority and the Secretary of the Authority is hereby authorized and directed to countersign each of the Series 2019 Bonds on behalf of the Authority. The signatures of such Executive Director and Secretary may be by printed, lithographed or engraved by facsimile reproduction. In case any officer whose signature appears on the Series 2019 Bonds shall cease to be such officer before the delivery of the Series 2019 Bonds to the purchaser thereof, such signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until such delivery of the Series 2019 Bonds. 16 4132-5580-5718.4 Only those Series 2019 Bonds bearing thereon a certificate of authentication in the form hereinbefore recited, executed manually and dated by the Trustee, shall be entitled to any benefit, protection or security hereunder or be valid or obligatory for any purpose, and such certificate of the Trustee shall be conclusive evidence that the Series 2019 Bonds so authenticated have been duly authorized, executed, issued and delivered hereunder and are entitled to the benefit, protection and security hereof. SECTION 2.07 Transfer and Payment of Bonds. Any Bond may, in accordance with its terms, be transferred in the books required to be kept pursuant to the provisions of Section 2.09 by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee. 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 the same Series and maturity for a like aggregate principal amount of Authorized Denominations. The Trustee shall require the payment by the Bondholder requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer as a condition precedent to the exercise of such privilege. The Authority and the Trustee may, except as otherwise provided herein, deem and treat the registered owner of any Bond as the absolute owner of such Bond for the purpose of receiving payment thereof and for all other purposes, whether such Bond shall be overdue or not, and neither the Authority nor the Trustee shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of and redemption premium, if any, on such Bond shall be made only to such registered owner, which payments shall be valid and effectual to satisfy and discharge liability on such Bond to the extent of the sum or sums so paid. The Trustee shall not be required to register the transfer of or exchange any Bonds which has been selected for redemption in whole or in part, from and after the day of mailing of a notice of redemption of such Bond selected for redemption in whole or in part as provided in Section 4.05 or during the period established by the Trustee for selection of Bonds for redemption. SECTION 2.08 Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Trustee for a like aggregate principal amount of Bonds of the same Series and maturity of other authorized denominations. The Trustee shall require the payment by the Bondholder requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange as a condition precedent to the exercise of such privilege. The Trustee shall not be required to exchange any Bond which has been selected for redemption in whole or in part, from and after the day of mailing of a notice of redemption of such Bond selected for redemption in whole or in part as provided in Section 4.05 or during the period established by the Trustee for selection of Bonds for redemption. SECTION 2.09 Bond Registration Books. The Trustee will keep at its office sufficient books for the registration and transfer of the Bonds, which during normal business hours shall be open to inspection by the Authority, upon reasonable notice, and upon 17 4132-5580-5718.4 presentation for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the Bonds in such books as hereinabove provided. SECTION 2.10 Mutilated, Destroyed, Stolen or Lost Bonds; Temporary Bonds. If any Bond shall become mutilated, the Trustee, at the expense of the Bondholder, shall thereupon authenticate and deliver a new Bond of like tenor and amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Bondholder, 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 reasonable sum for each new Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee in the premises. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits of this Trust Agreement with all other Bonds of the same Series secured by this Trust Agreement. Neither the Authority nor the Trustee shall be required to treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be issued hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated as one and the same. The Bonds issued under this Trust Agreement may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Authority, shall be in fully registered form and may contain such reference to any of the provisions of this Trust Agreement as may be appropriate. Every temporary Bond shall be executed and authenticated as authorized by the Authority, in accordance with the terms of the Act. If the Authority issues temporary Bonds it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds may be surrendered, for cancellation, in exchange therefor at the Principal Office of the Trustee, and the Trustee shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Trust Agreement as definitive Bonds delivered hereunder. SECTION 2.11 Special Covenants as to Book-Entry Only System for Series 2019 Bonds. (a) Except as otherwise provided in subsections (b) and (c) of this Section, all of the Series 2019 Bonds initially issued shall be registered in the name of Cede & Co., as nominee for DTC, or such other nominee as DTC shall request pursuant to the Representation Letter. Payment of the interest on any Series 2019 Bond registered in the name of Cede & Co. shall be made on each Interest Payment Date for such Series 2019 Bonds to the account, in the manner and at the address indicated in or pursuant to the Representation Letter. 18 4132-5580-5718.4 (b) The Series 2019 Bonds initially shall be issued in the form of a single authenticated fully registered bond for each stated maturity of such Series 2019 Bonds, representing the aggregate principal amount of the Series 2019 Bonds of such maturity. Upon initial issuance, the ownership of all such Series 2019 Bonds shall be registered in the registration records maintained by the Trustee pursuant to Section 2.09 in the name of Cede & Co., as nominee of DTC, or such other nominee as DTC shall request pursuant to the Representation Letter. The Trustee, the Authority and any paying agent may treat DTC (or its nominee) as the sole and exclusive owner of the Series 2019 Bonds registered in its name for the purposes of payment of the principal or redemption price of and interest on such Series 2019 Bonds, selecting the Series 2019 Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Bondholders hereunder, registering the transfer of Series 2019 Bonds, obtaining any consent or other action to be taken by Bondholders of the Series 2019 Bonds and for all other purposes whatsoever; and neither the Trustee nor the Authority or any paying agent shall be affected by any notice to the contrary. Neither the Trustee nor the Authority or any paying agent shall have any responsibility or obligation to any “Participant” (which shall mean, for purposes of this Section, securities brokers and dealers, banks, trust companies, clearing corporations and other entities, some of whom directly or indirectly own DTC), any person claiming a beneficial ownership interest in the Series 2019 Bonds under or through DTC or any Participant, or any other person which is not shown on the registration records as being a Bondholder, with respect to (i) the accuracy of any records maintained by DTC or any Participant, (ii) the payment by DTC or any Participan t of any amount in respect of the principal or redemption price of or interest on the Series 2019 Bonds, (iii) any notice which is permitted or required to be given to Bondholders of Series 2019 Bonds hereunder, (iv) the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the Series 2019 Bonds, or (v) any consent given or other action taken by DTC as Bondholder of Series 2019 Bonds. The Trustee shall pay all principal of and premium, if any, and interest on the Series 2019 Bonds only at the times, to the accounts, at the addresses and otherwise in accordance with the Representation Letter, and all such payments shall be valid and effective to satisfy fully and discharge the Authority’s obligations wit h respect to the payment of the principal of and premium, if any, and interest on the Series 2019 Bonds to the extent of the sum or sums so paid. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of its then existing nominee, the Series 2019 Bonds will be transferable to such new nominee in accordance with subsection (e) of this Section. (c) In the event that the Authority determines that the Series 2019 Bonds should not be maintained in book-entry form, the Trustee shall, upon the written instruction of the Authority, so notify DTC, whereupon DTC shall notify the Participants of the availability through DTC of bond certificates. In such event, the Series 2019 Bonds will be transferable in accordance with subsection (e) of this Section. DTC may determine to discontinue providing its services with respect to the Series 2019 Bonds or a portion thereof, at any time by giving written notice of such discontinuance to the Authority or the Trustee and discharging its responsibilities with respect thereto under applicable law. In such event, the Series 2019 Bonds will be transferable in accordance with subsection (e) of this Section. If at any time DTC shall no longer be registered or in good standing under the Securities Exchange Act or other applicable statute or regulation and a successor securities depository is not appointed by the Authority within 90 days after the Authority receives notice or becomes aware of such condition, as the case may be, then 19 4132-5580-5718.4 this Section shall no longer be applicable and the Authority shall execute and the Trustee shall authenticate and deliver certificates representing the Series 2019 Bonds as provided below. Whenever DTC requests the Authority and the Trustee to do so, the Trustee and the Authority will cooperate with DTC in taking appropriate action after reasonable notice to arrange for another securities depository to maintain custody of all certificates evidencing the Series 2019 Bonds then Outstanding. In such event, the Series 2019 Bonds will be transferable to such securities depository in accordance with subsection (e) of this Section, and thereafter, all references in this Trust Agreement to DTC or its nominee shall be deemed to refer to such successor securities depository and its nominee, as appropriate. (d) Notwithstanding any other provision of this Trust Agreement to the contrary, so long as all Series 2019 Bonds Outstanding are registered in the name of any nominee of DTC, all payments with respect to the principal of and premium, if any, and interest on each such Series 2019 Bond and all notices with respect to each such Series 2019 Bond shall be made and given, respectively, to DTC as provided in or pursuant to the Representation Letter. (e) In the event that any transfer or exchange of Series 2019 Bonds is authorized under subsection (b) or (c) of this Section, such transfer or exchange shall be accomplished upon receipt by the Trustee from the registered owner thereof of the Series 2019 Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee, all in accordance with the applicable provisions of Sections 2.07 and 2.08. In the event Series 2019 Bond certificates are issued to Bondholders other than Cede & Co., its successor as nominee for DTC as holder of all the Series 2019 Bonds, another securities depository as holder of all the Series 2019 Bonds, or the nominee of such successor securities depository, the provisions of Sections 2.07 and 2.08 shall also apply to, among other things, the registration, exchange and transfer of the Series 2019 Bonds and the method of payment of principal of, premium, if any, and interest on the Series 2019 Bonds. ARTICLE III ISSUANCE OF BONDS SECTION 3.01 Procedure for the Issuance of Series 2019 Bonds. At any time after the sale of the Series 2019 Bonds in accordance with the Act, the Authority shall execute the Series 2019 Bonds for issuance hereunder and shall deliver them to the Trustee, and thereupon the Series 2019 Bonds shall be authenticated and delivered by the Trustee to the purchaser thereof upon the Written Request of the Authority and upon receipt of payment therefor from the purchaser thereof. Upon receipt of payment for the Series 2019 Bonds from the purchaser thereof, the Trustee shall, unless otherwise instructed by the Authority, deposit the proceeds received from such sale to the following respective funds, in the following order of priority: (i) deposit the sum of $_________ in the Costs of Issuance Fund, which fund is hereby created and which fund the Trustee hereby agrees to maintain until _________ 1, ____. All money in the Costs of Issuance Fund shall be used and withdrawn by the Trustee to pay the Costs of Issuance of the Series 2019 Bonds upon receipt of a Written Request of the Authority filed with the Trustee, each of which shall 20 4132-5580-5718.4 be sequentially numbered and shall state the person(s) to whom payment is to be made, the amount(s) to be paid, the purpose(s) for which the obligation(s) was incurred and that such payment is a proper charge against said fund. On _________ 1, ____, or upon the earlier Written Request of the Authority, any remaining balance in the Costs of Issuance Fund shall be transferred to the Revenue Fund; and (ii) deposit the sum of $__________ in the Acquisition and Construction Fund, which fund is hereby established with the Trustee. The Trustee may, in its discretion, establish a temporary fund or account in its books and records to facilitate such deposits. SECTION 3.02 Use of Moneys in the Acquisition and Construction Fund. All moneys in the Acquisition and Construction Fund shall be held by the Trustee in trust and applied by the Trustee to the payment of Project Costs and of expenses incident thereto (or for making reimbursements to the Authority or the City or any other person, firm or corporation for such costs theretofore or thereafter paid by it). Before any payment is made from the Acquisition and Construction Fund by the Trustee, the City shall cause to be filed with the Trustee a Written Request of the City, endor sed thereon, showing with respect to each payment to be made: (i) the item number of the payment; (ii) the name and address of the person to whom payment is due; (iii) the amount to be paid; and (iv) the purpose for which the obligation to be paid was incurred. Each such Written Request shall state, and shall be sufficient evidence to the Trustee that obligations in the stated amounts have been incurred and that each item thereof is a proper charge against the Acquisition and Construction Fund. The Trustee is not responsible for determining whether any cost of construction is pursuant to a contract. When the Series 2019 Project (or component thereof) shall have been completed, the City shall (1) deliver to the Trustee a Certificate of Completion stating that all such costs of construction and incidental expenses have been determined and paid (or that all of such costs and expenses have been paid less specified claims which are subject to dispute and for which a retention in the Acquisition and Construction Fund is to be maintained in the full amount of such claims until such dispute is resolved); and (2) subject to the covenants contained in Section 6.03, transfer to the Trustee any moneys remaining in the Acquisition and Construction Fund (but less the amount of any such retention) for deposit in the Revenue Fund. SECTION 3.03 Conditions for the Issuance of Additional Bonds. The Authority may at any time, issue Additional Bonds pursuant to a Supplemental Trust Agreement, payable from the Revenues as provided herein and secured by a pledge of and charge and lien upon the Revenues as provided herein equal to the pledge, charge and lien securing the 21 4132-5580-5718.4 Outstanding Bonds theretofore issued hereunder, but only subject to the following specific conditions, which are hereby made conditions precedent to the issuance of any such Additional Bonds: (a) The Authority shall be in compliance with all agreements and covenants contained herein and no Event of Default shall have occurred and be continuing. (b) The Supplemental Trust Agreement shall require that the proceeds of the sale of such Additional Bonds shall be applied to finance or refinance Projects, or for the refunding or repayment of any Bonds then Outstanding, including the payment of costs and expenses of and incident to the authorization and sale of such Additional Bonds. The Supplemental Trust Agreement may also provide that a portion of such proceeds shall be applied to the payment of the interest due or to become due on said Additional Bonds. (c) The aggregate principal amount of Bonds issued and at any time Outstanding hereunder shall not exceed any limit imposed by law, by this Trust Agreement or by any Supplemental Trust Agreement. (d) The Facilities Sublease shall have been amended, if necessary, so that the Base Rental Payments payable by the City thereunder in each Fiscal Year shall at least equal Debt Service, including Debt Service on the Additional Bonds, in each Fiscal Year, and if Base Rental Payments are being increased, a Certificate of the City shall be delivered to the Trust ee certifying that the annual fair rental value (which may be based on, but not limited to, the construction or acquisition cost or replacement cost of such facility to the City) will be at least equal to 100% of the maximum amount of Base Rental Payments becoming due in the then current fiscal year or in any subsequent fiscal year. (e) If additional facilities, if any, are to be leased and are not situated on property described in the Facilities Lease and Facilities Sublease, (1) the Facilities Lease shall have been amended so as to lease to the Authority such additional real property; and (2) the Facilities Sublease shall have been amended so as to lease to the City such additional real property. SECTION 3.04 Proceedings for Authorization of Additional Bonds. Whenever the Authority and the City shall determine to execute and deliver any Additional Bonds pursuant to Section 3.03, the Authority and the Trustee shall enter into a Supplemental Trust Agreement providing for the issuance of such Additional Bonds, specifying the maximum principal amount of such Additional Bonds and prescribing the terms and conditions of such Additional Bonds. The Supplemental Trust Agreement shall prescribe the form or forms of such Additional Bonds and, subject to the provisions of Section 3.03, shall provide for the distinctive designation, denominations, method of numbering, dates, payment dates, interest rates, interest payment dates, provisions for redemption (if desired) and places of payment of principal and interest. Before such Additional Bonds shall be issued, the City and the Authority shall file or cause to be filed the following documents with the Trustee: 22 4132-5580-5718.4 (a) An Opinion of Counsel addressed to the Authority and the Trustee, setting forth that (1) such Counsel has examined the Supplemental Trust Agreement and the amendment to the Facilities Sublease and Facilities Lease required by Section 3.03(d) and (e); (2) the execution and delivery of the Additional Bonds have been duly authorized by the City and the Authority; and (3) said amendment to the Facilities Sublease and Facilities Lease, when duly executed by the City and the Authority, will be valid and binding obligations of the City and the Authority. (b) A Certificate of the Authority stating that the requirements of Section 3.03 have been met. (c) A Certificate of the City stating that the insurance required by Sections 5.01, 5.02 and 5.03 of the Facilities Sublease is in effect. Upon the delivery to the Trustee of the foregoing instruments and upon the Trustee’s receipt of Certificates of the City and of the Authority stating that all applicable provisions of this Trust Agreement have been complied with (so as to permit the execution and delivery of the Additional Bonds in accordance with the Supplemental Trust Agreement then delivered to the Trustee), the Trustee shall execute and deliver said Additional Bonds in the aggregate principal amount specified in such Supplemental Trust Agreement to, or upon the Written Request of, the Authority. SECTION 3.05 Limitations on the Issuance of Obligations Payable from Revenues. The Authority will not, so long as any of the Bonds are Outstanding, issue any obligations or securities, however denominated, payable in whole or in part from Revenues except the following: (a) Bonds of any Series authorized pursuant to Section 3.03; or (b) Obligations which are junior and subordinate to the payment of the principal, premium and interest on the Bonds and which subordinated obligations are payable as to principal, premium and interest only out of Revenues after the prior payment of all amounts then required to be paid hereunder from Revenues for principal, premium and interest on the Bonds, as the same become due and payable and at the times and in the manner as required in this Trust Agreement. ARTICLE IV REDEMPTION OF BONDS SECTION 4.01 Extraordinary Redemption. The Series 2019 Bonds are subject to redemption by the Authority on any date prior to their respective stated maturities, upon notice as hereinafter provided, as a whole or in part by lot within each stated maturity in integral multiples of Authorized Denominations, from prepayments made by the City pursuant to Section 7.02(a) of the Facilities Sublease, at a redemption price equal to the sum of the principal amount thereof, without premium, plus accrued interest thereon to the Redemption Date. Whenever less than all of the Outstanding Bonds are to be redeemed on any one date, the Trustee shall select, in accordance with written directions from the Authority, the Bonds to be redeemed 23 4132-5580-5718.4 in part from the Outstanding Bonds so that the aggregate annual principal amount of and interest on Bonds which shall be payable after such Redemption Date shall be as nearly proportional as practicable to the aggregate annual principal amount of and interest on Bonds Outstanding prior to such Redemption Date. SECTION 4.02 Optional Redemption. The Series 2019 Bonds maturing on or prior to _________ 1, ____, are not subject to optional redemption. The Series 2019 Bonds maturing on and after _________ 1, ____ are subject to optional redemption prior to maturity at the written direction of the Authority, from any moneys deposited by the Authority or the City, as a whole or in part on any date on or after _________ 1, ____, and among such maturities as are designated by the Authority to the Trustee, at a redemption price equal to 100% o f the principal amount of the Bonds called for redemption plus accrued but unpaid interest to the redemption date. SECTION 4.03 Mandatory Sinking Fund Redemption. Bonds maturing on _________ 1, ____, shall be subject to redemption prior to their stated maturity, by lot, from mandatory sinking fund payments in the following amounts and on the following dates, at the principal amount thereof on the date fixed for redemption, without premium: Mandatory Sinking Fund Payment Date Principal Amount _____________ *Maturity Bonds maturing on _________ 1, ____, shall be subject to redemption prior to their stated maturity, by lot, from mandatory sinking fund payments in the following amounts and on the following dates, at the principal amount thereof on the date fixed for redemption, without premium: Mandatory Sinking Fund Payment Date Principal Amount _____________ *Maturity In the event of an optional redemption pursuant to Section 4.02, the City shall provide the Trustee with a revised sinking fund schedule giving effect to the optional redemption so completed. 24 4132-5580-5718.4 SECTION 4.04 Selection of Bonds for Redemption. If less than all Outstanding Series 2019 Bonds of the same Series maturing by their terms on any one date are to be redeemed at any one time, the Trustee shall select the Series 2019 Bonds of such maturity date to be redeemed by lot and shall promptly notify the Authority in writing of the numbers of the Series 2019 Bonds so selected for redemption. For purposes of such selection, Series 2019 Bonds shall be deemed to be composed of multiples of minimum Authorized Denominations and any such multiple may be separately redeemed. In the event 2012 Term Bonds are designated for redemption, the Authority may designate which sinking account payments are allocated to such redemption. SECTION 4.05 Notice of Redemption; Cancellation; Effect of Redemption. Notice of redemption shall be mailed by first-class mail by the Trustee, not less than thirty (30) nor more than sixty (60) days prior to the redemption date to (i) t he respective Bondholders of the Series 2019 Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, (ii) the Securities Depositories and (iii) one or more Information Services. Notice of redemption to the Securities Depositories and the Information Services shall be given by registered mail or overnight delivery or facsimile transmission or by such other method acceptable to such institutions. Each notice of redemption shall state the date of such notice, th e date of issue of the Bonds, the Series, the redemption date, the Redemption Price, the place or places of redemption (including the name and appropriate address of the Trustee), the CUSIP number (if any) of the maturity or maturities, and, if less than all of any such maturity is to be redeemed, the distinctive certificate numbers of the Series 2019 Bonds of such maturity, to be redeemed and, in the case of Series 2019 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 said date there will become due and payable on each of said Series 2019 Bonds the redemption price thereof, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Series 2019 Bonds be then surrendered at the address of the Trustee specified in the redemption notice. Failure to receive such notice or any defect in such notice shall not invalidate any of the proceedings taken in connection with such redemption. The Authority may, at its option, prior to the date fixed for redemption in any notice of optional redemption rescind and cancel such notice of redemption by Written Requ est to the Trustee and the Trustee shall mail notice of such cancellation to the recipients of the notice of redemption being cancelled. If notice of redemption has been duly given as aforesaid and money for the payment of the redemption price of the Bonds called for redemption is held by the Trustee, then on the redemption date designated in such notice Bonds so called for redemption shall become due and payable, and from and after the date so designated interest on such Bonds shall cease to accrue, and the Bondholders of such Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. All Series 2019 Bonds redeemed pursuant to the provisions of this Article shall be cancelled by the Trustee and shall be destroyed with a certificate of destruction furnished to the Authority upon its request and shall not be reissued. 25 4132-5580-5718.4 ARTICLE V REVENUES SECTION 5.01 Pledge of Revenues. (a) All Revenues, any other amounts (including proceeds of the sale of the Bonds) held by the Trustee in any fund or account established hereunder (other than amounts on deposit in the Rebate Fund created pursuant to Section 6.03) and any other amounts (excluding Additional Payments) received by the Authority in respect of the Facilities are hereby irrevocably pledged to the payment of the interest and premium, if any, on and principal of the Bonds as provided herein, and the Revenues and other amounts pledged hereunder shall not be used for any other purpose while any of the Bonds remain Outstanding; provided, however, that out of the Revenues and other moneys there may be applied such sums for such purposes as are permitted hereunder. This pledge shall constitute a pledge of and charge and first lien upon the Revenues, all other amounts pledged hereunder and all other moneys on deposit in the funds and accounts established hereunder (excluding amounts on deposit in the Rebate Fund created pursuant to Section 6.03) for the payment of the interest on and principal of the Bonds in accordance with the terms hereof and thereof. The Authority hereby assigns to the Trustee all of the Authority’s right, title and interest in the Facilities Sublease and the Facilities Lease as security for payment of the Bonds. (b) At least three (3) Business Days prior to each date on which a Base Rental Payment is due, pursuant to the Facilities Sublease, the Trustee shall notify the City of the amount of the installment of Base Rental Payment needed to pay the principal of and interest on the Bonds due on the next following Interest Payment Date. Any failure to send such notice shall not affect the City’s obligation to make timely payments of installments of Base Rental Payments. SECTION 5.02 Receipt and Deposit of Revenues in the Revenue Fund. In order to carry out and effectuate the pledge, charge and lien contained herein, the Authority agrees and covenants that all Revenues and all other amounts pledged hereunder when and as received shall be received by the Authority in trust hereunder for the benefit of the Bondholders and shall be transferred when and as received by the Authority to the Trustee for deposit in the Revenue Fund (the “Revenue Fund”), which fund is hereby created and which fund the Authority hereby agrees and covenants to maintain in trust for Bondholders so long as any Bonds shall be Outstanding hereunder. Subject to Section 5.05, all Revenues and all other amounts pledged hereunder shall be accounted for through and held in trust in the Revenue Fund, and the Authority shall have no beneficial right or interest in any of the Revenues except only as herein provided. All Revenues and all other amounts pledged hereunder, whether received by the Authority in trust or deposited with the Trustee as herein provided, shall nevertheless be allocated, applied and disbursed solely to the purposes and uses hereinafter in this Article set forth, and shall be accounted for separately and apart from all other accounts, funds, money or other resources of the Authority. SECTION 5.03 Establishment and Maintenance of Accounts for Use of Money in the Revenue Fund. (a) Subject to Section 6.03, all money in the Revenue Fund shall be set aside by the Trustee in the following respective special accounts within the Revenue Fund 26 4132-5580-5718.4 (each of which is hereby created and each of which the Authority hereby covenants and agrees to cause to be maintained) in the following order of priority: (1) Interest Account, and (2) Principal Account. All money in each of such accounts shall be held in trust by the Trustee and shall be applied, used and withdrawn only for the purposes hereinafter authorized in this Section. On each Principal Payment Date, following payment of principal of and interest on the Bonds, any excess amount on deposit in the Revenue Fund shall be returned to the City as an excess of Base Rental Payments. (b) Interest Account. On or before each Interest Payment Date, the Trustee shall set aside from the Revenue Fund and deposit in the Interest Account that amount of money which is equal to the amount of interest becoming due and payable on all Outstanding Bonds on the next succeeding Interest Payment Date. No deposit need be made in the Interest Account if the amount contained therein and available to pay interest on the Bonds is at least equal to the aggregate amount of interest becoming due and payable on all Outstanding Bonds on such Interest Payment Date. All money in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity). (c) Principal Account. On or before each _______ 1, commencing _________ 1, ____, the Trustee shall set aside from the Revenue Fund and deposit in the Principal Account an amount of money equal to the amount of all sinking fund payments required to be made on such ___________ 1, into the respective sinking fund accounts for all Outstanding Term Bonds and the principal amount of all Outstanding Serial Bonds maturing on such ________ 1. No deposit need be made in the Principal Account if the amount contained therein and available to pay principal of the Bonds is at least equal to the aggregate amount of the principal of all Outstanding Serial Bonds maturing by their terms on such ________ 1 plus the aggregate amount of all sinking fund payments required to be made on such _______ 1 for all Outstanding Term Bonds. The Trustee shall establish and maintain within the Principal Account a separate subaccount for the Term Bonds of each Series and maturity, designated as the “____ Sinking Account” (the “Sinking Account”), inserting therein the Series and maturity (if more than one such account is established for such Series) designation of such Bonds. With respect to each Sinking Account, on each mandatory sinking account payment date established for such Sinking Account, the Trustee shall apply the mandatory sinking account payment required on that date to the redemption (or payment at maturity, as the case may be) of Term Bonds of the Series and maturity for which such Sinking Account was established, upon the notice and in the manner provided in Article IV; provided that, at any time prior to selection of Bonds for redemption, the Trustee may, upon the Written Request of the Authority, apply moneys in such Sinking Account 27 4132-5580-5718.4 to the purchase of Term Bonds of such Series and maturity at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account), as may be directed by the Authority, except that the purchase price (excluding accrued interest) shall not exceed the redemption price that would be payable for such Bonds upon redemption by application of such mandatory sinking account payment. If, during the twelve (12)-month period immediately preceding said mandatory sinking account payment date, the Trustee has purchased Term Bonds of such Series and maturity with moneys in such Sinking Account, such Bonds so purchased shall be applied, to the extent of the full principal amount thereof, to reduce said mandatory sinking account payment. All money in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of paying the principal of the Bonds as it shall become due and payable, whether at maturity or redemption, except that any money in any Sinking Account shall be used and withdrawn by the Trustee only to purchase or to redeem or to pay Term Bonds for which such Sinking Account was created. SECTION 5.04 Application of Insurance Proceeds. In the event of an y damage to or destruction of any part of the Facilities covered by insurance, the Authority shall cause the proceeds of such insurance to be utilized for the repair, reconstruction or replacement of the damaged or destroyed portion of the Facilities, and the Trustee shall hold said proceeds in a fund established by the Trustee for such purpose separate and apart from all other funds, to the end that such proceeds shall be applied to the repair, reconstruction or replacement of the Facilities to at least the same good order, repair and condition as it was in prior to the damage or destruction, insofar as the same may be accomplished by the use of said proceeds. The Trustee shall invest said proceeds in Permitted Investments pursuant to the Request of the Ci ty, as agent for the Authority under the Facilities Sublease, and withdrawals of said proceeds shall be made from time to time upon the filing with the Trustee of a Written Request of the City, stating that the City has expended moneys or incurred liabilities in an amount equal to the amount therein stated for the purpose of the repair, reconstruction or replacement of the Facilities, and specifying the items for which such moneys were expended, or such liabilities were incurred, in reasonable detail. The City shall file a Certificate of the City with the Trustee that sufficient funds from insurance proceeds or from any funds legally available to the City, or from any combination thereof, are available in the event it elects to repair, reconstruct or replac e the Facilities. Any balance of such proceeds not required for such repair, reconstruction or replacement and the proceeds of use and occupancy insurance shall be paid to the Trustee as Base Rental Payments and applied in the manner provided by Section 5.01. Alternatively, the City, if the proceeds of such insurance together with any other moneys then available for such purpose are sufficient to prepay all, in case of damage or destruction in whole of the Facilities, or that portion, in the case of partial damage or destruction of the Facilities, of the Base Rental Payments and all other amounts relating to the damaged or destroyed portion of the Facilities, may elect not to repair, reconstruct or replace the damaged or destroyed portion of the Facilities and thereupon shall cause said proceeds to be used for the redemption of Outstanding Bonds pursuant to the applicable provisions of Section 4.01. The City shall not apply the proceeds of insurance as set forth in this Section 5.04 to redeem the Bonds in part due to damage or destruction of a portion of the Facilities unless the Base Rental Payments on the undamaged portion of the Facilities will be sufficient to pay the initially-scheduled principal and interest on the Bonds remaining unpaid after such redemption. 28 4132-5580-5718.4 SECTION 5.05 Deposit and Investments of Money in Accounts and Funds . Subject to Section 6.03, all money held by the Trustee and the Treasurer in any of the accounts or funds established pursuant hereto shall be invested in Permitted Investments at the Written Request of the City or, if no instructions are received, in money market funds described in paragraph 4 of the definition of Permitted Investments; 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 City specifying a specific money market fund and, if no such Written Request of the City is so received, the Trustee shall hold such moneys uninvested. Such investments shall, as nearly as practicable, mature on or before the dates on which such money is anticipated to be needed for disbursement hereunder. For purposes of this restriction, Permitted Investments containing a withdrawal option, repurchase option or put option by the investor shall be treated as having a maturity of no longer than such option. Subject to Section 6.03, all interest or profits received on any money so invested shall be deposited in the Revenue Fund. The Trustee and its affiliates may act as principal, agent, sponsor or advisor with respect to any investments. The Trustee shall not be liable for any losses on investments made in accordance with the terms and provisions of this Trust Agreement. Investments (except investment agreements or repurchase agreements) in Trust Agreement funds and accounts shall be valued at the market value thereof, exclusive of accrued interest. Investments purchased with funds on deposit in the Revenue Fund shall mature not later than the payment date or redemption date, as appropriate, immediately succeeding the investment. Subject to Section 6.03, investments in any and all funds and accounts may be commingled for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in particular funds and accounts amounts received or held by the Trustee hereunder, provided that the Trustee shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credit ed and otherwise as provided in this Trust Agreement. The Authority (and the City by its execution of the Facilities Sublease) acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority, the right to receive brokerage confirmations of security transactions as they occur, the Authority specifically waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the City periodic cash transaction statements which shall include detail for all investment transactions made by the Trustee hereunder. ARTICLE VI COVENANTS OF THE AUTHORITY SECTION 6.01 Punctual Payment and Performance. The Authority will punctually pay out of the Revenues the interest on and principal of and redemption premiums, if 29 4132-5580-5718.4 any, to become due on every Bond issued hereunder in strict conformity with the terms hereof and of the Bonds, and will faithfully observe and perform all the agreements and covenants to be observed or performed by the Authority contained herein and in the Bonds. SECTION 6.02 Against Encumbrances. The Authority will not make any pledge or assignment of or place any charge or lien upon the Revenues except as provided in Section 3.05, and will not issue any bonds, notes or obligations payable from the Revenues or secured by a pledge of or charge or lien upon the Revenues except as provided in Section 3.05. SECTION 6.03 Tax Covenants; Rebate Fund. (a) In addition to the accounts created pursuant to Section 5.03, the Trustee shall establish and maintain a fund separate from any other fund or account established and maintained hereunder designated as the Rebate Fund. There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Certificate. The Trustee may rely conclusively upon the City’s determinations, calculations and certifications required by this Section. The Trustee shall have no responsibility to independently make any calculation or determination or to review the City’s calculations hereunder. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement (as defined in the Tax Certificate), for payment to the United States of America. Notwithstanding the provisions of Sections 5.01, 5.02, 5.05, 9.01 and 10.01 relating to the pledge of Revenues, the allocation of money in the Revenue Fund, the investments of money in any fund or account, the application of funds upon acceleration and the defeasance of Outstanding Bonds, all amounts required to be deposited into or on deposit in the Rebate Fund shall be governed exclusively by this Section 6.03 and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions if it follows the written directions of the Authority, and shall have no liability or responsibility to enforce compliance by the Authority with the terms of the Tax Certificate. (b) Any funds remaining in the Rebate Fund with respect to a Series of Bonds after redemption and payment of all such Series of Bonds and all other amounts due hereunder or under the Facilities Sublease relating to such Series of Bonds, or provision made therefor satisfactory to the Trustee, including accrued interest and payment of any applicable fees and expenses of the Trustee and satisfaction of the Rebate Requirement (as defined in the Tax Certificate), shall be withdrawn by the Trustee and remitted to or upon the direction of the Authority. (c) The Authority shall not use or permit the use of any proceeds of the Bonds or any funds of the Authority, directly or indirectly, to acquire any securities or obligations, and shall not take or permit to be taken any other action or actions, which would cause any of the Bonds to be an “arbitrage bond” within the meaning of Section 148 of the Code, “private activity bond” within the meaning of Section 141(a) of the Code, or “federally guaranteed” within the meaning of Section 149(b) of the Code and any such applicable requirements promulgated from time to time thereunder and under Section 103(c) of the Internal Revenue Code of 1954, as amended. The Authority shall observe and not violate the requirements of Section 148 of the Code and any such applicable regulations. The Authority shall comply with all requirements of 30 4132-5580-5718.4 Sections 148 and 149(b) of the Code to the extent applicable to the Bonds. In the event that at any time the Authority is of the opinion that for purposes of this Section 6.03(c) it is necessary to restrict or to limit the yield on the investment of any moneys held by the Trustee under this Trust Agreement, the Authority shall so instruct the Trustee under this Trust Agreement in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions. (d) The Authority and the Trustee (as directed by the Authority) specifically covenant to comply with the provisions and procedures of the Tax Certificate; provided that the Trustee shall not be bound by this covenant if an Event of Default has occurred and is continuing. (e) The Authority shall not use or permit the use of any proceeds of the Bonds or any funds of the Authority, directly or indirectly, in any manner, and shall not take or omit to take any action that would cause any of the Bonds to be treated as an obligation not described in Section 103(a) of the Code. (f) Notwithstanding any provisions of this Section 6.03, if the Authority shall provide to the Trustee an Opinion of Counsel that any specified action required under this Section 6.03 or the Tax Certificate is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Bonds, the Trustee and the Authority may conclusively rely on such opinion in complying with the requirements of this Section, and, notwithstanding Article IX hereof, the covenants hereunder shall be deemed to be modified to that extent. (g) The foregoing provisions of this Section 6.03 shall not be applicable to any Series of Bonds or the proceeds thereof that the Authority determines upon the issuance thereof are to be taxable bonds, the interest on which is intended to be included in the gross income of the Owner thereof for federal income tax purposes. SECTION 6.04 Accounting Records and Reports. The Authority will keep or cause to be kept proper books of record and accounts in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocation and application of the Revenues, and such books shall be available for inspection by the Trustee at reasonable hours and under reasonable conditions. Not more than seven months after the close of each Fiscal Year, the Authority shall furnish or cause to be furnished to the Trustee a complete financial statement (which may be unaudited) covering receipts, disbursements, allocation and application of Revenues for such Fiscal Year. The Authority shall also keep or cause to be kept such other information as required under the Tax Certificate. SECTION 6.05 Prosecution and Defense of Suits. The Authority will defend against every suit, action or proceeding at any time brought against the Trustee upon any claim to the extent arising out of the receipt, application or disbursement of any of the Revenues or to the extent involving the failure of the Authority to fulfill its obligations hereunder; provided, that the Trustee or any affected Bondholder at its election may appear in and defend any such suit, action or proceeding. The Authority will indemnify and hold harmless the Trus tee against any and all liability claimed or asserted by any person to the extent arising out of such failure by the Authority, and will indemnify and hold harmless the Trustee against any reasonable attorney’s 31 4132-5580-5718.4 fees or other reasonable expenses which it may incur in connection with any litigation to which it may become a party by reason of its actions hereunder, except for any loss, cost, damage or expense resulting from the negligence or willful misconduct by the Trustee. Notwithstanding any contrary provision hereof, this covenant shall remain in full force and effect even though all Bonds secured hereby may have been fully paid and satisfied. SECTION 6.06 Further Assurances. Whenever and so often as reasonably requested to do so by the Trustee or any Bondholder, the Authority will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments, and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Bondholders all rights, interests, powers, benefits, privileges and advantages conferred or intended to be conferred upon them hereby. SECTION 6.07 [Reserved]. SECTION 6.08 Amendments to Facilities Sublease or Facilities Lease. The Authority shall not supplement, amend, modify or terminate any of the terms of the Facilities Sublease or Facilities Lease, or consent to any such supplement, amendment, modification or termination, without the prior written consent of the Trustee. The Trustee shall give such written consent if such supplement, amendment, modification or termination (a) will not materially adversely affect the interests of the Bondholders or result in any material impairment of the security hereby given for the payment of the Bonds (provided that such supplement, amendment or modification shall not be deemed to have such adverse effect or to cause such material impairment solely by reason of increasing the amount of Base Rental Payments to provide for the payment of Additional Bonds as required by Section 3.03(d); or substitution, release or addition of real property pursuant to Section 2.04 of the Facilities Sublease), (b) is to add to the agreements, conditions, covenants and terms required to be observed or performed thereunder by any party thereto, or to surrender any right or power therein reserved to the Authority or the City, (c) is to cure, correct or supplement any ambiguous or defective provision contained therein, (d) is to accommodate any increase in the amou nt of Base Rental Payments to provide for the payment of Base Rental Payments as required by Section 3.03(d); or any addition, substitution or release of property in accordance with Section 2.04 under the Facilities Sublease, (e) is to modify the legal description of the Facilities to conform to the requirements of title insurance or otherwise to add or delete property descriptions to reflect accurately the description of the parcels intended to be included therein, or substituted for the Facilities pursuan t to the provision of Section 2.04 of the Facilities Sublease, or (f) if the Trustee first obtains the written consent of the Bondholders of a majority in principal amount of the Bonds then Outstanding to such supplement, amendment, modification or termination. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS SECTION 7.01 Events of Default and Acceleration of Maturities. If one or more of the following events (herein called “Events of Default”) shall happen, that is to say: 32 4132-5580-5718.4 (a) if default shall be made by the Authority in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; (b) if default shall be made by the Authority in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed or by proceedings for redemption; (c) if default shall be made by the Authority in the performance of any of the other agreements or covenants required herein to be performed by the Authority, and such default shall have continued for a period of thirty (30) days after the Authority shall have been given notice in writing of such default by the Trustee; (d) if the Authority shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the Authority seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the Authority or of the whole or any substantial part of its property; or (e) if an Event of Default has occurred under Section 6.01 of the Facilities Sublease; then and in each and every such case during the continuance of such event of default the Trustee may, and upon the written request of the Bondholders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, shall, by notice in writing to the Authority, declare the principal of all Bonds then Outstanding and the interest accrued thereon to be due and payable immediately, and upon any such declaration the same shall become due and payable, anything contained herein or in the Bonds to the contrary notwithstanding. The Trustee shall promptly notify all Bondholders by first class mail of any such event of default which is continuing of which a Responsible Officer has actual knowledge or written notice. This provision, however, is subject to the condition that if at any time after the principal of the Bonds then Outstanding shall have been so declared due and payable and before any judgment or decree for the payment of the money due shall have been obtained or entered the Authority shall deposit with the Trustee a sum sufficient to pay all matured interest on all the Bonds and all principal of the Bonds matured prior to such declaration, with interest at the rate borne by such Bonds on such overdue interest and principal, and the reasonable fees and expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of interest on and principal of the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then and in every such case the Trustee or the Bondholders of not less than a majority in aggregate principal amount of Bonds then Outstanding, by written notice to the Authority and to the Trustee, may on behalf of the Bondholders of all the Bonds then Outstanding rescind and annul such declaration and its 33 4132-5580-5718.4 consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default or shall impair or exhaust any right or power consequent thereon. SECTION 7.02 Application of Funds Upon Acceleration. All moneys in the accounts and funds provided in Sections 3.01, 3.02, 5.02, 5.03 and 5.05 upon the date of the declaration of acceleration by the Trustee as provided in Section 7.01 and all Revenues (ot her than Revenues on deposit in the Rebate Fund) thereafter received by the Authority hereunder shall be transmitted to the Trustee and shall be applied by the Trustee in the following order-- First, to the payment of the reasonable fees, costs and expenses of the Trustee in providing for the declaration of such event of default and carrying out its duties under this Trust Agreement, including reasonable compensation to their accountants, advisors, agents and counsel together with interest on any amounts advanced as provided herein and thereafter to the payment of the reasonable costs and expenses of the Bondholders, if any, in carrying out the provisions of this Article, including reasonable compensation to their accountants, advisors, agents and counsel; and Second, upon presentation of the several Bonds, and the stamping thereon of the amount of the payment if only partially paid or upon the surrender thereof if fully paid, to the payment of the whole amount then owing and unpaid upon the Bonds for interes t and principal, with (to the extent permitted by law) interest on the overdue interest and principal at the rate borne by such Bonds, and in case such money shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such interest, principal and (to the extent permitted by law) interest on overdue interest and principal without preference or priority among such interest, principal and interest on overdue interest and principal ratably to the aggregate of such interest, principal and interest on overdue interest and principal. SECTION 7.03 Institution of Legal Proceedings by Trustee. If one or more of the Events of Default shall happen and be continuing, the Trustee may, and upon the written request of the Bondholders of a majority in principal amount of the Bonds then Outstanding, and in each case upon being indemnified to its reasonable satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of the Bondholders of Bonds under this Trust Agreement and under Article VI of the Facilities Sublease by a suit in equity or action at law, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or by mandamus or other appropriate proceeding for the enforcement of any other legal or equitable remedy as the Trustee shall deem most effectual in support of any of its rights and duties hereunder. SECTION 7.04 Non-Waiver. Nothing in this Article or in any other provision hereof or in the Bonds shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the interest on and principal of and redemption premiums, if any, on the Bonds to the respective Bondholders of the Bonds at the respective dates of maturity or upon prior redemption as provided herein from the Revenues as provided herein pledged for such payment, or shall affect or impair the right of such Bondholders, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein and in the Bonds. 34 4132-5580-5718.4 A waiver of any default or breach of duty or contract by the Trustee or any Bondholder shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee or any Bondholder to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be con strued to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Bondholders by the Act or by this Article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Bondholders. If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned, the Authority, the Trustee and any Bondholder shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken. SECTION 7.05 Actions by Trustee as Attorney-in-Fact. Any action, proceeding or suit which any Bondholder shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Bondholders, whether or not the Trustee is a Bondholder, and the Trustee is hereby appointed (and the successive Bondholders, by taking and holding the Bonds issued hereunder, shall be conclusively deemed to have so appointed it) the true and lawful attorney-in-fact of the Bondholders for the purpose of bringing any such action, proceeding or suit and for the purpose of doing and performing any and all acts and things for and on behalf of the Bondholders as a class or classes as may be advisable or necessary in the opinion of the Trustee as such attorney- in-fact. SECTION 7.06 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law. SECTION 7.07 Limitation on Bondholders’ Right to Sue. No Bondholder of any Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or equity, for any remedy under or upon this Trust Agreement, unless (a) such Bondholder shall have previously given to the Trustee written notice of the occurrence of an event of default as defined in Section 7.01; (b) the Bondholders of at least a majority in aggregate principal amount of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) said Bondholders shall have tendered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. 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 Bondholder of Bonds 35 4132-5580-5718.4 of any remedy hereunder; it being understood and intended that no one or more Bondholders of Bonds shall have any right in any manner whatever by his or their action to enforce any right under this Trust Agreement, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Trust Agreement shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Bondholders of the Outstanding Bonds. ARTICLE VIII THE TRUSTEE SECTION 8.01 The Trustee. U. S. Bank National Association shall serve as the Trustee for the Bonds for the purpose of receiving all money which the Authority is required to deposit with the Trustee hereunder and for the purpose of allocating, applying and using such money as provided herein and for the purpose of paying the interest on and principal of and redemption premiums, if any, on the Bonds presented for payment, with the rights and obligations provided herein. The Authority agrees that it will at all times maintain a Trustee having a corporate office in California. The Authority, unless there exists any Event of Default as defined in Section 7.01, may at any time remove the Trustee initially appointed and any successor thereto and may appoint a successor or successors thereto by an instrument in writing; provided, that any such successor shall be a national banking association, bank, banking institution, or trust company, having (or whose parent holding company has) a combined capital (exclusive of borrowed capital) and surplus of at least fifty million dollars ($50,000,000) and subject to supervision or examination by federal or state authority. If such national banking association, bank, banking institution, or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this Section the combined capital and surplus of such bank, banking institution, or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee may at any time resign by giving written notice of such resignation to the Authority, and by mailing by first class mail to the Bondholders notice of such resignation. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing. Any removal or resignation of a Trustee and appointment of a successor Trustee shall become effective only upon the acceptance of appointment by the successor Trustee. The successor Trustee shall send notice of its acceptance by first class mail to the Bondholders. If, within thirty (30) days after notice of the removal or resignation of the Trustee no successor Trustee shall have been appointed and shall have accepted such appointment, the removed or resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, which court may thereupon, after such notice, if any, as it may deem proper and prescribe and as may be required by law, appoint a successor Trustee having the qualifications required hereby. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business shall succeed to the rights and obligations of the 36 4132-5580-5718.4 Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. The Trustee is hereby authorized to pay or redeem the Bonds when duly presented for payment at maturity or on redemption prior to maturity. The Trustee shall cancel all Bonds upon payment thereof or upon the surrender thereof by the Authority and shall destroy such Bonds and a certificate of destruction shall be delivered to the Authority upon its request. The Trustee shall keep accurate records of all Bonds paid and discharged and cancelled by it. The Trustee shall, prior to an Event of Default, and after the curing of all Events of Default that may have occurred, perform such duties and only such duties as are specifically set forth in this Trust Agreement and no implied duties or obligations shall be read into this Trust Agreement. The Trustee shall, during the existence of any Event of Default (that has not been cured), exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. SECTION 8.02 Liability of Trustee. The recitals of facts, agreements and covenants herein and in the Bonds shall be taken as recitals of facts, agreements and covenants of the Authority, and the Trustee assumes no responsibility for the correctness of the same or makes any representation as to the sufficiency or validity hereof or of the Bonds, or shall incur any responsibility in respect thereof other than in connection with the rights or obligations assigned to or imposed upon it herein, in the Bonds or in law or equity. The Trustee shall not be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct. The Trustee shall not be bound to recognize any person as the Bondholder of a Bond unless and until such Bond is submitted for inspection, if required, and such Bondholder’s title thereto satisfactorily established, if disputed. The Trustee shall not be liable for any error of judgment made in good faith, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Bondholders of not less than a majority (or any lesser amount that may direct the Trustee in accordance with this Agreement) 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 Trust Agreement. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request, order or direction of any of the Bondholders pursuant to the provisions of this Trust Agreement unless such Bondholders shall have offered to the Trustee reasonable security or indemnity against the reasonable costs, expenses and liabilities that may be incurred therein or thereby. The Trustee has no obligation or liability to the Bondholders for the payment of the interest on, principal of or redemption premium, if any, with 37 4132-5580-5718.4 respect to the Bonds from its own funds; but rather the Trustee’s obligations shall be limited to the performance of its duties hereunder. The Trustee shall not be deemed to have knowledge of any Event of Default (except payment defaults) unless and until a Responsible Officer shall have actual knowledge thereof or a Responsible Officer of the Trustee shall have received written notice thereof at its Principal Office. The Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to the existence of a default or Event of Default thereunder. The Trustee shall not be responsible for the validity or effectiveness of any collateral given to or held by it. The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through attorneys-in-fact, agents or receivers, but shall not be answerable for the negligence or misconduct of any such attorney-in-fact, agent or receiver if such attorneys-in-fact, agents or receivers were selected by the Trustee with due care. The Trustee shall be entitled to advice of counsel and other professionals concerning all matters of trust and its duty hereunder, but the Trustee shall not be answerable for the professional malpractice of any attorney-in-law or certified public accountant in connection with the rendering of his professional advice in accordance with the terms of this Trust Agreement, if such attorney-in-law or certified public accountant was selected by the Trustee with due care. The Trustee shall not be concerned with or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof. Whether or not therein expressly so provided, every provision of this Trust Agreement, the Facilities Sublease or related documents relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article. The Trustee makes no representation or warranty, express 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 City of the Facilities. In no event shall the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising from the Facilities Sublease or this Trust Agreement for the existence, furnishing or use of the Facilities. The Trustee shall be protected in acting upon any notice, resolution, requisition, request (including any Written Request of the Authority or Written Request of the City), consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Th e 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 shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of delay in the performance of such 38 4132-5580-5718.4 obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee. Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be established or proved prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Trustee, be deemed to be conclusively proved and established by a Certificate of the Authority, which certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may in lieu thereof accept other evidence of such matter or may require such additional evidence as it may deem reasonable. No provision of this Trust Agreement shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers. The Trustee shall not be required to review or inspect, and shall not be deemed to have notice of, the contents of any financial statement delivered to the Trustee including but not limited to Section 6.04, it being expressly understood that the Trustee shall only receive and hold such documents as a repository for examination and copying by any Holder at such Holder’s expense during business hours on Business Days with reasonable prior notice. The Trustee agrees to accept and act upon instructions or directions pursuant to this Trust Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Trustee shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the City elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. 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 instructions conflict or are inconsistent with a subsequent written instruction. The City agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions 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. 39 4132-5580-5718.4 The Trustee shall not be concerned with or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof. The permissive right of the Trustee to do things enumerated in this Trust Agreement shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct. The Trustee shall have no responsibility or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of these Bonds. SECTION 8.03 Compensation and Indemnification of Trustee. The Authority covenants to pay (but solely from Additional Payments) to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for all services rendered by them in the exercise and performance of any of the powers and duties hereunder of the Trustee, and the Authority will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee, in accordance with any of the provisions of this Trust Agreement (including the reasonable compensation and the reasonable expenses and disbursements of their counsel (including the allocated reasonable fees and disbursements of in-house counsel) and of all persons not regularly in their employ) except any such expense, disbursement or advance as may arise from their negligence or willful misconduct. The Authority, to the extent permitted by law, shall indemnify, defend and hold harmless the Trustee against any loss, damage, liability or expense incurred without negligence or bad faith on the part of the Trustee arising out of or in connection with the acceptance or administration of the trusts created hereby, including reasonable costs and expenses (including reasonable attorneys’ fees and disbursements) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers hereunder. The rights of the Trustee and the obligations of the Authority under this Section 8.03 shall survive the discharge of the Bonds and this Trust Agreement and the resignation or removal of the Trustee. SECTION 8.04 Compliance with Continuing Disclosure Certificate. Pursuant to Section 8.09 of the Facilities Sublease, the City has undertaken all responsibility for compliance with continuing disclosure requirements, and the Authority shall have no liability to the Holders of the Bonds or any other person with respect to S.E.C. Rule 15c2-12. Notwithstanding any other provision of this Trust Agreement, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default; however, the Trustee may (and, at the request of any Participating Underwriter (as defined in the Continuing Disclosure Certificate) or the Holders of at least 25% aggregate principal amount in Outstanding Bonds, and upon receipt of indemnification satisfactory to it, shall) or any Bondholder or Beneficial Owner 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 Section 8.09 of the Facilities Sublease or under this Section 8.04. For purposes of this Section, “Beneficial Owner” means any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). 40 4132-5580-5718.4 ARTICLE IX AMENDMENT OF THE TRUST AGREEMENT SECTION 9.01 Amendment of the Trust Agreement. (a) This Trust Agreement and the rights and obligations of the Authority and of the Bondholders may be amended at any time by a Supplemental Trust Agreement which shall become binding when the written consents of the Bondholders of a majority in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 9.02, are filed with the Trustee; provided that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any particular maturity or Series remain Outstanding, the consent of the Holders of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Bonds Outstanding under this Section. No such amendment shall (1) extend the maturity of or reduce the interest rate on or amount of interest on or principal of or redemption premium, if any, on any Bond without the express written consent of the Bondholder of such Bond, or (2) permit the creation by the Authority of any pledge of or charge or lien upon the Revenues as provided herein superior to or on a parity with the pledge, charge and lien created hereby for the benefit of the Bonds, or (3) reduce the percentage of Bonds required for the written consent to any such amendment, or (4) modify any rights or obligations of the Trustee, the Authority, or the City without their prior written assent thereto, respectively. It shall not be necessary for the consent of the Bondholders to approve the particular form of any Supplemental Trust Agreement, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the Authority and the Trustee of any Supplemental Trust Agreement pursuant to this subsection (a), the Trustee shall mail a notice on behalf of the Authority, setting forth in general terms the substance of such Supplemental Trust Agreement to the Bondholders at the addresses shown on the registration books maintained by the Trustee. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Trust Agreement. (b) The Trust Agreement and the rights and obligations of the Authority and of the Bondholders may also be amended at any time by a Supplemental Trust Agreement which shall become binding upon adoption without the consent of any Bondholders for any purpose that will not materially adversely affect the interests of the Bondholders, including (without limitation) for any one or more of the following purposes -- (i) to add to the agreements and covenants required herein to be performed by the Authority other agreements and covenants thereafter to be performed by the Authority, or to surrender any right or power reserved herein to or conferred herein on the Authority; (ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the Authority may deem desirable or necessary; (iii) to provide for the issuance of any Additional Bonds and to provide the terms of such Additional Bonds, subject to the conditions and upon compliance with the 41 4132-5580-5718.4 procedure set forth in Article III (which shall be deemed not to adversely affect Bondholders); or (iv) to add to the agreements and covenants required herein, such agreements and covenants as may be necessary to qualify the Trust Agreement under the Trust Indenture Act of 1939. SECTION 9.02 Disqualified Bonds. Bonds owned or held by or for the account of the Authority shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Bonds provided in this Article, and shall not be entitled to consent to or take any other action provided in this Article. SECTION 9.03 Endorsement or Replacement of Bonds After Amendment. After the effective date of any action taken as hereinabove provided, the Authority may determine that the Bonds may bear a notation by endorsement in form approved by the Authority as to such action, and in that case upon demand of the Bondholder of any Outstanding Bonds and presentation of his Bond for such purpose at the office of the Trustee a suitable notation as to such action shall be made on such Bond. If the Authority shall so determine, new Bonds so modified as, in the opinion of the Authority, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Bondholder of any Outstanding Bond a new Bond or Bonds shall be exchanged at the office of the Trustee without cost to each Bondholder for its Bond or Bonds then Outstanding upon surrender of such Outstanding Bonds. SECTION 9.04 Amendment by Mutual Consent. The provisions of this Article shall not prevent any Bondholder from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds. ARTICLE X DEFEASANCE SECTION 10.01 Discharge of Bonds. (a) If the Authority shall pay or cause to be paid or there shall otherwise be paid to the Bondholders of all Outstanding Bonds the interest thereon and principal thereof and redemption premiums, if any, thereon at the times and in the manner stipulated herein and therein, and the Authority shall pay in full all other amounts due hereunder and under the Facilities Sublease, then the Bondholders of such Bonds shall cease to be entitled to the pledge of and charge and lien upon the Revenues as provided herein, and all agreements, covenants and other obligations of the Authority to the Bondholders of such Bonds hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Authority all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, the Trustee shall pay over or deliver to the Authority all money or securities held by it pursuant hereto which are not required for the payme nt of the interest on and principal of and redemption premiums, if any, on such Bonds and for the payment of all other amounts due hereunder and under the Facilities Sublease. 42 4132-5580-5718.4 (b) Any Outstanding Bonds shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this Section if (1) in case any of such Bonds are to be redeemed on any date prior to their maturity date, the Authority shall have given to the Trustee in form satisfactory to it irrevocable instructions to provide notice in accordance with Section 4.05, (2) there shall have been deposited with the Trustee (A) money in an amount which shall be sufficient and/or (B) Government Securities, the interest on and principal of which when paid will provide money which, together with the money, if any, deposited with the Trustee at the same time, shall be sufficient, in the opinion of an Independent Certified Public Accountant, to pay when due the interest to become due on such Bonds on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and redemption premiums, if any, on such Bonds, and (3) in the event such Bonds are not by their terms subject to redemption within t he next succeeding sixty (60) days, the Authority shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable, a notice to the Bondholders of such Bonds that the deposit required by clause (2) above has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with this Section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and redemption premiums, if any, on such Bonds. SECTION 10.02 Unclaimed Money. Anything contained herein to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Bonds or interest thereon which remains unclaimed for two (2) years after the date when such Bonds or interest thereon have become due and payable, either at their stated maturity dates or by call for redemption prior to maturity, if such money was held by the Trustee at such date, or for two (2) years after the date of deposit of such money if deposited with the Trustee after the date when such Bonds have become due and payable, shall at the Written Request of the Authority be repaid by the Trustee to the Authority as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bondholders shall not look to the Trustee for the payment of such Bonds; provided, however, that before being required to make any such payment to the Authority, the Trustee may, and at the request of the Authority shall, at the expense of the Authority, cause to be published once a week for two (2) successive weeks in a Financial Newspaper of general circulation in Los Angeles and in San Francisco, California, and in the same or a similar Financial Newspaper of general circulation in New York, New York, a notice that such money remains unclaimed and that, after a date named in such notice, which date shall not be less than thirty (30) days after the date of the first publication of each such notice, the balance of such money then unclaimed will be returned to the Authority. ARTICLE XI [INTENTIONALLY LEFT BLANK] 43 4132-5580-5718.4 ARTICLE XII MISCELLANEOUS SECTION 12.01 Liability of Authority Limited to Revenues. Notwithstanding anything contained herein, the Authority shall not be required to advance any money derived from any source other than the Revenues as provided herein for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds or for the performance of any agreements or covenants herein contained. The Authority may, however, advance funds for any such purpose so long as such funds are derived from a source legally available for such purpose. The Bonds are limited obligations of the Authority and are payable, as to interest thereon, principal thereof and any premiums upon the redemption of any thereof, solely from the Revenues as provided herein, and the Authority is not obligated to pay them except from the Revenues. All the Bonds are equally secured by a pledge of and charge and lien upon the Revenues, and the Revenues constitute a trust fund for the security and payment of the interest on and principal of and redemption premiums, if any, on the Bonds as provided herein. The Bonds are not a debt of the City, the State or any of its political subdivis ions, and neither the City, the State nor any of its political subdivisions is liable thereon, nor in any event shall the Bonds be payable out of any funds or properties other than those of the Authority as provided herein. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory limitation or restriction. SECTION 12.02 Benefits of this Trust Agreement Limited to Parties. Nothing contained herein, expressed or implied, is intended to give to any person other than the Authority, the Trustee and the Bondholders any right, remedy or claim under or by reason hereof. Any agreement or covenant required herein to be performed by or on behalf of the Authority or any member, officer or employee thereof shall be for the sole and exclusiv e benefit of the Authority, the Trustee and the Bondholders. SECTION 12.03 Successor Is Deemed Included In All References To Predecessor. Whenever herein either the Authority or any member, officer or employee thereof or of the State is named or referred to, such reference shall be deemed to include the successor to the powers, duties and functions with respect to the Facilities that are presently vested in the Authority or such member, officer or employee, and all agreements and covenants required hereby to be performed by or on behalf of the Authority or any member, officer or employee thereof shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. SECTION 12.04 Execution of Documents by Bondholders. Any declaration, request or other instrument which is permitted or required herein to be executed by Bondholders may be in one or more instruments of similar tenor and may be executed by Bondholders in person or by their attorneys appointed in writing. The fact and date of the execution b y any Bondholder or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to make acknowledgments of deeds to be recorded in the state or territory in which he 44 4132-5580-5718.4 purports to act that the person signing such declaration, request or other instrument or writing 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 any Bonds and the amount, maturity, number and date of holding the same may be proved by the registration books relating to the Bonds at the Principal Office of the Trustee. Any declaration, request, consent or other instrument or writing of the Bondholder of any Bond shall bind all future Bondholders of such Bond with respect to anything done or suffered to be done by the Trustee or the Authority in good faith and in accordance therewith. SECTION 12.05 Waiver of Personal Liability. No member, officer or employee of the Authority or the City shall be individually or personally liable for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds by reason of their issuance, but nothing herein contained shall relieve any such member, officer or employee from the performance of any official duty provided by the Act or any other applicable provisions of law or hereby. SECTION 12.06 Acquisition of Bonds by Authority. All Bonds acquired by the Authority, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation. SECTION 12.07 Destruction of Cancelled Bonds. Whenever provision is made for the return to the Authority of any Bonds which have been cancelled pursuant to the provisions hereof, the Authority may, by a Written Request of the Authority, direct the Trustee to destroy such Bonds and furnish to the Authority a certificate of such destruction, at its request. SECTION 12.08 Content of Certificates. Every Certificate of the Authority with respect to compliance with any agreement, condition, covenant or provision provided herein shall include (a) a statement that the person or persons making or giving such certificate have read such agreement, condition, covenant or provision and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based; (c) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such agreement, condition, covenant or provision has been complied with; and (d) a statement as to whether, in the opinion of the signers, such agreement, condition, covenant or provision has been complied with. Any Certificate of the Authority may be based, insofar as it relates to legal matters, upon an Opinion of Counsel unless the person making or giving such certificate knows that the Opinion of Counsel with respect to the matters upon which his certificate may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters information with respect to which is in the possession of the Authority, upon a representation by an officer or officers of the Authority unless the counsel executing such Opinion of Counsel knows that the representation with respect to the matters upon which his opinion may be based, 45 4132-5580-5718.4 as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. SECTION 12.09 Publication for Successive Weeks. Any publication required to be made hereunder for successive weeks in a Financial Newspaper may be made in each instance upon any Business Day of the first week and need not be made on the same Business Day of any succeeding week or in the same Financial Newspaper for any subsequent publication, but may be made on different Business Days or in different Financial Newspapers, as the case may be. SECTION 12.10 Accounts and Funds. Any account or fund required herein to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund; but all such records with respect to all such accounts and funds shall at all times be maintained in accordance with corporate trust industry standards and with due regard for the protection of the security of the Bonds and the rights of the Bondholders. SECTION 12.11 Business Day. When any action is provided for herein to be done on a day named or within a specified time period, and the day or the last day of the period falls on a day which is not a Business Day, such action may be performed on the next ensuing Business Day with the same effect as though performed on the appointed day or within the specified period. SECTION 12.12 Notices. All written notices to be given hereunder shall be given by mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other party in writing from time to time, namely: If to the Authority: Burlingame Financing Authority c/o City of Burlingame-Dept. of Finance 501 Primrose Road Burlingame, CA 94010-3997 Attention: Executive Director If to the Trustee: U.S. Bank National Association One California Street, Suite 1000 San Francisco, CA 94111 Attention: Global Corporate Trust If to the City: City of Burlingame 501 Primrose Road Burlingame, CA 94010-3997 Attention: Finance Director SECTION 12.13 Notices to Rating Agencies. The Trustee shall give written notice to Moody’s and S&P of the redemption or defeasance of any Bonds, the amendment of the Facilities Sublease or Trust Agreement, any change in the Trustee. 46 4132-5580-5718.4 SECTION 12.14 Article and Section Headings and References. The headings or titles of the several articles and sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. All references herein to “Articles,” “Sections” and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof; and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to this Trust Agreement as a whole and not to any particular article, section, subdivision or clause hereof. SECTION 12.15 Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the Authority or the Trustee shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect th e validity hereof or of the Bonds, and the Bondholders shall retain all the benefit, protection and security afforded to them under the Act or any other applicable provisions of law. The Authority and the Trustee hereby declare that they would have executed and delivered this Trust Agreement and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid. SECTION 12.16 Governing Law. This Trust Agreement shall be governed exclusively by the provisions hereof and by the laws of the State as the same from time to time exist. SECTION 12.17 Execution in Several Counterparts. This Trust Agreement 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. S-1 4132-5580-5718.4 IN WITNESS WHEREOF, the BURLINGAME FINANCING AUTHORITY has caused this Trust Agreement to be signed in its name by its Executive Director, and U.S. Bank National Association in token of its acceptance of the trusts created hereunder, has caused this Trust Agreement to be signed by one of the officers thereunder duly authorized, all as of the day and year first above written. BURLINGAME FINANCING AUTHORITY By: Executive Director U.S. BANK NATIONAL ASSOCIATION, as Trustee By: Authorized Officer Acknowledged: CITY OF BURLINGAME By: City Manager A-1 4132-5580-5718.4 EXHIBIT A FORM OF SERIES 2019 BOND No. _____ $__________ BURLINGAME FINANCING AUTHORITY LEASE REVENUE BOND, SERIES 2019 NEITHER THE FULL FAITH AND CREDIT OF THE AUTHORITY NOR THE CITY OF BURLINGAME IS PLEDGED FOR THE PAYMENT OF THE INTEREST ON OR PRINCIPAL OF THE BONDS AND NO TAX OR OTHER SOURCE OF FUNDS OTHER THAN THE REVENUES HEREINAFTER REFERRED TO IS PLEDGED TO PAY THE INTEREST ON OR PRINCIPAL OF THE BONDS. NEITHER THE PAYMENT OF THE PRINCIPAL OF NOR INTEREST ON THE BONDS CONSTITUTES A DEBT, LIABILITY OR OBLIGATION OF THE CITY OF BURLINGAME. Interest Rate Maturity Date Dated Date CUSIP ___% _________ 1, ____ ___________, 2019 __________ REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: _______________________________________ DOLLARS The BURLINGAME FINANCING AUTHORITY, a joint exercise of powers authority, duly organized and validly existing under and pursuant to the laws of the State of California (the “Authority”), for value received, hereby promises to pay (but only out of the Revenues hereinafter referred to) to the registered owner identified above or registered assigns, on the maturity date specified above (subject to any right of prior redemption hereinafter provided for) the principal sum specified above, together with interest on such principal sum from the interest payment date next preceding the date of authentication of this Bond (unless this Bond is registered as of an interest payment date or during the period from the fifteenth day of the month preceding an interest payment date to such interest payment date, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated prior to _________ 15, 2020, in which event it shall bear interest from the original issue date specified above) until the principal hereof shall have been paid at the interest rate per annum specified above, payable on _________ 1, ____, and semiannually thereafter on each _________ 1 and __________ 1. Interest due on or before the maturity or prior redemption of this Bond shall be payable only by check mailed by first-class mail to the registered owner hereof; provided that upon the written request of a Bondholder of $1,000,000 or more in aggregate principal amount of Bonds of the Series of which this Bond is a part received by the Trustee prior to the applicable A-2 4132-5580-5718.4 record date, interest shall be paid by wire transfer in immediately available funds. The principal hereof is payable in lawful money of the United States of America upon presentation of this Bond at the principal office of U.S. Bank National Association in San Francisco or Los Angeles, California. This Bond is one of a duly authorized issue of bonds of the Authority designated as its “Burlingame Financing Authority Lease Revenue Bonds” (the “Bonds”) and is one of a duly authorized series of such Bonds known as “Series 2019” (the “Series 2019 Bonds”) issued in an aggregate principal amount of _________________ dollars ($________), all of like tenor and date (except for such variations, if any, as may be required to designate varying numbers, maturities and interest rates), and is issued under and pursuant to the provisions of the Joint Exercise of Powers Act (being Chapter 5 of Division 7 of Title 1 of the California Government Code, as amended) and all laws amendatory thereof or supplemental thereto (the “Act”) and under and pursuant to the provisions of a trust agreement, dated as of ___________ 1, 2019 (as amended from time to time, the “Trust Agreement”), between the Authority and U.S. Bank National Association, as trustee (together with any successor as trustee under the Trust Agreement, the “Trustee”) (copies of the Trust Agreement are on file at the corporate trust office of the Trustee in St. Paul, Minnesota). The Bonds are issued to provide funds to finance the cost of the acquisition and construction of the ________________________. The Bonds are limited obligations of the Authority and are payable, as to interest thereon and principal thereof, solely from certain proceeds of the Bonds held in certain funds and accounts pursuant to the Trust Agreement and the revenues (as more fully defined in the Trust Agreement, the “Revenues”) derived from Base Rental Payments and other payments made by the City of Burlingame (the “City”), and all interest or other investment income thereon, pursuant to the Facilities Sublease, dated as of ___________ 1, 2019 (as amended from time to time, the “Facilities Sublease”), by and between the Authority and the City, and the Authority is not obligated to pay the interest or premium, if any, on and principal of the Bonds except from the Revenues. All Bonds are equally and ratably secured in accordance with the terms and conditions of the Trust Agreement by a pledge of and charge and lien upon the Revenues, and the Revenues constitute a trust fund for the security and payment of the interest or premium, if any, on and principal of the Bonds as provided in the Trust Agreement. The full faith and credit of the Authority and the City are not pledged for the payment of the interest or premium, if any, on or principal of the Bonds. No tax shall ever be levied to pay the interest on or principal of the Bonds. The Bonds are not secured by a legal or equitable pledge of or charge or lien upon any property of the Authority or any of its income or receipts except the Revenues, and neither the payment of the interest on nor principal of the Bonds is a debt, liability or general obligation of the Authority, the City or any member of the Authority for which such entity is obligated to levy or pledge any form of taxation. Additional bonds payable from the Revenues may be issued which will rank equally as to security with the Bonds, but only subject to the conditions and upon compliance with the procedures set forth in the Trust Agreement. Reference is hereby made to the Act and to the Trust Agreement and any and all amendments thereof and 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, the rights of the registered owners of the Bonds, security for payment of the Bonds, remedies upon default and limitations thereon, and amendment of the Trust Agreement (with or without consent of the registered owners of the Bonds); and all the terms of the Trust Agreement are hereby A-3 4132-5580-5718.4 incorporated herein and constitute a contract between the Authority and the registered owner of this Bond, to all the provisions of which the registered owner of this Bond, by acceptance hereof, agrees and consents. The Bonds are subject to redemption by the Authority on the dates, and at the redemption prices, set forth in the Trust Agreement. Notice of redemption of this Bond shall be given by first-class mail not less than thirty (30) days nor more than sixty (60) days before the redemption date to the registered owner of any Bond selected for redemption, subject to and in accordance with provisions of the Trust Agreement with respect thereto. If notice of redemption has been duly given as aforesaid and money for the payment of the above-described redemption price is held by the Trustee, then this Bond shall, on the redemption date designated in such notice, become due and payable at the above-described redemption price; and from and after the date so designated, interest on this Bond shall cease to accrue and the registered owner of this Bond shall have no rights with respect hereto except to receive payment of the redemption price hereof. If an Event of Default (as defined in the Trust Agreement) shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Trust Agreement. The Trust Agreement provides that in certain events such declaration and its consequences may be rescinded by the holders of not less than a majority in aggregate principal amount of the Bonds then outstanding or by the Trustee. This Bond is transferable only on a register to be kept for that purpose at the above-mentioned corporate trust office of the Trustee by the registered owner hereof in person or by the duly authorized attorney of such owner upon payment of the charges provided in the Trust Agreement and upon surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or the duly authorized attorney of such owner, and thereupon a new fully registered Bond or Bonds in the same aggregate principal amount in authorized denominations will be issued to the transferee in exchange therefor. The Authority and the Trustee may deem and treat the registered owner hereof as the absolute owner hereof for the purpose of receiving payment of the interest hereon and principal hereof and for all other purposes, whether or not this Bond shall be overdue, and neither the Authority nor the Trustee shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of this Bond shall be made only to such registered owner, which payments shall be valid and effectual to satisfy and discharge liability on this Bond to the extent of the sum or sums so paid. This Bond shall not be entitled to any benefit, protection or security under the Trust Agreement or become valid or obligatory for an y purpose until the certificate of authentication hereon endorsed shall have been executed and dated by the Trustee. It is hereby certified and recited that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by the Act, and by the Constitution and laws of the State of California, that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit A-4 4132-5580-5718.4 prescribed by the Constitution or laws of the State of California and is not in excess of the amount of Bonds permitted to be issued under the Trust Agreement. Unless this Bond is presented by an authorized representative of The Depository Trust Company to the issuer or its agent 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. A-5 4132-5580-5718.4 IN WITNESS WHEREOF, the Burlingame Financing Authority has caused this Bond to be executed in its name and on its behalf by the manual or facsimile signature of the Executive Director of the Authority and countersigned by the manual or facsimile signature of the Secretary of said Authority, and has caused this Bond to be dated as of the original issue date specified above. BURLINGAME FINANCING AUTHORITY By: Executive Director Countersigned: Secretary A-6 4132-5580-5718.4 [FORM OF CERTIFICATE OF AUTHENTICATION TO APPEAR ON SERIES 2019 BONDS] This is one of the Bonds described in the within-mentioned Trust Agreement which has been registered and authenticated on _______________. U.S. BANK NATIONAL ASSOCIATION, as Trustee By: Authorized Signatory A-7 4132-5580-5718.4 [FORM OF ASSIGNMENT TO APPEAR ON SERIES 2019 BONDS] For value received the undersigned hereby sells, assigns and transfers unto (Taxpayer Identification Number: ___________ ) the within Bond and all rights thereunder, and hereby irrevocabl y constitutes and appoints attorney to transfer the within bond on the books kept for registration thereof, with full power of substitution in the premises. NOTE: The signature to this Assignment must correspond with the name as written on the face of the Bond in every particular, without alteration or enlargement or any change whatever. Dated: ________________ PLEASE INSERT SOCIAL SECURITY NUMBER, TAXPAYER IDENTIFICATION NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: Signature Guaranteed: NOTE: Signature must be guaranteed by an eligible guarantor institution. DRAFT 10/10/2019 4132-5580-5718.4 TRUST AGREEMENT between the BURLINGAME FINANCING AUTHORITY and U.S. BANK NATIONAL ASSOCIATION as Trustee Dated as of _________ 1, 2019 $__________ Burlingame Financing Authority Lease Revenue Bonds, Series 2019 TABLE OF CONTENTS Page -i- 4132-5580-5718.4 ARTICLE I DEFINITIONS; EQUAL SECURITY ............................................................ 2 SECTION 1.01 Definitions...................................................................................... 2 SECTION 1.02 Equal Security .............................................................................. 12 SECTION 1.03 Interpretation ................................................................................ 12 ARTICLE II THE BONDS ................................................................................................. 13 SECTION 2.01 Authorization of Bonds; Series 2019 Bonds ................................ 13 SECTION 2.02 Terms of the Series 2019 Bonds .................................................. 14 SECTION 2.03 Form of Series 2019 Bonds.......................................................... 15 SECTION 2.04 [Reserved] .................................................................................... 15 SECTION 2.05 [Reserved] .................................................................................... 15 SECTION 2.06 Execution of Series 2019 Bonds .................................................. 15 SECTION 2.07 Transfer and Payment of Bonds ................................................... 16 SECTION 2.08 Exchange of Bonds ...................................................................... 16 SECTION 2.09 Bond Registration Books ............................................................. 16 SECTION 2.10 Mutilated, Destroyed, Stolen or Lost Bonds; Temporary Bonds ........................................................................................... 17 SECTION 2.11 Special Covenants as to Book-Entry Only System for Series 2019 Bonds........................................................................ 17 ARTICLE III ISSUANCE OF BONDS ............................................................................... 19 SECTION 3.01 Procedure for the Issuance of Series 2019 Bonds ........................ 19 SECTION 3.02 Use of Moneys in the Acquisition and Construction Fund .......... 20 SECTION 3.03 Conditions for the Issuance of Additional Bonds ........................ 20 SECTION 3.04 Proceedings for Authorization of Additional Bonds ................... 21 SECTION 3.05 Limitations on the Issuance of Obligations Payable from Revenues ...................................................................................... 22 ARTICLE IV REDEMPTION OF BONDS ......................................................................... 22 SECTION 4.01 Extraordinary Redemption ........................................................... 22 SECTION 4.02 Optional Redemption ................................................................... 23 SECTION 4.03 Mandatory Sinking Fund Redemption ......................................... 23 SECTION 4.04 Selection of Bonds for Redemption ............................................. 24 SECTION 4.05 Notice of Redemption; Cancellation; Effect of Redemption ....... 24 TABLE OF CONTENTS (continued) Page -ii- 4132-5580-5718.4 ARTICLE V REVENUES ................................................................................................... 25 SECTION 5.01 Pledge of Revenues ...................................................................... 25 SECTION 5.02 Receipt and Deposit of Revenues in the Revenue Fund .............. 25 SECTION 5.03 Establishment and Maintenance of Accounts for Use of Money in the Revenue Fund ........................................................ 25 SECTION 5.04 Application of Insurance Proceeds .............................................. 27 SECTION 5.05 Deposit and Investments of Money in Accounts and Funds ....... 28 ARTICLE VI COVENANTS OF THE AUTHORITY ........................................................ 28 SECTION 6.01 Punctual Payment and Performance ............................................ 28 SECTION 6.02 Against Encumbrances................................................................. 29 SECTION 6.03 Tax Covenants; Rebate Fund. ...................................................... 29 SECTION 6.04 Accounting Records and Reports................................................. 30 SECTION 6.05 Prosecution and Defense of Suits ................................................ 30 SECTION 6.06 Further Assurances....................................................................... 31 SECTION 6.07 [Reserved]. ................................................................................... 31 SECTION 6.08 Amendments to Facilities Sublease or Facilities Lease ............... 31 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS ........... 31 SECTION 7.01 Events of Default and Acceleration of Maturities ....................... 31 SECTION 7.02 Application of Funds Upon Acceleration .................................... 33 SECTION 7.03 Institution of Legal Proceedings by Trustee ................................ 33 SECTION 7.04 Non-Waiver.................................................................................. 33 SECTION 7.05 Actions by Trustee as Attorney-in-Fact ....................................... 34 SECTION 7.06 Remedies Not Exclusive .............................................................. 34 SECTION 7.07 Limitation on Bondholders’ Right to Sue .................................... 34 ARTICLE VIII THE TRUSTEE ............................................................................................. 35 SECTION 8.01 The Trustee .................................................................................. 35 SECTION 8.02 Liability of Trustee ...................................................................... 36 SECTION 8.03 Compensation and Indemnification of Trustee ............................ 39 SECTION 8.04 Compliance with Continuing Disclosure Certificate ................... 39 ARTICLE IX AMENDMENT OF THE TRUST AGREEMENT ....................................... 40 TABLE OF CONTENTS (continued) Page -iii- 4132-5580-5718.4 SECTION 9.01 Amendment of the Trust Agreement ........................................... 40 SECTION 9.02 Disqualified Bonds....................................................................... 41 SECTION 9.03 Endorsement or Replacement of Bonds After Amendment ........ 41 SECTION 9.04 Amendment by Mutual Consent .................................................. 41 ARTICLE X DEFEASANCE.............................................................................................. 41 SECTION 10.01 Discharge of Bonds. ..................................................................... 41 SECTION 10.02 Unclaimed Money ........................................................................ 42 ARTICLE XI [INTENTIONALLY LEFT BLANK] ........................................................... 42 ARTICLE XII MISCELLANEOUS ...................................................................................... 43 SECTION 12.01 Liability of Authority Limited to Revenues ................................. 43 SECTION 12.02 Benefits of this Trust Agreement Limited to Parties ................... 43 SECTION 12.03 Successor Is Deemed Included In All References To Predecessor .................................................................................. 43 SECTION 12.04 Execution of Documents by Bondholders ................................... 43 SECTION 12.05 Waiver of Personal Liability ........................................................ 44 SECTION 12.06 Acquisition of Bonds by Authority .............................................. 44 SECTION 12.07 Destruction of Cancelled Bonds .................................................. 44 SECTION 12.08 Content of Certificates ................................................................. 44 SECTION 12.09 Publication for Successive Weeks ............................................... 45 SECTION 12.10 Accounts and Funds ..................................................................... 45 SECTION 12.11 Business Day ................................................................................ 45 SECTION 12.12 Notices ......................................................................................... 45 SECTION 12.13 Notices to Rating Agencies .......................................................... 45 SECTION 12.14 Article and Section Headings and References ............................. 46 SECTION 12.15 Partial Invalidity........................................................................... 46 SECTION 12.16 Governing Law ............................................................................ 46 SECTION 12.17 Execution in Several Counterparts............................................... 46 EXHIBIT A FORM OF SERIES 2019 BOND.......................................................................... A-1 4132-5580-5718.4 An extra section break has been inserted above this paragraph. Do not delete this section break if you plan to add text after the Table of Contents/Authorities. Deleting this break will cause Table of Contents/Authorities headers and footers to appear on any pages following the Table of Contents/Authorities. PRELIMINARY OFFICIAL STATEMENT DATED __________, 2019 NEW ISSUE — FULL BOOK-ENTRY ONLY BOND RATING:_____ ISSUER CREDIT RATING: _____ (See “RATING” herein). In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, based upon an analysis of existing laws, regulations, rul ings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, in terest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds. See “TAX MATTERS” herein. OHS DRAFT 10/16/2019 $___________ BURLINGAME FINANCING AUTHORITY Lease Revenue Bonds, Series 2019 (_________________________________) Dated: Date of Delivery Due: _______ 1, as shown on the inside cover hereof The Burlingame Financing Authority Lease Revenue Bonds, Series 2019 (the “Bonds”) will be issued in fully registered form only and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“D TC”). Ownership interests in the Bonds will be in denominations of $5,000 or any integral multiple thereof. Beneficial owners of the Bonds will not receive physical certificates representing the Bonds purchased, but will receive a credit balance on the books of the nominee s of such purchasers. Interest on the Bonds is payable semiannually on ___________ 1 and ___________ 1, commencing _____ 1, ____ (the “Interest Payment Dates”). Principal of, premium, if any, and interest on the Bonds will be paid by U.S. Bank National Association, St. Paul, Minnesota, as trustee (the “Trustee”) to DTC, which in turn will remit such principal, premium, if any, and interest to its participants for subsequent disbursement to beneficial owners of the Bonds as described herein. See “APPENDIX G—BOOK-ENTRY ONLY SYSTEM” herein. The Bonds are being issued to finance the [construction and equipping of a portion of the Burlingame Community Center to be located at 850 Burlingame Avenue and pay certain costs of issuance of the Bonds]. The Bonds are special, limited obligations of the Authority payable solely from Revenues, consisting primarily of Base Rental Payments to be made by the City to the Authority pursuant to a Master Facilities Sublease, dated as of ___________ 1, 2019 (the “Facilities Sublease”) pursuant to which the City will lease the City’s Main Library and adjacent parking structure (the “Facilities”) from the Authority. The City has covenanted in the Facilities Sublease to take such action as may be necessary to include Base Rental Payments and Additional Payments due u nder the Facilities Sublease in its annual budgets, and to make necessary ann ual appropriations therefor. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” herein. The Base Rental Payments are subject to abatement as described herein. See “RISK FACTORS” herein. THE BONDS DO NOT CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF (INCLUDING ANY MEMBER OF THE AUTHORITY). THE AUTHORITY SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF THE BONDS, AND THE INTEREST THEREON, ONLY FROM THE REVENUES DESCRIBED ABOVE, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF (INCLUDING ANY MEMBER OF THE AUTHORITY) IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE BONDS. THE ISSUANCE OF THE BONDS SHALL NOT DIRECTLY, INDIRECTLY OR CONTINGENTLY OBLIGATE THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF (INCLUDING ANY MEMBER OF THE AUTHORITY) TO LEVY OR PLEDGE ANY FORM OF TAXATION. THE AUTHORITY HAS NO TAXING POWER. The Bonds are subject to redemption prior to maturity as described herein. See “THE BONDS—Redemption” herein. _________________________ Maturity Schedule located on inside front cover THIS COVER PAGE CONTAINS INFORMATION FOR REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. The Bonds will be offered when, as and if issued, subject to the approval of validity by Orrick, Herrington & Sutcliffe LLP, Bond Counsel. Certain legal matters will be passed upon for the Authority and the City by the City Attorney of the City of Burlingame. Orrick, Her rington & Sutcliffe LLP will serve as Disclosure Counsel. It is expected that the Bonds will be delivered through the facilities of DTC on or about _________, 2019, in New York, New York, against payment therefor. Dated: ___________, 2019 This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there by any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. MATURITY SCHEDULE (Base CUSIP† ________) Maturity (_____ 1) Principal Amount Interest Rate Yield CUSIP† $_______ _______% Term Bond due _______ 1, ____ Yield: ___________% CUSIP† _____ $_______ _______% Term Bond due _______ 1, ____ Yield: ___________% CUSIP† _____ † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the Ameri can Bankers Association by S&P Capital IQ. Copyright© 2019 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 C GS database. CUSIP® numbers are provided for convenience of reference only. None of the District, the Underwriters or their agents or counsel assumes responsibility for the accuracy of such numbers. BURLINGAME FINANCING AUTHORITY Governing Board and Mayor and City Council Donna Colson Mayor Emily Beach Vice Mayor Michael Brownrigg Ann Keighran Ricardo Ortiz Authority Staff/City Staff Lisa K. Goldman City Manager Carol Augustine Finance Director Karen Huang Deputy Finance Director Syed Murtuza Director of Public Works Kathleen A. Kane City Attorney Bond and Disclosure Counsel Orrick, Herrington & Sutcliffe LLP San Francisco, California Trustee U.S. Bank National Association St. Paul, Minnesota Municipal Advisor Public Financial Management, Inc. San Francisco, California No dealer, broker, salesman or other person has been authorized to give any information or to make any representation 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 City, the Authority or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of facts. The information contained in this Official Statement has been furnished by the City, the Authority and other sources which are deemed to be reliable but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the Underwriter. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement, nor any sale hereunder, shall under any circumstances create an implication that there has been no change in the affairs of the City, the Authority or any other matter described herein since the date hereof. The Underwriter has provided the following sentence for inclusion in this O fficial Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibility 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. Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements.” Such statements are generally identifiable by the terminology used, such as “plan,” “expect,” “estimate,” “budget,” or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Neither the Authority nor the City plans to issue any updates or revisions to those forward-looking statements if or when their expectations, or events, conditions or circumstances on which such statements are based, occur. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER- ALLOT 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 Bonds have not been registered under the Securities Act of 1933, as amended, in reliance upon an exemption contained in the Act. The Bonds have not been registered or qualified under the securities laws of any state. TABLE OF CONTENTS Page -i- INTRODUCTION ....................................................................................................................................................... 1 General ........................................................................................................................................................ 1 The Authority ................................................................................................................................................ 1 Purpose of the Bonds ..................................................................................................................................... 1 Authority for Issuance ................................................................................................................................... 1 Sources of Payment for the Bonds ................................................................................................................ 1 Bonds Constitute Limited Obligations; Lease Not Debt ............................................................................... 2 Abatement ..................................................................................................................................................... 2 The City ........................................................................................................................................................ 2 Description of the Bonds ............................................................................................................................... 2 Tax Matters ................................................................................................................................................... 2 Continuing Disclosure ................................................................................................................................... 3 Summaries Not Definitive ............................................................................................................................. 3 Other Information .......................................................................................................................................... 3 THE PROJECT ........................................................................................................................................................... 3 ESTIMATED SOURCES AND USES OF FUNDS ................................................................................................... 4 THE BONDS ............................................................................................................................................................... 4 General ........................................................................................................................................................ 4 Redemption ................................................................................................................................................... 4 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS ........................................................................... 6 Limited Obligation ........................................................................................................................................ 6 Covenant to Appropriate Funds for Rental Payments ................................................................................... 6 Action on Default .......................................................................................................................................... 6 Base Rental Payments ................................................................................................................................... 7 No Debt Service Reserve Fund ..................................................................................................................... 7 Additional Payments ..................................................................................................................................... 7 Insurance ....................................................................................................................................................... 7 Additional Bonds; Substitution; Release; Addition of Property .................................................................... 8 DEBT SERVICE ....................................................................................................................................................... 10 THE FACILITIES ..................................................................................................................................................... 10 RISK FACTORS ....................................................................................................................................................... 11 General Considerations - Security for the Bonds ........................................................................................ 11 No Debt Service Reserve Fund ................................................................................................................... 11 Abatement ................................................................................................................................................... 11 Seismic Considerations ............................................................................................................................... 12 TABLE OF CONTENTS (continued) Page -ii- Limited Recourse on Default ...................................................................................................................... 12 No Acceleration Upon Default .................................................................................................................... 12 Loss of Tax Exemption ............................................................................................................................... 12 Bankruptcy .................................................................................................................................................. 13 STATE OF CALIFORNIA BUDGET INFORMATION .......................................................................................... 13 CONSTITUTIONAL AND STATUTORY LIMITATIONS AFFECTING CITY REVENUES AND APPROPRIATIONS ................................................................................................................................... 14 Article XIII A of the State Constitution ...................................................................................................... 14 Article XIII B of the State Constitution ...................................................................................................... 15 Articles XIII C and XIII D of the California Constitution .......................................................................... 15 Statutory Limitations ................................................................................................................................... 16 Proposition 1A............................................................................................................................................. 17 Proposition 22 ............................................................................................................................................. 18 Proposition 26 ............................................................................................................................................. 18 Further Initiatives ........................................................................................................................................ 19 THE AUTHORITY ................................................................................................................................................... 19 Organization and Membership .................................................................................................................... 19 Powers ...................................................................................................................................................... 19 THE CITY ................................................................................................................................................................. 19 RATING .................................................................................................................................................................... 19 FINANCIAL STATEMENTS ................................................................................................................................... 19 LITIGATION ............................................................................................................................................................ 20 TAX MATTERS ....................................................................................................................................................... 20 LEGAL MATTERS .................................................................................................................................................. 21 UNDERWRITING .................................................................................................................................................... 22 CONTINUING DISCLOSURE ................................................................................................................................. 22 ADDITIONAL INFORMATION.............................................................................................................................. 22 APPENDIX A - CITY OF BURLINGAME FINANCIAL AND DEMOGRAPHIC INFORMATION ................. A-1 APPENDIX B - CITY OF BURLINGAME CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, ____ ................................................................ B-1 APPENDIX C - CITY OF BURLINGAME STATEMENT OF INVESTMENT POLICY ................................... C-1 APPENDIX D - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS .............................................................. D-1 APPENDIX E - FORM OF CONTINUING DISCLOSURE CERTIFICATE ......................................................... E-1 APPENDIX F - FORM OF LEGAL OPINION ....................................................................................................... F-1 APPENDIX G - BOOK-ENTRY ONLY SYSTEM ................................................................................................ G-1 1 OFFICIAL STATEMENT $__________ BURLINGAME FINANCING AUTHORITY Lease Revenue Bonds, Series 2019 (______________________________) 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 contai ned in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Bonds to potential investors is mad e only by means of the entire Official Statement. Capitalized terms used, but not otherwise defined, herein, shall have the meanings ascribed thereto in “APPENDIX D—SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—CERTAIN DEFINITIONS.” General The purpose of this Official Statement, which includes the cover page, inside cover, table of contents and appendices hereto is to provide certain information concerning the issuance, sale and delivery by the Burlingame Financing Authority (the “Authority”) of its Lease Revenue Bonds, Series 2019 (the “Bonds”), in the aggregate principal amount of $__________. The Authority The Authority is a joint exercise of powers authority duly organized and existing under and pursuant t o that certain Joint Exercise of Powers Agreement, by and between the City of Burlingame (the “City”) and the Redevelopment Agency of the City of Burlingame (the “Agency”), and under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Act”). Purpose of the Bonds The Bonds are being issued to finance the [construction and equipping of a portion of the Burlingame Community Center to be located at 850 Burlingame Avenue and pay certain costs of issuance of the Bonds]. Authority for Issuance The Bonds are being issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”), and a master trust agreement dated as of ___________ 1, 2019 (the “Trust Agreement”), by and between the Authority and U.S. Bank National Association, St. Paul, Minnesota, as trustee (the “Trustee”). Sources of Payment for the Bonds In general, the City is required under the Facilities Sublease to pay semiannual lease payments (the “Base Rental Payments”) for the use and occupancy of the Facilities, which amounts are designed to be sufficient in both time and amount to pay, when due, the principal of, redemption premium (if any) and interest on the Bonds. In the Facilities Sublease, the City has covena nted that it will take such action as may be necessary to include all Base Rental Payments in its annual budgets and to make the necessary annual appropriations therefor. The obligation of the City to make Base Rental Payments, however, is subject to abatement in the event of material damage or destruction of the Facilities or the taking of the Facilities in whole or in part. The obligation of the City to pay Base Rental Payments does not constitute an obligation of the City for which the City is obligate d to levy or pledge any 2 form of taxation or for which the City has levied or pledged any form of taxation. The obligation of the City to make Base Rental Payments does not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. While the City is obligated to pay Base Rental Payments from any lawfully available funds, it is the expectation of the City that the Base Rental Payments will be paid from the General Fund, including voter approved Measure I sales taxes. See “APPENDIX A—CITY OF BURLINGAME FINANCIAL AND DEMOGRAPHIC INFORMATION” herein for more information on Measure I and the General Fund . Bonds Constitute Limited Obligations; Lease Not Debt The Bonds are limited obligations of the Authority payable solely from Revenues, consisting primarily of Base Rental Payments to be made by the City, and amounts on deposit in certain funds and accounts held under the Trust Agreement. The Bonds do not constitute a debt or liability of the State of California or of any political subdivision thereof (including any member of the Authority). The Authority shall be obligated to pay the principal of the Bonds, and the interest thereon, only from the Revenues described above, and neither the faith and credit nor the taxing power of the State of California or of any political subdivision thereof (including any member of the Authority) is pledged to the payment of the principal of or the interest on the Bonds. The issuance of the Bonds shall not directly, indirectly or contingently obligate the State of California or any political subdivision thereof (including any member of the Authority) to levy or pledge any form of taxation. The Authority has no taxing power. Abatement The obligation of the City under the Facilities Sublease to make Base Rental Payments is in consideration for the beneficial use and possession of the Facilities. The obligation of the City to make Ba se Rental Payments (other than to the extent that funds are available in the Revenue Fund or from the proceeds of rental interruption insurance, if available) may be abated in whole or in part if the City does not have full use and possession of the Facilities. See “RISK FACTORS—Abatement.” The City The City of Burlingame is located on the San Francisco Peninsula approximately 10 miles south of San Francisco and had a population of approximately 30,317 as of January 1, 2019. See “THE CITY” and “APPENDIX A—CITY OF BURLINGAME FINANCIAL AND DEMOGRAPHIC INFORMATION” herein. Description of the Bonds The Bonds will be issued as fully-registered current interest bonds without coupons in denominations of $5,000 principal amount each, or any integral multiple thereof, and will be registered initially in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. See “APPENDIX G—BOOK-ENTRY ONLY SYSTEM” herein. Interest on the Bonds is payable semiannually each ___________ 1 and ___________ 1, commencing ___________ 1, 20__. Principal of the Bonds is payable on ___________ 1 in each year due, as set forth on the inside cover page hereof. Tax Matters In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, t he accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds. See “TAX MATTERS” herein. 3 Continuing Disclosure The City has covenanted for the benefit of the holders and beneficial owne rs of the Bonds to annually provide certain financial information and operating data relating to the City (the “Annual Report”) and to provide notices of the occurrence of certain enumerated events, if material. See “CONTINUING DISCLOSURE” and “APPENDIX E—FORM OF CONTINUING DISCLOSURE CERTIFICATE” herein. Summaries Not Definitive Brief descriptions of the Bonds, the security and sources of payment for the Bonds, the Authority, the City and the Facilities are included in this Official Statement together with summaries of the Trust Agreement, the Facilities Lease and the Facilities Sublease. Such descriptions do not purport to be comprehensive or definitive. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in “APPENDIX D— SUMMARY OF PRINCIPAL LEGAL DOCUMENTS,” and if not therein, then in Trust Agreement, the Facilities Lease or the Facilities Sublease. All references herein to the Trust Agreement, the Facilities Lease and the Facilities Sublease are qualified in their entirety by reference to such documents, and references herein to the Bonds are qualified in their entirety by reference to the forms thereof, copies of all of which are available for inspection at the principal corporate trust office of the Trustee. Other Information Copies of documents referred to herein and information concerning the Bonds are available from the Finance Director, City of Burlingame, 501 Primrose Road, Burlingame, California 94010-3997 telephone (650) 558- 7201. The City may impose a charge for copying, mailing and handling. THE PROJECT The Bonds are issued to finance a portion of the construction and equipping of the new Burlingame Community Center. The Project is expected to cost approximately $52,000,000, of which approximately $__________ will be financed by the proceeds of the Bonds and the remainder with funds on hand in the City’s Capital Investment Reserve. The Project is expected to be completed by April 2022. The City intends to replace the existing Recreation Center located at 850 Burlingame Avenue with a new state of the art facility. The scope of work includes: (1) the demolition of the existing single story recreation ce nter and site work, and (2) the construction of the new 36,000 square foot two story above ground community center building, adjacent surface parking lot, a single level 22,000 square foot underground parking garage, as well as associated sitework including the outdoor terraces, fencing, pedestrian and vehicular hardscape, softscape and trash/stair enclosure structure. 4 ESTIMATED SOURCES AND USES OF FUNDS The estimated sources and uses of funds with respect to the Bonds are as follows: Estimated Sources and Uses of Funds Sources of Funds Principal Amount of Bonds Net Original Issue Premium Uses of Funds Acquisition and Construction Fund Costs of Issuance Fund(1) Underwriter’s Discount Total Uses (1) Costs of Issuance includes amounts to pay legal fees, rating agency fees, printing costs, title insurance premiums and other issuance costs. THE BONDS General The Bonds will be dated the date of delivery and will be issued in fully registered form, without coupons, in the denominations of $5,000 or any integral multiple thereof. Only such Bonds as shall bear thereon a certificate of authentication, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of the Trust Agreement. The Bonds will be initially registered in the name of “Cede & Co.,” as nominee of The Depository Trust Company, New York, New York (“DTC”), which has been appointed depository for the Bonds, and registered ownership may not thereafter be transferred except as provided in the Trust Agreement. See “APPENDIX G— BOOK-ENTRY ONLY SYSTEM” herein. Principal of and premium, if any, on the Bonds will be paid by the Trustee at maturity or redemption to DTC, which in turn will remit such principal and premium, if any, to its participants for subsequent disbursement to beneficial owners of the Bonds as described herein. See “APPENDIX G—BOOK-ENTRY ONLY SYSTEM” herein. Interest on the Bonds will be payable semiannually on _______ 1 and ___________ 1, commencing ___________ 1, ____, to DTC in the same manner as described in the preceding sentence. Interest on the Bonds shall be computed on the basis of a 360-day year of twelve 30-day months. Redemption Optional Redemption. The Bonds maturing on or before __________ 1, ____ are not subject to optional redemption prior to maturity. The Bonds maturing on or afte r __________ 1, ____ are subject to optional redemption prior to maturity on or after __________ 1, ____ at the option of the Authority, on any date in whole or in part and among such maturities as are designated by the Authority to the Trustee, from funds derived by the Authority from any source at a redemption price equal to 100% of the principal amount of the Bonds called for redemption plus accrued but unpaid interest to the redemption date. 5 Sinking Fund Redemption. The Bonds maturing on __________ 1, ____ are subject to redemption prior to maturity in part, by lot, at the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, from mandatory sinking fund payments in the following amounts, commencing on __________ 1, ____ according to the following schedule: Schedule of Mandatory Sinking Fund Payments Bonds Maturing __________ 1, ____ Redemption Date (______ 1) Principal Amount _________________ *Maturity The Bonds maturing on __________ 1, ____ are subject to redemption prior to maturity in part, by lot, at the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, from mandatory sinking fund payments in the following amounts, commencing on __________ 1, ____ according to the following schedule: Schedule of Mandatory Sinking Fund Payments Bonds Maturing __________ 1, ____ Redemption Date (_______ 1) Principal Amount _________________ *Maturity Special Mandatory Redemption. The Bonds are subject to redemption by the Authority on any date prior to their respective stated maturities, upon notice as hereinafter provided, as a whole or in part by lot within each stated maturity in integral multiples of Authorized Denominations, from prepayme nts made by the City from funds received by the City due to a taking of the Facilities or portions thereof under the power of eminent domain, from the net proceeds of insurance received for material damage to or destruction of the Facilities or portions th ereof under the circumstances and upon the conditions and terms prescribed in the Trust Agreement and Facilities Sublease, or from the proceeds of title insurance in the event of defective title to the Facilities as provided for in the Facilities Sublease, at a redemption price equal to the sum of the principal amount thereof, without premium, plus accrued interest thereon to the redemption date. Procedure for and Notice of Redemption. The Trustee will cause notice of each redemption to be given to the Owner of any Bonds designated for redemption at the address which appears upon the registration books of the Trustee by mailing a copy of the redemption notice at least 30 but not more than 60 days prior to the redemption date. Each notice of redemption will state the date of such notice, the date of issue of the Bonds, the Series, the redemption date, the Redemption Price, the place or places of redemption (including the name and appropriate address of the Trustee), the CUSIP number (if any) of the maturity or maturities, and, if less than all of any such maturity is to be redeemed, the distinctive certificate numbers of the Bonds of such maturity, to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal a mount thereof to be 6 redeemed. Each such notice will also state that on said date there will become due and payable on each of said Bonds the redemption price thereof, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and will require that such Bonds be then surrendered at the address of the Trustee specified in the redemption notice. The failure of any Owner to receive such notice or any defect in such notice will not affect the validity of the redemption of any Bonds. Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same Series maturing by their terms on any one date are to be redeemed at any one time, the Trustee will select the B onds of such maturity date to be redeemed by lot and will promptly notify the Authority in writing of the numbers of the Bonds so selected for redemption. For purposes of such selection, Bonds shall be deemed to be composed of multiples of minimum Authorized Denominations and any such multiple may be separately redeemed. In the event Term Bonds are designated for redemption, the Authority may designate which sinking account payments are allocated to such redemption. Cancellation of Notice. The Authority may, at its option, prior to the date fixed for redemption in any notice of redemption, rescind and cancel such notice of redemption by Written Request to the Trustee , and the Trustee shall mail notice of such cancellation to the recipients of the notice o f redemption being cancelled. Effect of Notice of Redemption. If notice of redemption has been duly given as aforesaid and money for the payment of the redemption price of the Bonds called for redemption is held by the Trustee, then on the redemption date designated in such notice Bonds so called for redemption shall become due and payable, and from and after the date so designated, interest on such Bonds shall cease to accrue, and the Owners of such Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. All Bonds redeemed pursuant to the provisions of the Trust Agreement shall be canceled by the Trustee and shall be destroyed with a certificate of destruction furnished to the Authority upon its request and shall not be reissued. SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Limited Obligation THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM REVENUES, CONSISTING PRIMARILY OF BASE RENTAL PAYMENTS TO BE MADE BY THE CITY AND FROM AMOUNTS ON DEPOSIT IN CERTAIN FUNDS AND ACCOUNTS HELD UNDER THE TRUST AGREEMENT. THE BONDS DO NOT CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF (INCLUDING ANY MEMBER OF THE AUTHORITY). THE AUTHORITY SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF THE BONDS, AND THE INTEREST THEREON, ONLY FROM THE REVENUES DESCRIBED ABOVE, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF (INCLUDING ANY MEMBER OF THE AUTHORITY) IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE BONDS. THE ISSUANCE OF THE BONDS SHALL NOT DIRECTLY, INDIRECTLY OR CONTINGENTLY OBLIGATE THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF (INCLUDING ANY MEMBER OF THE AUTHORITY) TO LEVY OR PLEDGE ANY FORM OF TAXATION. THE AUTHORITY HAS NO TAXING POWER. Covenant to Appropriate Funds for Rental Payments The City has covenanted in the Facilities Sublease to take such action as may be necessary to include all Base Rental Payments and Additional Payments due under the Facilities Sublease in its annual budge ts and to make the necessary annual appropriations therefor. The obligation of the City to make Base Rental Payments, however, is subject to abatement in the event of material damage or destruction of the Facilities or the taking of the Facilities in whole or in part. 7 Action on Default Should the City default under the Facilities Sublease, the Trustee may terminate the Facilities Sublease and recover certain damages from the City, or may retain the Facilities Sublease and hold the City liable for all Base Rental Payments thereunder as the same become due. Base Rental Payments may not be accelerated upon a default under the Facilities Sublease. See “RISK FACTORS” herein. For a description of the events of default and permitted remedies of the Trustee contained in the Facilities Sublease and the Trust Agreement, see “APPENDIX D—SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Facilities Sublease—Defaults and Remedies” and “—Trust Agreement—Events of Default; Remedies of Bondholders” herein. Base Rental Payments For the right to the use and occupancy of the Facilities, the Facilities Sublease requires the City to make Base Rental Payments. While the City is obligated to pay Base Rental Payments from any lawfully available funds, it is the expectation of the City that the Base Rental Payments will be paid from certain parking revenues and assessment revenues. To secure the payment of the Base Rental Payments, the City will pay to the Trustee, for depo sit into the Revenue Fund, on each __________ 25 and _________ 25, an amount sufficient to pay the principal of and interest on the Bonds due on the following ___________ 1 and ___________ 1, respectively. Pursuant to the Trust Agreement, on or before each Interest Payment Date and each Principal Payment Date, the Trustee will transfer amounts in the Revenue Fund as are necessary to the Interest Account and the Principal Account to provide for the payment of the interest and principal in respect of the Bond s. See “APPENDIX D—SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Trust Agreement—Establishment of Funds and Accounts; Flow of Funds” herein. Debt Service on the Bonds is set forth below under the heading “DEBT SERVICE.” No Debt Service Reserve Fund The Bonds are not secured by a debt service reserve fund. Additional Payments The Facilities Sublease requires the City to pay all amounts, costs and expenses incurred by the Authority in connection with the execution, performance or enforcement of the Facilities Sublease, the Trust Agreement, the Authority’s interest in the Facilities, and the lease of the Facilities to the City, including but not limited to payment of all fees, costs and expenses and all administrative costs of the Authority related to the Bonds, and the Facilities, including without limiting the generality of the foregoing, salaries and wages of employees, all expenses, compensation and indemnification payable by the Authority to the Trustee under the Trust Agreement, fees of auditors, accountants, attorneys or architects, and all other necessary administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Bonds or of the Trust Agreement; but not including in such Additional Payments amounts required to pay the principal of or interest on the Bonds. Insurance The Facilities Sublease requires the City to cause to be maintained casualty insurance insuring the Facilities against fire, lightning and all other risks covered by an extended coverage endorsement in an amount equal to the lesser of 100% of the replacement cost of the Facilities or 100% of the outstanding pri ncipal amount of the Bonds. The City may, subject to the restrictions contained in the Facilities Sublease, self-insure against such risks. The Facilities Sublease does not require that insurance be maintained for earthquake or flood risks. 8 The Facilities Sublease requires the City to cause to be maintained, throughout the term of the Facilities Sublease, rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments resulting from the loss, total or partial, of the use of any part of the Facilities as a result of any of the hazards covered by the insurance described in the preceding paragraph, in an amount sufficient at all times to pay maximum annual Base Rental for any two-year period. The City is also required to obtain certain public liability and property damage insurance coverage in protection of the Authority and the City and worker’s compensation insurance. See “APPENDIX D—SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Facilities Sublease,” for additional information regarding the insurance requirements contained in the Facilities Sublease. Additional Bonds; Substitution; Release; Addition of Property The Authority may at any time issue Additional Bonds payable from the Revenues and sec ured by a pledge of and charge and lien upon the Revenues as provided in the Trust Agreement equal to the pledge, charge and lien securing the Outstanding Bonds theretofore issued under the Trust Agreement, subject to, among other things, the following specific conditions: 1. The Authority shall be in compliance with all agreements and covenants contained in the Trust Agreement and no Event of Default shall have occurred and be continuing. 2. The Supplemental Trust Agreement shall require that the proceeds of the sale of such Additional Bonds shall be applied to finance or refinance Projects, or for the refunding or repayment of any Bonds then Outstanding, including the payment of costs and expenses of and incident to the authorization and sale of such Additional Bonds. 3. The aggregate principal amount of Bonds issued and at any time Outstanding under the Trust Agreement shall not exceed any limit imposed by law, by the Trust Agreement or by any Supplemental Trust Agreement. 4. The Facilities Sublease shall have been amended, if necessary, so that the Base Rental Payments payable by the City thereunder in each Fiscal Year shall at least equal Debt Service, including Debt Service on the Additional Bonds, in each Fiscal Year, and if Base Rental Payments are b eing increased, a Certificate of the City shall be delivered to the Trustee certifying that the annual fair rental value (which may be based on, but not limited to, the construction or acquisition cost or replacement cost of such facility to the City) will be at least equal to 100% of the maximum amount of Base Rental Payments becoming due in the then current fiscal year or in any subsequent fiscal year. 5. If additional facilities, if any, are to be leased and are not situated on property described in the Facilities Lease and Facilities Sublease, (1) the Facilities Lease shall have been amended so as to lease to the Authority such additional real property; and (2) the Facilities Sublease shall have been amended so as to lease to the City such additional real property. (See “APPENDIX D—SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Trust Agreement”). In addition, the City and the Authority may add, substitute or release real property for all or part of, or may release part of, the Facilities for purposes of the Facili ties Lease and the Facilities Sublease, but only after the City has filed with the Authority and the Trustee, with copies to each rating agency then providing a rating for the Bonds, all of the following: 1. Executed copies of the Facilities Lease and the Facilities Sublease or amendments thereto containing the amended description of the Facilities, including the legal description of any real property component of the Facilities as modified, if necessary. 9 2. A Written Certificate of the City, certifying that the annual fair rental value (which may be based on, but not limited to, the construction or acquisition cost or replacement cost of such facility to the City) of the Facilities that will constitute the Facilities after such addition, substitution or wit hdrawal will be at least equal to 100% of the maximum amount of Base Rental Payments becoming due in the then current fiscal year or in any subsequent fiscal year. At the sole discretion of the City, in the alternative, in the event of a substitution only, the Written Certificate of the City will certify that the annual fair rental value of the new Facility is at least equal to that of the substituted Facility. 3. With respect to an addition or substitution of property, a leasehold owner’s title insurance policy or policies or a commitment for such policy or policies or an amendment or endorsement to an existing title insurance policy or policies resulting in title insurance with respect to the Facilities after such addition or substitution in an amount at least equal to the aggregate principal amount of Bonds Outstanding; each such insurance instrument, when issued, shall name the Trustee as the insured, and shall insure the leasehold estate of the Authority in such property subject only to such exceptions as do not substantially interfere with the City’s right to use and occupy such property and as will not result in an abatement of Base Rental Payments payable by the City under the Facilities Sublease. 4. A Written Certificate of the City stating that such addition, substitution or withdrawal, as applicable, does not adversely affect the City’s use and occupancy of the Facilities. 5. With respect to the substitution of property, a Written Certificate of the City stating that the useful life of the property to be substituted is at least equal to the useful life of the property being released. 6. An opinion of bond counsel stating that any amendment executed in connection with such addition, substitution or withdrawal, as the case may be, (i) is authorized or permitted under the Facilities Sublease; (ii) will, upon the execution and delivery thereof, be valid and binding upon the Authority and the City; and (iii) will not cause the interest on the Bonds to be included in gross income for federal income tax purposes. The Facilities or portion thereof for which other real property is substituted, pursuant to the Facilities Sublease, shall be released from the Facilities Lease and the Facilities Sublease, and shall no longer be encumbered thereby or by the Trust Agreement at such time as the City shall have caused said substitution. 10 DEBT SERVICE Set forth below are the annual principal, interest and total debt service requirements for the Bonds, assuming no redemptions: Debt Service Fiscal Year Ending Principal Interest Total THE FACILITIES The Facilities consist of the City’s Main Library and an adjacent parking facility. The City’s Main Library is located at 480 Primrose Road, close to the City’s downtown and residential areas. Originally constructed in 1931, the building underwent a major reconstruction and expansion in 1995 -1997, retaining only the main and side entrance facades. The reconstruction addressed all issues of seismic safety, the need for increased space and for upgrades to support technology. The approximately 54,000 square foot Mediterranean-style building underwent a smaller remodeling project in 2014, a $3.5 million renovation named the Millennium Project. The building includes two above-grade levels and one below-grade level. 11 Adjacent to the Main Library at 1260 Donnelly Avenue is a two-level concrete parking structure built in 1980. The garage contains 16 parking spaces for library employees, five spaces compliant with the Americans with Disabilities Act of 1990, and 151 metered parking spaces for the general public. Subject to certain conditions contained in the Facilities Sublease, the City may remove or substitute facilities so long as the facilities at the time of substitution or release have an annual fair rental value at least equal to 100% of the maximum amount of annual Base Rental Payments (see “APPENDIX D—SUMMARY OF PRINCIPAL LEGAL DOCUMENTS”). RISK FACTORS The following factors, along with the other information in this Official Statement, should be considered by potential investors in evaluating purchase of the Bonds. However, they do not purport to be an exhaustive listing of risks and other considerations which may be relevant to an investment in the Bonds. In addition, the order in which the following factors are presented is not intended to reflect the relative importance of any such risks. General Considerations - Security for the Bonds The obligation of the City to make the Base Rental Payments does not constitute a debt of the City or the State or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City 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. Although the Facilities Sublease does not create a pledge, lien or enc umbrance upon the funds of the City, the City is obligated under the Facilities Sublease to pay the Base Rental Payments and Additional Payments from any source of legally available funds, and the City has covenanted in the Facilities Sublease that it will take such action as may be necessary to include all rental payments due under the Facilities Sublease in its annual budgets and to make necessary annual appropriations for all such rental payments. The City is currently liable and will become liable on other obligations payable from general fund revenues, some of which may have a priority over the Facilities Sublease. The City has the capacity to enter into other obligations which may constitute additional charges against its revenues. To the extent that additional obligations are incurred by the City, the funds available to make Base Rental Payments may be decreased. In the event the City’s revenue sources are less than its total obligations, the City could choose to fund other activities before making Base Rental Payments and other payments due under the Facilities Sublease. No Debt Service Reserve Fund The Bonds are not secured by a debt service reserve fund. Possible Insufficiency of Insurance Proceeds The Facilities Sublease obligates the City to keep in force various forms of insurance, subject to deductibles, for repair or replacement of the Property in the event of damage, destruction or title defects, subject to certain exceptions. The Authority and the City make no representation as to the ability of any insurer to fulfill its obligations under any insurance policy obtained pursuant to the Facilities Sublease, and no assurance can be given as to the adequacy of any such insurance to fund necessary repair or replacement or to pay principal of and interest on the Bonds when due. In addition, certain risks, such as earthquakes and floods, are not covered by the insurance required under the Facilities Sublease. Abatement Base Rental Payments and Additional Payments are paid by the City in each rental period for and in consideration of the right to use and occupy the Facilities during each such period. Pursuant to the Facilities Sublease, during any period in which, by reason of ma terial damage to, or destruction or condemnation of, the 12 Facilities, or any defect in title to the Facilities, there is substantial interference with the City’s right to use and occupy any portion of the Facilities, rental payments due under the Facilities Sublease will be abated proportionately. Such abatement will continue for the period commencing on the date of such interference resulting from such damage, destruction, condemnation, or title defect, and ending, with respect to damage to or destruction of the Facilities, upon the substantial completion of the work of repair or replacement of the Facilities, or portion thereof, so damaged or destroyed. In the event that such portion of the Facilities, if damaged or destroyed by an insured casualty, could not be replaced during the period of time in which proceeds of the City’s rental interruption insurance will be available in lieu of Base Rental Payments, plus the period for which funds are available from funds and accounts established under the Trust Agreement, or in the event that casualty insurance proceeds are insufficient to provide for complete repair or replacement of such portion of the Facilities or prepayment of the Bonds, there could be insufficient funds to make payments to Owners in full. In the event of any such substantial interference, the Facilities Sublease continues in full force and effect, and the City waives any right to terminate the Facilities Sublease by virtue of such substantial interference. The Trustee cannot terminate the Facilities Sublease in the event of such substantial interference. Abatement of Base Rental Payments and Additional Payments is not an event of default under the Facilities Sublease, and the Trustee is not permitted in such event to take any action or avail itself of any remedy against the City. See “APPENDIX D — SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Facilities Sublease—Rental Abatement” herein. Seismic Considerations The City, like most regions adjacent to the Pacific Oc ean, is an area of significant seismic activity and, therefore, is subject to potentially destructive earthquakes. The San Andreas Fault is the major active fault closest to the City, and is approximately 2.5 miles from the Facilities. Several active or potentially active faults are located closer to the Facilities. On October 17, 1989, at 5:04 pm, a 7.1 magnitude earthquake occurred in Loma Prieta, California, which is located approximately 50 miles from the City. The City sustained minimal damage at it s facilities. Within the City, the Hyatt Regency Hotel was closed for one year, and the Amfac Hotel was closed permanently and subsequently demolished. The Facilities meet all applicable seismic requirements. Natural Disaster Natural and economic forces can adversely affect the City’s economy, tax receipts, and residential and business real property values. As described under “Seismic Considerations” herein, the City is located in a seismically active region, and damage from an earthquake in or near the C ity could cause moderate to extensive damage to the City. Other natural or manmade disasters, such as flood, fire, toxic dumping or acts of terrorism, as wells as the impacts of climate change and sea level rise, could cause a reduction in the assessed val ue of taxable property within the City and adversely impact the City’s finances and operations. For example, the City’s low -lying areas along the San Francisco Bay are sensitive to flooding and sea level rise hazards. Storm surges and flooding could limit traffic and restrict the only access to the City’s hotel corridor. Closure of the City’s hotel corridor and/or damage to the businesses along the corridor could cause tax revenue loss and would affect travelers to and from San Francisco International Airport. Additionally, preliminary results of the assessment conducted by an independent firm indicate that a limited number of properties in the northern area of the City are in a higher risk area for wildfires. However, both the Facilities and the Projec t properties are located in a low risk area for wildfires. Sea level rise and wildfires could cause a reduction in the assessed value of taxable property within the City and adversely impact the City’s finances and operations. Limited Recourse on Default If the City defaults on its obligations to make rental payments with respect to the Facilities, the Trustee may retain the Facilities Sublease and hold the City liable for all rental payments on an annual basi s and will also have 13 the right to re-enter and re-let the Facilities. In the event such re-letting occurs, the City would be liable for any resulting deficiency in rental payments (without acceleration). Alternatively, the Trustee may terminate the Facilities Sublease with respect to the Facilities and proceed against the City to recover damages pursuant to the Facilities Sublease. Due to the governmental function of the Facilities, the Facilities Lease and the Facilities Sublease, it is not certain whether a court would permit the exercise of the remedies of repossession and re -letting of the Facilities. In any case, due to the specialized nature of the Facilities, no assurance can be given that the Trustee would be able to re-let the Facilities so as to provide rental income sufficient to make principal and interest payments on the Bonds in a timely manner, and the Trustee is not empowered to sell the fee interest in the Facilities for the benefit of the Owners of the Bonds. Any suit for money damages would be subject to limitations on legal remedies against cities in the State, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. Moreover, there can be no assurance that such re-letting will not adversely affect the exclusion of any interest on the Bonds from federal or state income taxation. No Acceleration Upon Default If the City defaults on its obligation to make Base Rental Payments, there is no available remedy of acceleration of the total Base Rental Payments due over the term of the Facilities Sublease. The City will only be liable for Base Rental Payments on an annual basis, and the Trustee would be required to seek a separate judgment in each fiscal year for that fiscal year’s rental payments. Loss of Tax Exemption As discussed under the heading “TAX MATTERS,” interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of delivery of the Bonds, as a result of acts or omissions of the City in violation of its covenants in the Facilities Sublease or of the Authority in violation of its covenants in the Trust Agreement. Should such an event of taxability occur, the Bonds would not be subject to a special redemption and would remain outstanding until maturity or until redeemed under the redemption provisions contained in the Trust Agreement. Cybersecurity The City, like many other public and private entities, relies on a large and complex technology environment to conduct its operations and faces multiple cybersecurity threats, including, but not limited to, hacking, viruses, malware and other attacks on its computing and digital networks and systems. The City initially approved and adopted a Computer User Policy in 2004 with varied enhancements since that time. Several departments and operations within the City are subject to applicable cybersecurity standards, including but not limited to the Payment Card Industry Data Security Standard for credit card purchasing, standards promulgated by the Department of Justice for public safety and law enforcement, and standards promulgated by the Water Information Sharing and Analysis Center for the water and wastewater utilities. The City’s financial auditors dedicate specialized resources each year reviewing the City’s information technology (“IT”) systems’ internal controls and cybersecurity measures. The City’s IT Department has established a routine process for distributing and installing critical security patches and continues to be trained in best practices in administrative, technical and physical security protocols to protect against cyberattacks. Frequent messaging is provided to ensure that all employees are aware of security threats and methods of prevention , and a response and recovery strategy has been developed to mitigate the impact of cyberattacks should they occur . Cybersecurity incidents could result from unintentional events, or from deliberate attacks by unauthorized entities or individuals attempting to gain access to the City’s IT for purposes of misappropriating assets or information or causing operational disruption and damage. While the City places a high level of importance on cybersecurity and its operation safeguards, no assurance can be given by the City that such measures will ensure against all cybersecurity threats and attacks. Cybersecurity breaches could damage the City’s IT and cause material disruption to the City’s operations and the provision of City services. The costs of 14 remedying any such damage or protecting against future attacks could be substantial. Further, cybersecurity breaches could expose the City to material litigation and other legal risks, which could cause the City to incur material costs related to such legal claims or proceedings. Bankruptcy In addition to the limitation on remedies contained in the Trust Agreement, the rights and remedies provided in the Trust Agreement and the Facilities Sublease may be limited by and are subject to the provisions of federal bankruptcy laws and to other laws or equitable principles that may affect the enforcement of creditors’ rights. Under Chapter 9 of the Bankruptcy Code (Title 11, United States Code), which governs the bankruptcy proceedings for public agencies such as the City, there are no involuntary petitions in bankruptcy. Bankruptcy proceedings, if initiated, could subject the owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy proceedings or otherwise, and consequently may entail risks of delay, limitation or modification of their rights. STATE OF CALIFORNIA BUDGET INFORMATION State Budget and Its Impact on the City Set forth in the following paragraphs are descriptions of the State budget process, the current State budget situation, and the potential impacts on the City. The Budget Process. Through the State budget process, the State can enact legislation that significantly impacts the source, amount and timing of the receipt of revenues by local agencies, including the City. As in recent years, State budget deficits can result in legislation that adversely impacts local agency budgets. The State’s fiscal year begins on July 1 and ends on June 30. The annual budget is proposed by the Governor by January 10 of each year for the next fiscal year (the “Governor’s Budget”). Under State law, the annual proposed Governor’s Budget cannot provide for projected expenditures in excess of projected revenues and balances available from prior fiscal years. Following the submission of the Governor’s Budget, the Legislature takes up the proposal. Under the State Constitution, money may be drawn from the Treasury only through an appropriation made by law. The primary source of the annual expenditure authorizations is the Budget Act as approved by the Legislature and signed by the Governor. The Budget Act must be approved by a two -thirds majority vote of each House of the Legislature. The Governor may reduce or eliminate specific line items in the Budget Act or any other appropriations bill without vetoing the entire bill. Such individual line item vetoes are subject to override by a two - thirds majority vote of each House of the Legislature. Appropriations also may be included in legislation other than the Budget Act. Bills containing appropriations (except for K-14 education) must be approved by a two -thirds majority vote in each House of the Legislature and be signed by the Governor. Bills containing K -14 education appropriations only require a simple majority vote. Continuing appropriations, available without regard to fiscal year, may also be provided by statute or the State Constitution. Funds necessary to meet an appropriation need not be in the State Treasury at the time such appropriation is enacted; revenues may be appropriated in anticipation of their receipt. Recent State Budgets. Certain information about the State budgeting process and the State Budget is available through several State of California sources. A convenient source of information is the State’s website, where recent official statements for State bonds are posted. The references to internet websites shown below are shown for reference and convenience only; the information contained within the websites has not been reviewed by the City and is not incorporated herein by reference. 15 The California State Treasurer’s Internet home page at www.treasurer.ca.gov, under the heading “Financial Information,” posts the State’s audited financial statements. In addition, the “Financial Information” section includes the State’s Rule 15c2-12 filings for State bond issues. The “Financial Information” secti on also includes the “Overview of the State Economy and Government, State Finances, State Indebtedness, Litigation” from the State’s most current Official Statement, which discusses the State budget and its impact on school districts. The California Department of Finance’s Internet home page at www.dof.ca.gov, under the heading “California Budget,” includes the text of proposed and adopted State Budgets. The State Legislative Analyst’s Office (“LAO”) prepares analyses of the proposed and adopted State budgets. The analyses are accessible on the Legislative Analyst’s Internet home page at www.lao.ca.gov under the heading “Products.” The Governor signed the fiscal year 2019-20 State Budget (the “2019-20 State Budget”) on June 27, 2019. The 2019-20 State Budget sets forth a balanced budget for fiscal year 2019-20 that projects approximately $143.8 billion in revenues, and $91.9 billion in non-Proposition 98 expenditures and $55.9 billion in Proposition 98 expenditures. The 2019-20 State Budget includes a $1.4 billion reserve in the Special Fund for Economic Uncertainties. The City cannot predict the impact that the 2019-20 State Budget, or subsequent budgets, will have on its own finances and operations. Additionally, the City cannot predict the accuracy of any projections made in the State’s 2019-20 State Budget. Future State Budgets. The City cannot predict what actions will be taken in future years by the State Legislature and the Governor to address the State’s current or future budget deficits. Future State budgets will be affected by national and state economic conditions and other factors over which the City has no control. To the extent that the State budget process results in reduced revenues to the City, the City will be required to make adjustments to its budget. Decrease in such revenues may have an adverse impact on the City’s ability to pay Base Rental Payments. CONSTITUTIONAL AND STATUTORY LIMITATIONS AFFECTING CITY REVENUES AND APPROPRIATIONS Article XIII A of the State Constitution Article XIII A of the California Constitution, known as “Proposition 13,” was approved by the California voters in June of 1978. It limits the amount of ad valorem tax on real property to 1% of “full cash value,” as determined by the county assessor. Article XIII A defines “full cash value” to mean the county assessor’s valuation of real property as shown on the 1975 –76 tax bill under “full cash value,” or thereafter, the appraised value of real property when “purchased, newly constructed or a change in ownership has occurred” (as such terms are used in Article XIII A) after the 1975 assessment. Furthermore, all real property valuation may be increased or decreased to reflect the inflation rate, as shown by the consumer price index or comparable data, in an amount not to exceed 2% per year, or may be reduced in the event of declining property values caused by damage, destruction or other factors. Article XIII A provides that the 1% limitation does not apply to ad valorem taxes to pay interest or redemption charges on 1) indebtedness approved by the voters prior to July 1, 1978, 2) any 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 3) bonded indebtedness incurred by a school district, community college district or county office of education for the construction, reconstruction, rehabilitation or replacement of school facilities or the acquisition or lease of real property for school facilities, approved by 55% voting on the proposition, but only if certain accountability measures are included in the proposition. The California Revenue and Taxation Code permits county assessors who have reduced the assessed valuation of a property as a result of natural disasters, economic downturns or other factors, to subsequently “recapture” such value (up to the pre–decline value of the property) at an annual rate higher or lower than 2%, depending on the assessor’s measure of the restoration of value of the damaged prope rty. The California courts have upheld the constitutionality of this procedure. 16 Since its adoption, Article XIII A has been amended a number of times. These amendments have created a number of exceptions to the requirement that property be assessed when purchased, newly constructed or 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 persons with disabilities and for seismic upgrades to property. Both the California State Supreme Court and the United States Supreme Court have upheld the validity of Article XIII A. If property values decline due to recessionary or other factors, the County of San Mateo may review the assessed values of properties. See “APPENDIX A”. Article XIII B of the State Constitution On October 6, 1979, California voters approved Proposition 4, known as the Gann Initiative, which added Article XIII B to the California Constitution. Propositions 98 and 111, approved by California voters in 1988 and 1990, respectively, substantially modified Article XIII B. The principal effect of Article XIII B is to limit the annual appropriations of the State and any city, county, school district, authority, or other political subdivision of the State to the level of appropriations for the prior fiscal year, as adjusted for changes in the cost of living and population. The initial version of Article XIII B provided that the “base year” for establishing an appropriations limit was Fiscal Year 1978-79, which was then adjusted annually to reflect changes in population, consumer prices and certain increases in the cost of services provided by these public agencies. Proposition 111 revised the method for making annual adjustments to the appropriations limit by redefining changes in the cost of living and in population. It also required that beginning in Fiscal Year 1990-91 each appropriation limit must be recalculated using the actual Fiscal Year 1986-87 appropriations limit and making the applicable annual adjustments as if the provis ions of Proposition 111 had been in effect. Appropriations subject to limitations of a local government under Article XIII B include generally any authorization to expend during a fiscal year the proceeds of taxes levied by or for that entity and the proce eds of certain State subventions to that entity, exclusive of refunds of taxes. Proceeds of taxes include, but are not limited to all tax revenues plus the proceeds to an entity of government from (a) regulatory licenses, user charges and user fees (but only to the extent such proceeds exceed the cost of providing the service or regulation), (b) the investment of tax revenues, and (c) certain subventions received from the State. Article XIII B permits any government entity to change the appropriations limit by a vote of the electors in conformity with statutory and constitutional voting effective for a maximum of four years. As amended by Proposition 111, Article XIII B provides for testing of appropriations limits over consecutive two-year periods. If any entity’s revenues in any two-year period exceed the amounts permitted to be spent over such period, the excess has to be returned by revising tax rates or fee schedules over the subsequent two years. Amended by Proposition 98, Article XIII B provides fo r the payment of a portion of any excess revenues to a fund established to assist in financing certain school needs. Appropriations for “qualified capital outlays” are excluded from the limits of Proposition 111. Section 7900 et. seq. of the California Government Code defines certain terms used in Article XIII B and sets forth the methods for determining the appropriations limits for local jurisdictions. Relying on these definitions and Chapter 60, Statutes of 1990 effective August 1, 1990, which implemented Proposition 111. The City has estimated that its appropriations limit for “proceeds of taxes” for Fiscal Year 2019 -20 is $70,888,590. Estimated appropriations for Fiscal Year 2019-20 for the City subject to the limitation total $54,684,506. Articles XIII C and XIII D of the California Constitution On November 5, 1996, the voters of the State approved Proposition 218, the “Right to Vote on Taxes Act.” Proposition 218 added Articles XIII C and XIII D to the State Constitution, which contain a number of provisions affecting the ability of a local agency to levy and collect both existing and future taxes, assessments, fees and charges. 17 Article XIII C requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes of a local agency require a majority vote and taxes for specific purposes, even if deposited in the general fund, require a two –thirds vote. Further, any general purpose tax which the local agency imposed, extended or increased without voter approval after December 31, 1994 may continue to be imposed only if approved by a majority vote in an election held prior to November 5, 1998. The voter approval requirements of Article XIII C reduce a local agency’s flexibility to deal with fiscal problems by raising revenue through new or extended or increased taxes and no assurance can be given that the City will be able to raise taxes in the future to meet increased expenditure requirements. Article XIII D contains several provisions making it generally more difficult for local agencies to levy and maintain “assessments” for municipal services and programs. “Assessment” is defined to mean any levy or charge upon real property for a special benefit conferred upon the real property. Article XIII D also contains several provisions affecting a “fee” or “charge,” defined for purposes of Article XIII D to mean “any levy other than an ad valorem tax, a special tax, or an assessment, imposed by a local agency upon a parcel or upon a person as an incident of property ownership, including a user fee or charge for a property related service.” All new and existing property related fees and charges must conform to requirement s prohibiting, among other things, fees and charges which (i) generate revenues exceeding the funds required to provide the property related service, (ii) are used for any purpose other than those for which the fees and charges are imposed, (iii) with respect to any parcel or person, exceed the proportional cost of the service attributable to the parcel, (iv) are for a service not actually used by, or immediately available to, the owner of the property in question, or (v) 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. Further, before any property related fee or charge may be imposed or increased, written notice must be given to the record owner of each parcel of land affected by such fee or charge. The local agency must then hold a hearing upon the proposed imposition or increase, and if written protests against the proposal are presented by a majority o f the owners of the identified parcels, the local agency may not impose or increase the fee or charge. Moreover, except for fees or charges for sewer, water and refuse collection services (or fees for electrical and gas service, which are not treated as “property related” for purposes of Article XIII D), no property related fee or charge may be imposed or increased without majority approval by the property owners subject to the fee or charge or, at the option of the local agency, two–thirds voter approval by the electorate residing in the affected area. The City has two enterprise funds that are self–supporting from fees and charges, which could, depending upon judicial interpretation of Proposition 218, ultimately be determined to be property related for purposes of Article XIII D. In the event that fees and charges cannot be appropriately increased, or are reduced pursuant to exercise of the initiative power (described in the following paragraph), the City may have to decide whether to support any deficiencies in these enterprise funds with moneys from the general fund or to curtail service, or both. In addition to the provisions described above, Article XIII C removes prohibitions and limitations on the initiative power in matters of any “local tax, asse ssment, fee or charge.” Consequently, the voters of the City could, by future initiative, repeal, reduce or prohibit the future imposition or increase of any local tax, assessment, fee or charge. “Assessment,” “fee” and “charge,” are not defined in Article XIII C and it is not clear whether the definitions of these terms in Article XIII D (which are generally property–related as described above) would limit the scope of the initiative power set forth in Article XIII C. If the Article XIII D definitions a re not held to limit the scope of Article XIII C initiative powers, then the Article XIII C initiative power could potentially apply to revenue sources that currently constitute a substantial portion of general fund revenues. No assurance can be given tha t the voters of the City will not, in the future, approve initiatives that repeal, reduce or prohibit the future imposition or increase of local taxes, assessments, fees or charges. Statutory Limitations On November 4, 1986, California voters adopted Proposition 62, an initiative statute that, among other things, requires (i) that any new or increased general purpose tax be approved by a two –thirds vote of the local governmental entity’s legislative body and by a major ity vote of the voters, and (ii) that any new or increased special purpose tax be approved by a two–thirds vote of the voters. 18 In Santa Clara County Local Transportation Authority v. Guardino , 11 Cal. 4th 220 (1995) (the “Santa Clara decision”), the California Supreme Court upheld a Court of Appeal decision invalidating a one–half cent countywide sales tax for transportation purposes levied by a local transportation authority. The California Supreme Court based its decision on the failure of the authority to obtain a two–thirds vote for the levy of a “special tax” as required by Proposition 62. The Santa Clara decision did not address the question of whether it should be applied retroactively. In McBrearty v. City of Brawley, 59 Cal. App. 4th 1441 (1997), the Court of Appeal, Fourth District, concluded that the Santa Clara decision is to be applied retroactively to require voter approval of taxes enacted after the adoption of Proposition 62 but before the Santa Clara decision. Following the California Supreme Court’s decision upholding Proposition 62, several actions were filed challenging taxes imposed by public agencies since the adoption of Proposition 62, which was passed in November 1986. On June 4, 2001, the California Supreme Court released its deci sion in one of these cases, Howard Jarvis Taxpayers Association v. City of La Habra et. al. In this case, the court held that the public agency’s continued imposition and collection of a tax is an ongoing violation, upon which the statute of limitations p eriod begins anew with each collection. The court also held that, unless another statute or constitutional rule provided differently, the statute of limitations for challenges to taxes subject to Proposition 62 is three years. Accordingly, a challenge to a tax subject to Proposition 62 may only be made for those taxes received within three years of the date the action is brought. Proposition 1A The California Constitution and existing statutes give the Legislature authority over property taxes, sales taxes and the vehicle license fee (the “VLF”). The Legislature has authority to change tax rates, the items subject to taxation and the distribution of tax revenues among local governments, schools, and community college distri cts. The State has used this authority for many purposes, including increasing funding for local services, reducing State costs, reducing taxation, addressing concerns regarding funding for particular local governments, and restructuring local finance. The California Constitution generally requires the State to reimburse the local governments when the State mandates a new local program or higher level of service. Due to the ongoing financial difficulties of the State in recent years, it has not provided reimbursements for many mandated costs. In other cases, the State has suspended mandates, eliminating both responsibility of the local governments for complying with the mandate and the need for State reimbursements. On November 3, 2004, the voters of the State approved Proposition 1A, which amended the California Constitution to, among other things, reduce the State Legislature’s authority over local government revenue sources by placing restrictions on the State’s access to local government’s property, sa les and vehicle license fee revenues. Proposition 1A generally prohibits the shift of property tax revenues from cities, counties and special districts, except to address a “severe state financial hardship,” which must be approved by a two -thirds vote of both houses of the Legislature, and only then if, among other things, such amounts were agreed to be repaid with interest within three years. The measure also (a) protects the property tax backfill of sales tax revenues diverted to pay the State’s economic recovery bonds, and the reinstatement of the sales tax revenues once such bonds are repaid, and (b) protects local agency vehicle license fee revenue (or a comparable amount of backfill payments from the State). If the State reduces the VLF rate below its current level of 0.65 percent of the vehicle value, Proposition 1A requires the State to provide local governments with equal replacement revenues. Proposition 1A provides two significant exceptions to the above restrictions regarding sales and property taxes. First, the State may shift to schools and community colleges up to 8 percent of local government property tax revenues if the Governor proclaims that the shift is needed due to a severe State financial hardship, the legislature approves the shift with a two-thirds vote of both houses and certain other conditions are met. The State must repay local governments for the diversion of their property tax revenues, with interest, within three years. Second, Proposition 1A allows the State to approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county. Proposition 1A amends the California Constitution to require the State to suspend certain State laws creating mandates in any year that the State does not fully reimburse local governments for their costs to comply 19 with the mandates. If the State does not provide funding for the activity that has been determined to be mandated, the requirement on cities, counties or special districts to abide by the manda te would be suspended. In addition, Proposition 1A expands the definition of what constitutes a mandate to encompass State action that transfers to cities, counties and special districts financial responsibility for a required program for which the State previously had complete or partial financial responsibility. This provision does not apply to mandates relating to schools or community colleges, or to those mandates relating to employee rights. Proposition 1A restricts the State’s authority to reallocate local tax revenues to address concerns regarding funding for specific local governments or to restructure local government finance. For example the State could not enact measures that changed how local sales tax revenues are allocated to cities and coun ties. In addition, measures that reallocated property taxes among local governments in a county would require approval by two -thirds of the members of each house of the legislature (rather than a majority vote). As a result, Proposition 1A could result i n fewer changes to local government revenues than otherwise would have been the case. Proposition 22 Proposition 22 (“Proposition 22”) which was approved by California voters in November 2010, prohibits the State, even during a period of severe fiscal hardship, from delaying the distribution of tax revenues for transportation, redevelopment, or local government projects and services and prohibits fuel tax revenues from being loaned for cash–flow or budget balancing purposes to the State General Fund or any other State fund. The City is unable to predict how Proposition 22 will be interpreted, or to what extent the measure will affect the revenues in the general fund of local agencies, although it could eventually provide greater stability in local agency revenues. Proposition 26 On November 2, 2010, the voters of the State approved Proposition 26 (“Proposition 26”), revising certain provisions of Articles XIIIA and XIIIC of the California Consti tution. Proposition 26 re-categorizes many State and local fees as taxes, requires local governments to obtain two –thirds voter approval for taxes levied by local governments, and requires the State to obtain the approval of two–thirds of both houses of the State Legislature to approve State laws that increase taxes. Furthermore, pursuant to Proposition 26, any increase in a fee beyond the amount needed to provide the specific service or benefit is deemed to be a tax and the approval thereof will require a two–thirds vote. In addition, for State–imposed charges, any tax or fee adopted after January 1, 2010 with a majority vote which would have required a two–thirds vote if Proposition 26 were effective at the time of such adoption is repealed as of November 2011 absent the re–adoption by the requisite two–thirds vote. Proposition 26 amends Article XIII C of the State Constitution to state that a “tax” means a levy, charge or exaction of any kind imposed by a local government, except: (1) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (2) a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (3) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (4) a charge imposed for entrance to or use of local government property or the purchase, rental or lease of local government property; (5) a fine, penalty, or other monetary charge imposed by the judicial branch of government or a local government, as a result of a violation of law, including late payment fees, fees imposed under administrative citation ordinances, parking violations, etc.; (6) a charge imposed as a condition of property development; or (7) assessments and property related fees imposed in accordance with the provisions of Article XIII D. Fees, charges and payments that are made pursuant to a voluntary contract that are not “imposed by a local government” are not considered taxes and are not covered by Proposition 26. Proposition 26 applies to any levy, charge or exaction imposed, increased, or extended by local government on or after November 3, 2010. Accordingly, fees adopted prior to that date are not subject to the measure until they are increased or extended or if it is determined that an exemption applies. 20 If the local government specifies how the funds from a proposed local tax are to be used, the approval will be subject to a two–thirds voter requirement. If the local government does not specify how the funds from a proposed local tax are to be used, the approval will be subject to a fifty percent voter requirement. Proposed local government fees that are not subject to Proposition 26 are subject to the approval of a majority of the governing body. In general, proposed property charges will be subject to a majority vote of approval by the governing body although certain proposed property charges will also require approval by a majority of property owners. Further Initiatives The laws and Constitutional provisions described above 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. Neither the Authority nor the City can anticipate the nature or impact of such measures. THE AUTHORITY Organization and Membership The Authority was formed pursuant to the provisions of Articles 1, 2 and 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”) and the Joint Exercise of Powers Agreement, dated as of May 1, 1995 (the “JPA Agreement”), by and between the City and the Redevelopment Agency of the City of Burlingame (the “Agency”). The Authority was formed by and between the City and the Agency to assist in the financing of public capital improvements. State legislation enacted as part of the 2011 Budget Act, a nd upheld by the California Supreme Court (as amended, the “Dissolution Act”), resulted in the formal dissolution of redevelopment agencies, including the Agency. However, California Health and Safety Code Section 34178(b)(3) states that joint exercise of powers agreements entered into by redevelopment agencies such as the Agency are not invalid. The Authority functions as a public entity, separate and apart from the City and the Agency, and is administered by a five-member governing board consisting of the members of the City Council. The City Attorney serves as counsel to the Authority. The Authority has no employees and all staff work is performed by the City or consultants. Powers Under the JPA Agreement, the Authority is empowered to assist in the financing of public capital improvements through the issuance of bonds in accordance with the Act. To exercise its powers, the Authority is authorized, in its own name, to do all necessary acts, including but not limited to making an d entering into contracts; employing agents and employees; and to sue or be sued in its own name. THE CITY Information with respect to the City, including financial information and certain economic and demographic information relating to the City, is provided in “APPENDIX A—CITY OF BURLINGAME FINANCIAL AND DEMOGRAPHIC INFORMATION” attached hereto. A copy of the financial statements of the City for the fiscal year ended June 30, 2018 is attached hereto as Appendix B and should be r ead in its entirety. RATING Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business (“S&P”), has assigned its municipal bond rating of “____” to the Bonds and its “____” issuer credit rating to the Ci ty. Such ratings reflect only the view of such organization, and an explanation of the significance of such ratings may be obtained from the rating agency at Standard & Poor’s Ratings Group, One Market Street, Steuart Tower, 15th Floor, San Francisco, CA 94105, (415) 371-5000. The City and the Authority furnished to the rating agency certain information and materials concerning the Bonds and the City. Generally, the rating agencies base their ratings on such information and materials and on investigations, studies and assumptions made by the rating agencies. There is 21 no assurance that such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the respective rating agency, if in its j udgment circumstances so warrant. Any such downward revision or withdrawal may have an adverse effect on the market price of the Bonds. FINANCIAL STATEMENTS The City’s financial statements for the fiscal year ended June 30, 2018, included in Appendix B hereto, have been audited by Maze & Associates Accountancy Corporation, independent auditors, as stated in their report appearing in Appendix B hereto. Maze & Associates Accountancy Corporation has not consented to the inclusion of its report as Appendix B and has not undertaken to update its report or to take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in this Official Statement, and no opinion is expressed by Maze & Associates Accountancy Corporation with respect to any event subsequent to its report dated October 26, 2018. LITIGATION At the time of delivery of and payment for the Bonds, officials of the City a nd Authority will certify that to the best of such officials’ knowledge, there is no action, suit, litigation, inquiry or investigation before or by any court, governmental agency, public board or body served or threatened, against the Authority or City, r espectively, or the titles of their officers to their respective offices or seeking to prohibit, restrain or enjoin the sale, execution or delivery of the Bonds or the payments of the Base Rental Payments or challenging the validity or enforceability of the Facilities Sublease or the Trust Agreement. TAX MATTERS In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, amon g other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”) and is e xempt from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax. A complete copy of the proposed form of opinion of Bond Counsel is set forth in Appendix F hereto. To the extent the issue price of any maturity of the Bonds is less than the amount to be paid at maturity of such Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Bonds), the difference constitutes “original issue discount,” the accrual of which, to the extent properly allocable to each beneficial owner thereof, is treated as interest on the Bonds which is excluded from gross income for federal income tax purposes and State of California personal income taxes. For this purpose, the issue price of a particular maturity of the Bonds is the first price at which a substantial amount of such maturity of the Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Bonds accrues daily over the term to maturity of such Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Bonds. Beneficial owners of the Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of beneficial owners who do not purchase such Bonds in the original offering to the public at the first price at which a substantial amount of such Bonds is sold to the public. Bonds purchased, whether at original issuance or otherwise, for an amount higher than their p rincipal amount payable at maturity (or, in some cases, at their earlier call date) (“Premium Bonds”) will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax-exempt interest received, and a beneficial owner’s basis in a Premium Bond, will be reduced by the amount of amortizable bond premium properly allocable to such beneficial owner. Beneficial 22 owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. The Authority and the County have made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Although Bond Counsel is of the opinion that interest on the Bonds is ex cluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the Bonds may otherwise affect a beneficial owner’s federal, state or local tax liability. The nature and extent of these other tax consequences depends upon the particular tax status of the beneficial owner or the beneficial owner’s other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences. Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, in whole or in part, to fed eral income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative propo sals or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel is expected to express no opinion. The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”) or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the Authority and the County, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The Authority and the County have covenanted, however, to comply with the requirements of the Code. Bond Counsel’s engagement with respect to the Bonds ends with the issuance of the Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Authority, the County or the beneficial owners regarding the tax-exempt status of the Bonds in the event of an audit examination by the IRS. Under current procedures, parties other than the Authority, the County and their appointed counsel, including the benef icial owners, would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the Authority or the County legitimately disagrees, may not be practicable. Any action of the IRS, including but not limited to selection of the Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues may affect the market price for, or the marketability of, the Bonds, and may cause the Authority, the County or the beneficial owners to incur significant expense. LEGAL MATTERS The validity of the Bonds and certain other legal matters are subject to the approving opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel. Certain legal matters will be passed upon for the Authority and the City by the City Attorney. The proposed form of opinion of Bond Counsel is set forth in APPENDIX F hereto. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. 23 UNDERWRITING The Bonds are being purchased by the Underwriter at a purchase price equal to the principal amount of Bonds being issued plus a net original issue premium of $_________ and less an Underwriter’s discount of $_________. The Bond Purchase Agreement provides that the Underwriter will purchase all of the Bonds if any a re purchased, the obligation to make such purchase, if made, being subject to certain terms and conditions set forth in the Bond Purchase Agreement, the approval of certain legal matters by counsel, and certain other conditions. The Underwriter may offer a nd sell Bonds to certain dealers and others at a price other than the offering price. The offering price may be changed from time to time by the Underwriter. CONTINUING DISCLOSURE The City has covenanted for the bene fit of Bond Owners and beneficial owners of the Bonds to provide certain financial information and operating data relating to the City by not later than seven months following the end of the City’s fiscal year (currently ending June 30) (the “Annual Report”), commencing with the report for the fiscal year June 30, ____, and to provide notices of the occurrence of certain enumerated events, if material. The Annual Report and the notices of material events will be filed by the City or by the Trustee on behal f of the City with the Municipal Securities Rulemaking Board through the Electronic Municipal Access (EMMA) System. The specific nature of the information to be contained in the Annual Report or the notices of material events is summarized below under the caption “APPENDIX E—FORM OF CONTINUING DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Underwriters in complying with S.E.C. Rule 15c2 -12(b)(5). The City has not failed during the previous five years to comply in all mater ial respects with any previous undertaking under such Rule. ADDITIONAL INFORMATION References made herein to certain documents and reports are brief summaries thereof which do not purport to be complete or definitive, and reference is made to such documents and reports for full and complete statements of the contents thereof. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Authority and the purchasers or the Owners of any of the Bonds. The execution and delivery of this Official Statement has been duly authorized by th e Authority. 24 At the time of delivery and payment for the Bonds, an authorized representative of the Authority and the City will deliver a certificate stating that to the best of his or her knowledge this Official Statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements herein (excepting therefrom the information contained herein describing DTC, and its book entry system), in light of the circumstances under which they were made, not misleading. Such certificate will also certify that to the best of his or her knowledge from the date of this Official Statement to the date of such delivery and payment there was no material adverse change in the information set forth herein. BURLINGAME FINANCE AUTHORITY By: Executive Director A-1 APPENDIX A CITY OF BURLINGAME FINANCIAL AND DEMOGRAPHIC INFORMATION General The City of Burlingame is situated in San Mateo County, approximately 10 miles south of San Francisco and 35 miles north of San Jose. The City is approximately three miles south of the San Francisco International Airport and served by two major freeways, north-south U.S. 101 (Bayshore Freeway) and Interstate 280. The City was incorporated in 1908. It is a California general law city with a Council -Manager form of government, whereby the policies of the City Council (the “Council”) are administered by a City Manager, who is appointed by the Council. The Council consists of five members who are elected at large on a non-partisan basis for four-year staggered terms. The Mayor is selected annually by the Council. City Management The City Manager is Lisa K. Goldman, who was appointed in 2012. Ms. Goldman has spent nearly 30 years working in government and non-profits. She earned her Bachelor of Arts in History from Harvard University and a Master of Public Policy from the University of California, Berkeley. She also belongs to the Internationa l City/County Management Association. The Finance Director is Carol Augustine, who started with the City in 2013. Prior to her position with the City, Ms. Augustine worked as Finance Director for the City of Menlo Park for eight years. She also served as Finance Director for the City of Cupertino, and Administrative Services Director for the Town of Los Altos Hills. She began her career in California municipal finance as Accounting Manager for the City of Palo Alto, a position she held for seven years, in 1988. Ms. Augustine received her Bachelor’s degree in Accounting from the University of Texas, Austin in 1980, and has been a member of the American Institute of Certified Public Accountants since 1983. She is a member of the Government Finance Officers Association, the California Society of Municipal Finance Officers, and the California Municipal Treasurers Association. The Deputy Finance Director is Karen Huang, who started with the City in 2018. Ms. Huang received a Bachelor’s degree from Sun Yat-Sen University and a Masters in Business Administration from San Francisco State University. Prior to joining the City, Ms. Huang was the Finance Manager for the Town of Los Altos Hills . Accounting Policies and Financial Reporting The City institutes a fiscal year beginning July 1 and ending June 30 of each year (a “Fiscal Year”). The following financial information has been extracted from the City’s audited financial statements for Fiscal Year 2018 (the most recent audited financial statements) and, in some cases, from unaudited information provided by the City’s Finance Department. The most recent audited financial statements of the City are included in “APPENDIX B” hereto. See “APPENDIX B—CITY OF BURLINGAME CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018.” The City’s accounting records are organized and operated on a “fund” basis, which is the basic fiscal and accounting method in governmental accounting. The three broad fund categories include governmental, proprietary and fiduciary funds. The operations of different funds are accounted for with separate sets of self -balancing accounts with assets, liabilities, fund balance or equity, and revenues and expenses. The basis of accounting for all funds is more fully explained in the Notes to Basic Financial Statements contained in “APPENDIX B”. Budgetary Process The City adopts an annual budget for all funds under its control. Major funds include the General Fund, Capital Projects Fund, Water Fund, Sewer Fund and Parking Fund. Annual appropriations for all funds except A-2 capital projects lapse at the end of the year. Budgets are prepared on the same basis of accounting as the associated financial statements. The budget process begins each January with a public goal-setting session. The City Council, community, and staff discuss progress on the City’s current year priorities, refine the priorities to reflect citizen needs, and deliberate on strategies to advance the City’s goals both in the coming year and in the longer term. The City’s Finance Department prepares a multi-year forecast of operating and maintenance expenditures for the General Fund. This long-term forecast of the General Fund includes the ensuing fiscal year and the succeeding five years, for a total of six budget years. The forecast accompanies the mid-year budget status report, which projects the year-end balance of the General Fund and other significant funds, at a Budget Study Session in March. Together, the forecast and budget status report are designed to provide clarity on potential and future revenue and expenditure scenarios, offering additional context for the financial decisions made for the upcoming fiscal year. With Council guidance, the City departments prepare their budget requests during the months of March and April and deliver them to the Finance Department. The City Manager’s proposed budget is then formulated and delivered to the City Council in early-May. The City Council conducts budget study sessions, which are open for public comment, before adopting the budget. On June 17, 2019 the City adopted its budget for Fiscal Year 2019-20. Formal budgetary integration is employed as a management control device during the year for the General Fund and Special Revenue Funds. Budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States (GAAP). The Debt Service Funds are governed by the appropriate bond indentures. The Capital Projects Funds are budgeted on a project length basis. Annual budgets are not adopted for the Development and Local Grants special revenue funds. Budgets for the General Fund, Enterprise Funds and Special Revenue Funds are adopted on a consistent basis. Expenditures are controlled at the department level for all budgets within the City. Budget amendments that increase departmental appropriations must be approved by the City Council by majority vote. Changes within departments are approved by the City Manager. Supplemental appropriations are made during the fiscal year and are reflected in the final budgetary data. Except for the Capital Project Fund, appropriations lapse at the close of the fiscal year to the extent that they have not been expended or encumbered . Comparison of Budget to Actual Performance The following table summarizes the City’s adopted budgets for fiscal years 20 15-16 through 2019-20 and sets forth actual revenues and expenditures for fiscal years 2015-16 through 2018-19 for purposes of comparison. [Remainder of Page Intentionally Left Blank] A-3 CITY OF BURLINGAME General Fund Comparison of Budgeted and Actual Revenues, Expenditures and Fund Balances For Fiscal Years 2015-16 through 2019-20 2015-16 2016-17 2017-18 2018-19 2019-20 Budget REVENUE: Budget Actual(a) Budget Actual(a) Budget Actual(a) Budget Actual(b) Property Taxes $17,716,400 $17,645,289 $18,851,000 $18,932,794 $20,150,000 $20,334,818 $22,047,000 $21,955,938 $23,270,000 Sales and Use Taxes 13,244,000 12,827,673 12,150,000 12,089,288 12,205,000 12,819,794 15,470,000 17,819,970 14,760,000 Transient Occupancy Taxes 25,200,000 26,092,240 26,216,000 26,262,930 27,400,000 27,935,991 28,500,000 29,384,461 28,700,000 Other Taxes 3,113,000 3,153,550 2,958,000 3,024,388 3,085,000 3,216,203 3,308,000 3,233,401 3,224,000 Licenses and Permits 87,000 86,154 88,000 88,069 88,000 82,622 81,000 84,610 79,500 Fines, Forfeitures and Penalties 836,000 864,393 942,000 898,184 910,700 977,121 976,500 1,209,074 978,000 Investment Income (c) 323,000 757,153 630,000 184,900 840,000 332,714 1,792,000 4,071,886 1,970,000 Intergovernmental Revenues Charges for Services 4,574,200 4,470,276 5,247,200 6,023,354 5,337,775 5,515,803 5,977,400 6,368,771 5,490,000 Grants and Subventions 157,000 22,230 234,000 256,928 238,216 284,839 140,000 156,576 140,000 Other Revenue 237,000 236,185 191,500 281,915 208,500 223,078 195,000 252,629 160,000 TOTAL REVENUE 65,487,600 66,155,143 67,507,700 68,042,750 70,463,191 71,722,983 78,486,900 84,537,316 78,771,500 EXPENDITURES: General Government 5,125,008 4,477,403 5,365,353 4,874,250 5,819,089 5,132,951 6,189,203 5,634,673 6,550,069 Public Safety 25,004,024 24,625,068 26,288,304 25,517,278 26,993,769 26,361,307 28,517,054 27,602,614 29,216,507 Public Works 4,890,816 4,662,203 5,094,577 4,456,524 6,342,629 5,624,681 6,901,475 5,911,110 6,335,440 City Planning 1,806,184 1,405,793 1,977,916 1,530,975 1,861,358 1,799,124 2,444,844 1,709,734 2,019,157 Library, Parks and Recreation 13,335,959 12,234,914 13,928,045 13,228,912 14,985,796 14,546,580 15,656,322 14,781,798 15,917,263 Capital Outlay 120,231 53,994 229,500 99,544 209,200 172,615 277,148 123,170 218,500 TOTAL EXPENDITURES 50,282,222 47,459,375 52,883,695 49,707,483 56,211,841 53,637,258 59,986,046 55,763,099 60,256,936 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 15,205,378 18,695,768 14,624,005 18,335,267 14,251,350 18,085,725 18,500,854 28,774,217 18,514,564 OTHER FINANCING SOURCES (USES) Operating Transfers In 3,194,770 3,106,045 3,110,347 3,110,347 3,194,673 3,194,673 2,488,489 2,783,637 2,543,819 Operating Transfers Out (21,387,743) (21,285,231) (18,151,362) (18,151,362) (18,185,317) (18,180,617) (18,762,311) (18,762,311) (20,517,263) NET CHANGE IN FUND BALANCE (2,987,595) 516,582 (417,010) 3,294,252 (739,294) 3,099,781 2,227,032 12,795,543 541,120 FUND BALANCE, JULY 1 29,461,566 29,978,148 33,272,400 36,372,181 FUND BALANCE, JUNE 30 29,978,148 33,272,400 36,372,181 49,167,724 (a) Audited Financial Reports (b) Unaudited (c) In fiscal year 2018-19, revenues from Investment Income include $1,691,095 from an increase in the market value of the City’s portfolio as of June 30, 2019, from the prior year Source: City of Burlingame, Finance Department A-4 General Fund Financial Summary The information contained in the following tables of audite d revenues, expenditures and changes in fund balances, and assets, liabilities and fund equity is summarized from audited financial statements for fiscal years ending June 30, 2014 through June 30, 2018, and unaudited financial statements for fiscal year 2018-19. The City’s audited General Purpose Financial Statements for the fiscal year ended June 30, 2018 is attached as “APPENDIX B—CITY OF BURLINGAME CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018” hereto. [Remainder of Page Intentionally Left Blank] A-5 CITY OF BURLINGAME General Fund Revenue, Expenditures and Fund Balances for Fiscal Years 2014-15 through 2018-19 2014-2015(a) 2015-2016(a) 2016-2017(a) 2017-2018(a) 2018-2019(b) REVENUE: Property Taxes 16,677,381 17,645,289 18,932,794 20,334,818 21,955,938 Sales and Use Taxes (1) 11,100,900 12,827,673 12,089,288 12,819,794 17,819,970 Transient Occupancy Taxes 23,698,396 26,092,240 26,262,930 27,935,991 29,384,461 Other Taxes 3,048,313 3,153,550 3,024,388 3,216,203 3,233,401 Licenses and Permits 83,840 86,154 88,069 82,622 84,610 Fines, Forfeitures and Penalties 837,704 864,393 898,184 977,121 1,209,074 Investment Income (2) 260,740 757,153 184,900 332,714 4,071,886 Intergovernmental Revenues Charges for Services 4,481,618 4,470,276 6,023,354 5,515,803 6,368,771 Grants and Subventions 465,725 22,230 256,928 284,839 156,576 Other Revenue 1,254,463 236,185 281,915 223,078 252,629 TOTAL REVENUE 61,909,080 66,155,143 68,042,750 71,722,983 84,537,316 EXPENDITURES: General Government 4,121,895 4,477,403 4,874,250 5,132,951 5,634,673 Public Safety 22,773,494 24,625,068 25,517,278 26,361,307 27,602,614 Public Works 4,769,873 4,662,203 4,456,524 5,624,681 5,911,110 City Planning 1,244,199 1,405,793 1,530,975 1,799,124 1,709,734 Library, Parks and Recreation 11,495,603 12,234,914 13,228,912 14,546,580 14,781,798 Capital Outlay 53,994 99,544 172,615 123,170 TOTAL EXPENDITURES 44,405,064 47,459,375 49,707,483 53,637,258 55,763,099 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 17,504,016 18,695,768 18,335,267 18,085,725 28,774,217 OTHER FINANCING SOURCES (USES) Operating Transfers In 3,386,759 3,106,045 3,110,347 3,194,673 2,783,637 Operating Transfers Out (14,314,633) (21,285,231) (18,151,362) (18,180,617) (18,762,311) NET CHANGE IN FUND BALANCE 6,576,142 516,582 3,294,252 3,099,781 12,795,543 FUND BALANCE, JULY 1 22,885,423 29,461,566 29,978,148 33,272,400 36,372,181 FUND BALANCE, JUNE 30 29,461,565 29,978,148 33,272,400 36,372,181 49,167,724 (a) Audited Financial Reports (b) Unaudited (1) In fiscal year 2018-19, revenues from Sales and Use Taxes include $2,514,349 in Measure I transaction taxes. (2) In fiscal year 2018-19, revenues from Investment Income include $1,691,095 from an increase in the market value of the City’s portfolio as of June 30, 2019, from the prior year. Source: City of Burlingame Finance Department. A-6 CITY OF BURLINGAME General Fund Comparative Balance Sheet For Fiscal Years 2014-15 through 2018-19 2014-2015(a) 2015-2016(a) 2016-2017(a) 2017-2018(a) 2018-2019(b) ASSETS Cash and investments 26,959,258 26,809,634 30,151,721 29,864,637 39,043,671 Accounts receivables 5,829,015 7,186,554 5,447,684 3,451,844 6,863,249 Due from other governments 120,548 2,432,771 578,370 Due from other funds 42,688 44,059 103,778 20,785 Prepaids and deposits 223,936 235,317 214,992 6,041 4,341 Cash and investments, restricted 11,725 4,390,537 7,479,556 TOTAL ASSETS 33,054,897 34,275,564 36,050,448 40,166,615 53,969,187 LIABILITIES Accounts payable 948,721 954,209 559,391 846,146 1,259,164 Due to other funds 201,990 101,497 Retentions payable Accrued payroll 1,629,614 1,785,500 496,738 695,443 596,795 Deposits 772,381 1,113,294 1,515,294 2,061,944 2,788,754 Unearned Revenue 40,625 151,008 107,393 154,770 61,800 TOTAL LIABILITIES 3,593,331 4,105,508 2,678,816 3,758,303 4,706,513 DEFERRED INFLOWS Unavailable revenue 191,908 99,232 36,131 94,924 TOTAL DEFERRED INFLOWS 0 191,908 99,232 36,131 94,924 FUND BALANCES Nonspendable 223,936 336,814 214,992 6,041 4,341 Restricted 11,725 4,390,537 7,479,556 Committed Assigned 18,772,578 18,637,867 19,386,210 19,929,904 21,578,912 Unassigned 10,465,052 11,003,467 13,659,473 12,045,699 20,104,943 Unreserved TOTAL FUND BALANCES 29,461,566 29,978,148 33,272,400 36,372,181 49,167,752 TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES 33,054,897 34,275,564 36,050,448 40,166,615 53,969,189 (a) Audited Financial Reports (b) Unaudited Source: City of Burlingame Finance Department. Tax Receipts Taxes and revenues received by the City include sales and use taxes, property taxes, transient occupancy taxes, licenses and permits revenues, intergovernmental revenues and others. Of such taxes, sales taxes, property taxes and transient occupancy taxes constitute the major sources of General Fund revenues. A-7 The following table sets forth tax revenues received by the City, by source: CITY OF BURLINGAME General Fund Tax Revenues by Source For Fiscal Years 2014-15 through 2018-19 (Expressed in thousands) Fiscal Year Ended June 30: 2014-15 2015-16 2016-17 2017-18 (Unaudited) 2018-19 Sales and Use Taxes (1) 11,101 12,828 12,089 12,820 17,820 (1) Property Taxes 16,677 17,645 18,933 20,335 21,956 Transient Occupancy Taxes 23,698 26,092 26,263 27,936 29,384 Licenses, Permits, Fines, Forfeitures and Penalties 922 951 986 1,060 1,294 Grants and Subventions 466 22 257 285 157 Charges for Services 4,482 4,470 6,023 5,516 6,369 (1) In fiscal year 2018-19, revenues from Sales and Use Taxes include $2,514,349 in Measure I transaction taxes . Source: City of Burlingame Finance Department. Sales Taxes Sales tax receipts provide one of the largest tax revenue sources for the City, contributing 17.8% of the total General Fund revenues during Fiscal Year 2017 -18 and 21.1% in Fiscal Year 2018-19. A sales tax is imposed on retail sales or consumption of personal property. The tax rate is established by the State Legislature. The statewide tax rate is currently 7.25%. An additional 2.00% is collected in San Mateo County for transportation purposes. Effective April 1, 2018, the City collects an additional 0.25% transaction tax as a result of voter-approved Measure I. The budget priorities from the public engagement surrounding Measure I include public safety; street and sidewalk maintenance; and safe, adequate park and recreation programs and facilities. The annual expenditures plan for Measure I revenues include s funding for one police officer, $1 million in debt service for the Bonds, with remaining revenues intended for specific street and sidewalk improvements identifi ed in the City’s Capital Improvement Plan. The State collects and administers the tax, and makes distributions on taxes within the City as follows: CITY OF BURLINGAME Sales Tax Rates State (General Fund): 3.9375% State (Local Revenue Fund): 1.5625 State (Local Public Safety Fund): 0.50 Local: County transportation: 0.25 City and County Operations: 1.00 County (Transportation): 2.00 City (Measure I) Transaction Tax: 0.25 Total: 9.50 A-8 Senate Constitutional Amendment No. 4, approved by the voters as Proposition 1A in the November 2004 election, amended the State Constitution to, among other things, reduce the Legislature’s authority over local government revenue sources by restricting the State from lowering the local sales tax rate or chan ging the allocation of local sales tax revenues without meeting certain conditions. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS AFFECTING CITY REVENUES AND APPROPRIATIONS—Proposition 1A” in the forepart of this Official Statement. The State’s actual administrative costs with respect to the portion of sales taxes allocable to the City are deducted before distribution and are determined on a quarterly basis. A history of taxable sales in the City during calendar years 2013 through 2018 is shown below: CITY OF BURLINGAME Taxable Transactions by Type of Business For Calendar Years 2013 through 2018 (Amounts in thousands) Type of Business 2013 2014 2015 2016 2017 2018 Apparel Stores $ 41,645 $ 42,600 $ 44,933 $ 43,274 $ 45,994 $ 45,446 General Merchandise 204 150 161 235 209 136 Food Stores 108,561 19,236 19,986 20,292 19,463 19,116 Eating and Drinking Places 108,561 118,621 131,676 141,899 149,466 155,419 Building Materials 32,071 35,644 40,184 39,670 44,130 49,293 Auto Dealers and Supplies 340,395 379,342 405,284 391,682 402,199 456,541 Service Stations 44,750 46,403 42,790 37,797 41,707 66,557 Other Retail Stores 124,639 135,472 140,368 142,012 123,664 138,579 Retail Stores Total 711,040 777,469 825,383 816,861 826,832 931,087 All Other Outlets 322,874 367,863 426,788 419,583 460,192 518,485 TOTAL ALL OUTLETS 1,033,914 1,145,332 1,252,171 1,236,444 1,236,444 1,449,572 * Detail may not compute to total due to rounding. Source: City of Burlingame Property Taxes Property tax is currently the City’s second largest revenue source of the General Fund. It accounted for 25.66% of all governmental revenue and 28.35% of the General Fund revenue in fiscal year 2018. Unaudited property tax revenue grew in fiscal year 2019 by 7.97%, an increase of over $ 1.6 million from fiscal year 2018 . Assessed Valuation. The valuation of property in the City is established by the San Mateo County Assessor, except for public utility property, which is assessed by the State Board of Equalization. Assessed valuations are reported at 100% of the full value of the property, as defined in Article XIIIA of the California Constitution. Prior to 1981-82, assessed valuations were reported at 25% of the full value of the property. See A-9 “CONSTITUTIONAL AND STATUTORY LIMITATIONS AFFECTING CITY REVENUES AND APPROPRIATIONS” in the forepart of this Official Statement. Two types of State-reimbursed exemptions affect the valuation of property. The first currently exempts 100% of the full value of business inventories from taxation. The second exemption currently provides a credit of $7,000 of the full value of an owner-occupied dwelling for which application has been made to the County Assessor. Revenue estimated to be lost to local taxing agencies due to the above exemptions has in the past been reimbursed from State sources. Reimbursement is based upon total taxes due upon such exemption values and therefore is not reduced by any estimated amount of actual delinquencies. The following table sets forth assessed valuations for Fiscal Years 2013-14 through 2018-19. CITY OF BURLINGAME Assessed Valuations Local Secured Unsecured SBE Nonunitary Total % Change 2013-14 $7,636,495,631 $302,712,785 $2,560,452 $7,941,768,868 6.84 2014-15 8,135,613,312 307,284,506 2,560,452 8,445,458,270 6.34 2015-16 8,690,688,613 324,903,282 2,763,435 8,445,458,270 6.78 2016-17 9,378,077,970 329,134,973 2,763,435 9,709,976,378 7.67 2017-18 10,015,772,431 338,411,794 2,763,435 10,356,947,660 6.66 2018-19 10,621,963,371 344,682,252 2,763,435 10,969,409,058 5.91 Source: City of Burlingame A-10 The following table sets forth assessed valuation of single family homes for Fiscal Year 2018 -19. CITY OF BURLINGAME Per Parcel 2018-19 Assessed Valuation of Single Family Homes No. of Parcels 2018-19 Assessed Valuation Average Assessed Valuation Median Assessed Valuation Single Family Residential 2018-19 Assessed Valuation No. of Parcels(1) % of Total Cumulative % of Total Total Valuation % of Total Cumulative % of Total (1) Improved single family residential parcels. Excludes condominiums and parcels with multiple family units. Source: California Municipal Statistics, Inc. A-11 The following table sets forth the assessed valuation and parcels by land use for Fiscal Year 2018-19. CITY OF BURLINGAME 2018-19 Assessed Valuation and Parcels by Land Use Assessed Valuation (1) % of Total No. of Parcels Net Taxable Value % of Total Non-Residential: Commercial 2,028,432,684 17.0 553 1,978,102,748 18.0 Industrial 650,767,854 5.5 195 650,767,854 5.9 Government Owned 40,103,131 0.3 27 40,103,131 0.4 Institutional 176,945,605 1.5 44 5,819,973 0.1 Recreational 52,691,864 0.4 23 52,691,864 0.5 Miscellaneous 2,461,921 0.0 18 2,461,921 0.0 Residential 7,877,981,165 66.0 7,780 7,873,773,642 71.8 Vacant Parcels 18,692,481 0.2 63 18,242,238 0.2 Unsecured 1,083,643,048 9.1 907 344,682,252 3.1 SBE Nonunitary 2,763,435 0.0 4 2,763,435 0.0 Unknown 0 0.0 1 0 0.0 Total 11,934,483,188 8,704 10,969,409,058 (1) Local Secured Assessed Valuation; excluding tax-exempt property. Source: California Municipal Statistics, Inc. Ad Valorem Property Taxes. Taxes are levied for each fiscal year on taxable real and personal property that is situated in the City 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 property, the taxes on which are a lien on real property sufficient to secure payment of the taxes. Other property is assessed on the “unsecured roll.” A-12 The following table sets forth the largest taxpayers located within the City in terms of their assessed value for Fiscal Year 2018-19. CITY OF BURLINGAME Largest Taxpayers (Secured Roll) Fiscal Year Ending 2019 Property Owner Primary Land Use 2018-19 Assessed Valuation % of Total (1) HMC Burlingame Hotels LLC Commercial $223,639,145 2.10% EQR-Northpark LP Residential 125,410,528 1.18 Inland Amer Lodging Burlingame LLC Commercial 114,916,690 1.08 Burlingame Bay LLC Commercial 93,636,000 0.88 Burlingame Point LLC Industrial 59,383,892 0.56 Mncvad-Harvest One Bay LLC Commercial 57,013,920 0.54 EQR Skyline Terrace LP Residential 47,998,338 0.45 Romel Chicago LLC Residential 42,214,230 0.40 Green Banker LLC Commercial 42,169,890 0.40 $806,382,633 7.59% (1) 2018-19 Local Secured Assessed Valuation: $10,624,726,806 Source: California Municipal Statistics, Inc. Tax Rates The basic tax rate for all taxing entities within a particular tax code area is $1 per $100 of assessed valuation in accordance with Article XIIIA o f the State Constitution. To this may be added whatever tax rates are necessary to meet debt service on indebtedness approved by the voters. Tax Levies, Collections and Delinquencies Property taxes on the secured roll are determined as of the “lien date” of January 1st. Taxes are billed once a year in late October and are payable in two equal installments due by December 10th and April 10 th of the following year. Taxes are considered delinquent if paid after the due dates. A 10 percent penalty attaches to any delinquent payment. On July 1, an additional 1½ percent per month is levied on delinquencies for five years. In addition, property on the secured roll with respect to which taxes are delinquent is sold to the State on or about June 30th five years after the delinquency occurs. Such property may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a redemption penalty of one percent per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the County Tax Collector. Property taxes on the unsecured roll are due as of the March 1st lien date and become delinquent, if unpaid, on August 31st. A six percent penalty attaches to delinquent taxes on property on the unsecured roll, and an additional penalty of one percent per month begins to accrue beginning November 1st of the fiscal year. Beginning in fiscal year 1978-79, Proposition 13 and its implementing legislatio n shifted the function of property taxation primarily to the counties, except for levies to support prior voted debt, and prescribed how levies on countywide property values are to be shared with local taxing entities within each county. The total tax levies and year-end delinquencies for fiscal years 2014-15 through 2018-19 are set forth in the following table. A-13 CITY OF BURLINGAME Secured Tax Charges and Delinquencies Fiscal Year Secured Tax Charge(1) Amount Delinquent June 30 Percent Delinquent June 30 2014-15 2015-16 2016-17 2017-18 2018-19 (1) All taxes collected by the County within the City. Includes Special Charges. Source: California Municipal Statistics, Inc. Teeter Plan The San Mateo County Board of Supervisors utilizes the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”), as provided for in Section 4701 et seq. of the California Revenue and Taxation Code. Generally, the Teeter Plan provides for a tax distribution procedure in which secured roll taxes and assessments are distributed to taxing agencies within the County on the basis of the tax and assessment levy, rather than on the basis of actual tax and assessment collections. The County t hen receives all future delinquent tax and assessment payments and penalties. Pursuant to the Teeter Plan, the County establishes a tax and assessment losses reserve fund and a tax resources account, and each entity levying or entitled to receipt of property taxes in the County may draw on the amount of uncollected taxes and assessments credited to its fund, in the same manner as if the amount credited had been collected. The County is responsible for determining the amount of tax and assessment levy on ea ch parcel that is entered onto the secured real property tax roll. Upon completion of the secured real property tax roll, the County’s Auditor-Controller determines the total amount of taxes and assessments actually extended on the roll for each fund for which a tax levy has been included, and apportions 100 percent of the tax and assessment levies to that fund’s credit. Such moneys may thereafter be drawn against by the taxing agency in the same manner as if the amount credited had been collected. The County determines which moneys in the county treasury (including those credited to the tax and assessment losses reserve fund) shall be available to be drawn on to the extent of the amount of uncollected taxes and assessments credited to each fund for which a levy had been included. When amounts are received on the secured tax roll for the current year, or for redemption of tax -defaulted property, Teeter Plan moneys are distributed to the apportioned tax resources funds. California State law has authorized the Teeter Plan for over 40 years; however, until 1993, it had been implemented by only five counties. Legislation signed by the Governor on July 19, 1993 provided a financial inducement to utilize this simplified accounting method. So long as the Teeter Plan is in place, the City is expected to be credited with 100 percent of its property taxes, regardless of any delinquencies in payment of the taxes. However, the County Board of Supervisors may discontinue the Teeter Plan at any time. Transient Occupancy Taxes Because of the City’s location near San Francisco International Airport, transient occupancy taxes have historically provided one of the largest single revenue sources for the City’s General Fund. Sometimes referred to as a hotel tax, this tax is imposed on occupants for the privilege of occupying rooms in hotels, motels, inns and other A-14 taxed properties. The following table lists as of June 30, 2019, the major hotels located within the City and their room totals: CITY OF BURLINGAME Hotel Room Totals June 30, 2019 Hotel Number of Rooms Bay Landing SFO Hotel 130 Crown Plaza SFO 309 Doubletree by Hilton Hotel SFO 395 Embassy Suites by Hilton SFO Waterfront 340 Hampton Inn & Suites SFO South 77 Hilton Garden Inn – SFO/Burlingame 132 Hilton SFO Bayfront 400 Holiday Inn Express SFO South 146 Hyatt Regency SFO 789 Red Roof PLUS+ SFO 213 SFO Marriott Waterfront 688 Vagabond Inn Executive SFO 90 Total rooms 3709 Source: City of Burlingame A-15 Long-Term Bonded Debt Obligations As of June 30, 2019, the City had total long-term governmental activity bonded debt obligations of $45,878,217 and total business type activities of $40,851,061. Description Beginning Balance June 30, 2018 Additions Reductions Ending Balance June 30, 2019 Amounts Due Within One Year Governmental Activities: Pension Obligation Bonds, Series 2006 $ 8,970,000 $ (460,000) $ 8,510,000 $ 505,000 Storm Drainage Revenue Bonds, Series 2010 7,995,000 (265,000) 7,730,000 275,000 - Unamortized Premium 149,661 (7,790) 141,871 (7,790) Storm Drainage Revenue Bonds, Series 2012 9,075,000 (310,000) 8,765,000 325,000 - Unamortized Premium 218,475 (10,658) 207,817 (10,658) Lease Revenue Refunding Bonds, Series 2010 3,260,000 (1,050,000) 2,210,000 1,085,000 - Unamortized Premium 163,095 (54,365) 108,730 (54,365) Lease Revenue Bonds, Series 2012 8,845,000 (235,000) 8,610,000 245,000 - Unamortized Premium 197,608 (8,065) 189,543 (8,066) Storm Drainage Revenue Bonds, Series 2016 8,800,000 (280,000) 8,520,000 295,000 - Unamortized Premium 931,849 (46,593) 885,257 (46,593) Total Governmental Activities $ 48,605,688 $ - $ (2,727,470) $ 45,878,217 $ 2,602,529 Business-Type Activities: State Water Resource Loan - 2003 $ 5,691,803 $ (571,781) $ 5,120,222 $ 586,075 State Water Resource Loan - 2010 4,318,934 (247,780) 4,071,154 254,966 Water and Wastewater Revenue Bonds, Series 2016 15,580,000 (935,000) 14,645,000 950,000 - Unamortized Premium 2,594,832 (199,601) 2,395,231 (199,601) Water and Wastewater Refunding Bonds, Series 2011 3,910,000 (310,000) 3,600,000 330,000 - Unamortized Premium 347,215 (34,722) 312,493 (34,722) Water and Wastewater Refunding Bonds, Series 2013 10,590,000 (785,000) 9,805,000 815,000 - Unamortized Premium 992,378 (90,216) 902,162 (90,216) Total Business-Type Activities $ 44,025,161 $ $ (3,174,100) $ (40,851,061) $ 2,611,502 A-16 Direct and Overlapping Bonded Debt The statement of direct and overlapping debt (the “Debt Report”) set forth below was prepared by California Municipal Statistics, Inc. as of ___________ 1, 2019. The Debt Report includes only such information as has been reported to California Municipal Statistics, Inc. by the issuers of the debt described therein and by others. The Debt Report is included for general information purposes only. The City takes no responsibility for its completeness or accuracy. A-17 CITY OF BURLINGAME Statement of Direct and Overlapping Debt As of __________ CITY OF BURLINGAME A-18 Investment Policies and Procedures Funds held by the City are invested in accordance with the City’s Statement of Investment Policy (the “Investment Policy”) prepared by the Finance Director/Treasurer as authorized by section 53601 of the Government code of California. A copy of the City’s current Investment Policy is attached as “APPENDIX C—CITY OF BURLINGAME STATEMENT OF INVESTMENT POLICY.” The Investment Policy is submitted to the Burlingame City Council annually. The Investment Policy allows for the purchase of a variety of securities and provides for limitations as to exposure, maturity and rating which vary with each security type. The composition of the portfolio will change over time as old investments mature, or are sold, and as new investments are made. Invested funds are managed to insure preservation of capital through high quality investments, maintenance of liquidity and then yield. Further, operating funds may not be invested in any investment with a maturity greater than five years. The City has never invested in derivatives or reverse repurchase agreements, and such investments and instruments are not allowed by City policy. The market value of the City’s investment portfolio as of June 30, 2019 was as follows: CITY OF BURLINGAME Market Value of Investments June 30, 2019 Market Value Percent of Portfolio Days to Maturity(1) U.S. Treasury Bonds/Notes 39,559,255 21.0 1,306.8 Supra-National Agency Bonds/Notes 8,234,407 4.4 571.2 Federal Agency Collateralized Mortgage Obligations 497,573 0.3 818.0 Federal Agency Bonds/Notes 22,847,331 12.1 1,175.7 Corporate Notes 24,547,204 13.0 822.9 Certificates of Deposit 15,588,617 8.3 341.0 Asset-Backed Securities 6,486,757 3.4 1,360.0 Local Agency Investment Fund(2) 29,780,983 15.8 0.0 California Asset Management Program(2) 40,814,873 21.7 0.0 TOTAL 188,357,000 625.8 (1) Weighted average days to maturity based on the final stated maturity of each security. (2) Local Agency Investment Fund and California Asset Management Program are pooled cash and investments providing same-day liquidity. Source: The City of Burlingame. The City believes that its funds are prudently invested and that the investments therein are scheduled to mature at the times and in the amounts that are necessary to meet the City’s expenditures and other scheduled withdrawals. For additional information concerning the City investments, see “APPENDIX B—CITY OF BURLINGAME CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018” and “APPENDIX C—CITY OF BURLINGAME STATEMENT OF INVESTMENT POLICY” hereto. A-19 Self-Insurance Program Effective July 1, 1976, for workers’ compensation, an d December 2, 1976, for general liability, the City implemented a self-insurance program. The City is self-insured for losses up to $500,000 and $250,000 for workers’ compensation and general liability, respectively. The City, along with 29 other Bay Are a governments, is a member of the Pooled Liability Assurance Network Corporation JPA (the “PLAN JPA”), a joint powers insurance authority. The PLAN JPA provides liability insurance coverage, claims management, risk management services, and legal defense to its participating members. The PLAN JPA is governed by a board of directors, which comprises officials appointed by each participating member. Premiums paid to PLAN JPA are subject to possible refund based on the results of actuarial studies and approval by the PLAN JPA’s board of directors. Premiums are assessed to the participants based on their individual loss experience. General liability insurance coverage has been purchased by the PLAN JPA for losses exceeding $250,000 up to a maximum of $10,000 ,000. The workers’ compensation program is administered by a third -party administrator, LWP Claims Solutions. LWP Claims Solutions sets reserve levels for reported claims. Excess workers’ compensation insurance has been purchased by the City for losses exceeding $500,000 up to a maximum of statutory limits. The PLAN JPA claim administrators set the reserve levels for known liability claims. The City’s liabilities are reported when it is both probable that a loss has occurred and when the amount of the loss can be reasonably estimated. The claims and litigation liabilities are reported in the governmental activities of the government -wide financial statements and in the internal service fund and include an amount for claims that have been incurred but not reported. The liabilities are reevaluated annually using the results of actuarial studies. The estimated liability for claims and litigation is calculated considering recent claim settlement trends, amounts for claims incurred but not reported, current settlements, frequency of claims, past experience, and economic factors. Changes in the balances of the City’s claims liabilities during the years ended June 30, 2015, 2016, 2017 and 2018 were as follows: Balance July 1 Claims and Changes in Estimates Current and Prior Fiscal Years Balance June 30 2014-15 7,895,000 911,838 1,791,838 7,015,000 2015-16 7,015,000 910,959 1,507,959 6,418,000 2016-17 6,418,000 1,675,414 1,558,414 6,535,000 2017-18 6,535,000 1,591,781 1,461,781 6,665,000 2018-19 6,665,000 629,239 786,239 6,508,000 There have been no significant reductions in any insurance coverage, nor have there been any insurance-related settlements that exceeded insurance coverage during the past four fiscal years. Pension Plans General. The following information concerning the California Public Employees’ Retirement System (“PERS”) is excerpted from publicly available sources, which the City believes to be accurate. PERS is not obligated in any manner for payment of debt service on the Bonds, and the assets of PERS are not available for such payment. PERS should be contacted directly at CalPERS, Lincoln Plaza, 400 P Street Sacramento, California 95814 or (888) 225-7377 for other information, including information relating to its financial position and investments. The City provides retirement benefits to its employees through contracts with PERS, a multiple -employer public sector employee defined benefit pension plan. PERS provides retirement and disability benefits, annu al cost- of-living adjustments and death benefits to PERS members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State. PERS is a contributory plan deriving funds from employee contributions as well as from employer contributions and earnings from investments. A-20 PERS maintains more than one pension plan (each, a “PERS Plan”) for the City based on type of employee. The City has PERS Plans for “Safety Police Employees” and “Miscellaneo us Employees”. The City contributes to PERS amounts equal to the recommended rates for each PERS Plan multiplied by the payroll of those employees of the City who are eligible under PERS. Actuarial Valuations. The staff actuaries at PERS prepare annually an actuarial valuation that covers a Fiscal Year ending approximately 13 months before the actuarial valuation is prepared (thus, the actuarial valuation delivered to the City in July 2019 covered PERS’s Fiscal Year ended June 30, 2018). The actuarial va luations express the City’s required contribution rates in percentages of payroll, which percentages the City must contribute in the Fiscal Year immediately following the Fiscal Year in which the actuarial valuation is prepared (thus, the City’s contribution rate derived from the actuarial valuation as of June 30, 2018, that was provided in July 2019, will affect such City’s Fiscal Year 2020-21). PERS rules require the City to implement the actuary’s recommended rates. In calculating the annual actuarially recommended contribution rates, the PERS actuary calculates on the basis of certain assumptions the actuarial present value of benefits that PERS will fund under the PERS Plans, which includes two components, the normal cost and the UAAL. The normal cost represents the actuarial present value of benefits that PERS will fund under the PERS Plans that are attributed to the current year, and the UAAL represents the actuarial present value of benefits that PERS will fund that are attributed to past years. The UAAL represents an estimate of the actuarial shortfall between assets on deposit at PERS and the present value of the benefits that PERS will pay under the PERS Plans to retirees and active employees upon their retirement. The UAAL is based on several assumptions such as, among others, the rate of investment return, average life expectancy, average age of retirement, inflation, salary increases and occurrences of disabilities. In addition, the UAAL includes certain actuarial adjustments such as, among others, the actuarial practice of smoothing losses and gains over multiple years (which is described in more detail below). As a result, the UAAL may be considered an estimate of the unfunded actuarial present value of the benefits that PERS will fund under the PERS Plans to retirees and active employees upon their retirement. In each actuarial valuation, the PERS actuary estimates the actuarial value of the assets (the “Actuarial Value”) of the PERS Plans at the end of the Fiscal Year, which assumes, among other things, that the rate of return during that Fiscal Year equaled the assumed rate of return . Over the past few years, PERS adopted measures to strengthen the long-term future of the system. These measures include lowering the discount rate from 7.5% to 7.0% and shortening the amortization period for future unexpected changes in unfunded liability. The PERS actuary uses a smoothing technique to determine Actuarial Value that is calculated based on certain policies. As described below, these policies can significantly affect the Actuarial Value calculation for subsequent fiscal years. Actuarial Assumptions and Policies. On April 21, 2004, the PERS Board approved a change in the inflation assumption used in the actuarial valuations that set employer contribution rates. The inflation assumption was changed from 3.5 percent to 3 percent. The change impacted the inflation component of the annual investment return assumption and the long-term payroll growth assumption as follows:  The annual assumed investment return has decreased from 8.25 percent to 7.75 percent (lowered to 7.50% in March 2012).  The long-term payroll growth assumption has decreased from 3.75 percent to 3.25 percent. In April 2005, the PERS Board adopted new policies aimed at stabilizing rising employer costs. These policies were used to set Fiscal Year 2006-07 employer contribution rates for the City. These policies include:  Spreading PERS market value asset gains and losses over 15 years rather than three years.  Widening the “corridor” limits for establishing the actuarial value of assets from 90 to 110 percent of market value to 80 to 120 percent of market value. A-21  Establishing a rolling 30-year amortization on all remaining net unamortized gains or losses, instead of amortizing 10% of the net unamortized gain or loss each year.  Requiring a minimum employer contribution rate equal to the employer normal costs minus a 30 - year amortization of surplus (but not less than 0%). Due to significant market investment losses of approximately -24% in the PERS trust fund for fiscal year 2008-09, PERS implemented a three-year phase-in of the FY 2008-09 investment loss to allow for economic recovery. The corridor was widened and then contracted as follows:  Increase the corridor limits from 80%-120% of market value to 60% to 140% of market value to determine the actuarial value of assets for the June 30, 2009 valuation, which impact ed the 2011- 12 contribution rate.  Reduce the corridor limits from 60%-140% of market value to 70% to 130% of market value to determine the actuarial value of assets for the June 30, 2010 valuation, which impact ed the 2012- 2013 contribution rate.  Return to the 80%-120% of market value corridor limits for the actuarial value of assets on June 30, 2011 and thereafter, which impacted contribution rates for fiscal years 2013-14 and beyond.  Asset losses outside of the 80%-120% corridor described above will be amortized pursuant to a fixed 30-year amortization schedule. In response to soaring public pension Unfunded Liabilities, the California Legislature adopted the California Public Employees Pension Reform Act of 2013 (“PEPRA”), which imposed significant reductions on state and local government pension benefits, primarily for employees hired after January 1, 2013 (referred to as "New Members"). Employees hired prior to that date are termed "Classic Members.” Classic Members who change public employers retain their "Classic" status. Thus, to date, the impact of PEPRA on public pension liabilities has been small. However, it will increase over time as Classic Members retire and are replaced by New Members. Some of the most important changes mandated by PEPRA include:  Reduced pension benefit formulas for New Members. For New Member employees with Miscellaneous Plans, PEPRA requires a "2 percent at age 62" benefit formula; that is, a New Member retiring at age 62 is entitled to a pension equal to the employee’s number of years of service, times two percent, times the employee’s average salary. A New Member retiring before age 62 woul d have a pension that is further reduced. PEPRA specifies similar but more complex reductions for New Members under Safety Plans.  Caps on annual salary basis for calculation. PEPRA also caps the amount of annual salary that can be used to calculate pensions for New Members at $136,440 (as Social Security is not offered for Burlingame’s covered employees) plus COLA. Classic Members are not subject to salary caps in calculating their pensions.  Averaging of salaries for calculation. PEPRA requires, in calcula ting the annual salary used to calculate pensions, that New Members use the average of the three highest consecutive years’ salary. In contrast, the single highest salary year is used to calculate pensions for Burlingame’s Classic Members.  Prohibition on "spikinq" salaries. PEPRA also prohibits "spiking" salaries used to calculate pensions by prohibiting the inclusion of overtime, bonuses, cash payouts for unused vacation or sick leave, severance pay, and the like. The City of Burlingame has never pursued such practices. A-22  Prohibition on purchases of "airtime". PEPRA also prohibits employees from purchasing nonqualified service time ("airtime"), which allows Members to boost their pensions by buying up to five years of additional service credit. The City’s two safety plans (for Classic and PEPRA employees) have fewer than 100 active members. PERS requires such pension plans to join a larger risk pool (a “Risk Pool”) with other pension plans that have similar members receiving similar benefits (e.g. other plans for safety employees receiving the 3.0% at 50 benefit or the 2.7% at 57 benefit). In a Risk Pool, assets and liabilities across employers are combined to produce large groups where the impact of a catastrophic demographic event is shared among all empl oyers of the same Risk Pool. To equalize funding status across agencies in each Risk Pool, at the time the City joined the Risk Pool, a side fund was created to account for the difference between the funded status of the Risk Pool and the funded status of the City’s pension plan (a “Side Fund”). Risk Pools and Side Funds are subject to the Actuarial Assumptions and Policies described above. Also as noted below, proceeds of the City’s pension obligation bonds were deposited with PERS to eliminate any Safety Plan side funds on September 28, 2006. PERS annually performs an actuarial analysis of each Risk Pool. Based on the actuarial report for the Risk Pool, PERS calculates the Risk Pool’s “Required Base Employer Rate” as a percentage of payroll that the Ci ty must pay for the “normal cost” component of the employees participating in the plan. The “amortization base” component, where the unfunded liability of the Risk Pool is amortized, is paid by the City as a lump sum amount each year. As a consequence of past performance, a prolonged low-interest rate environment, and attempts to limit future volatility in investment returns, the PERS board approved a plan in December 2016 to reduce the assumed rate of return from 7.5 percent to 7.0 percent over a three-year period. The decision was, in part, based on outside investment advisors’ belief that investment returns over the next 10 years would be well below the 7.5 percent then - assumed return, and likely even below 7 percent. The rate of return would decrease over a three-year period as follows: Valuation Date Discount Rate FY of Initial Impact FY of Full Impact June 30, 2016 7.375% 2018-19 2022-23 June 30, 2017 7.250 2019-20 2023-24 June 30, 2018 7.000 2020-21 2024-25 This decrease in the rate of return assumption means that investment returns will be relied upon less, and contributions from employers and employees relied upon more, in order to fund pension obligations. As the rate of return decreases, these funding levels will drop. At that same time, the PERS Board announced its intent to utilize a new Risk Mitigation Strategy, moving the portfolio to more conservative investments over time. In February 2018, PERS adopted a new amortization policy that would apply to newly-established amortization bases going forward. Among other changes, the policy called for amortized cost to be paid by employers as a fixed dollar amount each year, rather than as a percentage of pay, and decreased the amortization period of portfolio gains/losses from 30 years to 20 years. The policy minimizes the total interest employers pay over time, paying off the unfunded liability faster, but also increasing required employer contributions each year. Pension Obligation Bonds. The City issued $32,975,000 Taxable Pension Obligation Bonds on September 28, 2006. The proceeds of the Bonds were applied to pay the then -current unfunded accrued actuarial liabilities with respect to the City’s retirement plans ($9,887,000 for the Miscellaneous Plan, $9,803,814 for Safety (3% at 50) and $10,806,150 for Safety (3% at 55) and to pay a portion of the normal annual contribution for the 2006 -07 Fiscal Year. While debt service on the pension obligation bonds is an obligation of the General Fund of the City, a portion of the debt service is payable from the water and wastewater funds. The amount of pension obligation bonds outstanding as of June 30, 2019 is $8,510,000. A-23 Burlingame Fire Employees. Effective July 1, 2010, the Burlingame Fire employees became employees of the Central County Fire Department (“CCFD”), a stand-alone employer recognized by PERS. CCFD is a joint powers authority that provides fire, emergency medical, and disaster preparedness services to the City and Town of Hillsborough. Fire and emergency medical services are pro vided to the City of Millbrae through a contract for services that began in December 2014. CCFD is now a stand -alone entity with the partner cities only responsible for facilities respectively owned by the City, Town, or City of Millbrae. The City of Burl ingame and the Town of Hillsborough are also responsible for the post -employment benefits for those retirees having retired prior to June 21, 2010. CCFD is governed by a board of directors consisting of two Council members each from the City and the Town of Hillsborough. The Board appoints the City Manager of each city to serve as Chief Administrative Officer for an alternating two -year term. Generally, the City is allocated 42% of total direct costs in support of the ongoing operations and maintenance of CCFD. The remainder is allocated to the Town of Hillsborough (28%) and City of Millbrae (30%). Miscellaneous Plan. As set forth in the PERS actuarial report dated July 2019, the unfunded accrued liability for the City’s Miscellaneous Plan was $41,582,554 as of June 30, 2018. The following table sets forth the schedule of funding progress for the Miscellaneous Plan: Valuation Date Accrued Liability Market Value of Assets (MVA) Unfunded Liability Funded Ratio Annual Covered Payroll 06/30/11 $ 105,996,377 $ 82,520,153 $ 23,476,224 77.9% $ 12,034,265 06/30/12 110,833,551 79,904,906 30,928,645 72.1% 11,801,991 06/30/13 115,874,433 87,907,702 27,966,731 75.9% 12,697,166 06/30/14 125,315,394 100,111,070 25,204,324 79.9% 12,807,692 06/30/15 128,090,048 99,073,644 29,016,404 77.3% 13,165,101 06/30/16 134,473,369 96,539,298 37,934,071 71.8% 14,484,389 06/30/17 141,463,950 104,300,047 37,163,903 73.7% 14,915,159 06/30/18 151,868,465 110,285,911 41,582,554 72.6% 15,951,011 Safety Plans. Based on the PERS Act uarial Report dated July 2019, the City’s unfunded accrued actuarial liability for the combined PERS Safety Risk Sharing Pool (3% at 50) and the PERS Safety PEPRA Risk Sharing Pool (2.7% at 57) Plans was $30,303,345 as of June 30, 2018. The following table sets forth the funding history of the City’s portion of the PERS Risk Sharing Pool Safety (3% at 50) Plan: Valuation Date Accrued Liability Market Value of Assets (MVA) Unfunded Liability Funded Ratio Annual Covered Payroll 06/30/2011 $ 67,654,694 $ 53,391,551 $ 14,263,143 78.9% $ 3,799,268 06/30/2012 72,137,159 53,196,282 18,940,877 73.7% 4,214,256 06/30/2013 75,589,196 58,599,557 16,989,639 77.5% 4,138,128 06/30/2014 81,280,370 65,176,150 16,104,220 80.2% 4,291,011 06/30/2015 83,564,301 63,218,478 20,345,823 75.7% 4,164,481 06/30/2016 86,515,984 60,505,085 26,010,899 69.9% 4,192,910 06/30/2017 90,454,649 63,908,896 26,545,753 70.7% 4,174,195 06/30/2018 95,880,135 65,623,440 30,256,695 68.4% 3,721,947 The following table sets forth the funding history of the City’s portion of the PERS Safety PEPRA Risk Sharing Pool (2.7% at 57) Plan: Valuation Date Accrued Liability Market Value of Assets (MVA) Unfunded Liability Funded Ratio Annual Covered Payroll 06/30/2013 $ 375 $ 550 $ (175) 146.7% $ 78,648 06/30/2014 34,364 36,028 (1,664) 104.8% 168,358 06/30/2015 74,925 71,067 3,858 94.9% 270,755 06/30/2016 162,360 144,920 17,440 89.3% 471,308 A-24 06/30/2017 284,059 264,877 19,182 93.2% 663,279 06/30/2018 495,858 449,208 46,650 90.6% 892,436 Source: PERS Actuarial Report Dated July 2019 Concerned over growing pension liabilities and in response to the sharply increasing employer rates to support the pensions provided by PERS (projected by the City’s actuary), the City implemented a plan, beginning in fiscal year 2017-18, to annually set aside additional funding in a Section 115 trust, at a rate that would smooth the projected increased employer contributions to PERS over the next 10 -15 years. The balance in the pension trust fund as of June 30, 2019 was slightly over $8.7 million. Trust fund contributions are not shown as expenditures, but are reflected in each operating fund as restricted cash and investments. In addition, City employees hired prior to the implementation of PEPRA continue to contribute a portion of their base salary toward the employer share of the PERS retirement contribution. The additional employee contribution for non-sworn employees is 1.5%, while the employee contribution for sworn Police personnel is four percent. By law, both sworn and non-sworn PEPRA employees (those hired on or after January 1, 2013) contribute 50% of the “normal” cost of their pensions Post-Employment Healthcare Benefits The City has established a Retiree Healthcare Plan (the “Plan”) and participates in an agent multiple‐employer defined benefit retiree healthcare plan. The Plan provides post ‐employment healthcare benefits to eligible employees who retire directly from the City under PERS at the minimum age of 50 with at least five years of PERS service or disability. Retirees must make a retirement election with PERS within 120 days following the date of separation from the City. Benefit provisions are established and may be amended through agreements and memorandums of understanding (“MOUs”) between the City, its management employees, and unions representing City employees. The City participates in the PERS healthcare program (“PEMHCA”) and allow retirees to continue participation in the medical insurance program after retirement. Under the Plan, the City pays retiree he althcare benefits up to a cap for eligible retirees and dependents based on bargaining unit and hire date. Employees hired on or after January 1, 2012 (or an earlier date as defined in the MOUs) are only eligible to receive a City contribution equal to the PEMHCA minimum upon retirement from the City. As stated above, an individual must also qualify as a PERS annuitant in order to receive this benefit. No dental, vision or life insurance benefits are provided. In addition, the City provides a defined contribution retiree healthcare plan for eligible employees. All employees are enrolled in a retiree health reimbursement arrangement (“HRA”) upon hire. The City contributes one percent (1%) of base salary for all employees into the employee’s HRA account. For employees not eligible for the defined retiree healthcare benefits described above, the City contributes an additional two percent (2%) of the employee’s base pay into the employee’s HRA account, or an additional three percent (3%) for these employees with more than five-years of service. The Police Administrators and Department Head and Unrepresented Group contribute one percent (1%) of their own salary to this account. The contribution requirements of the Plan participants and the City are established and may be amended by the City. In September 2013, the City established an irrevocable trust with the California Employers’ Retiree Benefit Trust Fund (“CERBT”) to prefund its unfunded actuarially accrued liability for retiree health care benefits. The CERBT, a multi? employer trust, is administered by PERS. Placing the funds in the qualified trust significantly decreased both the City’s unfunded liability and its ongoing normal (annual) costs by increasing the yield assumption earned with the fund. The City pre-funds the Plan by contributing the City’s Actuarially Determined Contribution every year to the CERBT, in addition to paying OPEB obligations directly to eligible retirees on a monthly basis. During fiscal year 2018-19, the City made deposits of $2,299,179 to the trust. As of June 30, 2019, the cash balance was $20,285,294. The Actuarially Determined Contribution is an amount actuarially determined in accordance with the parameters of GASB Statement 75. The Actuarially Determined Contribution is based on the City’s funding policy A-25 and is equal to the normal cost plus an amortization of the unfunded actuarial liability. As of June 30, 2019, there are 16 remaining years of amortization. Deferred Compensation Plan The City adopted an IRS-approved deferred-compensation plan for its employees in 1976. The plan is fully funded, and a separate account is maintained for each participant. Expenses for managing the Deferred Compensation Plan, as well as legal and consultant fees, are paid by the plan t hrough a reimbursement agreement with the provider. Employer-Employee Relations The City Council has authorized a total of approximately 215 full -time equivalent staff positions. These employees are represented by a total of seven bargaining units. The City Manager and the Human Resources Director conduct negotiations with each employee unit with assistance of outside negotiators when necessary. The following table lists the existing bargaining units and the respective date for which their contract with the City expires. CITY OF BURLINGAME Bargaining Units Bargaining Units Contract Expires Burlingame Association of Middle Managers 12/31/2019 Police Officers Associations 12/31/2021 Police Administrators 12/31/2021 Teamsters (Dispatchers) 12/31/2021 American Federation of State, County, Municipal Employees 829 06/30/2022 American Federation of State, County, Municipal Employees 2190 06/30/2022 Association of Department Heads (Unrepresented) 12/31/2021 Source: City of Burlingame. Population The following table presents population data for the City and the County of San Mateo. POPULATION Year City of Burlingame County of San Mateo 1980 26,173 587,329 1990 26,666 649,623 2000 28,158 707,161 2010 28,806 718,451 2018 30,345 772,372 2019 30,317 774,485 Source: The 1980, 1990, 2000 and 2010 totals are U.S. Census figures. The figures for the years 2018 and 2019 are based upon adjusted January 1 estimates provided by the State. A-26 Median Household Income The City and the County have historically enjoyed higher Median Household Incomes than either the State or the nation. Median Household Income for the City, County, State, and the nation from 2013-2017 is shown below. MEDIAN HOUSEHOLD INCOME Year City of Burlingame County of San Mateo State of California United States 2017 $118,410 $105,667 $67,169 $57,652 2016 102,443 98,546 63,783 55,322 2015 94,500 93,623 61,818 53,889 2014 90,890 91,421 61,489 53,482 2013 84,854 88,202 61,094 53,046 Source: Data USA with data provided by the United States Census Bureau. A-27 Employment The following table summarizes the major employers in the City. CITY OF BURLINGAME PRINCIPAL EMPLOYERS [2018-19 to come] 2018-19 2017-18 2016-17 Employer Employees Rank Percentage of Total City Employment Employees Rank Percentage of Total City Employment Employees Rank Percentage of Total City Employment Mills‐Peninsula Medical Center ‐ Sutter Health 1,960 1 10.71% 2,140 1 11.82% Lufthansa Service Holding Group Sky Chefs Inc 569 2 3.11 488 2 2.70 Hyatt Regency SF Airport 425 3 2.32 420 3 2.32 Flying Food Group 425 4 2.32 350 4 1.93 Lahlouh Inc. 350 5 1.91 350 5 1.93 Burlingame School District 327 6 1.79 315 7 1.74 Burlingame Long Term Care 297 7 1.62 340 6 1.88 Guittard Chocolate CO 267 8 1.46 267 8 1.48 American Medical response 228 9 1.25 232 9 1.28 Hilton‐San Francisco Airport 176 10 0.96 176 10 0.97 Source: City of Burlingame. A-28 The following table summarizes historical employment and unemployment in San Mateo County. SAN MATEO COUNTY Civilian Labor Force, Employment and Unemployment Annual Averages 2014 2015 2017 2018 Civilian Labor Force Employment 408,908.00 419,825.00 428,675.00 444,858.00 Unemployment 18,000.00 14,850.00 13,475.00 12,092.00 Total 426,908.00 434,675.00 442,150.00 446,034.00 Unemployment Rate(a) 4.22 3.42 3.05 2.75 (a) The unemployment rate is calculated rounding up to the nearest hundredth. Source: California Employment Development Department, Labor Market Information Division. The following table summarizes historical employment and unemployment in the City. CITY OF BURLINGAME Civilian Labor Force, Employment and Unemployment Annual Averages 2014 2015 2017 2018 Civilian Labor Force Employment 16,600 17,000 17,300 17,600 Unemployment 600 500 500 500 Total 17,200 17,500 17,800 18,100 Unemployment Rate(a) 3.28 2.67 3.03 2.58 (a) The unemployment rate is calculated rounding up to the nearest hundredth. Source: California Employment Development Department, Labor Market Information Division. Community Facilities The City of Burlingame maintains a main library and a branch library. Several daily newspapers serve the community. The City’s Parks and Recreation Department operates six large parks with athletic fields, seven neighborhood parks and tot lots, eleven (11) baseball and softball fields, over thirty (30) sports courts throughout the City, and a recreation building with facilities and programs directed to all age groups in the community. In fiscal year 2019-20, recreational programming will be held in temporary portable buildings and at other off -site locations so the new Community Center can be constructed at the same site of the current recreation building. Burlingame Country Club, a private facility located in neighboring Hillsborough, is reputed to be the oldest country club in the United States. There are several championship golf courses in the vicinity. A-29 Hospitals A full medical services hospital, the Mills-Peninsula Medical Center (associated with Sutter Health) serves the residents of the City and surrounding communities. The 241-bed 450,000 square foot general acute care hospital features 24-hour emergency care, all private patient rooms, and family sleeping accommodations in all medical/surgical, obstetric, intensive care, and neonatal intensive care rooms. Education Public education services through high school in the City are provided by the Burlingame School District (kindergarten through eighth grade) and the San Mateo Union High School District. Located within the City limits are six public elementary schools, an intermediate school, and Burlingame High School. Post-secondary public education is available at three community colleges operated by the San Mateo County Community College District. The College of San Mateo is located in San Mateo; Canada College is located in Redwood City; and Skyline College is located in San Bruno. Transportation North-south U.S. 101 serves the most densely populated areas along the Bayside of the San Francisco Peninsula. Interstate 280 runs near the western city limits of the City, providing an alternate major route to San Francisco and San Jose. California 82 (El Camino Real) parallels these two principal highways, serving the City’s commercial corridor. CalTrain provides passenger rail service on the San Francisco Peninsula as well as connections to BART and San Francisco Airport through an intermodal station in Millbrae. The City of Burlingame is one of the principal commuter points on this main line. The commuter station in Burlingame is convenient to those traveling to San Francisco or south to San Jose and intermediate points. Commuter service is also offered by the San Mateo County Transit District (SamTrans), which connects to transit systems in San Francisco and Santa Clara County. San Francisco International Airport is three miles northeast of the City and the Mineta San Jose Airport is approximately 30 miles south of the City. The Port of San Francisco is less than twenty (20) miles north. San Francisco and the port are easily accessible from interstate highways. The Port of Oakland is approximately twenty- five (25) miles northeast of the City. Utilities Natural gas and electric power are provided by the Pacific Gas and Electric Company and Peninsula Clean Energy. Telephone service is primarily provided by AT&T and Comcast. The City supplies water, sewer and wastewater treatment services, as well as storm water collection/drainage systems maintenance and pollution prevention programs. Recology San Mateo County is the City’s franchise provider of recycle, compost and garbage collection services for both commercial and residential customers. All collected materials are received by the Shoreway Environmental Center in San Carlos, California, which is owned and managed by the South Bayside Waste Management Authority, also known as RethinkWaste. RethinkWaste is a joint powers authority formed by twelve (12) local government jurisdictions in San Mateo County, including the City of Burlingame. In addition to providing strategic oversight, support and management of the member agencies’ solid waste collection, recycling and disposal service providers, RethinkWaste advocates for environmental best practices through cost-effective and sustainable waste reduction programs and policies. B-1 APPENDIX B CITY OF BURLINGAME CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE [UNAUDITED] FISCAL YEAR ENDED JUNE 30, 2019 C-1 APPENDIX C CITY OF BURLINGAME STATEMENT OF INVESTMENT POLICY D-1 APPENDIX D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS The following summary discussion of selected features of the Master Facilities Lease, dated as of ___________ 1, 2019 (the “Facilities Lease”), the Master Facilities Sublease, dated as of ___________ 1, 2019 (the “Facilities Sublease”), and the Master Trust Agreement, dated as of ___________ 1, 2019 (the “Trust Agreement”), are made subject to all of the provisions of such documents and to the discussions of such documents contained elsewhere in this Official Statement. This summary discussion does not purport to be a complete statement of said provisions and prospective purchasers of the Bonds are referred to the complete text of said documents, copies of which are available upon request from the Trustee or the City . [to come] E-1 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE [to come] F-1 APPENDIX F FORM OF LEGAL OPINION [to come] G-1 APPENDIX G BOOK-ENTRY ONLY SYSTEM Book-Entry Only System The information in this section concerning DTC and DTC’s book-entry system has been obtained from DTC. The Authority and City take no responsibility for the accuracy or completeness thereof. The Authority and City cannot and do not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, wi th respect to the Bonds, (b) certificates representing ownership interest in or other confirmation of 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 Official Statement. 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. DTC will act as securities depository for the Bonds. The Bonds 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 Bond certificate for each maturity will be issued for the Bonds in the aggregate principal amount of each maturity, and will be deposited with DTC. 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 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 i s 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 (“I ndirect 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. The information contained in such website is not incorporated by reference herein. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“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 Bonds 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 Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds 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 Bonds with DTC and their registration in the name of Cede & Co. or such G-2 other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DT C’s records reflect only the identity of the Direct Participants to whose accounts such Bonds 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 o n behalf of their customers. 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 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults and proposed amendments to the bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding Bonds 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. Redemption notices shall be sent to DTC. If less than all of the Bonds wit hin a maturity are being redeemed, DTC’s practice is to determine by lot the amount of interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bond s unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an omnibus proxy (the “Omnibus Proxy”) to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or the Trustee, on payable dates in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, 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. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Authority or the Trustee, or the Authority or City may decide to discontinue use of the system of book-entry transfers through DTC. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered in accordance with the provisions set forth in the Trust Agreement. DRAFT 10/1/2019 4141-2707-1775.2 OFFICIAL NOTICE OF SALE BURLINGAME FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2019 NOTICE IS HEREBY GIVEN that electronically submitted bids via i-Deal LLC’s Parity System (“Parity”) will be received by the Burlingame Financing Authority (the “Authority”) for the purchase of all but not less than all of $__________* aggregate principal amount of the Burlingame Financing Authority Lease Revenue Bonds, Series 2019 (the “Bonds”). ISSUE: The Bonds are described in the Preliminary Official Statement for the Bonds dated ________, 2019. TIME: Bids for the Bonds: 8:00* a.m., Pacific Daylight Time, on ________, 2019* The date and time of the Bond sale and the terms thereof may be changed at the sole discretion of the Authority by providing notice thereof through Parity, Bloomberg Professional Service, known as “Bloomberg Terminal” and/or Thomson Reuters “Thomson Municipal News” as soon as practicable prior to the then-scheduled sale date and times of the Bonds and, in any case, prior to 1:00 p.m. Pacific Daylight Time one day prior to the then-scheduled sale date. If no legal bid or bids are received for the Bonds on said date (or such later date as is established as provided herein) at the times specified, bids will be received for the Bonds on such other date and at such other time as shall be designated through the News Service as soon as practicable. As an accommodation to bidders, telephone or email notice of the postponement of the sale date or dates or of a change in the principal payment schedule will be given to any bidder requesting such notice from the Municipal Advisor (defined herein), at the address and attention given below. Failure of any bidder to receive such supplementary notice shall not affect the legality of the sale. The Authority further reserves the right to amend this Official Notice of Sale (the “Official Notice of Sale”) and the terms of sale in any respect, upon notice thereof given through the News Service not later than the times bids are then scheduled to be received. Subject to the provisions of this Official Notice of Sale, the Bonds will be awarded to the bidder with the lowest true interest cost (“TIC”) for the Bonds. Bidders for the Bonds are required to bid on all of the Bonds. See “TERMS OF SALE” herein. Any questions on the bidding procedures and sale terms set forth in this Official Notice of Sale, or any modification or amendment thereof, or any postponement or cancellation of the sale of the Bonds should be directed to PFM Financial Advisors LLC, ________________. * Preliminary, subject to change. 2 4141-2707-1775.2 TERMS OF THE BONDS Important Note: This notice will be submitted to i-Deal LLC for posting at i-Deal’s website and in the Parity bid delivery system. In the event i-Deal’s summary of the terms of sale of the Bonds disagrees with this Official Notice of Sale in any particulars, the terms of this Official Notice of Sale shall control (unless notice of an amendment hereto is given as described above). The Authority will accept bids in electronic form exclusively through Parity. Each bidder submitting an electronic bid understands and agrees by doing so that it is solely responsible for all arrangements with Parity, and that Parity is not acting as an agent of the Authority. Instructions and forms for submitting electronic bids must be obtained from Parity. Bidders may contact Parity directly at (212) 849-5021 or at the Parity website: https://www.newissuehome.i-deal.com. PRINCIPAL PAYMENTS AND MATURITIES: The Bonds will be issued in the aggregate principal amount of $__________*. The Bonds will be dated as of the date of issuance. The Bonds shall bear interest from their dated date at the rate or rates to be fixed upon the sale thereof. Interest on the Bonds is payable on each ________ 1 and ________ 1, commencing ________ 1, 2020 (each, an “Interest Payment Date”). The Bonds will mature on ________ 1 of each year through ____* in the following amounts: Principal Payment Date _______ 1 Principal Amount* TOTAL * Preliminary, subject to change. 3 4141-2707-1775.2 The Bonds will be fully registered bonds in the denominations of $5,000 each or any integral multiple thereof. Interest will be computed on the basis of a 360-day year composed of twelve 30-day calendar months at the rate per annum specified in the bid accepted. ADJUSTMENT OF PRINCIPAL AMOUNTS: The Authority reserves the right, following the receipt of bids and determination of the winning bid and at its sole discretion, to change the total principal amount of the Bonds and the principal amount of each maturity of the Bonds awarded by up to [15%] based upon the interest rates and premiums submitted by the successful bidder, provided that the total principal amount of Bonds shall not exceed $___________. The successful bidder will be notified of the modification to the principal amount at the time of the award. THE SUCCESSFUL BIDDER MAY NOT WITHDRAW ITS BID OR CHANGE THE INTEREST RATES BID OR ANY INITIAL REOFFERING PRICES AS A RESULT OF ANY CHANGES MADE TO THE STATED PRINCIPAL AMOUNTS. The successful bidder will be notified of the modification to the principal amount at the time of the award. The adjusted bid price will reflect changes in the dollar amount of the underwriter’s discount, if any, but will not change the per Bond underwriter’s discount as provided in the bid. SERIAL BONDS AND/OR TERM BONDS: The Bonds shall be issued as serial maturities as shown in the table above, unless the bidder requests the creation of one or more term Bonds by combining any two (2) or more consecutive serial maturities. Bidders may designate the principal amounts of the Bonds set forth in the maturity schedule under “Principal Payments and Maturities” for any two (2) or more consecutive years as a single term maturity which will mature in the latest of the years designated, and will have a stated maturity amount equal to the sum of the annual principal amounts designated as a part of such term maturity. Amounts included in a single term bond must bear the same rate of interest. Only one term maturity may be subject to mandatory sinking fund redemption in any year. Upo n such designation, the Bonds of such term maturity shall be subject to mandatory sinking fund redemption in part by lot on ________ 1, in the principal amounts which would otherwise have matured in such designated years, at the price of par plus accrued interest to the redemption date, without premium. In the event term Bonds are designated, all term Bond maturities and corresponding mandatory sinking fund redemptions shall be subject to the same optional redemption provisions. See “ – REDEMPTION” herein. REDEMPTION*: Optional. The Bond maturing on or before ________ 1, ____ are not subject to optional redemption prior to their respective stated maturities. The Bonds maturing on or after ________ 1, ____ are subject to redemption prior to their respective stated maturities at the option of the Authority on or after ________ 1, ____, from any source of available funds, as a whole or in part on any date (with the maturities to be redeemed to be determined by the Authority and by lot within a maturity), at redemption prices equal to 100% of the principal amount thereof to be redeemed, without premium, together with accrued interest to the date fixed for redemption. Special Mandatory Redemption. The Bonds are subject to redemption by the Authority on any date prior to their respective stated maturities, upon notice as hereinafter provided, as a whole or in part by lot within each stated maturity in integral multiples of authorized denominations, from prepayments made by the City from funds received by the City due to a taking of the Facilities or portions thereof under the power of eminent domain, from the net proceeds of insurance received for material damage to or destruction of the Facilities or portions thereof under the circumstances and upon the conditions and terms prescribed in the Trust Agreement and Facilities Sublease, or from the proceeds of title insurance in the event of defective title to the Facilities as provided for in the Facilities Sublease, at a redemption price equal to the sum of the principal amount thereof, without premium, plus accrued interest thereon to the redemption date. * Preliminary; subject to change. 4 4141-2707-1775.2 TAX MATTERS: Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority, will render to the Authority its legal opinion with respect to tax-exemption of the interest paid on the Bonds. See the discussion of Tax Matters in the Preliminary Official Statement hereinafter referred to. In the event that prior to the delivery of the Bonds (a) the income received by private holders from obligations of the same type and character shall be declared to be includable in gross income (either at the time of such declaration or at any future date) for purposes of federal income tax laws, either by the terms of such laws or by ruling of a federal income tax authority or official which is followed by the Internal Revenue Service, or by decision of any federal court, or (b) any federal income tax law is adopted which will have a substantial adverse tax effect on holders of the Bonds as such, the successful bidder may, at its option, prior to the tender of the Bonds by the Authority, be relieved of its obligation to purchase the Bonds, and in such case the deposit accompanying its bid will be returned. For purposes of the preceding sentence, interest will be treated as excludable from gross income for federal income tax purposes whether or not it is includable as an item of tax preference for calculating alternative minimum taxes or otherwise includable for purposes of calculating certain other tax liabilities. BOOK-ENTRY ONLY: The Bonds will be issued in book-entry only form. The Depository Trust Company (“DTC”) will act as securities depository for the Bonds. LEGAL OPINION: The legal opinion of Bond Counsel referred to in the Preliminary Official Statement under “LEGAL MATTERS,” the proposed form of which is included in Appendix F – “FORM OF LEGAL OPINION” to the Preliminary Official Statement, will be furnished to the Authority and a reliance letter thereto will be furnished to the successful bidder without charge. CERTIFICATE: The City will provide to the successful bidder of the Bonds a certificate, signed by an authorized representative of the City, confirming to the successful bidder that, at the time of acceptance of its proposal for the Bonds and at the time of delivery thereof, to the best of the knowledge of said authorized representative, the Official Statement did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. TERMS OF SALE SUBMISSION OF BIDS: Each bid for the Bonds must be for not less than all of the Bonds hereby offered for sale. [The bid price for the Bonds must be for not less than ____% of the par value of the Bonds.] No bid will be accepted which contemplates the waiver of any interest or other concession by the bidder as a substitute for payment in full of the purchase price. Each bid must be in accordance with, and shall be deemed to incorporate, all of the terms and conditions set forth in this Official Notice of Sale. Each bid must state the aggregate purchase price of the Bonds and the interest rate applicable to each maturity thereof. Bids may only be delivered by electronic transmission via i-Deal/Parity, as follows: Electronic Transmission: The Authority will accept bids in electronic form exclusively through i- Deal LLC’s Parity System (“Parity”). Each bidder submitting an electronic bid understands and agrees by doing so that it is solely responsible for all arrangements with Parity, and that Parity is not acting as an agent of the Authority. Instructions and forms for submitting electronic bids must be obtained from Parity. Bidders may contact Parity directly at (212) 849-5021 or at the Parity website: https://www.newissuehome.i-deal.com. No other provider of internet bidding services and no other means of delivery (i.e. telephone, telefax, or physical delivery) will be accepted. THE AUTHORITY RETAINS ABSOLUTE DISCRETION TO DETERMINE WHETHER ANY BID IS TIMELY AND COMPLETE. 5 4141-2707-1775.2 Multiple Bids: In the event multiple bids are received from a single bidder by any means or combination thereof, the Authority shall accept the bid representing the lowest TIC to the Authority, and each bidder agrees by submitting any bid to be bound by such best bid. WARNINGS REGARDING ELECTRONIC BIDS. THE AUTHORITY ASSUMES NO RESPONSIBILITY FOR ENSURING OR VERIFYING BIDDER COMPLIANCE WITH PARITY’S PROCEDURES. THE AUTHORITY SHALL BE ENTITLED TO ASSUME THAT ANY BID RECEIVED VIA PARITY HAS BEEN MADE BY A DULY AUTHORIZED AGENT OF THE BIDDER. NONE OF THE AUTHORITY, THE MUNICIPAL ADVISOR OR BOND COUNSEL ASSUMES ANY RESPONSIBILITY FOR ANY ERROR CONTAINED IN ANY BID SUBMITTED ELECTRONICALLY OR FOR FAILURE OF ANY BID TO BE TRANSMITTED, RECEIVED OR OPENED BY THE TIME FOR RECEIVING BIDS, AND EACH BIDDER EXPRESSLY ASSUMES THE RISK OF, ANY INCOMPLETE, ILLEGIBLE, UNTIMELY OR NONCONFORMING BID SUBMITTED BY ELECTRONIC TRANSMISSION BY SUCH BIDDER, INCLUDING WITHOUT LIMITATION, BY REASON OF GARBLED TRANSMISSIONS, MECHANICAL FAILURE, ENGAGED TELECOMMUNICATIONS LINES, OR ANY OTHER CAUSE ARISING FROM SUBMISSION BY ELECTRONIC TRANSMISSION. THE TIME FOR RECEIVING BIDS WILL BE DETERMINED BY THE AUTHORITY AT THE PLACE OF BID OPENING, AND THE AUTHORITY WILL NOT BE REQUIRED TO ACCEPT THE TIME KEPT BY PARITY. INTEREST RATE AND BID CONSTRAINTS: The interest rate on the Bonds shall not exceed ____% per annum. Bidders must specify the rate or rates of interest that the Bonds offered for sale shall bear and an aggregate purchase price. Bidders may not bid a price of less than ____%, or more than ____%, of the aggregate principal amount of the Bonds. Bids that do not conform to the terms of this section may be rejected. Bidders will be permitted to bid different rates of interest for each bond maturity, according to the following: (i) Each interest rate specified in any bid must be in a multiple of one-eighth (1/8th) or one- twentieth (1/20th) of one percent per annum and a zero rate of interest cannot be specified; (ii) No maturity shall represent more than one rate of interest; and (iii) Each Bond shall bear interest from its dated date to its maturity date at the interest rate specified in the bid; premium bids must be paid as part of the purchase price, and no bid will be accepted which contemplates the waiver of any interest or other concession by the bidder as substitute for payment in full of the purchase price. The Authority reserves the absolute right, in its sole discretion, to modify or amend the terms of the sale prior to the time bids are received and to reject any and all bids and to waive any irregularity or informality in any bid. TRUE INTEREST COST CALCULATION: The TIC to the Authority of any bid shall be calculated on the basis of the present value of the principal and interest to be paid on the Bonds based on the bid price, i.e., principal of the Bonds, plus premium, if any, compounded semi-annually. In the event that two or more bidders offer bids for the Bonds at the same lowest TIC, the first one submitted, as determined by reference to the time displayed on Parity’s website, shall be the leading bid. The Authority will award the Bonds to the bidder offering the lowest TIC to the Authority, provided, however that the Authority reserves the right to reject any and all bids and to waive any informality or irregularity in any and all bids. The Authority reserves the further right, in its discretion, to adjourn the sale, in which event a notice will be given via Parity. 6 4141-2707-1775.2 BEST BID: The Bonds will be awarded to the responsible bidder submitting the best responsive bid, considering the interest rate or rates specified and the premium offered, if any. The best bid will be the bid which represents the lowest TIC to the Authority. The TIC is the discount rate which, when used to discount all debt service payments on the Bonds back to the date of such Bonds, results in an amount equal to the price bid for the Bonds. For the purpose of calculating the TIC, the mandatory sinking fund payments, if any (see “TERMS OF THE BONDS—Serial Bonds and/or Term Bonds” herein), shall be treated as serial maturities in such years. The determination of the bid representing the lowest TIC will be made without regard to any adjustments made or contemplated to be made after the award by the Authority, as described herein under “TERMS OF THE BONDS—Adjustment of Principal Amounts,” even if such adjustments have the effect of raising the TIC of the successful bid to a level higher than the bid containing the next lowest TIC prior to adjustment. PROMPT AWARD: The Authority will take action awarding the Bonds or rejecting all bids for the Bonds not later than twenty-four (24) hours after the expiration of the time herein prescribed for the sale of the Bonds, unless such time of award is waived by the successful bidder. Notice of award will be given promptly to the successful bidder. REOFFERING PRICE: The successful bidder shall assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at closing an “issue price” or similar certificate setting forth the reasonably expected initial offering price to the public or the sales price or prices of the Bonds, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Appendix B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Authority and Bond Counsel. The Authority intends that the provisions of Treasury Regulation Section 1.148-1(f)(3)(i) (defining “competitive sale” for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds (the “competitive sale requirements”) because: (1) the Authority shall disseminate this Notice of Sale to potential underwriters in a manner that is reasonably designed to reach potential underwriters; (2) all bidders shall have an equal opportunity to bid; (3) the Authority may receive bids from at least three underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and (4) the Authority anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase the Bonds at the highest price (or lowest interest cost), as set forth in this Notice of Sale. Any bid submitted pursuant to this Notice of Sale shall be considered a firm offer for the purchase of the Bonds, on the terms set forth in the bid form and this Notice of Sale, and is not subject to any conditions, except as permitted by this Notice of Sale. By submitting a bid, each bidder confirms that it has an established industry reputation for underwriting new issuances of municipal bonds. In the event that the competitive sale requirements are not satisfied, the Authority shall so advise the successful bidder. The Authority shall treat the first price at which 10% of each maturity (the “10% test”) is sold to the public as the issue price of that maturity, applied on a maturity-by-maturity basis. The successful bidder shall advise the Authority if any maturity satisfies the 10% test as of the date and time of the award of the Bonds. The Authority will not require bidders to comply with the “hold-the-offering- price rule” and therefore does not intend to use the initial offering price to the public as of the sale date of any maturity as the issue price of that maturity. Bids will not be subject to cancellation in the 7 4141-2707-1775.2 event that the competitive sale requirements are not satisfied. Bidders should prepare their bids on the assumption that all of the maturities will be subject to the 10% test in order to establish the issue price of the Bonds. If the competitive sale requirements are not satisfied, then until the 10% test has been satisfied as to each maturity, the successful bidder agrees to promptly report to the Authority the prices at which the unsold Bonds of that maturity have been sold to the public. That reporting obligation shall continue, whether or not the closing has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold. By submitting a bid, each bidder confirms that: (i) any agreement among underwriters, any selling group agreement and each retail distribution agreement (to which the bidder is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable, to report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the successful bidder that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public, if and for so long as directed by the successful bidder and as set forth in the related pricing wires, and (ii) any agreement among underwriters relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such retail distribution agreement to report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the successful bidder or such underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public, if and for so long as directed by the successful bidder or such underwriter and as set forth in the related pricing wires. Sales of any Bonds to any person that is a related party to an underwriter shall not constitute sales to the public for purposes of this Notice of Sale. Further, for purposes of this Notice of Sale: (i) “public” means any person other than an underwriter or a related party, (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public), (iii) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (iv) “sale date” means the date that the Bonds are awarded by the Authority to the successful bidder 8 4141-2707-1775.2 DEPOSIT: The winning bidder shall deliver a good faith deposit (the “Deposit”) in the form of a federal funds wire transfer payable in immediately available funds in the amount of $_________ for the Bonds to secure the Authority from any loss resulting from the failure of the winning bidder to comply with the terms of its bid. Each bidder shall acknowledge as a condition precedent to the submission of its bid that the winning bidder is required to submit its Deposit to the Authority in the form of a federal funds wire transfer as instructed by the Authority not later than 12:00 p.m. (Pacific Time) on the same business day following the Authority’s acceptance of the bid of the winning bidder. Each winning bidder shall use the following wiring instructions in connection with the Deposit: [to come] In the event a winning bidder fails to honor its accepted bid, the Deposit will be retained by the Authority. If a winning bidder completes its purchase of the Bonds on the terms stated in its bid, its Deposit will be applied to the purchase of the Bonds on the date of delivery of the Bonds. No interest will be paid upon the Deposit made by any bidder. In the event of the Authority’s inability to deliver the Bonds at the closing, the Authority shall forthwith return the amount of the Deposit to a winning bidder immediately and such return shall constitute a full release and discharge of all claims by the winning bidder against the Authority arising out of the transactions contemplated by this Official Notice of Sale. CUSIP NUMBER: It is anticipated that a CUSIP number will be printed on the Bonds, but neither the failure to print such number on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the successful bidder thereof to accept delivery of and pay for said Bonds in accordance herewith. All charges of the CUSIP Service Bureau for the assignment of CUSIP numbers for the Bonds shall be paid by the successful bidder. LITIGATION: Other than disclosed in the Preliminary Official Statement, no litigation is pending, or, to the knowledge of the City, threatened concerning the validity of the Bonds, and an opinion of the City Attorney to that effect will be furnished at the time of the original delivery of the Bonds. Other than disclosed in the Preliminary Official Statement, the City is not aware of any litigation pending or threatened questioning the political existence of the City or contesting the Authority’s ability to issue the Bonds. OFFICIAL STATEMENT: The Authority has approved a Preliminary Official Statement dated _________, 2019 (the “Preliminary Official Statement”), which the Authority prepared with the assistance of Orrick, Herrington & Sutcliffe, LLP, Disclosure Counsel to the Authority. The Authority and City have “deemed final” said Preliminary Official Statement for purposes of Rule 15c2 -12 (the “Rule”) of the Securities and Exchange Commission although it is subject to revision, amendment and completion in the form of a Final Official Statement in conformance with such Rule. Up to [25] copies of the Final Official Statement will be supplied to a successful bidder without charge. An electronic copy of the Preliminary Official Statement will be made available to bidders. 9 4141-2707-1775.2 EACH BIDDER IS DEEMED TO HAVE OBTAINED AND REVIEWED THE PRELIMINARY OFFICIAL STATEMENT PRIOR TO BIDDING FOR THE BONDS. THE DESCRIPTION OF THE BONDS CONTAINED IN THIS OFFICIAL NOTICE OF SALE IS QUALIFIED IN ALL RESPECTS BY THE DESCRIPTION CONTAINED IN THE PRELIMINARY OFFICIAL STATEMENT. BLUE SKY: The Authority has not taken any action relating to the requirements of the securities or “blue sky” laws of any jurisdiction with respect to the offer and sale of the Bonds. Certain jurisdictions may have filing requirements which must be satisfied prior to any offer or sale of the Bonds. TAX EXEMPT STATUS: In the event that prior to the delivery of the Bonds(a) the income received by any private holder from bonds of the same type and character as the Bonds shall be declared to be taxable (either at the time of such declaration or at any future date) under any federal income tax laws, either by the terms of such laws or by ruling of a federal income tax authority or official which is followed by the Internal Revenue Service, or by decision of any federal court, or (b) any federal income tax law is enacted which will have a substantial adverse tax effect on holders of the Bonds as such, the successful bidder may, at its option, prior to the tender of the Bonds by the Authority, be relieved of its obligation to purchase the Bonds and in such case its Deposit will be returned. DELIVERY AND PAYMENT: Delivery of the Bonds is expected to occur on, but not before, December __, 2019. The Bonds will be delivered to DTC through the Fast Automated Securities Transfer service. The successful bidder shall pay for the Bonds on the date of delivery in Federal Reserve Bank funds or equivalent immediately available funds in California. Payment on the delivery date shall be made in an amount equal to the price bid for the Bonds, less the amount of the Deposit. 10 4141-2707-1775.2 ADDITIONAL INFORMATION: Copies of the Official Notice of Sale and Official Form of Bid for Bonds will be furnished to any potential bidder upon request made to the Municipal Advisor, PFM Financial Advisors LLC, ______________________. Dated: _____________, 2019 Burlingame Financing Authority A-1 4141-2707-1775.2 APPENDIX A OFFICIAL FORM OF BID FOR BONDS BURLINGAME FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2019 We hereby certify that we are an eligible bidder and submit our bid and commit to purchase not less than all of Burlingame Financing Authority Lease Revenue Bonds, Series 2019 (the “Bonds”) subject to all the terms and conditions stated in the Official Notice of Sale. We hereby pay $______ which is not less than ____%, or more than ____%, of par for the Bonds, with principal and interest to be payable in the amounts and at the interest rates set forth below. The Purchase Price equals the principal amount of the Bonds of $________* [plus a Premium of $_______________]. Schedule of Maturity Dates, Principal Amounts**, and Interest Rates (Check One) Principal Payment Date* (______ 1) Principal* Amount Serial** Maturity Mandatory** Sinking Fund Redemption Interest Rate ________ __________ _______ ________ __________ _______ ________ __________ _______ ________ __________ _______ ________ __________ _______ ________ __________ _______ ________ __________ _______ ________ __________ _______ ________ __________ _______ ________ __________ _______ ________ __________ _______ ________ __________ _______ ________ __________ _______ TOTAL ________ __________ _______ * Subject to adjustment as described in Official Notice of Sale. ** Place a check in the appropriate column indicating whether the principal component is a serial maturity or mandatory sinking fund redemption. Circle the final maturity of each term Bond specified. Our calculation of the true interest cost (determined as described in the section of the Official Notice of Sale entitled “True Interest Cost Calculation”), which is considered to be informative only and not a part of the proposal, is as follows: True Interest Cost: _____________% The submission of this bid is a representation that the bidder, with the intent of acting as Underwriter for the Bonds, did not consult with any other potential underwriter, or agent thereof, about this bid and that the bid was determined without regard to any other formal or informal agreement that the A-2 4141-2707-1775.2 bidder may have with the Authority or City or any other person (whether or not in connection with the subject Bond issue). Date: _________, 2019 Firm/Syndicate: _______________________ By __________________________________ Authorized Representative Accepted: BURLINGAME FINANCING AUTHORITY By ______________________ Title: ______________________ Date: _________, 2019 B-1 4141-2707-1775.2 APPENDIX B ISSUE PRICE CERTIFICATE (IF 3 BIDS FROM COMPETITIVE PROVIDERS ARE RECEIVED) (TO BE DELIVERED BY THE PURCHASER AS DESCRIBED IN THE OFFICIAL NOTICE OF SALE) This certificate is being delivered by _____________________, the purchaser (the “Purchaser”) in connection with the issuance of the Burlingame Financing Authority Lease Revenue Bonds, Series 2019 (the “Bonds”). The Purchaser hereby certifies and represents that: 1. Reasonably Expected Initial Offering Price. (a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by [SHORT NAME OF UNDERWRITER] are the prices listed on the [inside] cover page of the Official Statement in respect of the Bonds dated _________, 2019 (the “Expected Offering Prices”). The Expected Offering Prices are the prices for the Maturities of the Bonds used by [SHORT NAME OF UNDERWRITER] in formulating its bid to purchase the Bonds. Attached as Schedule A is a true and correct copy of the bid provided by [SHORT NAME OF UNDERWRITER] to purchase the Bonds. (b) [SHORT NAME OF UNDERWRITER] was not given the opportunity to review other bids prior to submitting its bid. (c) The bid submitted by [SHORT NAME OF UNDERWRITER] constituted a firm offer to purchase the Bonds on the terms set forth in the bid form and the Official Notice of Sale, and was not subject to any conditions, except as permitted by the Official Notice of Sale. We confirm that we have an established industry reputation for underwriting new issuances of municipal bonds. 2. Defined Terms. (a) Issuer means the Burlingame Financing Authority. (b) Maturity means principal payment dates with the same credit and payment terms. Bonds with different maturities, or Bonds with the same Maturity but different stated interest rates, are treated as separate Maturities. (c) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) Sale Date means the first day on which there is a binding contract in writing for the sale of a maturity of the Bonds. The Sale Date of the Bonds is _________, 2019. (e) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). B-2 4141-2707-1775.2 The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents [SHORT NAME OF UNDERWRITER]’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Orrick, Herrington & Sutcliffe LLP, Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. [UNDERWRITER] By:___________________________________ Name:_________________________________ Dated: [ISSUE DATE] B-3 4141-2707-1775.2 ISSUE PRICE CERTIFICATE (IF LESS THAN 3 BIDS FROM COMPETITIVE PROVIDERS ARE RECEIVED) (TO BE DELIVERED BY THE PURCHASER AS DESCRIBED IN THE OFFICIAL NOTICE OF SALE) This certificate is being delivered by _____________________, the purchaser (the “Purchaser”) in connection with the execution and delivery of the Burlingame Financing Authority Lease Revenue Bonds, Series 2019 (the “Bonds”). The Purchaser hereby certifies and represents that: 1. As of the date hereof, other than the Bonds listed on Schedule 1 hereto as undersold maturities (the “Undersold Maturities”), the first price or yield at which at least 10% of each Maturity of the Bonds was sold by the Purchaser to the Public was the price set forth on Schedule 1 hereto. 2. With respect to the Undersold Maturities, the Purchaser agrees to notify the Issuer in writing of the first price or yield at which at least 10% of each such Undersold Maturity is ultimately sold by the Purchaser to the Public as soon as practicable after such applicable sales have occurred. If all of an Undersold Maturity is sold to the Public but not more than 10% of the Undersold Maturity is sold by the Purchaser to the Public at any particular price or yield, the Purchaser agrees to notify the Issuer in wri ting of the amount of the Undersold Maturity sold by the Purchaser to the Public at each of the respective prices or yields at which the Undersold Maturity is sold to the Public. 3. Defined Terms. (a) Issuer means the Burlingame Financing Authority. (b) Maturity means principal payment dates with the same credit and payment terms. Bonds with different maturities, or Bonds with the same Maturity but different stated interest rates, are treated as separate Maturities. (c) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have gr eater than 50 percent common ownership, directly or indirectly. (d) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is ___________, 2019. (e) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents [SHORT NAME OF UNDERWRITER]’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Orrick, Herrington & Sutcliffe LLP, Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded B-4 4141-2707-1775.2 from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. [UNDERWRITER] By:___________________________________ Name:_________________________________ Dated: [ISSUE DATE] B-5 4141-2707-1775.2 Schedule A to Exhibit B Bonds Maturity (_______) Principal Amount Interest Rate Reoffering Price or Yield % % _____________ * Principal components evidenced by the Bonds were priced to call on January 15, 202_ at 100% of par. 4164-3388-9823.1 EXHIBIT A TO STAFF REPORT GOOD FAITH ESTIMATES BURLINGAME FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2019 The following information was obtained from PFM Financial Advisors LLC, as the municipal advisor of the bonds defined above (the “Bonds”): 1. True Interest Cost of the Bonds. Assuming an aggregate principal amount of the Bonds in the amount of $37,524,619 is sold to effectuate the financing with annual debt service savings and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 3.52%. 2. Finance Charge of the Bonds. Assuming such a principal amount of the proposed Bonds is sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the Finance Charge of the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the issuance of the Bonds), is $501,480. 3. Amount of Proceeds to be received. Assuming such aggregate principal amount of the proposed Bonds required to effectuate the financing is sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the amount of proceeds expected to be received by the issuer for sale of the Bonds less the Finance Charge of the Bonds described in 2 above and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $ 37,023,139. 4. Total Payment Amount. Assuming such aggregate principal amount of the proposed Bonds ($37,524,619) are sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the total payment amount, which means the sum total of all payments the issuer will make to pay debt service on the Bonds plus the Finance Charge of the Bonds described in paragraph 2 above not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $59,916,089. Attention is directed to the fact that the foregoing information constitutes good faith estimates only. The actual interest cost, finance charges, amount of proceeds and total payment amount may vary from the estimates above due to variations from these estimates in the timing of Bond sales, the amount of Bonds sold, the amortization of the Bonds sold and market interest rates at the time of each sale. The date or dates of sale and the amount of Bonds sold will be determined by the issuer based on need for funds and other factors. The actual interest rates at which the Bonds will be sold will depend on the bond market at the time of sale. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of each sale. Market interest rates are affected by economic and other factors beyond the issuer’s control. 4164-3388-9823.1