HomeMy WebLinkAbout _ 9.5(b)--Consider Authorization of Bond Refunding 2015A GI �" Y C� F
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REPORT TO THE CITY COUNCIL
MEETING DATE: June 2,2026 FROM: Nick Zettel, Director of
ITEM NO. 9.5(b} Redding Electric Utility
***APPROVED BY***
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nzettel@cityofredding.org wtarbox@cityofredding.gov
SUBJECT: 9.5(b)--Consider authorization of issuance of Electric System Refunding Revenue
Bonds Series 2026 to refund the remaining Redding Joint Powers Financing Authority, Electric
S stem Revenue Bonds, 2015 Series A.
Recommendation
Adopt Resolution relative to City of Redding's Electric System Refunding Revenue Bonds to:
(1) Authorize the issuance of Electric System Refunding Revenue Bonds, Series 2026, in an
amount not-to-exceed $28 million for the purpose of refunding the outstanding Electric
System Revenue Bonds, 2015 Series A;
(2) Authorize the City Manager, or designee, to execute and deliver an Indenture, a Purchase
Contract and a Continuing Disclosure Agreement;
(3) Approve the form of the Preliminary Official Statement; and
(4) Authorize the City Manager, or designee, to execute any and all documents and taking of
all necessary actions related to the financing.
Fiscal Impact
The proposed refunding bonds will re�nance the outstanding Redding Joint Powers Financing
A�uthority, Electric System Revenue Bonds, 2015 Series A, payable from Electric Utility (Utility)
Net Revenues. The transaction is expected to generate an estimated savings of approximately
$1.46 million, based on market conditions as of May 6, 2026, with an estimated true interest cost
of approximately 2.81 percent. No General Fund resources are pledged. Debt service wi11
continue to be paid solely from Utility revenues. The refunding supports long-term financial
planning and balance within the Utility five-year financial plan. The refunding will not increase
the outstanding principal amount or extend the final maturity of the existing debt.
Alternative Action
The City Council may eleet not to authorize the issuance of the refunding bonds. This action
would result in the City of Redding (City) foregoing the opportunity to achieve debt service
savings under current market conditions and would maintain existing higher interest rate
obligations.
Report to Redding City Council May 28,2026
Re: 9.5(b)--ConsiderAuthorization of Bond Refunding 2015A Page 2
Background/Analysis
In 2015, the City entered into an Installment Sale Agreement with the Redding Joint Powers
Financing Authority (Authority) to finance the 2005 Electric System Project and the 2015
Electric System Project. Those projects included building acquisition, capital improvements and
infrastructure investments necessary to maintain reliability, capacity, and operational efficiency
of the Electric System. Bonds were issued by the Authority in 2015 to fund those improvements,
and the City is currently obligated to make installment sale payments from Electric System Net
Revenues. Approxiinately $23.8 million of those obligations remain outstanding. Staff has
evaluated current municipal market conditions and determined that refunding the 2015
obligations at lower interest rates will produce measurable debt service savings while
maintaining the Utility's strong credit profile.
The proposed City of Redding Electric System Refunding Revenue Bonds, Series 2026, will be
issued in a principal amount not to exceed $28,000,000. Proceeds will be used to refund the
outstanding 2015 obligations and pay costs of issuance. The bonds will be secured by a pledge of
Net Revenues of the Electric System on parity with existing Electric System revenue obligations.
The bonds do not constitute a debt of the General Fund, and neither the faith and credit nor the
taxing power of the City is pledged.
The Utility is targeting a minimum net present value savings of 5 percent of the refunded
amount; however, in challenging market conditions, the Utility may proceed with a refunding
that achieves at least 3 percent net present value savings, which is within the reasonable savings
threshold identified by the Government Finance Officers Association. As of the pricing analysis
dated May 6, 2026, the estimated true interest cost is approximately 2.81 percent, with projected
net present value savings of approximately $1.28 million (5.39 percent). Final pricing will
depend on market conditions at the time of sale.
The refunding supports the City's commitment to maintaining balanced financial plans across all
funds. Professional services for this financing incl�ude Orrick, Herrington & Sutcliffe LLP as
Bond Counsel, Stradling Yocca Carlson & Rauth LLP as Disclosure Counsel, PFM Financial
Advisors LLC as Municipal Advisor, and J.P. Morgan Securities LLC as Underwriter.
The Resolution Authorizing Issuance of Bonds formally authorizes the issuance of the refunding
bonds, approves execution of the Indenture, Continuing Disclosure Agreement, and Purchase
Contract, and authorizes distribution of the Preliminary Official Statement. The Indenture
establishes the legal framework for the bonds, including security provisions, rate covenants, flow
of funds, events of default, and responsibilities of the Trustee. The Preliminary Official
Statement and Of�cial Statement provide comprehensive disclosure to investors regarding the
Electric System, the City's financial condition, risks associated with the bonds, and detailed
descriptions of the security and repayment structure.
The Purchase Contract sets forth the terms under which J.P. 1Vlorgan Securities LLC will
purchase the bonds, including pricing parameters, underwriting discount, representations of the
parties, and closing conditions. The Continuing Disclosure Agreement outlines the City's
ongoing obligations to provide annual financial information and notice of specified material
events in compliance with SEC Rule 15c2-12. The Direction to Mail Conditional Notice of
Redemption instructs the Trustee to provide formal notice of redemption of the 2015 bonds,
contingent upon successful issuance of the Series 2026 Bonds. Appendix B — Certain
Report to Redding City Council May 28,2026
Re: 9.5(b)--ConsiderAuthorization of Bond Refunding 2015A Page 3
Information Concerning the City provides demographic, economic, and governmental
background information relevant to investors' evaluation of the Electric System and the City's
broader financial environment.
EnviNonmental Review
This is not a project defined under the California Environmental Quality Act, and no further
action is required.
Council Priority/City Manager Goals
• Budget and Financial Management — "Achieve balanced and stable 10-year Financial
Plans for all funds."
Attachments
Resolution
Previous Staff Report -November 3, 2015, 2015 Series A Bonds
Indenture
Direction to Mail Conditional Notice of Redemption
Direction to Redeem Bonds
Purchase Contract
Continuing Disclosure Agreement
Official Statement
OHS Draft
Distributed 5/18/26
RESOLUTION NO. 2026-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
AUTHORIZING THE ISSUANCE OF ELECTRIC SYSTEM REFUNDING
REVENUE BONDS, THE EXECUTION AND DELIVERY OF AN
INDENTURE, A CONTINUING DISCLOSURE AGREEMENT, A
PURCHASE CONTRACT, AND AN OFFICIAL STATEMENT AND
APPROVING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL
STATEMENT; AND AUTHORIZING THE EXECUTION OF
DOCUMENTS AND THE TAKING OF ALL NECESSARY ACTIONS
RELATING THERETO
WHEREAS, pursuant to the 2015 Installment Sale Agreement, dated as of December 1, 2015
(the "2015 Installment Sale Agreement"), by and between the City of Redding (the "City") and
the Redding Joint Powers Financing Authority (the "Authority"), the City heretofore determined
to make installment sale payments to the Authority for purchase of the 2005 Electric System
Project and the 2015 Electric System Project (as defined in the 2015 Installment Sale
Agreement); and
WHEREAS, the City has determined that it is in the best interests of the City and its residents to
refund all or a portion of the City's obligation to make installment sale payments under the 2015
Installment Sale Agreement (the "2015 Installment Sale Payments") through the issuance and
sale of electric system revenue bonds to be designated "City of Redding Electric System
Refunding Revenue Bonds, Series 2026" (the `Bonds"); and
WHEREAS, to provide for the issuance and payment of the Bonds, the City desires to enter into
an Ir�denture (the "Indenture") with U.S. Bank Trust Company, National Association, as Trustee
(the "Trustee"); and
WHEREAS, the City will enter into a Purchase Contract (the "Purchase Contract") with J.P.
Morgan Securities LLC (the "Underwriter"); and
WHEREAS, in order to assist the Underwriter in complying with Securities and Exchange
Commission Rule 15c2-12, the City will execute and deliver a continuing disclosure agreement
(the"Continuing Disclosure Agreement"); and
WHEREAS, there have been submitted and are on �ile with the City Clerk proposed forms of
the Indenture, Purchase Contract, Continuing Disclosure Agreement and an Official Statement
(as defined below) with respect to the Bonds; and
WHEREAS, the City has engaged Orrick, Herrington & Sutcliffe LLP as bond counsel,
Stradling Yocca Carlson & Rauth LLP as disclosure counsel, and PFM Financial Advisors LLC
as municipal advisor(the "Municipal Advisor") with respect to the Bonds; and
WHEREAS, California Government Code Section 5852.1 requires that the City Council obtain
from an underwriter, financial advisor or private lender and disclose, prior to authorization of the
issuance o�bonds with a term of greater than 13 months, good faith estimates of the following
information in a meeting open to the public: (a) the true interest cost of the bonds, (b) the sum of
4131-3255-3572.2
all fees and charges paid to third parties with respect to the bonds, (c) the amount o�proceeds of
the bonds expected to be received net of the fees and charges paid to third parties and any
reserves or capitalized interest paid or funded with proceeds of the bonds, and (d) the sum total
of all debt service payments on the bonds calculated to the final maturity of the bonds plus the
fees and charges paid to third parties not paid with the proceeds of the bonds; and
WHEREAS, in compliance with Government Code Section 5852.1, the City Council has
obtained from the Municipal Advisor the required good faith estimates and such estimates are
disclosed and set forth on Exhibit A attached hereto;
NOW THEREFORE, the City Council of the City of Redding 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, in an
aggregate principal amount not to exceed $28,000,000.00, to refinance the 2005 Electric System
Project and the 2015 Electric System Project. The officers of the City are hereby directed to
perform the duties, if any, imposed upon the City by the provisions of the financing documents
approved herein, including the Indenture, and the Director of Finance of the City is hereby
authorized and directed to hold the funds and accounts created in said financing documents and
directed or permitted to be held by the City.
Section 3. The proposed form of Indenture by and between the City and the Trustee,
on file with the City Clerk, is hereby approved. The Mayor or City Manager of the City(or other
officer designated by the City Manager) is each hereby authorized and directed, for and in the
name and on behalf of the City, to execute and deliver an indenture 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 Bonds
shall mature no later than June 1, 2035, and the interest rates result in a true interest cost for the
Bonds of not to exceed six percent(6.00%)per annum.
Section 4. The proposed form of Purchase Contract, by and between the Underwriter
and the City, on �le with the City Clerk, is hereby approved. The Mayor ar City Manager of the
City(or other officer designated by the City Manager) is each hereby authorized and directed, on
behalf of the City, to execute and deliver a purchase contract 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, the underwriting discount
(not including original issue discount) sha11 not exceed one-half percent (0.50%) of the aggregate
principal amount of the Bonds.
Section 5. The proposed form of Continuing Disclosure Agreement, by and between
the City and U.S. Bank Trust Company, National Association, as trustee and dissemination
agent, on file with the City C1erk, is hereby approved. The Mayor or City Manager of the City
(or other officer designated by the City Manager) is each hereby authorized and directed to and
in the name and on the behalf of the City, to execute and deliver a continuing disclosure
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4131-3255-3572.2
agreement in substantially said form with said changes therein as such officer may require or
approve, such approval to be conclusively evidenced by the execution and delivery thereof.
Section 6. The proposed fonn of Official Statement relating to the Bonds (the
"Official Statement"), on file with the City Clerk, is hereby approved. The Mayor or City
Manager of the City (or other o�ficer designated by the City Manager) is each hereby authorized
and directed, for and in the name and on behalf of the City, to execute and deliver an Official
Statement in substantially said �orm, with such changes therein as such officer may require or
approve, such approval to be conclusively evidenced by the execution and delivery thereof The
Underwriter is hereby directed to distribute copies of the Official Statement to all actual
purchasers of the Bonds. Distribution by the Underwriter of a preliminary Official Statement
relating to the Bonds is hereby approved and the Mayor or City Manager of the City (or other
officer designated by the City Manager) is each hereby 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 Mayor or City Manager of the City (or other officer designated by the
City Manager) is each hereby authorized, upon a determination by such officer that the
procurement of such policy is in the best interests of the City, to procure and maintain a policy of
municipal bond insurance for the benefit of the registered owners of one or more maturities of
the Bonds in such form and on such terms as such officer shall require or approve, such approval
to be conclusively evidenced by the execution and delivery of the commitment for and on behalf
of the City to the issuer of such municipal bond insurance policy or surety bond.
Section 8. The 2015 Installment Sale Payments to be prepaid sha11 be determined by
the officer executing the Indenture to be in the best interest of the City. Such determination shall
be conclusively evidenced by the execution and delivery of the Indenture.
Section 9. The City Clerk is hereby authorized and directed to attest the signature of
the Mayor, City Manager or other officers of the City as may be required in connection with the
issuance, sale and delivery of the Bonds and the execution and delivery of the Indenture,
Purchase Contract and Continuing Disclosure Agreement in accordance with this Resolution.
Section 10. 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 a11
documents and certificates which they deem necessary or advisable in order to consummate the
execution and delivery of the documents mentioned herein including, without limitation,
signature certificates, no-litigation certificates, tax certificates, investment instructions,
redemption or defeasance notices, legal services agreements (with the approval of the City
Attorney) with the firms identified in the recitals hereto and otherwise to effectuate the purposes
of this Resolution and the transactions contemplated hereby.
Section 11. All actions heretofore taken by the officers and agents of th� City with
respect to the refinancing of the 2005 Electrie System Project and the 2015 Electric System
Project are hereby ratified, confirmed and approved.
Seetion 12. This Resolution shall take effect from and after its adoption and approval.
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4131-3255-3572.2
I hereby certify that the foregoing resolution was introduced and adopted at a regular ineeting of
the City Council of the City of Redding on the 2nd day of June 2026, by the following vote of the
members thereof:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
MIKE LITTAU, Mayor
ATTEST: FORM APPROVAL:
SHARLENE TIPTON, City Clerk BENJAMIN L. STOCK, Interim City Attorney
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4131-3255-3572.2
EXHIBIT A
GOOD FAITH ESTIMATES
The good �aith estimates set forth herein are provided with respect to the Bonds in
compliance with Section 5852.1 of the California Government Code. Such good faith estimates
have been provided to the City by PFM Financial Advisors LLC, as municipal advisor to the City
(the "Municipal Advisor").
Principal Amount. The Municipal Advisor has informed the City that, based on the City's
financing plan and current market conditions, its good faith estimate of the aggregate principal
amount of the Bonds to be sold is $22,115,000.00 (the`Bstimated Principal Amount").
Ti^ue Interest Cost of the Bonds. The Municipal Advisor has informed the City that,
assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest
rates prevailing at the time of preparation of such estimate,its 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
2.91%.
Finance Cha�ge of the Bonds. The Municipal Advisor has informed the City that, assuming
that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates
prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge
for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated
with the Bonds),is $410,575.00.
Amount of Proceeds to be Received. The Municipal Advisor has informed the City that,
assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest
rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of
proceeds expected to be received by the City for sale of the Bonds, less the finance charge of the
Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of
the Bonds,is $23,865,809.30.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming that
the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing
at the time of preparation of such estimate, its good faith estimate of the total payment amount,
which means the sum total of all payments the City will make to pay debt service on the Bonds,pl�us
the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds,
calculated to the final maturity of the Bonds, is $27,505,353.47.
The foregoing estimates constitute good faith estimates on1y. The actual principal amount
of the Bonds issued and sold, the true interest eost thereof, the fmance eharges thereof, the amount
of proceeds received therefrom and total payment amount with respect th�reto may differ from such
good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date
assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being
different from the Estimated Principal Amount, (c) the aetual amortization of the Bonds being
different than the amortization assumed for purposes of such estimates, (d)the actual market interest
4131-3255-3572.2
rates at the tilne of sale of the Bonds being different than those estilnated for purposes of such
estimates, (e) other market conditions, or (� alterations in the City's financing plan, or a
combination of such factors. The actual date of sale of the Bonds and the actual principal amount of
Bonds sold will be determined by the City based on the need for project funds and other factors.
The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale
thereof. The actual amortization of the Bonds wi11 also depend, in part, on market interest rates at
the time of sale thereof. Market interest rates are affected by economic and other factors beyond the
control of the City. The City Council has approved the issuance of the Bonds with a maximum true
interest cost of 6.00%.
4131-3255-3572.2
CITY OF REDDING
REPORT TO REDDING JOINT POWERS
FINANCING AUTHORITY
MEETING DATE: November 3,2015 FROM: Barry Tippin, Asst. City
ITEM NO. 2 Manager/REU Director
[R-015-300-175]
SUB,TECT: 2--Joint Public Hearing to consider authorization of issuance of bonds to finance
the new Redding Electric Utility headquarters facility and to refinance the 2005 Series A
Certificates
***APPROVED BY***
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Recommendation
Conduct a joint public hearing with the Redding City Council and, upon conclusion, adopt a
resolution that authorizes the execution and delivery of a Trust Agreement, an Installment Sale
Agreement, a Purchase Contract, and approves the form of the Official Statement, and authorizes
the execution of documents and the taking of all necessary actions relating to the financing.
Background
City Council at its meeting on August 20, 2013, adopted a resolution authorizing pre-financing
activity for the purchase of a new Redding Electric Utility headquarters facility at 3611 Avtech
Parkway. The total approved budget was $11.4 million, including $500,000 of Public Bene�ts
funding for energy efficiency upgrades. The building was placed in service in February 2015.
Incl�uded in this bond issue is $11 million to reimburse for the above expenditures.
Approximately $9 million has been spent to date. In addition, the current interest rate
environment provides an opportunity to refmance the City's outstanding Electric System
Revenue Certificates of Participation, 2005 Series A at lower interest rates. The underwriter
currently estimates that the refunding portion of the bond issue will result in approximately 12
percent present value savings. Actual savings will be based on interest rates the day of the bond
sale. A resolution is attached that will provide authorization for the taking of all necessary
actions to issue the Electric System Revenue Bonds, Series 2015 A.
The space for the Electric Department at the Corporation Yard on Viking Way and at the Power
Plant is insufficient for the current staf�ng and operations. Previously, approximately $1.1
million was budgeted to expand the Corporation Yard. With the purchase of the facility at
Avteeh and the surrounding property, planning commeneed to provide for the identified space
needs. The identified solution entails moving staff from the Corporation Yard and the Power
Plant to the currently unfinished portion of Avtech and into a new faeility to be constructed
immediately adjacent to the existing building. To move forward with this solution, the $1.1.
Report to Redding Joint Powers Financing Authority Octobe
Re: 2-Joint Public Hearing re Issuance of bonds for REU Page 2
million targeted for the Corporation Yard will be re-directed to Avtech. This, combined with a
portion of the $11 million of new bond funding will complete the needed funding for the project.
After completion of the new facility and minor remodeling of the Corporation Yard and the
Power Plant, three trailers currently in use at the Power Plant will be removed from the site and
the respective leases canceled. As was noted when Avtech was purchased and as mentioned in
the current budget, the long term plan is to use Avtech as the Redding Electric Utility campus.
This proposal accomplishes part of that plan. Future contracts and bid awards will be presented
to the City Council for approval as the project proceeds.
In addition, at a special meeting of the Redding Joint Powers Financing Authority (RJPFA) held
on September 15, 2015, the RJPFA adopted a resolution setting the regular meeting schedule of
the RJPFA. November 3, 2015, is one of those approved regular meeting dates.
Issue
Does the RJPFA wish to proceed with the issuance of bonds to finance the new Electric Utility
headquarters facility and to re�nance the 2005 Series A Certificates?
Alternatives;Implications of AlteNnatzves
The RJPFA has the following alternatives:
1. Adopt a resolution that approves the issuance of the Electric System Revenue Bonds,
Series 2015 A in an amount not to exceed $45 million; authorizes the execution and
delivery of the documents identified above; approves the form of the Official Statement;
and authorizes the taking of all necessary actions to issue such bonds. The RJPFA will
be able to take the actions necessary to prepare bonds for issuance.
2. Decline to adopt the resolution. The RJPFA will not be able to move forward with a
bond issue at this time.
Fiscal Impact
The refinancing of the 2005 Series A Certificates will result in a savings of over $6 million
during the life of the bonds and a present value savings of approximately 12 percent. The
additional debt service for the financing of the purchase of the Redding Electric Utility
headguarters facility at 3611 Avtech Parkway will result in an additional debt service cost of
approximately $11 million per year. This is $300,000 less than what was included in the
Biennial Budget fo�Fiscal Years Ending June 30, 2016 & 2017. This also results in a $300,000
annual savings to the debt service requirement shown in the five-year plan included with the
Electric Utility's approved budget.
Conclusion
It is the recommendation of staff that the RJPFA approve the attached resolution thus facilitating
the preparation of the Electric System Revenue Bonds, Series 2015 A.
Report to Redding Joint Powers Financing Authority Octobe
Re: 2-Joint Public Hearing re Issuance of bonds for REU Page 3
Attachments:
Resolution
Trust Agreement (available online)
Installment Sale Agreement (available online)
Purchase Contract (available online)
Preliminary Official Statement(available online)
OHS Draft
Distributed 5/18/26
INDENTURE
Dated as of July 1, 2026
by and between the 1
CITY OF REDDING
and
U.S. BANK TRUST COMPANY,NATIONAL ASSOCIATION
as Trustee
Relating to the
CITY OF REDDING
ELECTRIC SYSTEM REFUNDING REVENUE BONDS,
SERIES 2026
4147-8150-4612.4
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; EQUAL SECURITY................................................................ 2
SECTION LO1. Definitions .......................................................................................... 2
SECTION 1.02. Equal Security................................................................................... 18
ARTICLE II AUTHORIZATION AND ISSUANCE OF 2026 BONDS .............................. 18
SECTION 2.01. Authorization and Purpose of 2026 Bonds....................................... 18
SECTION 2.02. Denominations of 2026 Bonds ......................................................... 19
SECTION 2.03. Date and Maturity Dates of and Interest Rates for 2026 Bonds....... 19
SECTION 2.04. Interest Payment Dates of 2026 Bonds............................................. 19
SECTION 2.05. Form of 2026 Bonds......................................................................... 20
SECTION 2.06. Payment of 2026 Bonds.................................................................... 20
SECTION 2.07. Execution of 2026 Bonds.................................................................. 20
SECTION 2.08. Transfer and Exchange of 2026 Bonds............................................. 21
SECTION 2.09. Mutilated, Destroyed, Stolen or Lost 2026 Bonds ........................... 21
SECTION 2.10. Temporary 2026 Bonds .................................................................... 22
SECTION 2.11. Use of Depository for 2026 Bonds................................................... 22
SECTION 2.12. Application of Proceeds of Sa1e of 2026 Bonds............................... 23
ARTICLE III REDEMPTION OF 2026 BONDS.................................................................... 24
SECTION 3.01. Redemption Prices and Terms of 2026 Bonds ................................. 24
SECTION 3.02. Selection of 2026 Bonds for Redemption......................................... 24
SECTION 3.03. Notice of Redemption of 2026 Bonds.............................................. 25
SECTION 3.04. Partial Redemption of 2026 Bonds................................................... 25
SECTION 3.05. Effect of Redemption of 2026 Bonds............................................... 25
ARTICLEIV REVENUES ...................................................................................................... 26
SECTION 4.01. Pledge of Net Revenues and Moneys in Electric Revenue
Fund; Electric Revenue Fund ........................................................... 26
SECTION�4.02. Establishment and Maintenance of Accounts for Use of
Money in the Debt Service Fund...................................................... 27
SECTION 4.03. Deposit and Investments of 1Vloney in Accounts and Funds ............ 28
SECTION 4.04. Conditions for the Execution of Parity Obligations ......................... 29
i
TABLE OF CONTENTS
(continued)
Page
SECTION 4.05. Subordinate Obligations ................................................................... 30
ARTICLE V COVENANTS OF THE CITY.......................................................................... 30
SECTION 5.01. Punctual Payment............................................................................. 30
SECTION 5.02. Against Encumbrances ..................................................................... 30
SECTION 5.03. Against Sale or Other Disposition of the Electric System................ 31
SECTION 5.04. Tax Covenants and Matters; Rebate Fund........................................ 31
SECTION 5.05. Maintenance and Operation of the Electric System; Budgets .......... 32
SECTION 5.06. Compliance with Contracts............................................................... 32
SECTION 5.07. Continuing Disclosure...................................................................... 32
SECTION5.08. Insurance........................................................................................... 33
SECTION 5.09. Accounting Records and Financial Statements ................................ 33
SECTION 5.10. Protection of Security and Rights of Owners ................................... 33
SECTION 5.1 l. Payment of Taxes and Compliance with Governmental
Regulations ....................................................................................... 33
SECTION 5.12. Amount of Rates and Charges.......................................................... 33
SECTION 5.13. Collection of Rates and Charges....................................................... 33
SECTION 5.14. Further Assurances ........................................................................... 34
ARTICLE VI THE TRUSTEE................................................................................................. 34
SECTION 6.01. The Trustee....................................................................................... 34
SECTION 6.02. Liability of Trustee........................................................................... 35
SECTION 6.03. Notice to Trustee............................................................................... 37
ARTICLE VII AMENDMENT OF OR SUPPLEMENT TO THE INDENTURE................... 37
SECTION 7.01. Procedure for Amendment of or Supplement to the Indenture......... 37
SECTION 7.02. Disqualified 2026 Bonds .................................................................. 38
SECTION 7.03. Endorsement or Replacement of 2026 Bonds After
Amendment....................................................................................... 3 8
SECTION 7.04. Amendment by Mutual Consent....................................................... 39
ARTICLE VII�I EVENTS OF DEFAULT AND REMEDIES.................................................... 39
SECTION 8.01. Events of Default and Acceleration of Maturities............................ 39
ii
TABLE OF CONTENTS
(continued)
Page
SECTION 8.02. Application of Funds Upon Acceleration......................................... 40
SECTION 8.03. Institution of Legal Proceedings by Trustee..................................... 40
SECTION 8.04. Non-Waiver...................................................................................... 41
SECTION 8.05. Actions by Trustee as Attorney-in-Fact............................................ 41
SECTION 8.06. Remedies Not Exclusive................................................................... 42
SECTION 8.07. Limitation on Owners' Right to Sue................................................. 42
ARTICLE IX DEFEASANCE................................................................................................. 42
SECTION 9.01. Discharge of 2026 Bonds.................................................................. 42
SECTION 9.02. Unclaimed Money ............................................................................ 43
ARTICLE X MISCELLANEOUS.......................................................................................... 44
SECTION 10.01. Liability of the City Limited to Net Revenues ................................. 44
SECTION 10.02. Benefits of the Indenture Limited to Certain Parties........................ 44
SECTION 10.03. Successor Is Deemed Included in All References to
Predecessor....................................................................................... 44
SECTION 10.04. Execution of Documents by Owners................................................ 45
SECTION 10.05. Waiver of Personal Liability............................................................. 45
SECTION 10.06. Acquisition of 2026 Bonds by the City............................................ 45
SECTION 10.07. Content of Certi�cates and Reports.................................................. 45
SECTION 10.08. Notice to Owners and Securities Depositories ................................. 46
SECTION 10.09. Maintenance of Funds....................................................................... 46
SECTION 10.10. Business Days................................................................................... 46
SECTION 10.11. Article and Section Headings, Gender and References.................... 46
SECTION 10.12. Governing Law................................................................................. 46
SECTION 10.13. Notices.............................................................................................. 46
SECTION 10.14. Partial Invalidity............................................................................... 47
SECTION� 10.15. Execution in Several Counterparts ................................................... 4'7
SECTION 10.16. Transaction by Electronic Means ..................................................... 47
iii
INDENTURE
This Indenture (the"Indenture"), dated as of July 1, 2026,by and between the City
of Redding, a municipal corporation duly organized and existing under and by virtue of the laws
of the State of California (the "City"), and U.S. Bank Trust Company, National Association, a
national banking association duly organized and existing under and by virtue of the laws of the
United States of America and authorized to accept and execute trusts of the character herein set
forth, as Trustee (the "Trustee");
WITNESSETH:
WI�EREAS, the City is authorized by law to issue refunding revenue bonds to
refinance all or portions of any obligations theretofore entered into by it; and
W�IEREAS, the City has determined that it is in the best interests of the City and
its residents and is necessary and proper that the City issue bonds to refinance [a portion of� the
City's obligation to make installment sale payments relating to the Redding Joint Powers
Financing Authority Electric System Revenue Bonds, 2015 Series A, issued under that certain
Trust Agreement, dated as of December 1, 2015, by and between U.S. Bank Trust Company,
National Association, as successor trustee to U.S. Bank National Association, and the Redding
Joint Powers Financing Authority, all in the manner described herein; and
WHEREAS, said bonds will be issued in one series: the City of Redding Electric
System Refunding Revenue Bonds, Series 2026, in the aggregate principal amount of $[Series
2026 Par] (the "2026 Bonds"); and
WI�EREAS, the City has determined that all things necessary to cause the 2026
Bonds,when duly executed by the City and authenticated and delivered by the Trustee as provided
herein, to be legal and valid special obligations of the City enforceable in accordance with their
terms, and to constitute the Indenture a valid agreement for the purposes and uses herein set forth
in accordance with its terms, have been done and taken, and the execution and delivery hereof and
the execution, authentication and delivery of the 2026 Bonds, subject to the terms hereof, have in
all respects been duly authorized;
NOW THEREFORE, THE INDENTURE WITNESSETH, that in order to declare
the conditions and terms upon and subject to which the 2026 Bonds are to be issued, and to secure
the payment of the interest on and principal of and redemption premiums, if any,on a112026 Bonds
at any time executed, authenticated and delivered hereunder according to their tenor, and to secure
the observance and performance of all the agreements, conditions, covenants and terms contained
herein and therein, and in consideration of the premises and of the mutual agreements and
eovenants contained herein and of the purchase and acceptance of the 2026 Bonds by the respective
registered owners thereof from time to time, and for other valuable consideration, the receipt
whereof is hereby acknowledged, the City does hereby agree and covenant with the Trustee, for
the benefit of the respective registered owners from time to time of the 2026 Bonds, as follows:
ARTICLE I
DEFINITION�S; EQUAL SECURITY
SECTION 1.01. Definitions. Unless the context otherwise requires,the terms
defined in this section shall for all purposes hereof and of the 2026 Bonds and of any certificate,
opinion, report, request or other document herein or therein mentioned have the meanings herein
specified, the following definitions to be equally applicable to both the singular and plural forms
of any of the terms defined herein:
Accountant's Report
The term"Accountant's Report"means a report signed by an Independent Certified
Public Accountant.
Adjusted Annual Debt Service
The term "Adjusted Annual Debt Service" means, for any Fiscal Year or any
designated twelve(12)month period in question, the Annual Debt Service for such Fiscal Year or
twelve month period minus the sum of the amount of the Annual Debt Service with respect to
Outstanding Parity Obligations to be paid during such Fiscal Year or twelve month period from
the proceeds of Parity Obligations or interest earned thereon(other than interest deposited into the
Electric Revenue Fund), all as set forth in a Certificate of the City.
Adjusted Annual Net Revenues
The term "Adjusted Annual Net Revenues" means, for any Fiscal Year or any
designated twelve (12) month period in question, the Adjusted Annual Revenues during such
Fiscal Year or twelve-month period less the Maintenance and Operation Costs during such Fiscal
Year or twelve-month period.
Adjusted Annual Revenues
The term "Adjusted Annual Revenues" means, for any Fiscal Year or any
designated twelve (12)month period in question,the Revenues during such Fiscal Year or twelve-
month period, less, for purposes of determining compliance with Section 5.12 and conditions for
the execution of Parity Obligations, any Payment Agreement Receipts taken into account in
calculating Annual Debt Service pursuant to paragraph (C) of the definition thereof, pl�us, for the
purposes of determining compliance with Section 5.12 hereof on1y, the amount of Available
Reserves on deposit, or which the City has authorized to be deposited, in the Electric Revenue
Fund as of the first day of such Fiscal Year or twelve-month period.
Annual Debt Service
The term "Annual Debt Service" means, for any Fiscal Year or any designated
twelve (12) month period in question, (i) with respect to the 2026 Bonds, the required payments
scheduled to be made with respect to all Outstanding 2026 Bonds in such Fiscal Year or twelve
(12) month period, or (ii) with respeet to Parity Obligations, the required payments scheduled to
2
be made with respect to all Outstanding Parity Obligations in such Fiscal Year or twelve (12)
month period provided, that for the purposes of determining compliance with Section 5.12 and
conditions for the execution of Parity Obligations:
(A) Generally. Except as otherwise provided by subparagraph(B)with respect
to Variable Interest Rate Parity Obligations and by subparagraph (C) with respect to Parity
Obligations as to which a Payment Agreement is in force, and by subparagraph (D) with respect
to certain Parity Payment Agreements, interest on any Parity Obligation sha11 be calculated based
on the actual amount of interest that is payable under that Parity Obligation;
(B) Interest on Variable Interest Rate Parity Obli_at� ions. The amount of interest
deemed to be payable on any Variable Interest Rate Parity Obligation shall be calculated on the
assuinption that the interest rate on that Parity Obligation would be equal to the Assumed RBI-
based Rate;
(C) Interest on Papments or Parity Obligations with res�ect to which a Pa_yment
A�reement is in force. The amount of interest deemed to be payable on any Parity Obligations
with respect to which a Payment Agreement is in force shall, so long as the Qualified Counterparty
thereto is not in default thereunder,be based on the net economic effect on the City expected to be
produced by the terms of such Parity Obligation and such Payment Agreement, including but not
limited to the effects that (i) such Parity Obligation would, but for such Payment Agreement, be
treated as an obligation bearing interest at a Variable Interest Rate instead shall be treated as an
obligation bearing interest at a fixed interest rate, and (ii) such Parity Obligation would, but for
such Payment Agreement,be treated as an obligation bearing interest at a fixed interest rate instead
shall be treated as an obligation bearing interest at a Variable Interest Rate; and accordingly, the
amount of interest deemed to be payable on any Parity Obligation with respect to which a Payment
Agreement is in force shall, so long as the Qualified Counterparty thereto is not in default
thereunder,be an amount equal to the amount of interest that would be payable at the rate or rates
stated in such Parity Obligation plus the Payment Agreement Payments minus the Payment
Agreement Receipts,and for the purpose of calculating Payment Agreement Receipts and Payment
Agreement Payments under such Payment Agreement, the following assumptions shall be made:
(1) Counterpart_��ated to Pay Actual Variable Interest Rate on
Variable Interest Rate Parit,� at� ions. If the Payment Agreement obligates a Qualified
Counterparty to make payments to the City based on the actual Variable Interest Rate on a
Parity Obligation that would, but for the Payment Agreement, be treated as a Variable
Interest Rate Parity Obligation and obligates the City to make payments to the Qualified
Counterparty based on a fixed rate, payments by the City to the Qualified Counterparty
shall be assumed to be made at the fixed rate specified by the Payment Agreement and
payments by the Qualified Counterparty to the City shall be assumed to be made at the
actual Variable Interest Rate on such Parity Obligation, without regard to the occurrence
of any event that, under the provisions of the Payment Agreement, would permit the
Qualified Counterparty to make payments on any basis other than the actual Variable
Interest Rate on such Parity Obligation, and such Parity Obligation shall set forth a debt
service schedule based on that assumption;
3
(2) Variable Interest Rate Paritv Obli�ations and Pa_yment A�reements
Having the Same Variable Interest Rate Com�onent. If both a Payment Agreement and
the related Parity Obligation that would, but for the Payment Agreement, be treated as a
Variable Interest Rate Parity Obligation include a variable interest rate payment component
that is required to be calculated on the salne basis (including, without limitation, on the
basis of the same variable interest rate index), it shall be assumed that the variable interest
rate payment component payable pursuant to the Payment Agreement is equal in amount
to the variable interest rate component payable on such Parity Obligation;
(3) Variable Interest Rate Parit.�gations and Pa_yment A�reements
Having Different Variable Interest Rate Com�onents. If a Payment Agreement obligates
either the City or the Qualified Counterparty to make payments of a variable interest rate
component on a basis that is different(including,without limitation, on a different variable
interest rate index) from the basis that is required to be used to calculate interest on the
Parity Obligation that would, but for the Payment Agreement, be treated as a Variable
Interest Rate Parity Obligation it shall be assumed:
(a) Cit,y Obligated to Make Pavments Based on Variable Interest
Rate Index. If payments by the City under the Payment Agreement are based on a
variable interest rate index and payments by the Qualified Counterparty are based
on a fixed interest rate,payments by the City to the Qualified Counterparty will be
based upon an interest rate equal to the Assumed RBI-based Rate, and payments by
the Qualified Counterparty to the City will be based on the fixed rate specified by
the Payment Agreement; and
(b) Citv Obli�ated to Make Pa_yments Based on Fixed Interest
Rate. If payments by the City under the Payment Agreement are based on a�ixed
interest rate and payments by the Qualified Counterparty are based on a variable
interest rate index,payments by the City to the Qualified Counterparty will be based
on an interest rate equal to the rate that is one hundred and five percent (105%) of
the fixed interest rate specified by the Payment Agreement to be paid by the City,
and payments by the Qualified Counterparty to the City will be based on a rate
equal to the Assumed RBI-based Rate as the variable interest rate deemed to apply
to the Variable Interest Rate Parity Obligation.
(4) Certain Pavment Apreements May be Disre a� rded.
Notwithstanding the provisions of subparagraphs (C)(1), (2) and (3) of this definition, the
City shall not be reguired to (but may at its option) take into account as set forth in
subparagraph (C) of this definition (for the purpose of determining Annual Debt Service)
the effects of any Payment Agreement that has a remaining term of ten (10) years or less;
(D) Debt Service on Parity Payment A�reements. No interest shall be taken into
account with respect to a Parity Payment Agreement for any period during which Payment
Agreement Payments on that Parity Payment Agreement are taken into account in determining
Annual Debt Serviee on a related Parity Obligation under subparagraph (C) of this definition;
provided, that for any period during which Payment Agreement Payments are not taken into
4
account in calculating Annual Debt Service on any Parity Obligation because the Parity Payment
Agreement is not then related to any other Parity Obligation, interest on that Parity Payment
Agreement shall be taken into account by assuming:
(1) Cit,y Obligated to Make Payments Based on Fixed Interest Rate. If
the City is obligated to make Payment Agreement Payments based on a fixed interest rate
and the Qualified Counterparty is obligated to make payments based on a variable interest
rate index,payments by the City will be based on the specified fixed rate, and payments by
the Qualified Counterparty will be based on a rate equal to the average rate determined by
the variable interest rate index specified by the Payinent Agreement during the calendar
quarter preceding the calendar quarter in which the calculation is made; and
(2) City Obli�ated to Make Payments Based on Variable Interest Rate
Index. If the City is obligated to make Payment Agreement Payments based on a variable
interest rate index and the Qualified Counterparty is obligated to make payments based on
a fixed interest rate, payments by the City wi11 be based on an interest rate equal to the
average rate determined by the variable interest rate index specified by the Payment
Agreement during the calendar quarter preceding the calendar quarter in which the
calculation is made, and the Qualified Counterparty will make payments based on the fixed
rate specified by the Parity Payment Agreement; and
(3) Certain Pa_yment Agreements May be Disre ag rded.
Notwithstanding the provisions of subparagraphs (D)(1) and(2)of this definition, the City
shall not be required to (but may at its option) take into account (for the purpose of
determining Annual Debt Service) the effects of any Payment Agreement that has a
remaining term of ten(10) years or less;
(E) Balloon Parit,� atg ions. For purposes of calculating Annual Debt
Service on any Balloon Parity Obligations, it shall be assumed that the principal of those Balloon
Parity Obligations, together with interest thereon at a rate equal to the Assumed RBI-based Rate,
will be amortized in equal annual installments over a term of thirty (30) years from the date of
issuance.
Assumed RBI-based Rate
The term "Assumed RBI-based Rate" means, as of any date of calculation, an
assumed interest rate equal to ninety percent (90%) of the average RBI during the twelve (12)
calendar months immediately preceding the month in which the calculation is made.
Authoritv
The term"Authority"means the Redding Joint Powers Financing Authority.
5
Authorized Representative
The term"Authorized Representative"means, with respect to the City, the Mayor,
City Manager or Director o�Finance of the City, and any other person who from time to time may
be so designated by a Certificate of the City furnished to the Trustee. Such Certificate shall contain
the speciinen signature of such person, shall be signed on behalf of the City by an Authorized
Representative and may designate an alternate or alternates.
Available Reserves
The term"Available Reserves"means, as of any date of calculation, the amount of
unrestricted funds in the Electric Revenue Fund designated as "Available Reserves" by the City
and then available to pay Maintenance and Operation Costs and/or Annual Debt Service which
may include transfers to the Electric Revenue Fund from any fund which is legally available for
deposit in the Electric Revenue Fund.
Balloon Parit. O�bli a� tion
The term `Balloon Parity Obligation" means any Parity Obligation described as
such in such Parity Obligation.
2017 Bonds
The term "2017 Bonds" means $55,785,000 aggregate principal amount of the City of
Redding Electric System Refunding Revenue Bonds, Series 2017, authorized, executed, issued
and delivered by the City under and pursuant to the Law and under and pursuant to an indenture,
dated as of April 1, 2017, by and between the City and U.S. Bank Trust Company, National
Association as trustee and that are secured thereby.
2018 Bonds
The term "2018 Bonds" means $39,510,000 aggregate principal amount of the City of Redding
Electric System Refunding Revenue Bonds, Series 2018, authorized, executed, issued and
delivered by the City under and pursuant to an indenture dated as of March 1,2018,by and between
the City and U.S. Bank Trust Company, National Association as trustee and that are secured
thereby.
2026 Bonds
The term "2026 Bonds" means $[Series 2026 Par] aggregate principal amount of
the City of Redding Electric System Refunding Revenue Bonds, Series 2026,authorized,executed,
issued and delivered by the City under and pursuant to the Law and under and pursuant hereto and
that are secured hereby.
6
Business Dav
The term"Business Day"means a day on which the Trustee is open for business at
the Principal Corporate Trust Office of the Trustee.
Certificate of the Citv
The term "Certificate o�the City" means an instruinent in writing signed by an
Authorized Representative.
Citv
The term"City"means the City of Redding,a municipal corporation duly organized
and existing under and by virlue of the laws and Constitution of the State of California.
Citv Council
The term"City Council"means the City Council of the City.
Code
The term"Code"means the Internal Revenue Code of 1986 and all then applicable
regulations of the United States Department of the Treasury issued thereunder, and in this regard
reference to any particular section of the Code shall include reference to all successors to such
section of the Code.
Costs of Issuance
The term "Costs of Issuance" means all costs and expenses directly or indirectly
payable by or reimbursable to the City related to the authorization, sale, execution and initial
delivery of the 2026 Bonds, including,but not limited to, costs of preparation and reproduction of
documents, filing and recording fees, initial fees and charges of the Trustee (including fees and
expenses of their counsel), rating agency fees, verification agent fees, legal fees and charges and
fees and charges of other consultants and professionals, together with a11 fees and charges for
preparation, execution and safekeeping of the 2026 Bonds, and any other cost, charge, fee or
expense in connection with the authorization, sa1e, execution and initial delivery of the 2026
Bonds.
Costs of Issuance Fund
The term "Costs of Issuance Fund" means the City of Redding 2026 Electric
System Refunding Revenue Bonds Costs of Issuance Fund established pursuant to Section 2.12(b).
Debt Service Fund
The term "Debt Service Fund" means the City of Redding 2026 Electric System
Refunding Revenue Bonds Debt Service Fund established pursuant to Section 4.01.
�
Defeasance Securities
The term"Defeasance Securities"means the following:
(1) non-callable direct obligations of the United States o� America
("Treasuries"),
(2) evidences of ownership of proportionate interests in future interest and
principal payments on Treasuries held by a bank or trust company as custodian, under which the
owner of the investment is the real party in interest and has the right to proceed directly and
individually against the obligor and the underlying Treasuries are not available to any person
claiming through the custodian or to whom the custodian may be obligated,
(3) pre-refunded municipal obligations rated "AAA" and "Aaa" by S&P and
Moody's, respectively, or
(4) securities eligible for "AAA" defeasance under then existing criteria of
S&P;
or any combination of the above.
Deliverv Date
The term "Delivery Date" means [Closing Date], 2026.
Electric Revenue Fund
The term "Electric Revenue Fund" means the City of Redding Electric Revenue
Fund established by the City,which fund is to be maintained and applied by the City in accordance
with Section 4.01 hereof.
Electric Service
The term`Blectric Service"means the electricity furnished,made available or sold
by the Electric System.
Electric S, s��
The term`Blectric System"means the electric utility system of the City,comprising
all electric generation,transmission and distribution facilities and all general plant facilities related
thereto now owned by the City and a11 other prop�rties, structures or works for the generation,
transmission and distribution of electricity hereafter acquired by the City and determined by the
City to be a part of the Electric System,including all contractual rights for electricity and capacity;
together with all additions, betterments, extensions or improvements to such facilities, properties,
structures or works or any part thereof hereafter acquired.
8
Event of Default
The term"Event of Default" means an event described as such in Section 8.01.
Fiscal Year
The term "Fiscal Year" means the period beginning on July 1 of each year and
ending on the next succeeding June 30, or any other annual accounting period hereafter selected
and designated by the City Council as the Fiscal Year of the City.
Fitch
The term "Fitch" means Fitch Ratings, Inc., a corporation duly organized and
existing under and by virtue of the laws of the State of Delaware, and its successors or assigns,
except that if such corporation shall be dissolved or liquidated or shall no longer perform the
services of a municipal securities rating agency, then"Fitch" shall be deemed to refer to any other
nationally recognized municipal securities rating agency rating Parity Obligations pursuant to a
Written Order of the City.
Generallv Acce�ted Accounting Principles
The term "Generally Accepted Accounting Principles" means the uniform
accounting and reporting proced�ures set forth in publications of the American Instit�ute of Certified
Public Accountants or its successor and the Governmental Accounting Standards Board or its
successor, or by any other generally accepted authority on such procedures, and includes, as
applicable, the standards set forth by the Financial Accounting Standards Board or its successor.
Indenture
The term"Indenture"means this Indenture and all Supplemental Indentures.
Inde�endent Certi�ed Public Accountant
The term "Independent Certified Public Accountant" means any certi�ed public
accountant or firm of such accountants duly licensed and entitled to practice and practicing as such
under the laws of the State, appointed and paid by the City, and who, or each of whom:
(A) is in fact independent according to the Statement of A�uditing Standards No.
1 and not under the domination of the City;
(B) does not have a substantial financial interest, direct or indirect, in the
operations of the City; and
(C) is not connected with the City as a councilmember, officer or employee of
the City, but who may be regularly retained to audit the accounting recards of and make reports
thereon to the City.
9
Installment Pa, i�
The term "Installment Payments" means, collectively, the 2015 Installment Sale
Payments and the 2025A Installment Sale Payments.
2015 Installment Sale Ag;reement
The term "2015 Installment Sale Agreement" means that certain 2015 Installment
Sale Agreement, dated as of December 1, 2015, by and between the City and the Authority.
2025A Installment Sale A�reement
The term "2025A Installment Sale Agreement" means that certain 2025A
Installment Sale Agreement, dated as of April 1, 2025,by and between the City and the Authority.
2015 Installment Sale Payments
The term "2015 Installment Sale Payments" means the installment sale payments
payable by the City under and pursuant to the 2015 Installment Sale Agreement.
2025A Installment Sale Payments
The term"2025A Installment Sale Payments"means the installment sale payments
payable by the City under and pursuant to the 2025A Installment Sale Agreement.
Insurance Consultant
"Insurance Consultant"means
(a) the Risk Manager for the City or
(b) any insurance consultant or firm of insurance consultants generaIly
recognized to be well qualified in insurance consulting matters relating to electric utility and other
municipal systems, appointed and paid by the City, and who or each of whom --
(1) is in fact independent and not under the domination of the City;
(2) does not have a substantial financial interest, direct or indirect, in the
operations of the City; and
(3) is not connected with the City as a councilmember, officer, or employee of
the City, but may be regularly retained to make reports to the City.
Interest Payment Date
The term "Interest Payment Date" means June 1 and December 1 of each year,
commencing December 1, 2026.
10
Law
The term "Law" means Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of
Title 5 of the Government Code o�the State of California.
Maintenance and Operation Costs
The term "Maintenance and Operation Costs" means the costs paid or incurred by
the City for maintaining and operating the Electric System including, but not limited to, (a) a11
costs of electric energy and power generated or purchased by the City for resale, costs of
transmission, fuel supply and water supply in connection with the foregoing, (b) all expenses of
management and repair and other expenses necessary to maintain and preserve the Electric System
in good repair and working order, (c) all administrative costs of the City that are charged directly
or apportioned to the operation of the Electric System, such as salaries and wages of employees,
overhead, taxes (if any) and insurance premiums, (d) all other reasonable and necessary costs of
the City or charges required to be paid by it to comply with the terms hereof or of any resolution
authorizing the execution of this Indenture or of any resolution authorizing the issuance or
incurrence of any Parity Obligations or of such Parity Obligations, such as compensation,
reimbursement and indemnification of the trustee, remarketing agent or surety costs for the 2026
Bonds or Parity Obligations, letter of credit fees relating to Parity Obligations, fees and expenses
of Independent Certified Public Accountants, (e)a11 amounts required to be paid by the City under
contracts with a joint powers agency for the purchase of capacity, energy, transmission capability
or any other commodity or service in connection with the foregoing, which contract requires
payments to be made by the City thereunder to be treated as maintenance and operation costs of
the Electric System, (� all deposits to be made to the Rebate Fund pursuant to the Tax Certificate
and all deposits in comparable accounts established with respect to Parity Obligations required to
be deposited pursuant to the proceedings authorizing such Parity Obligations, and (g) any other
cost or expense which, in accordance with Generally Accepted Accounting Principles, is to be
treated as a cost of operating or maintaining the Electric System; but excluding in all cases
depreciation, replacement and obsolescence charges or reserves therefor and amortization of
intangibles.
Maximum Annual Debt Service
The term "Maximum Annual Debt Service" means with respect to any period of
time, the greatest Annual Debt Service payable during such period of time on the Outstanding
2026 Bonds and any Outstanding Parity Obligations or Parity Obligations then being issued.
Mood�
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
or assigns, except that if sueh corporation shall be dissolved or liquidated or shall no longer
perform the services of a municipal securities rating agency, then "Moody's" shall be deemed to
refer to any other nationally recognized municipal securities rating agency rating Parity
Obligations pursuant to a Written Order of the City.
11
Net Revenues
The term "Net Revenues"means, for any period of time in question, the Revenues
during such period less the Maintenance and Operation Costs during such period.
Opinion of Counsel
The term "Opinion of Counsel" means a written opinion of counsel of national
representation generally recognized to be we11 qualified in the field of law relating to municipal
bonds, retained by the City.
Outstandin�
The term"Outstanding,"when used as o�any particular time with reference to 2026
Bonds, means (subject to the provisions of Section 7.02) a112026 Bonds executed, authenticated
and delivered hereunder except --
(1) 2026 Bonds theretofore cancelled by the Trustee or surrendered to the
Trustee for cancellation;
(2) 2026 Bonds paid or deemed to have been paid pursuant to Section 9.01; and
(3) 2026 Bonds in lieu of or in substitution for which other bonds shall have
been executed by the City and authenticated and delivered by the Trustee pursuant to Section 2.09.
The term "Outstanding," when used as of any particular time with reference to
Parity Obligations means all Parity Obligations which have not been paid or otherwise satisfied as
provided in the proceedings and instruments pursuant to which such Parity Obligations have been
issued or incurred.
Owner
The term "Owner" means the registered owner of any Outstanding 2026 Bond, as
shown in the registration books maintained by the Trustee pursuant to Section 2.08.
Parit,y Obli a� t�
The term "Parity Obligation" means the 2017 Bonds, the 2018 Bonds, and the
Installment Payments and all obligations hereafter issued or incurred by the City the payment of
which constitutes a charge and lien on the Net Revenues and moneys in the Electric Revenue Fund
equal to and on a parity with the charge and lien upon the Net Revenues and moneys in the Electric
Revenue Fund for the payment of the 2026 Bonds.
Parity Payment Agreement
The term "Parity Payment Agreement" means a Payment Agreement which is a
Parity Obligation.
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Payment Agreelnent
The term "Payment Agreement" means a written agreement for the purpose of
managing or reducing the City's exposure to fluctuations in interest rates or for any other interest
rate, investment, cash flow, asset or liability managing purposes, entered into either on a current
or forward basis by the City and a Qualified Counterparty in connection with, or incidental to, the
entering into of any Parity Obligation,that provides for an exchange of payments based on interest
rates, ceilings or floors on such payments, options on such payments, or any combination thereof
or any similar device.
Payment Agreelnent Payments
The term "Payment Agreement Payments" means the amounts required to be paid
periodically by the City to the Qualified Counterparty pursuant to a Payment Agreement.
Pavment A�reement Recei�ts
The term "Payment Agreement Receipts" means the amounts required to be paid
periodically by the Qualified Counterparty to the City pursuant to a Payment Agreement.
Permitted Investments
The term "Permitted Investments" means any of the following obligations to the
extent then permitted by law:
(1) Direct obligations of the United States (including obligations issued or held
in book-entry form on the books of the Department of the Treasury,and CATS and TIGRS)
or obligations the principal of and interest on which are unconditionally guaranteed by the
United States.
(2) Bonds, debent�ures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such obligations are
backed by the full faith and credit of the United States (stripped securities are only
permitted if they have been stripped by the agency itself j:
(a) United States Export-Im�ort Bank
Direct obligations or fully guaranteed certi�cates of bene�cial ownership
(b) Farmers Home Administration
Certificates of beneficial ownership
(c) Federal Financin�Bank
(d) Federal Housin�Administration Debentures
(e) General Services Administration
Participation certificates
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(� Government National Mort�a�e Association ("GNMA"�
GNMA—guaranteed mortgage-backed bonds
GNMA—guaranteed pass-through obligations
(g) United States Maritime Administration
Guaranteed Title XI financing
(h) United States Det�artment of Housing and Urban Development
Project Notes
Local Authority Bonds
New Communities Debentures - United States government guaranteed
debentures
United States Public Housing Notes and Bonds -United States government
guaranteed public housing notes and bonds
(3) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-fu11 faith and credit United States government
agencies (stripped securities are only permitted if they have been stripped by the agency
itsel�:
(a) Federal Home Loan Bank S. s�
Senior debt obligations
(b) Federal Home Loan Mort�age Corporation ("FHLMC")
Participation Certificates
Senior debt obligations
(c) Federal National Mortg�a�e Association ("FNMA"�
Mortgage-backed securities and senior debt obligations
(d) Resolution Fundin_g Corporation Obli atg ions
(4) Money market funds registered under the Federal Investment Company Act
of 1940, whose shares are registered under the Federal Securities Act of 1933, and having
a rating by S&P of"AAAm-G," or "AAA-m," including funds for which the Trustee or
any of its affiliates (including any holding company, subsidiaries, or other affiliates)
provides investment advisory or other management services.
(5) Certificates of deposit secured at all times by collateral described in (1)
and/or (2) above. Such certificates must be issued by commercial banks (ineluding
affiliates of the Trustee), savings and loan associations ar mutual savings banks. The
eollateral must be held by a third party and the Trustee must have a perfected first security
interest in the collateral.
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(6) Certificates of deposit, savings accounts, deposit accounts or money market
deposits(including those of the Trustee and its affiliates)which are fully insured by Federal
Deposit Insurance Corporation, including Bank Insurance Fund and Savings Association
Insurance Fund.
(7) Investment Agreements, including Guaranteed Investment Contracts,
Forward Purchase Agreements and Reserve Fund Put Agreements.
(8) Commercial paper rated, at the time ofpurchase,"P-1"by Moody's and"A-
1+"by S&P and which matures not more than 270 calendar days after the date of purchase.
(9) Bonds or notes issued by any state or municipality which are rated by
Moody's and S&P in one of the two highest rating categories assigned by such agencies.
(10) Any state administered pool investment fund in which the City is statutorily
permitted or required to invest.
Principal Corporate Trust Office
The term"Principal Corporate Trust Office"means the corporate trust office of the
Trustee located in [ ], California(except for payments, exchanges, transfers and surrenders of
the 2026 Bonds, in which case"Principal Corporate Trust Office"means the corporate trust office
of the Trustee in St. Paul, Minnesota) or such other office or offices as the Trustee shall designate
from time to time.
Prior Bonds
The term"Prior Bonds"means Redding Joint Powers Financing Authority Electric
System Revenue Bonds, 2015 Series A, issued under that certain Trust Agreement, dated as of
December 1,2015,by and between U.S. Bank Trust Company,National Association(as successor
trustee to U.S. Bank National Association) and the Redding Joint Powers Financing Authority.
Prior Installment Pa, ii�
The term"Prior Installment Payments"means the installment payments and interest
thereon payable by the City under and pursuant to the 2015 Installment Sale Agreement.
Qualified Counter�arty
The term "Qualified Counterparty" means a party (other than the City) who is the
other party to a Payment Agreement and (1) (a) whose senior debt obligations are rated in one of
the three (3) highest rating categories of each of the Rating Agencies then rating the 2026 Bonds
or any Parity Obligations (without regard to any gradations within a rating category), or(b)whose
obligations under the Payment Agreement are guaranteed for the entire term of the Payment
Agreement by a bond insurer or other institution which has been or whose debt service obligations
have been assigned a credit rating in one of the three highest rating categories of each of the Rating
Agencies then rating the 2026 Bonds or any Parity Obligations (without regard to any gradations
15
within a rating category), and(2)who is otherwise qualified to act as the other party to a Payment
Agreement with the City under any applicable laws.
RBI
The term"RBI"means the Bond Buyer Revenue Bond Index or comparable index
of long-term municipal obligations chosen by the City, or, if no comparable index can be obtained,
eighty percent (80%) of the interest rate on actively traded thirty(30) year United States Treasury
obligations.
Rebate Fund
The term "Rebate Fund" means the City of Redding 2026 Electric System
Refunding Revenue Bonds Rebate Fund established pursuant to Section 5.04.
Rebate Instructions
The term "Rebate Instructions" means the applicable Rebate Instructions defined
in the Tax Certificate.
Rebate Rec�uirement
The term"Rebate Requirement"means the applicable Rebate Requirement defined
in the Tax Certificate.
Record Date
The term "Record Date" means, with respect to any Interest Payment Date, the
May 15 or November 15, as the case may be, preceding such Interest Payment Date, whether or
not such day is a Business Day.
Refundin�Fund
The term "Refunding Fund" means the City of Redding 2026 Electric System
Refunding Revenue Bonds Refunding Fund established pursuant to Section 2.12(a).
Revenues
The term "Revenues" means all gross income and revenue received or receivable
by the City from the ownership or operation of the Electric System,including all rates and charges
received by the City for the Electric Service and the other services and facilities of the Electric
System, all proceeds of insurance eovering business interruption loss relating to the Electric
System and all other income and revenue howsoever derived by the City from the ownership or
operation of the Electric System or otherwise arising from the Electric System, including all
Payment Agreement Receipts, and all income from the deposit or investment of any money in the
Electric Revenue Fund, but excluding (i) proceeds of taxes and (ii) refundable deposits made to
establish credit and advances or contributions in aid of construction and line extension fees.
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s&p
The term "S&P" means S&P G1oba1 Ratings, a Standard & Poor's Financial
Services LLC business, a corporation duly organized and existing under and by virtue of the laws
of the State of New York, and its successors or assigns, except that if such entity shall be dissolved
or liquidated or shall no longer perform the services of a municipal securities rating agency, then
"S&P" shall be deemed to refer to any other nationally recognized municipal securities rating
agency rating Parity Obligations pursuant to a Written Order of the City.
Subordinate Obli ations
The term "Subordinate Obligations" means obligations of the City authorized and
executed by the City under applicable law, the payments under and pursuant to which are payable
from Net Revenues, subject and subordinate to the payment of the 2026 Bonds hereunder and to
the payment of Parity Obligations. Such obligations may be payable from any fund established
for the purpose of paying debt service on such Subordinate Obligations.
S u�plemental Indenture
The term "Supplemental Indenture" means any indenture then in full force and
effect which has been executed by the City and the Trustee, amendatory hereof or supplemental
hereto; but only if and to the extent that such Supplemental Indenture is specifically authorized
hereunder.
Tax Certificate
The term"Tax Certificate"means the Tax Certi�icate and Agreement executed and
delivered by the City on the Delivery Date, including any and all exhibits attached thereto.
Trustee
The term "Trustee" means U.S. Bank Trust Company, National Association, a
national banking association duly organized and existing under and by virtue of the laws of the
United States, and authorized to accept and execute trusts of the character herein set forth, at its
Principal Corporate Trust Office, acting in its capacity as trustee under and pursuant hereto, and
its successors or assigns,or any other bank or trust company or national banking association having
its designated corporate trust office in Los Angeles or San Francisco, California,which may at any
time be substituted in its place as provided in Section 6.01.
Variable Interest Rate
The term "Variable Interest Rate" means any variable interest rate or rates to be
paid under any Parity Obligations, the method of computing whieh variable interest rate shall be
as specified in the applicable Parity Obligation, which Parity Obligation shall also specify either
(i) the payment period or periods or time or manner of determining such period or periods or time
for which each value of such variable interest rate shall remain in effect, and(ii) the time or times
based upon whieh any change in sueh variable interest rate shall beeome effective, and whieh
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variable interest rate inay,without limitation,be based on the interest rate on certain bonds or may
be based on interest rate, currency, commodity or other indices.
Variable Interest Rate Parity Obli at� ions
The term"Variable Interest Rate Parity Obligations"means, for any period of time,
all in accordance with the definition of"Annual Debt Service" set forth in this Section 1.01, any
Parity Obligations that bear a Variable Interest Rate during such period, except that (i) Parity
Obligations shall not be treated as Variable Interest Rate Parity Obligations if the net economic
effect of interest rates on particular payments of the Parity Obligations and interest rates on other
payments of the same Parity Obligations, as set forth in such Parity Obligations, or the net
economic effect of a Payment Agreement with respect to particular Parity Obligations, in either
case, is to produce obligations that bear interest at a fixed interest rate, and (ii) Installment
Payments and Parity Obligations with respect to which a Payment Agreement is in force shall be
treated as Variable Interest Rate Parity Obligations if the net economic effect of the Payment
Agreement is to produce obligations that bear interest at a Variable Interest Rate.
Written Order of the Citv
The term "Written Order of the City" means an instrument in writing signed by an
Authorized Representative.
SECTION 1.02. Equal Security. In consideration of the acceptance of the
2026 Bonds by the Owners thereof, the Indenture shall be deemed to be and shall constitute a
contract between the City and the Trustee for the benefit of the Owners from time to time of a11
the 2026 Bonds executed, authenticated and delivered hereunder and then Outstanding to secure
the full and final payment of the interest on and the principal of and the redemption premiums, if
any, on all such 2026 Bonds, subject to the agreements, conditions, covenants and terms contained
herein; and all agreements, conditions, covenants and terms contained herein reguired to be
observed or performed on behalf of the City shall be for the equal and proportionate benefit,
security and protection of the Owners from time to time of all 2026 Bonds without preference,
priority or distinction as to security or otherwise of any 2026 Bonds over any other 2026 Bonds.
ARTICLE II
AUTI�ORIZATION AND ISSUANCE OF 2026 BONDS
SECTION 2.01. Authorization and Purpose of 2026 Bonds.
(a) The City Council has reviewed all proceedings heretofore taken relative to
the authorization of the 2026 Bonds and has found, as a result of such review, and hereby finds
and determines that all acts, conditions and things required by th� Law to exist, happen and be
performed precedent to the issuance of the 2026 Bonds do exist, have happened and have been
performed in due time, form and manner as required by the Law, and that the City is now
authorized,pursuant to each and every requirement of the Law and hereof,to issue the 2026 Bonds
under the Law in the form and manner provided herein. The 2026 Bonds shall be entitled to the
benefit, protection and security of the provisions hereof. The 2026 Bonds shall be issued in the
]8
aggregate principal amount of [ 1 ($[Series 2026 Par]), sha11 be designated the
"City of Redding Electric System Refunding Revenue Bonds, Series 2026" and shall be issued by
the City under and pursuant to the Law and under and pursuant hereto. The 2026 Bonds may
contain or have endorsed thereon such descriptive provisions, specifications and words not
inconsistent with the provisions hereof as may be desirable or necessary to comply with custom or
the rules of any securities exchange or commission or brokerage board or otherwise as may be
determined by the City prior to the delivery thereof.
(b) The purpose for which the 2026 Bonds are to be issued is to provide funds
to the City which will be sufficient to provide for the payment and prepayment of[a portion of�
the Prior Installment Payments relating to the Prior Bonds and to pay all Costs of Issuance.
(c) From and after the issuance of the 2026 Bonds the findings and
determinations of the City Council respecting the 2026 Bonds shall be conclusive evidence of the
existence of the facts so found and determined in any action or proceeding in any court in which
the validity of such 2026 Bonds is at issue, and no bona fide purchaser of any of the 2026 Bonds
shall be required to see to the existence of any fact or to the performance of any condition or to the
taking of any proceeding required prior to such issuance or to the application of the purchase price
paid for the 2026 Bonds. The validity of the issuance of the 2026 Bonds shall not be dependent
on or affected in any way by any proceedings taken by the City for the payment and prepayment
of any of the Prior Installment Payments relating to the Prior Bonds, and the recital contained in
the 2026 Bonds that the 2026 Bonds are issued under and pursuant to the Law and under and
pursuant hereto shall be conclusive evidence of their validity and of the regularity of their issuance,
and a112026 Bonds shall be incontestable from and after their issuance. The 2026 Bonds shall be
deemed to be issued, within the meaning hereof, whenever the definitive 2026 Bonds (or any
temporary 2026 Bonds exchangeable therefor) have been delivered to the purchaser thereof and
the purchase price thereof received.
SECTION 2.02. Denominations of 2026 Bonds. The 2026 Bonds shall be
issued as fully registered bonds in denominations of five thousand dollars ($5,000) or any integral
multiple of�ive thousand dollars ($5,000) (not exceeding the principal amount of 2026 Bonds
maturing at any one time).
SECTION 2.03. Date and Mat�urity Dates of and Interest Rates for 2026
Bonds. The 2026 Bonds shall be dated their date of delivery, and sha11 mature on the dates and in
the principal amounts and shall bear interest at the rates per annum as set forth in the following
schedule:
Maturity Date Principal
(June 1) Amount Interest Rate
SECTION 2.04. Interest Payment Dates of 2026 Bonds. The interest on the
2026 Bonds shall be computed on the basis of a 360-day year of twelve (12) 30-day calendar
months, and sha11 be payable on [December 1, 2026], and semiannually thereafter on June 1 and
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December 1 in each year. The 2026 Bonds shall bear interest from the Interest Payment Date next
preceding the date of authentication thereof, unless they are authenticated on a day during the
period from the day prior to a Record Date for an Interest Payment Date to such Interest Payment
Date,both dates inclusive,in which event they shall bear interest from such Interest Payment Date,
or unless they are authenticated on a day on or before the Record Date for the first Interest Payment
Date, in which event they shall bear interest from the Delivery Date; provided, that if at the time
of authentication of any 2026 Bond interest is then in default on the Outstanding 2026 Bonds, such
2026 Bond shall bear interest from the Interest Payment Date to which interest has previously been
paid or made available for payment on the Outstanding 2026 Bonds.
SECTION 2.05. Form of 2026 Bonds. The 2026 Bonds and the
authentication and registration endorsement and assignment to appear thereon sha11 be
substantially in the forms attached hereto as Exhibit A and by this reference herein incorporated.
SECTION 2.06. Payment of 2026 Bonds. The interest on and principal of
and redemption premiums, if any, on the 2026 Bonds sha11 be payable in lawful money of the
United States of America to the registered owners of such 2026 Bonds,and the City and the Trustee
may deem and treat the registered owner of any 2026 Bond as the absolute owner of such 2026
Bond for all purposes hereof, whether such 2026 Bond shall be overdue or not, and neither the
City nor the Trustee shall be affected by any notice or knowledge to the contrary. Payment of
interest on the 2026 Bonds due on or before the maturity or prior redemption thereof shall be made
only to the person whose name appears in the registration books required to be kept by the Trustee
pursuant to Section 2.08 as the registered owner thereof at the close of business as of the Record
Date next preceding each Interest Payment Date, such interest to be paid by check mailed by first
class mail on each Interest Payment Date to such registered owner at his or her address as it appears
on such books, except that in the case of an Owner of one million dollars ($1,000,000) or more in
aggregate principal amount of 2026 Bonds then Outstanding, payment shall be made at such
Owner's option by wire transfer on each Interest Payment Date of immediately available funds to
an account in a bank or trust company or savings bank that is a member of the Federal Reserve
System and that is located in the United States of America according to written instructions given
by such Owner to the Trustee by the applicable Record Date. Payment of the principal of and
redemption premiums, if any, on the 2026 Bonds shall be made only to the person whose name
appears in the registration books required to be kept by the Trustee pursuant to Section 2.08 as the
registered owner thereof, such principal and redemption premiums, if any, to be paid upon
surrender of the 2026 Bonds at the Principal Corporate Trust Office of the Trustee at maturity or
upon prior redemption. All such payments of interest on and principal of and redemption
premiums, if any, on the 2026 Bonds shall be valid and effectual to satisfy and discharge the
liability on such 2026 Bonds to the extent of the sum or sums so paid.
SECTION 2.0'7. Execution of 2026 Bonds. The 2026 Bonds shall be signed
on behalf of the City by the manual or facsimile signature of an Authorized Representative and
countersigned by the manual or facsimile signature of the City Clerk, whereupon they shall be
delivered to the Trustee for authentication and delivery by the Trustee to the purchaser thereof
upon receipt of a Written Order of the City;provided,that in case any officer of the City who shall
have signed any of the 2026 Bonds shall cease to be such officer before the 2026 Bonds so signed
shall have been deliver�d to the purchaser thereof by the Trustee, such 2026 Bonds may
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nevertheless be delivered by the Trustee, and upon such delivery shall be as binding upon the City
as though such oft"icer who signed the same had continued to be such officer until such delivery;
and t�rovided further, that any 2026 Bond may be signed on behalf of the City by any person who
on the actual date of the execution of such 2026 Bond shall be the proper officer of the City,
although on the nominal date of such 2026 Bond such person shall not have been such officer of
the City. Only those 2026 Bonds that bear thereon a certificate of authentication manually
executed 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 authentication of the Trustee sha11 be
conclusive evidence that the 2026 Bonds so authenticated have been duly authorized, sold,
executed and delivered hereunder and are entitled to the benefits hereof.
SECTION 2.08. Transfer and Exchange of 2026 Bonds. The Trustee shall
keep at its Principal Corporate Trust Office sufficient books for the transfer and exchange of the
2026 Bonds, which books shall at all times during normal business hours and upon reasonable
prior notice be open to inspection by the City. Any 2026 Bond may, in accordance with its terms,
be transferred or exchanged on such books by the person in whose name it is registered, in person
or by his or her duly authorized attorney, upon payment by the Owner requesting such transfer or
exchange of any tax or other governmental charge required to be paid with respect to such transfer
or exchange and upon surrender of such 2026 Bond for cancellation accompanied by delivery of a
duly executed written instrument of transfer or exchange in a form acceptable to the Trustee.
Whenever any 2026 Bond or 2026 Bonds shall be surrendered for transfer or exchange, the City
shall execute and the Trustee shall authenticate and deliver a new 2026 Bond or 2026 Bonds of
the same maturity date and in authorized denominations in the same aggregate principal amount.
No transfers or exchanges of 2026 Bonds shall be required to be made after the
Record Date and prior to the Interest Payment Date or during the period commencing fifteen (15)
Business Days preceding the giving of any notice of redemption and ending on the date such notice
is given. No registration of transfer or exchanges shall be made of any 2026 Bond selected for
redemption.
SECTION 2.09. Mutilated, Destroyed, Stolen or Lost 2026 Bonds. In case
any 2026 Bond shall become mutilated or shall be believed by the City to have been destroyed,
stolen or lost, upon proof of ownership satisfactory to the City and the Trustee and upon the
surrender of such mutilated 2026 Bond at the Principal Corporate Trust Office of the Trustee, or
upon the receipt of evidence satisfactory to the Trustee of such destruction, theft or loss and upon
receipt of indemnity satisfactory to the Trustee, and also upon payment of a11 expenses incurred
by the City and the Trustee in the premises,the City shall execute and the Trustee shall authenticate
and deliver a new 2026 Bond or 2026 Bonds of the same maturity date for the same aggregate
principal amount in authorized denominations of like tenor and date and bearing such numbers
and notations as the Trustee shall determine in exchange and substitution for and upon cancellation
of the mutilated 2026 Bond or in lieu of and in substitution for the 2026 Bond so destroyed, stolen
or lost;�rovided,that if any such destroyed, stolen or lost 2026 Bond shall have matured,payment
of the amount due thereon may be made by the City upon receipt of like proof, indemnity and
payment of expenses.
21.
Any replacement 2026 Bonds issued pursuant to this section shall be entitled to
equal and proportionate benefits with al1 other 2026 Bonds issued hereunder, and the City and the
Trustee shall not treat both the original 2026 Bond and any replacement 2026 Bond as being
Outstanding for the purpose of determining the principal amount of 2026 Bonds which may be
issued hereunder or for the purpose of determining any percentage of 2026 Bonds Outstanding
hereunder, but both the original and the replacement 2026 Bond shall be treated as one and the
same.
SECTION 2.10. Temporary 2026 Bonds. The 2026 Bonds may be initially
issued in temporary form exchangeable for definitive 2026 Bonds when ready for delivery,which
temporary 2026 Bonds shall be printed, lithographed or typewritten, sha11 be of such
denominations as may be determined by the City, shall be issued in fu11y registered form and shall
contain such reference to any of the provisions hereof as may be appropriate, and each temporary
2026 Bond shall be executed by the City upon the same conditions and in substantially the same
manner as the definitive 2026 Bonds. If the City issues temporary 2026 Bonds,it will execute and
furnish definitive 2026 Bonds without delay, and thereupon the temporary 2026 Bonds may be
surrendered in exchange therefor at the Principal Corporate Trust Office of the Trustee, and the
Trustee shall authenticate and deliver in exchange for such temporary 2026 Bonds an equal
aggregate principal amount of definitive 2026 Bonds in authorized denominations of the same date
or dates, and until so exchanged, the temporary 2026 Bonds shall be entitled to the same benefits
as definitive 2026 Bonds issued hereunder.
SECTION 2.11. Use of Det�ository for 2026 Bonds.
(a) Notwithstanding anything to the contrary contained herein,the 2026 Bonds
shall be initially registered in the name of"Cede & Co.," as nominee of The Depository Trust
Company, New York, New York, and shall be initially issued as one 2026 Bond for each of the
maturities of such 2026 Bonds in the principal amounts set forth in Section 2.03, and The
Depository Trust Company, New York, New York, is hereby appointed initial depository for the
2026 Bonds. After the initial registration of the 2026 Bonds, registered ownership of the 2026
Bonds, or any portion thereof, may not thereafter be transferred except:
(i) To any successor of Cede & Co., as nominee of The Depository Trust
Company, or its nominee, or to any substitute depository designated pursuant to clause (ii)
of this subsection (a"substitute depository"); provided, that any successor of Cede & Co.,
as nominee of The Depository Trust Company or substitute depository, shall be qualified
under any applicable laws to provide the services proposed to be provided by it;
(ii) To any substitute depository not objected to by the Trustee, upon (1) the
resignation of The Depositary Trust Company or its successor(or any substitute depository
or its successor) from its functions as depository, or (2) a determination by the City to
substitute another depository for The Depository Trust Company(or its successor)because
The Depository Trust Company or its successor (or any substitute depository or its
successor)is no longer able to carry out its functions as depository; provided,that any such
substitute depository shall be qualified under any applicable laws to provide the services
proposed to be provided by it; or
22
(iii) To any person as provided below, upon (l) the resignation of The
Depository Trust Company or its successor(or substitute depository or its successor) from
its functions as depository, or (2) a determination by the City to remove The Depository
Trust Company or its successor (or any substitute depository or its successor) from its
functions as depository.
(b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection
(a) hereof, upon receipt of the 2026 Bonds by the Trustee, together with a Written Order of the
City to the Trustee, a new 2026 Bond for each maturity shall be executed, authenticated and
delivered in the aggregate principal amount of the 2026 Bonds, registered in the naine of such
successor or such substitute depository, or their nominees, as the case may be, all as specified in
such Written Order of the City. In the case of any transfer pursuant to clause (iii) of subsection
(a)hereof,upon receipt of a112026 Bonds by the Trustee,together with a Written Order of the City
to the Trustee, new 2026 Bonds shall be executed, authenticated and delivered in such
denominations numbered in the manner determined by the Trustee and registered in the names of
such persons as are requested in such Written Order of the City, subj ect to the limitations of Section
2.02, and thereafter the 2026 Bonds shall be transferred pursuant to the terms of Section 2.08;
provided, that the Trustee shall not be required to deliver such new 2026 Bonds on a date prior to
sixty(60) days after receipt of such Written Order of the City.
(c) The City and the Trustee shall be entitled to treat the person in whose name
any 2026 Bond is registered as the Owner thereof for all purposes hereof and any applicable laws,
notwithstanding any notice to the contrary received by the City or the Trustee, and the City and
the Trustee shall have no responsibility for transmitting payments to, communication with,
notifying, or otherwise dealing with any beneficial owners of the 2026 Bonds. Neither the City
nor the Trustee shall have any responsibility or obligation, legal or otherwise, to the beneficial
owners or to any other party, including The Depository Trust Company or its successor (or
substitute depository or its successor), except to The Depository Trust Company or its successor
(or substitute depository or its successor) as an Owner of any 2026 Bonds.
(d) So long as the 2026 Bonds are registered in the name of Cede & Co. or its
registered assigns, the City and the Trustee sha11 cooperate with Cede& Co., as sole Owner, or its
registered assigns, in effecting payment of the interest on and principal of and redemption
premiums,if any, on the 2026 Bonds by arranging for payment in such manner that funds far such
payments are properly identified and are made immediately available on the date they are due.
SECTION 2.12. A�plication of Proceeds of Sa1e of 2026 Bonds. Upon the
receipt of payment of the net purchase price of the 2026 Bonds when the same shall have been
duly sold by the City, the Trustee shall (upon receipt of a Written Order of the City) set aside and
deposit such net purehase priee of the 2026 Bonds in the following funds, in the following order:
(a) The Trustee shall deposit in the "City of Redding 2026 Electric System
Refunding Revenue Bonds Refunding Fund"(which fund the Trustee sha11 establish and maintain)
an amount of such purchase price and moneys equal to $[ �; and on the date of such
deposit, the Trustee shall transfer all money in the City of Redding 2026 Electric System
23
Refunding Revenue Bonds Refunding Fund to the U.S. Bank Trust Company, National
Association, as trustee for the Prior Bonds in accordance with a Written Order of the City;
(b) The Trustee shall deposit in the "City of Redding 2026 Electric System
Refunding Revenue Bonds Costs of Issuance Fund" (which fund the Trustee shall establish and
maintain) the remainder of such purchase price. A11 inoney on deposit in the Costs of Issuance
Fund shall be held by the Trustee in such fund and shall not be available to make payments to the
Owners and shall be applied by the Trustee at the written direction of the City solely for the
payment of Costs of Issuance; provided,that on October 1, 2026, or upon a prior determination by
the City that all Costs of Issuance have been paid and written notice to the Trustee of such
determination, any balance of money remaining in the Costs of Issuance Fund shall be withdrawn
from the Costs of Issuance Fund by the Trustee and deposited in the Debt Service Fund.
The Trustee may, in its discretion, establish a temporary fund or account in its books and
records to facilitate any such deposits.
ARTICLE III
REDEMPTION OF 2026 BONDS
SECTION 3.01. Redem�tion Prices and Terms of 2026 Bonds. (a) Obtional
Redemption. The 2026 Bonds maturing on and after June 1, [_], are subject to optional
redemption by the City prior to their respective stated maturity dates, upon mailed notice as
provided herein, as a whole or in part from such maturity dates determined by the City, on any
date on or after June 1, [ ], from any source of available funds, at a redemption price equal to
the principal amount of the 2026 Bonds to be redeemed plus accrued interest to the redemption
date, without premium.
Mandatory Redemption. [The term 2026 Bonds maturing on June 1, 20 are
subject to mandatory redem�ption prior to maturity, in part by lot, commencing on June 1, 20 and
on each June 1 thereafter to and including June ], 20 , at a redemption price equal to the principal
amount of the 2026 Bonds to be redeemed, together with accrued interest thereon to the date fixed
for redemption,without premium, according to the following schedule(subject to modification in the
event of optional redemption as described above):]
[2026 Bonds maturing
on June l,20_
Redemption Date Principal
(June 1) Amount
t Final Maturity.]
SECTION 3.02. Selection of 2026 Bonds for Redem�tion. If less than a11 the
Outstanding 2026 Bonds of any maturity date are to be redeemed at any one time,the Trustee shall
select the 2026 Bonds or the portions thereof of such maturity date not previously called for
24
redemption to be redeemed in integral multiples of five thousand dollars ($5,000), randomly by
lot in any manner that it deems appropriate and fair.
SECTION 3.03. Notice of Redemt�tion of 2026 Bonds. The Trustee shall
provide, pursuant to Section 10.08, a notice of redemption to the respective Owners of all 2026
Bonds selected for redemption in whole or in part and to all securities depositories selected by the
City to comply with custom or the rules of any securities exchange or commission or brokerage
board or otherwise as may be determined by the City in its sole discretion and designated in writing
to the Trustee. Such notice shall state the date of such notice, the 2026 Bonds to be redeemed, the
date of issue of such 2026 Bonds, the redemption date, the redemption price, the place of
redemption (including the name and appropriate address of the Trustee), the CU�SIP number and
maturity or maturities and, if less than all of the 2026 Bonds of any maturity are to be redeemed,
the numbers of the 2026 Bonds of such maturity to be redeemed and, in the case of 2026 Bonds to
be redeemed in part only, the respective portions of the principal amount thereof to be redeemed,
and shall give notice that further interest on such 2026 Bonds or the portions thereof to be
redeemed will not accrue from and after the redemption date, and shall require that such 2026
Bonds be then surrendered for redemption at the address of the Trustee so designated; provided,
that neither the City nor the Trustee shall have any responsibility for any defect in the CUSIP
number that appears on any 2026 Bond or in any redemption notice with respect thereto, and any
such redemption notice may contain a statement to the effect that CUSIP numbers have been
assigned by an independent service for convenience of reference and that neither the City nor the
Trustee shall be liable for any inaccuracy in such numbers. If any 2026 Bond so chosen for
redemption shall not be redeemable in whole, such notice shall also state that such 2026 Bond is
to be redeemed in part only and that upon presentation of such 2026 Bond for redemption there
will be issued in lieu of the unredeemed portion of principal thereof a new 2026 Bond or 2026
Bonds of the same maturity date of authorized denominations equal in aggregate principal amount
to such unredeemed portion.
In the event of an optional redemption of 2026 Bonds, the Trustee shall provide a
notice of redemption only after receipt of a Written Order of the City; provided, that if the City
shall not have deposited or otherwise made available to the Trustee the money required for the
payment of the redemption price of the 2026 Bonds to be redeemed at the time of such mailing,
such notice of redemption shaIl state that the redemption is expressly conditioned upon the timely
deposit of sufficient funds therefor with the Trustee.
SECTION 3.04. Partial Redem�tion of 2026 Bonds. Upon surrender of any
2026 Bond redeemed in part only, the City shall execute and the Trustee shall authenticate and
deliver to the registered owner thereof at the expense of the City a new 2026 Bond or 2026 Bonds
of the same maturity date and of authorized denominations equal in aggregate principal amount to
the unredeemed portion of the 2026 Bond surrendered.
SECTION 3.05. Effect of Redem�tion of 2026 Bonds. If notice of
redemption has been duly given as aforesaid and money for the payment of the principal of and
redemption premiums, if any, on,together with interest to the redemption date on,the 2026 Bonds
or portions thereof so called for redemption is held by the Trustee, then on th� redemption date
designated in sueh notiee such 2026 Bonds or sueh portions thereof shall become due and payable,
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and from and after the date so designated interest on the 2026 Bonds or such portions thereof so
called for redemption shall cease to accrue and the Owners of such 2026 Bonds shall have no rights
in respect thereo� except to receive payment of the principal or such portions thereof and the
redemption premiums, if any, thereon and the interest accrued thereon to the redemption date.
ARTICLE IV
REVENUES
SECTION 4.01. Pled�e of Net Revenues and Moneys in Electric Revenue
Fund• Electric Revenue Fund. Subject to the application thereof of the terms and conditions herein
provided, all Net Revenues of the Electric Systein and all moneys on deposit in the Electric
Revenue Fund(as hereinafter defined) are hereby irrevocably pledged to the payment of the 2026
Bonds which pledge shall be on a parity with any pledge of Net Revenues and moneys in the
Electric Revenue Fund securing Parity Obligations. This pledge shall constitute a first pledge of
and charge and lien upon the Net Revenues of the Electric System and moneys in the Electric
Revenue Fund for the payment of amounts due with respect to this Indenture and all Parity
Obligations in accordance with the terms hereof and thereof.
The payment of the principal of and interest on the 2026 Bonds from Net Revenues
shall be payable on a parity with the payment of the outstanding Installment Payments and interest
thereon.
The general fund of the City is not liable for, and neither the faith and credit nor the
taxing power of the City is pledged to, the payment of the 2026 Bonds.
In order to carry out and effectuate the obligation of the City contained herein to
pay debt service on the 2026 Bonds, the City agrees and covenants that all Revenues received by
it shall be deposited when and as received in the "City of Redding Electric Revenue Fund" (the
`Blectric Revenue Fund"), which fund has heretofore been established by the City and which fund
the City agrees and covenants to maintain separate and apart from other moneys of the City so
long as any 2026 Bond remains Outstanding hereunder, and all money on deposit in the Electric
Revenue Fund shall be applied and used only as provided herein. The City shall pay a11
Maintenance and Operation Costs (including amounts reasonably required to be set aside in
contingency reserves for Maintenance and Operation Costs the payment of which is not then
immediately required) from the Electric Revenue Fund as they become due and payable, and all
remaining money on deposit in the Electric Revenue Fund shall be set aside and deposited by the
City at the following times:
On or before the fourth Business Day before each Interest Payment Date, the City
shall, from the money in the Electric Revenue Fund,transfer to the Trustee for deposit in the "City
of Redding 2026 Electric System Refunding Revenue Bonds Debt Service Fund" (which fund the
Trustee shall establish and maintain), a sum equal to the amount of interest becoming due
hereunder on the next succeeding Interest Payment Date, as the case may be, plus, if a principal
payment is due on such succeeding Interest Payment Date, the amount of principal beeoming due
hereunder on the next succeeding Jun� 1; provided, no deposit need be made in the Debt Service
Fund if the amount available and eontained therein is at least equal to the amount of interest
becoming due hereunder on the next succeeding June 1 or December 1, as the case may be,plus,
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if a principal payment is due on such succeeding Interest Payment Date, the amount of principal
becoming due hereunder on the next succeeding June 1.
The City shall also, from such remaining moneys in the Electric Revenue Fund,pay
to the party entitled thereto or transfer or cause to be transferred to any applicable debt service or
other payment fund or account for any Parity Obligations, without preference or priority between
transfers made pursuant to this sentence and the preceding sentence, and in the event of any
insufficiency of such moneys ratably without any discrimination or preference, on the dates
specified in the proceedings relating to such Parity Obligations, the sum or sums required to be
paid or deposited in such debt service or other payment fund or account with respect to principal,
premium, if any, and interest on Parity Obligations (or in the case of Parity Payment Agreements,
the net payments due) in accordance with the terms of such Parity Obligations.
After making the foregoing deposits and transfers hereinabove required to be made,
the City shall apply any remaining money in the Electric Revenue Fund for any lawful purpose of
the City, including for the payment of any Subordinate Obligations in accordance with the
instruments authorizing such Subordinate Obligations; provided, however, that no moneys in the
Electric Revenue Fund shall be applied to any purpose not related to the expansion of the facilities
or business of the Electric System or replacement of facilities thereof, including the payment of
any Subordinate Obligations, in any Fiscal Year unless amounts remaining on deposit in the
Electric Revenue Fund shall be sufficient to make the remaining transfers hereinabove required to
be made in such Fiscal Year with respect to 2026 Bonds and Parity Obligations.
The City shall distribute Net Revenues available for debt service on Outstanding
2026 Bonds and all Outstanding Parity Obligations on a pro rata basis without regard to whether
each such Parity Obligations has a funded debt service reserve or a surety bond or other similar
funding instrument.
SECTION 4.02. Establishment and Maintenance of Accounts for Use of
Money in the Debt Service Fund. Subject to Section 5.04, all money in the Debt Service Fund
shall be set aside by the Trustee in the following respective special accounts within the Debt
Service Fund (each of which is hereby created and each of which the Trustee hereby covenants
and agrees to cause to be maintained) in the following order of priority:
(1) Interest Account,
(2) Principal Account, and
(3) Surplus 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.
(a) Interest Account. On each June 1 and December 1, commencing December
1, 2026,the Trustee shall set aside from the Debt Service Fund and deposit in the Interest Account
that amount of money which is equal to the aggregate amount of interest becoming due and payable
on all Outstanding 2026 Bonds on such June 1 or December 1, as the case may be.
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No deposit need be made in the Interest Account if the amount contained therein is
at least equal to the aggregate amount of interest becoming due and payable on all Outstanding
2026 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 2026 Bonds as it sha11 become due and payable
(including accrued interest on any 2026 Bonds purchased or redeemed prior to maturity).
(b) Princit�al Account. On each June 1, commencing June 1, [ ],the Trustee
shall set aside from the Debt Service Fund and deposit in the Principal Account an amount of
money equal to the aggregate principal amount of a11 Outstanding 2026 Bonds maturing on such
June 1.
No deposit need be made in the Principal Account if the amount contained therein
is at least equal to the aggregate amount of the principal of all Outstanding 2026 Bonds maturing
by their terms on such June 1.
All money in the Principal Account sha11 be used and withdrawn by the Trustee
solely for the purpose of paying the principal of the 2026 Bonds as they shall become due and
payable, whether at maturity or redemption.
(c) Surplus Account. The Trustee, on or before June 1 of each year shall
deposit in the Surpl�us Account a11 money remaining in the Debt Service Fund after the deposits
required by Section 5.04 and subsections (a) and (b) of this section have been made. On June 16
of each year, the Trustee, if the City is not then in default hereunder, shall disburse the money in
the Surplus Account to the City.
SECTION 4.03. Deposit and Investments of Money in Accounts and Funds.
Subject to Section 5.04, all money held by the Trustee in any of the accounts or funds established
pursuant hereto shall be invested in Permitted Investments at the Written Order of the City. If the
City fails to direct the Trustee to invest any such moneys, they sha11 be invested in Permitted
Investments of the type described in paragraph (4) thereof. All investments hereunder sha11 be
valued by the Trustee as frequently as may be requested by the City and not less frequently than
annually at the market val�ue thereof, exclusive of accrued interest.
For purposes of valuing such investments,market value on any particular date shall
mean: (a) as to investments the bid and asked prices of which are published on a regular basis in
The Wall Street Jourr�al (or if not there, then in The New Yark Times), the average of the bid and
asked prices for such investments so published on or most recently prior to such time of
determination; (b) as to investments the bid and asked prices of which are not published on a
regular basis in The Wall Street Journal or The New York Times, the average bid price at such
time of determination for such investments by any two nationally recognized government
securities dealers (selected by the Trustee in its absolute discretion) at the time making a market
in such investments or the bid price published by a nationally recognized pricing service; (c) as to
certificates of deposit and bankers acceptances, the face amount thereof plus acerued interest; and
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(d) as to any investment not specified above, the value thereof established by prior agreement
between the City and the Trustee.
Subject to Section 5.04, all investment earnings or profits received on any money
held in the funds and accounts established hereunder shall be deposited in the Debt Service Fund
(except for investment earnings on the Rebate Fund, which shall be retained therein).
The City acknowledges that to the extent regulations of the Comptroller of the
Currency or other applicable regulatory entity grant the City the right to receive brokerage
confirmations of security transactions as they occur, the City specifically waives receipt of such
confirmation to the extent permitted by law. The Trustee will furnish the City with periodic cash
transaction statements which shall include details for all investment transactions made by the
Trustee hereunder. The Trustee or any of its affiliates may act as sponsor, adviser or manager in
connection with any investments made by the Trustee hereunder.
SECTION 4.04. Conditions for the Execution of Parity Obli_at� ions. The City
shall not incur any obligation the payment of which is payable from and secured by a lien and
charge on the Net Revenues or moneys in the Electric Revenue Fund prior to the lien and charge
on Net Revenues and moneys in the Electric Revenue Fund securing the 2026 Bonds. The City
may at any time execute and deliver any Parity Obligation, the payment of which is payable from
and secured by a lien and charge on the Net Revenues and moneys in the Electric Revenue Fund
on a parity with the lien and charge on Net Revenues and moneys in the Electric Revenue Fund
securing the 2026 Bonds, provided:
(a) Either—
(1) during any twelve (12) consecutive calendar months out of the
immediately preceding eighteen (18) calendar month period, the Adjusted Annual Net Revenues
were at least equal to one hundred ten percent (110%) of the Maximum Annual Debt Service for
all Outstanding 2026 Bonds and a11 Outstanding Parity Obligations plus the Parity Obligation
proposed to be executed; or
(2) as evidenced by a Certificate of the City, the projected Adjusted
Annual Net Revenues during the succeeding first complete Fiscal Year following issuance of such
Parity Obligation in which interest is not capitalized in whole or in part from the proceeds of Parity
Obligations, is at least equal to one h�undred ten percent (110%) of the Maximum Annual Debt
Service for all Outstanding 2026 Bonds and a11 Outstanding Parity Obligations plus the Parity
Obligation proposed to be executed;
(b) If the Parity Obligation proposed to be executed is not a Parity Payment
Agreement, the proceeds of such Parity Obligation proposed to be executed shall be used solely to
finance or refinance (including reimbursement to the City of amounts advanced for such costs)
one or more additions, betterments or improvement to the Electrie System as designated by the
City and to pay any incidental costs and expenses related thereto (including the costs of issuance,
execution or delivery of such proposed Parity Obligation);
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(c) With respect to any Parity Obligation to be executed in connection with a
Payment Agreement, there shall have been delivered to the City evidence that the incurrence of
such Parity Obligation and Payment Agreement will not in and of itself cause a downgrade of the
rating issued by the Rating Agencies then rating the 2026 Bonds or any Parity Obligation;
(d) There shall have been delivered to the City an Opinion of Counsel
substantially to the effect that(1)the City has the right and power under applicable law to execute
and deliver the Parity Obligation, and the Parity Obligation has been duly and lawfully executed
and delivered by the City, is in full force and effect and is a valid and binding special obligation
of the City and enforceable in accordance with its terms (except as enforcement may be limited by
bankruptcy,moratorium,insolvency,reorganization,fraudulent conveyance and other similar laws
relating to the enforcement of creditors' rights), and (2) such Parity Obligation has been duly and
validly authorized and issued in accordance herewith; and
(e) If required by the terms of such Parity Obligation, a separate reserve has
been established for such Parity Obligation and that provision has been made to fund such reserve.
(� No Event of Default(or any event which would become an Event of Default
once all notice or grace periods have passed) exists unless such Event of Default or default sha11
be cured upon such issuance.
Notwithstanding the foregoing provisions, neither clause (a) nor clause (b) above
shall limit the ability of the City to execute any Parity Obligations at any time to refund any
Outstanding 2026 Bonds and Outstanding Parity Obligations which results in a net present value
savings to the City, inclusive of all costs of such refunding.
SECTION 4.05. Subordinate Obli at��. The City may incur Subordinate
Obligations without meeting any of the tests set forth in Section 4.04.
ARTICLE V
COVENANTS OF THE CITY
SECTION 5.01. Punctual Payment. The City will punctually pay the interest
on and principal of and redemption premiums, if any, on the 2026 Bonds in strict conformity with
the terms hereof and of the 2026 Bonds,and will faithfully observe and perform all the agreements,
conditions, covenants and terms contained herein and in the 2026 Bonds required to be observed
and performed by it.
SECTION 5.02. Against Encumbrances. The City wi11 pay or cause to be
paid when due all sums of money that may become due or purporting to be due for any labor,
services, materials, supplies or equipment furnished, or alleged to have been furnished, to or for
the City in, upon, about or relating to the Electric System and will keep the Electric System free
of any and all liens against any portion of the Electric System. In the event any such lien attaches
to or is filed against any portion of the Eleetric System, the City will eause each such lien to be
fu11y 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.
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If any such lien sha11 be reduced to final judglnent and such judgment or any process as may be
issued for the enforcement thereof is not promptly stayed, or if so stayed and such stay thereafter
expires, the City will forthwith pay or cause to be paid and discharged such judgment. The City
will,to the maximum extent permitted by 1aw, indemnify and hold the Trustee harmless from, and
defend each of them against, any claim, demand, loss, damage, liability or expense (including
attorneys' fees) as a result of any such lien or claim of lien against any portion of the Electric
System.
The City will not create or give, or permit the creation or giving of, any priority for
payment, mortgage, lien, pledge or encumbrance upon any of the Net Revenues or moneys in the
Electric Revenue Fund, except as provided in Section 4.04.
SECTION 5.03. A�ainst Sale or Other Disposition of the Electric System.
The City will not sell,transfer or otherwise dispose of any of the works,plant,properties,facilities
or other part or rights of the Electric System or any real or personal property comprising a part of
the Electric System if such sale,transfer or disposition would cause the City to be unable to satisfy
the requirements of Section 512 hereof.
SECTION 5.04. Tax Covenants and Matters� Rebate Fund.
(a) The City will not directly or indirectly use or permit the use of any proceeds
of the 2026 Bonds provided herein or any other funds of the City or take or omit to take any action
that would cause the 2026 Bonds to be "arbitrage bonds"within the meaning of Section 148(a) of
the Code or"federal guaranteed obligations"within the meaning of Section 149(b) of the Code or
"private activity bonds" as described in Section 141 of the Code. The City will not allow 10% or
more of the proceeds of the 2026 Bonds provided herein to be used in the trade or business of any
nongovernmental units and will not loan 5% or more of the proceeds of the obligations provided
herein to any nongovernmental units.
To that end, as long as any 2026 Bonds are unpaid, the City will comply with all
reguirements of such sections of the Code to the extent applicable to the obligations provided
herein. In the event that at any time the City is of the opinion that for purposes of this Section 5.04
it is necessary to restrict or to limit the yield on the investment of any moneys held by the Trustee
under this Indenture, the City shall so instruct the Trustee in writing, and the Trustee shall act in
accordance with such instructions.
The City covenants that it wi11 at all times do and perform all acts necessary or
desirable in order to assure that the interest on the 2026 Bonds will not be included in gross income
of the holders of the 2026 Bonds for federal income tax purposes and the City covenants that it
will take no action that would result in such interest being so included.
(b) The City will pay or cause to be paid the Rebate Requirement as provided
in the Tax Certificate. This covenant shall survive payment in full of the 2026 Bonds. The City
shall establish and maintain a fund separate from any other fund established and maintained
hereunder designated the Rebate Fund. The City will cause the Rebate Requirement to be
deposited in the Rebate Fund as provided in the Tax Certificate (which is incorporated herein by
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reference). Subject to the provisions of this section, moneys held in the Rebate Fund are hereby
pledged to secure payments to the United States of America. The City,the Trustee and the holders
of the 2026 Bonds will have no rights in or claim to such moneys. The City will invest all amounts
held in the Rebate Fund in Permitted Investments.
Upon receipt of the Rebate Instructions required by the Tax Certificate, the City
shall remit part or al1 of the balance held in the Rebate Fund to the United States of America as so
directed. In addition, if the Rebate Instructions so direct, the City will deposit, or cause to be
deposited moneys into or transfer or cause to be transferred moneys out of the Rebate Fund from
or into such accounts or funds as the Rebate Instructions direct.
Notwithstanding any provision of this section or of Article IX, if the City receives
an opinion of Bond Counsel that any specified action required under this section is no longer
required or that some further or different action is required to maintain the exclusion from gross
income for federal income tax purposes of interest on the 2026 Bonds, the City may conclusively
rely on such opinion in complying with the requirements of this section, and the covenants
hereunder shall be deemed to be modified to that extent.
SECTION 5.05. Maintenance and O�eration of the Electric System;Budgets.
The City will maintain and preserve the Electric System in good repair and working order at all
times and will operate the Electric System in an efficient and economical manner and will pay all
Maintenance and Operation Costs as they become due and payable.
Not later than September 1 of each year,the City will adopt and,if requested,make
available to the Trustee, a budget approved by the City Council of the City setting forth the
estimated Maintenance and Operation Costs and the estimated payments for Parity Obligations
and Subordinate Obligations for the then current Fiscal Year;provided, that any such budget may
be amended at any time during any Fiscal Year and, if requested, such amended budget shall be
made available to the Trustee. The Trustee shall have no duty to review such budget.
SECTION 5.06. Com�liance with Contracts. The City will comply with,
keep, observe and perform a11 agreements, conditions, covenants and terms, express or implied,
reguired to be performed by it contained in all contracts for the use of the Electric System and all
other contracts affecting or involving the Electric System to the extent that the City is a party
thereto.
SECTION 5.07. Continuin� Disclosure. The City hereby covenants and
agrees that it will comply with and carry out all of its obligations under the Continuing Disclosure
Agreement to be delivered by the City in connection with the execution and delivery of the 2026
Bonds. Notwithstanding any other provision hereof, failure of the City to comply with the
Continuing Disclosure Agreement sha11 not be considered an Event of Default hereunder;
provided, however, that the Trustee, upon the direction of the Owners or any benefieial owner of
2026 Bonds, may take such actions as may be necessary and appropriate, including seeking
mandate or specifie performance by eourt order, to eause the City to comply with its obligations
in this section and the Continuing Disclosure Agreement.
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SECTION 5.08. Insurance. The City will procure and maintain such
insurance relating to the Electric System which it shall deem advisable or necessary to protect its
interests and the interests of the Trustee, which insurance shall a�ford protection in such amounts
and against such risks as are usually covered in connection with municipal electric utility systems
similar to the Electric System; provided, that any such insurance may be maintained under a self-
insurance program so long as such self-insurance is maintained in the amounts and manner usually
maintained in connection with municipal electric utility systems similar to the Electric System and
is, in the opinion of an Insurance Consultant, financially sound. All policies of insurance required
to be maintained herein shall provide that the Trustee shall be given thirty(30)days' written notice
of any intended cancellation thereof or reduction of coverage provided thereby. The Trustee is not
responsible for the sufficiency or adequacy of any insurance provided hereunder.
SECTION 5.09. Accounting Records and Financial Statements. The City
will keep appropriate accounting records in which complete and correct entries shall be made of
all transactions relating to the Electric System, which records shall be available for inspection by
the Trustee (who shall have no duty to inspect) at reasonable hours and under reasonable
conditions.
SECTION 5.10. Protection of Security and Rights of Owners. The City will
preserve and protect the security of the 2026 Bonds and the rights of the Owners hereunder and
will warrant and defend such rights against all claims and demands of all persons.
SECTION 5.11. Payment of Taxes and Com�liance with Governmental
Regulations. The City will pay and discharge all taxes, assessments and other governmental
charges which may hereafter be lawfully imposed upon the Electric System or any part thereof
when the same shall become due. The City will duly observe and conform with all valid
regulations and reguirements of any governmental authority relative to the operation of the Electric
System or any part thereof, but the City shall not be required to comply with any regulations or
reguirements so long as the validity or application thereof sha11 be contested in good faith.
SECTION 5.12. Amount of Rates and Char�es. The City will at all times fix,
prescribe and collect rates and charges for the services, facilities and electricity of the Electric
System during each Fiscal Year which will be at least sufficient to yield: (a) Adjusted Annual
Revenues for such Fiscal Year at least equal to the sum of the following for such Fiscal Year:
(i) Maintenance and Operation Costs; (ii) Adjusted �nual Debt Service, and (iii) all other
payments required to meet any other obligations of the City which are charges, liens or
encumbrances upon or payable from the Electric Revenue Fund, including all amounts owing
under Subordinate Obligations; and(b)Adjusted Annual Net Revenues for such Fiscal Year equal
to at least one hundred ten percent(110%) of Adjusted Annual Debt Service for such Fiscal Year.
The City may make adjustments from time to time in such rates and charges and may make such
classification thereof as it deems necessary,but shall not reduce the rates and charges then in effect
unless the Adjusted Annual Revenues and the Adjusted Annual Net Revenues from such reduced
rates and charges wi11 at all times be sufficient to meet the requirements of this Section.
SECTION 5.13. Collection of Rates and Charges. The City will have in
effect at all times rules and regulations requiring each consumer or customer located on any
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premises connected with the Electric System to pay the rates, fees and charges applicable to the
Electric Service to such premises and providing for the billing thereof and for a due date and a
delinquency date for each bill. The City will not permit any part of the Electric System or any
facility thereof to be used or taken advantage of free of charge by any corporation, firm ar person,
or by any public agency (including the United States of America, the State o�California and any
city, county, district, political subdivision,public corporation or agency of any thereo�;provided,
that the City may without charge use the facilities of the Electric System and the Electric Service.
Nothing herein shall prevent the City, in its sole and exclusive discretion, from permitting other
parties from selling electricity to retail customers within the service area of the Electric System;
provided,however,that permitting such sales shall not relieve the City of its obligations hereunder.
SECTION 5.14. Further Assurances. The City will adopt, deliver, execute
and make any and a11 further assurances, instruments and resolutions as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance hereof and for the
better assuring and confirming unto the Owners of the rights and benefits provided to it herein.
ARTICLE VI
THE TRUSTEE
SECTION 6.01. The Trustee. U.S. Bank Trust Company, National
Association, at its Principal Corporate Trust Office, is hereby appointed Trustee hereunder for the
purpose of receiving all money which the City is required to deposit with the Trustee hereunder
and to allocate, use and apply such money as provided herein.
The City at any time may (prior to the occurrence of an Event of Default which
shall then be continuing), upon any breach of the trust set forth herein, remove any Trustee and
appoint any successor thereto upon thirty (30) days' written notice to the removed Trustee;
provided, that any such successor Trustee shall be a bank or trust company or national banking
association and that has a combined capital (exclusive of borrowed capital) and surplus of at least
one h�undred million dollars($100,000,000)and is subject to supervision or examination by federal
or state authority. If such bank or trust company or national banking association 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 purposes of this section the combined capital
and surplus of such bank 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.
Any Trustee may at any time resign by giving thirty(30)days' written notice to the
City and by giving to the Owners notice of such resignation, which notice shall be mailed to the
Owners at their addresses appearing in the registration books maintained by the Trustee pursuant
to Section 2.08. Upon receiving such notice of resignation, the City shall promptly appoint a
successor Trustee by an instrument in writing; provided, that if no such successor shall have been
appointed by the City within thirty (30) days after the receipt by the City of such notice, the
resigning Trustee may petition any eourt of competent jurisdiction to appoint a successor Trustee.
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Any resignation or removal of a Trustee and appointment of a successor Trustee
shall become effective only upon the appointment of and the acceptance of appointment by the
successor Trustee.
The Trustee is hereby authorized and directed to pay the interest on the 2026 Bonds
on each Interest Payment Date as provided herein and to pay the principal of and the redemption
premiums, if any, on the 2026 Bonds when duly presented for payment at maturity or on
redemption prior to maturity, and to cancel and dispose of all 2026 Bonds upon payment thereof
in a manner deemed appropriate by it.
The City shall from time to time, subject to any agreement between the City and
the Trustee then in force, pay to the Trustee compensation for its services, reimburse the Trustee
for all its advances and expenditures, including but not limited to advances to and fees and
expenses of independent accountants, counsel and engineers or other experts employed by it in the
exercise and performance of its duties and obligations hereunder, and indemnify and save the
Trustee and its officers, directors, employees and agents harmless against any costs, expenses,
losses and liabilities not arising from its own negligence or willful misconduct which it may incur
in the exercise and performance of its duties and obligations hereunder. The Trustee's rights to
indemnification and protection from liability hereunder and its rights to payment of its fees and
expenses shall survive its resignation or removal and final payment or defeasance of the 2026
Bonds.
Any bank or trust company into which the Trustee may be merged or converted or
with which it may be consolidated, or any bank or trust company resulting from any merger,
conversion or consolidation to which it shall be a party, or any bank or trust company to which the
Trustee may sell or transfer all or substantially all of its corporate trust business, if such bank or
trust company would be eligible under this section to serve as Trustee, shall be the successor
Trustee hereunder without the execution or filing of any paper or any further act, anything herein
to the contrary notwithstanding.
SECTION 6.02. Liabilityo uf Trustee. The recitals of facts, agreements and
covenants contained herein and in the 2026 Bonds shall be taken as statements, agreements and
covenants of the City, and the Trustee does not assume any responsibility for the correctness of
the same and does not make any representation as to the validity or sufficiency hereof or of the
2026 Bonds, the adequacy of any security afforded thereunder, or the correctness or completeness
of any information contained in any offering materials distributed in connection with the sale of
any 2026 Bonds, and shall not incur any responsibility in respect of any of the foregoing other than
in connection with the d�uties or obligations assigned to or imposed upon it hereunder. The Trustee
shall not be liable in connection with the performance of its duties and obligations hereunder
except for its own negligence or willful misconduct.
The Trustee shall be under no obligation to exercise any of the rights vested in it
hereunder at the request or direction of any Owner pursuant hereto unless such Owner shall have
offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, exp�nses
and liabilities which might be incurred by it in compliance with such request or direction.
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Except during the continuance of an Event of Default,
(a) the Trustee undertakes to perform such duties and obligations and only such
duties and obligations as are specifically set forth herein, and no implied duties or
obligations shall be read herein against the Trustee; and
(b) in the absence of negligence or willful misconduct on its part, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of the opinions
expressed therein,upon certificates or opinions furnished to the Trustee and conforming to
the requirements hereof.
In case an Event of Default has occurred and is then continuing, the Trustee shall
exercise such rights vested in it hereby, and use the same degree of care and ski11 in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
The Trustee shall not be accountable for the use by the City of any money which
the Trustee releases to the City or which the City otherwise receives, or to verify compliance by
the City with the provisions of Section 4.01 or Section 2.12. The Trustee shall not have any
obligation to incur any financial or other liability or risk in performing any duty or obligation or
in exercising any right or remedy hereunder. The Trustee shall be entitled to interest on all amounts
advanced by it hereunder at the maximum interest rate permitted by law. The Trustee in its
individual or other capacity may become the owner or pledgee of the 2026 Bonds with the same
rights it would have if it were not the Trustee.
The Trustee shall not be deemed to have knowledge of any Event of Default (other
than a payment default hereunder) until an officer of the Trustee at its Principal Corporate Trust
Office has been notified by the City in writing that such an Event of Default has occurred. The
Trustee shall not be bound to ascertain or inquire as to the performance or observance by any other
party of any of the agreements, conditions, covenants or terms hereof or of any of the documents
executed in connection with the 2026 Bonds.
The Trustee shall not be liable for an error of judgement made in good faith unless
it has been proven that the Trustee was negligent in ascertaining the pertinent facts.
The Trustee shall not be liable for any action taken or omitted by it in good faith at
the direction of the holders of not less than a majority in principal amount of the 2026 Bonds as to
the time,method, and place of conducting any proceedings for any remedy available to the Trustee
or the exercising of any power conferred by this Indenture.
Before taking action under Article VIII or upon the direction of the Owners, the
Trustee may require that indemnity satisfactory to it be furnished to it to protect it against all fees
and expenses,including those of its attorneys and advisors, and protect it against a111iability it may
incur.
No provision herein shall require to the Trustee to expend or risk its own funds or
otherwise incur any financialliability in the performance of any of its duties hereunder, or in the
exereise of any of its rights or powers.
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Under no circumstances shall the Trustee be liable in its individual capacity for the
payment of the 2026 Bonds.
SECTION 6.03. Notice to Trustee. The Trustee shall be protected in acting
upon any bond, certificate, consent, indenture, notice, order, report, request, requisition or other
paper or document believed by it to be genuine and to have been signed or presented by the proper
party or parties. The Trustee may consult with counsel, who may be counsel to the City, with
regard to legal questions, and the opinion of such counsel shall be fu11 and complete authorization
and protection in respect of any action taken or suffered hereunder in good faith and in accordance
therewith.
The Trustee shall not be bound to recognize any person as the Owner of a 2026
Bond unless and until such 2026 Bond is submitted for inspection, if required, and his title thereto
satisfactorily established, if disputed.
Whenever in the administration of its duties and obligations hereunder the Trustee
shall deem it necessary or desirable that a matter be proved or established 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 negligence or willful misconduct on the part of the
Trustee,be deemed to be conclusively proved and established by a Certificate of the City,and such
certificate shall be fu11 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 to it may seem reasonable.
ARTICLE VII
AMENDMENT OF OR SUPPLEMENT TO THE 1NDENTURE
SECTION 7.01. Procedure for Amendment of or Su��lement to the
Indenture. The Indenture and the rights and obligations of the City and of the Owners may be
amended or supplemented at any time by a Supplemental Indenture which shall become binding
when the written consents of the Owners of at least sixty percent (60%) in aggregate principal
amount of the 2026 Bonds then Outstanding (exclusive of 2026 Bonds disqualified as provided in
Section 7.02) are filed with the Trustee;provided,that no such amendment or supplement shall(1)
extend the maturity of any 2026 Bond, or reduce the interest rate thereon, or otherwise alter or
impair the obligation of the City to pay the interest thereon or the principal thereof or any
redemption premium thereon at the time and place and at the rate and in the currency and from the
funds provided herein without the express written consent of the Owner of such 2026 Bond, or
(2) reduce the percentage of 2026 Bonds required for the written consent to any amendment hereof
or supplement hereto,or(3)modify any rights or obligations of the Trustee without its prior written
assent thereto.
The Indenture and the rights and obligations of the City and of the Owners may
also be amended or supplemented at any time by a Supplemental Indenture which shall become
binding upon execution, without the consent of any Owners, but only to the extent permitted by
law and only for any one or more of the following purposes:
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(a) To add to the agreements and covenants of the City contained herein other
agreements and covenants thereafter to be observed, or to surrender any right or remedy
herein reserved to or conferred upon the City;
(b) To make such provisions for the purpose of curing any ambiguity contained
herein or of curing, correcting or supplementing any defective provision contained herein
or in regard to questions arising hereunder as the City may deem necessary or desirable
and not inconsistent herewith, which sha11 not materially adversely affect the interests of
the Owners;
(c) To provide for the issuance of any additional bonds and to provide the terms
and conditions under which such additional bonds may be issued, subject to and in
accordance with the provisions hereof;
(d) To amend or supplement the Indent�ure in such manner as to permit the
qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar
federal statute hereafter in effect, and to add such other agreements, conditions, covenants
and terms as may be permitted by said act or any similar federal statute, which shall not
materially adversely affect the interests of the Owners of the 2026 Bonds;
(e) To maintain the exclusion under the Code of interest on the 2026 Bonds
from gross income for federal income tax purposes or the exemption of interest on the 2026
Bonds from State of California personal income taxes;
(� To the extent necessary to obtain a municipal bond insurance policy or to
maintain any then existing rating on the 2026 Bonds;
(g) For any other purpose that does not materially adversely affect the interests
of the Owners.
The Trustee may conclusively rely upon and accept an Opinion of Counsel that an
amendment hereof is in conformity with the provisions of this article, is enforceable against the
City and does not adversely impact the tax-exempt status of the interest on the 2026 Bonds. The
Trustee is not obligated to enter into any amendment or supplement that adversely impacts its
rights.
Copies of any amendments of or supplements to the Indenture shall be sent to Fitch
by the City.
SECTION 7.02. Disqualified 2026 Bonds. Any 2026 Bonds owned or held
by or for the account of the City shall not be deemed Outstanding for the purpose of any consent
or other action or any calculation of Outstanding 2026 Bonds provided for herein, and shall not be
entitled to consent to, or take any other action provided for herein.
SECTION� 7.03. Endorsement or Re�lacement of 2026 Bonds After
Amendment. After the effective date of any action taken as hereinabove provided, the City may
determine that the 2026 Bonds may bear a notation,by endorsement in form approved by the City,
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as to such action, and in that case upon demand of the Owner of any 2026 Bond Outstanding on
such effective date and presentation of such Owner's 2026 Bond for such purpose at the Principal
Corporate Trust Office, a suitable notation as to such action shall be made on such 2026 Bond;
provided, that if the City shall so determine,new 2026 Bonds so modified as,in the opinion of the
City, shall be necessary to conform to such action shall be prepared and executed, and in that case
upon demand of the Owner of any 2026 Bond Outstanding at such effective date such new 2026
Bonds shall be exchanged at the Principal Corporate Trust Office of the Trustee, without cost to
each Owner, for 2026 Bonds then Outstanding, upon surrender of such Outstanding 2026 Bonds.
SECTION 7.04. Amendment by Mutual Consent. The provisions of this
article shall not prevent any Owner from accepting any amendment as to the particular 2026 Bonds
held by such Owner,provided that due notation thereof is made on such 2026 Bonds.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01. Events of Default and Acceleration of Maturities. If one or
more of the following events (herein an`Bvent of Default") shall happen, that is to say:
(a) If default shall be made in the due and punctual payment of the interest on
any 2026 Bond when and as the same shall become due and payable;
(b) If default shall be made in the due and punct�ual payment of the principal of
or the redemption premium, if any, on any 2026 Bond when and as the same shall become
due and payable, whether at maturity as therein expressed, by declaration or otherwise;
(c) If default shall be made by the City in the observance or performance of any
of the other agreements, conditions, covenants or terms on its part contained herein or in
the 2026 Bonds, and such default shall have continued for a period of thirty (30) days (or
for such additional time as is reasonably required to correct the same after the City shall
have given notice in writing of such default to the Trustee, but in no event later than sixty
(60) days after the delivery of such default notice); provided, that such default shall not
constitute an Event of Default hereunder if the City sha11 commence to cure such default
within such thirty(30)-day period and thereafter diligently and in good faith shall proceed
to cure such default within a reasonable period of time; or
(d) If the City shall file a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the United
States of America or the State of California, or if a court of competent jurisdiction shall
approve a petition, filed with or without the consent of the City, seeking reorganization
under the federal bankruptcy laws or any other applicable law of the United States of
America or the State of California, 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 City or of the whole or any substantial part of its property;
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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 Owners of not less than a majority in aggregate principal
amount of the 2026 Bonds at the time Outstanding sha11, by notice in writing to the City, declare
the principal of all of the 2026 Bonds then Outstanding and the interest accrued thereon to be
immediately due and payable, and upon any such declaration the same sha11 become and shall
become due and payable, anything contained herein or in the 2026 Bonds to the contrary
notwithstanding; provided,that if at any time after the principal of the 2026 Bonds shall have been
so declared due and payable and before any judgment or decree for the payment of the money due
thereunder shall have been obtained or entered, the City shall deposit with the Trustee a sum
sufficient to pay all principal on the 2026 Bonds matured prior to such declaration and all matured
installments of interest (if any) upon a11 the 2026 Bonds, with interest at the rate borne by such
2026 Bonds on such overdue installments of interest and principal,and all expenses of the Trustee,
including attorneys' fees,together with interest on any amounts advanced as provided herein, and
any and all other defaults known to the Trustee (other than in the payment of interest and principal
on the 2026 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 Owners of at least a majority in
aggregate principal amount of the 2026 Bonds then Outstanding, by written notice to the City and
to the Trustee, may (on behalf of the Owners of all the 2026 Bonds) rescind and annul such
declaration and its consequences; except that no such rescission or annulment sha11 extend to or
shall affect any subsequent default or shall impair or exhaust any right consequent thereon.
SECTION 8.02. Application of Funds Upon Acceleration. All money in the
funds provided herein(except the Rebate Fund)upon the date of the declaration of acceleration by
the Trustee as provided in Section 8.01, and all Net Revenues thereafter available to the City
hereunder, shall be transmitted to the Trustee and shall be applied by the Trustee in the following
order:
First, to the payment of the costs, fees and expenses of the Trustee, if any, in
carrying out the provisions of this article, including reasonable compensation to its agents,
attorneys and counsel, and thereafter to the payment of the costs and expenses of the Owners in
providing for the declaration of such Event of Default, including reasonable compensation to their
agents, attorneys and counsel;
Second, upon presentation of the severa12026 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 2026 Bonds for interest and
principal,with interest on the overdue interest and principal at the rate borne by such 2026 Bonds,
and in case such money shall be insufficient to pay in full the whole amount so owing and unpaid
upon the 2026 Bonds, then to the payment of such interest, principal and 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 8.03. Institution of Le�al Proceedin�s b_y Trustee. If one or more
of the Events of Default shall happen and be continuing, the Trustee in its discretion may, and
40
shall, at the direction o�the Owners of a inajority in aggregate principal amount of the 2026 Bonds
then Outstanding, and upon being indemnified to its satisfaction therefor, proceed to protect or
enforce its rights or the rights of the Owners of the 2026 Bonds under this Indenture 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 shall be deemed most
effectual in support of any of its rights and duties hereunder.
SECTION 8.04. Non-Waiver. Nothing in this article or in any other
provision hereof, or in the 2026 Bonds, shall a�fect or impair the obligation of the City, which is
absolute and unconditional, to pay the interest on and the principal of and the redemption
premiums, if any, on the 2026 Bonds to the respective Owners of the 2026 Bonds at the scheduled
dates of maturity or upon prior redemption as herein provided out of the Revenues and the other
funds provided herein pledged for such payment, or affect or impair the right of action, which is
also absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue
of the contract embodied in the 2026 Bonds and herein.
A waiver of any default or breach of duty or contract by any Owner 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, and no delay or omission by the Trustee or any Owner to exercise
any right accruing upon any default hereunder shall impair any such right or remedy or shall be
construed to be a waiver of any such default or an acquiescence therein, and every remedy
conferred upon the Owners by the Law or by this article may be enforced and exercised from time
to time and as often as shall be deemed expedient by the Owners.
If any suit, action or proceeding to enforce any right or exercise any remedy is
abandoned or determined adversely to the Owners, then the City,the Trustee and the Owners shall
be restored to their former positions, rights and remedies as if such suit, action or proceeding had
not been brought or taken.
SECTION 8.05. Actions by Trustee as Attorney-in-Fact. Any suit, action or
proceeding which any Owner 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 Owners, and the Trustee
is hereby appointed (and the successive respective Owners of the 2026 Bonds issued hereunder,
by taking and holding the same, shall be conclusively deemed so to have appointed it)the true and
lawful attorney-in-fact of the Owners for the purpose of bringing any such suit, action or
proceeding and to do and perform any and all acts and things for and on behalf of the Owners as a
class or classes as may be necessary or advisable in the opinion of the Trustee as such attorney-in-
fact; �rovided, that the Trustee shall have no duty or obligation to enforce any right or remedy
unless it has been indemnified by the Owners from any liability or expense, including without
limitation fees and expenses of its attorneys.
The Trustee may file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claim of the Trustee and the Owners allowed in any
judicial proceeding relative to the City, its creditors or its property.
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The Owners of a majority in principal amount of the 2026 Bonds may direct the
time, method and place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust powers conferred on it, provided that, the Trustee is provided indemnity
satisfactory to it prior to taking such actions and provided further that, the Trustee may refuse to
follow any direction that conflicts with law or the Indenture, is unduly prejudicial to the rights o�
other Owners, or would involve the Trustee in personal liability.
SECTION 8.06. Remedies Not Exclusive. No remedy herein conferred upon
or reserved to the Owners is intended to be exclusive of any other remedy, and every such remedy
shall be cumulative and sha11 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 Law or any other law.
SECTION 8.07. Limitation on Owners' Right to Sue. No Owner of any 2026
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 Indenture, unless (a) such Owner shall have previously
given to the Trustee written notice of the occurrence of an Event of Default as defined in Section
8.01 hereunder; (b)the Owners of at least a majority in aggregate principal amount of all the 2026
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 Owners
shall have tendered to the Trustee security or indemnity satisfactory to the Trustee 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 sha11 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 Owner of 2026 Bonds of
any remedy hereunder; it being understood and intended that no one or more Owners of 2026
Bonds shall have any right in any manner whatever by his or their action to enforce any right under
this Indent�ure, except in the manner herein provided, and that all proceedings at law or in equity
to enforce any provision of the Indenture sha11 be instituted, had and maintained in the manner
herein provided and for the equal beneft of all Owners of the 2026 Bonds Outstanding.
ARTICLE IX
DEFEASANCE
SECTION 9.01. Dischar�e of 2026 Bonds. If the City sha11 pay or cause to
be paid, or there shall otherwise be paid, to the Owners of all Outstanding 2026 Bonds the interest
thereon and the principal thereof and the redemption premiums, if any, thereon at the times and in
the manner stipulated therein and herein, then the Owners of such 2026 Bonds shall cease to be
entitled to the pledge of Net Revenu�s and moneys in the Electric Revenue Fund securing the 2026
Bonds, and all agreements, covenants and other obligations of the City to the Owners of such 2026
Bonds hereunder shall thereupon cease, terminate and become void and be discharged and
satisfied.
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Any Outstanding 2026 Bonds shall prior to the scheduled maturity dates thereof be
deemed to have been paid within the meaning of and with the effect expressed in the first paragraph
of this section (except that the City shall remain liable for the payment of such 2026 Bonds, but
only from the money deposited with the Trustee as herein provided) if there shall have been
deposited with the Trustee money to be held in trust by the Trustee sufficient�or such payment at
the maturity dates thereof or the redemption dates thereof.
Any Outstanding 2026 Bonds shall prior to the scheduled maturity dates thereof be
deemed to have been paid within the meaning of and with the effect expressed in the first paragraph
of this section (except that the City shall remain liable for the payment of such 2026 Bonds, but
only from the money or Defeasance Securities deposited with the Trustee as herein provided) if
(1) there shall have been deposited with the Trustee either money in an amount which shall be
sufficient or Defeasance Securities which are not subject to redemption prior to maturity the
interest on and the 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 suffcient to pay when due the
interest to become due on such 2026 Bonds on and prior to the maturity dates thereof or the
redemption dates thereof and the principal of and the redemption premiums, if any, on such 2026
Bonds on the maturity dates thereof or the redemption dates thereof, (2) there shall be provided to
the City a verification report from an independent nationally recognized certified public accountant
stating its opinion as to the sufficiency of the moneys or Defeasance Securities deposited with the
Trustee to pay and discharge the principal of, premium, if any, and interest on all Outstanding
2026 Bonds to be defeased in accordance with this Section, as and when the same shall become
d�ue and payable, and an Opinion of Counsel (which may rely upon the opinion of the certified
public accountant) to the effect that the 2026 Bonds being defeased have been legally defeased in
accordance with this Indenture and any applicable Supplemental Indenture, and (3) the City shall
have given the Trustee (in form satisfactory to the Trustee) irrevocable instructions to mail, as
soon as practicable, a notice to the Owners of such 2026 Bonds that the deposit reguired by clause
(1)of this paragraph has been made with the Trustee and that such 2026 Bonds are deemed to have
been paid in accordance with this section, and stating the maturity dates thereof or the redemption
dates thereof upon which money is to be available for the payment of the principal of and the
redemption premiums, if any, on such 2026 Bonds; provided, that no Defeasance Securities or
money deposited with the Trustee pursuant to this section (nor any interest on or principal
payments of such Defeasance Securities) shall be withdrawn or used for any purpose other than,
and such Defeasance Securities and money shall be held in trust for,the payment of the interest on
and the principal of and the redemption premiums, if any, on such 2026 Bonds as provided herein,
except that any money received from such interest on or principal payments of such Defeasance
Securities deposited with the Trustee which is not then needed for the foregoing purpose shall, to
the extent practicable, be reinvested as specified in a Written Order of the City filed with the
Trustee in Defeasance Securities maturing at the times and in the amounts sufficient to pay when
due the interest on and the principal of and the redemption premiums, if any, on such 2026 Bonds
on and prior to such maturity dates thereof or redemption dates thereof, and all interest earned
from such reinvestments shall be deposited in the Electric Revenue Fund.
SECTION 9.02. Unclaimed Monev. Anything contained herein to the
contrary notwithstanding, any mon�y held by the Trustee in trust for the payment and discharge
of the interest on or the principal of or the redemption premiums, if any, on any of the 2026 Bonds
43
which remains unclaimed for two (2) years after the date when such payments have become due
and payable, 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 payments became
due and payable, shall be repaid by the Trustee to the City as its absolute property and free from
trust, and the Trustee sha11 thereupon be released and discharged with respect thereto and the
Owners shall look only to the City for the making of such payments; provided, that before being
required to make any such payment to the City, the Trustee shall mail by first class mail to the
Owners of such 2026 Bonds (at the expense of the City) at their addresses as they appear in the
registration books maintained by the Trustee pursuant to Section 2.08 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 mailing of such notice, the balance of such money then
unclaimed will be returned to the City.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Liability of the Citv Limited to Net Revenues.
Notwithstanding anything contained herein, the City shall not be required to advance any moneys
derived from any source of income other than the Net Revenues and moneys in the Electric
Revenue Fund for the payment of the principal of or the interest on the 2026 Bonds or for the
performance of any agreements or covenants required to be performed by it contained herein. The
City may, however, advance moneys for any such purpose so long as such moneys are derived
from a source legally available for such purpose and may be legally used by the City for such
purpose.
The 2026 Bonds are special obligations of the City payable solely from the Net
Revenues and moneys in the Electric Revenue Fund as provided herein, and do not constitute a
debt of the City or of the State of California or of any political subdivision thereof within the
meaning of any constitutional or statutory debt limitation or restriction. The general fund of the
City is not liable, and neither the faith and credit nor the taxing power of the City is pledged, for
the payment of the principal of or the interest on the 2026 Bonds or the performance or satisfaction
of any other obligations of the City hereunder.
SECTION 10.02. Benefits of the Indenture Limited to Certain Parties.
Nothing herein, expressed or implied, is intended to give to any person other than the City, the
Trustee and the Owners any right or remedy under or by reason hereof. Any agreements,
conditions, covenants or terms hereof required to be observed or performed by and on behalf of
the City or any of�icer or employee thereof shall be for the sole and exclusive benefit of the Trustee
and the Owners.
SECTION 10.03. Successor Is Deemed Included in All References to
Predecessor. Whenever herein either the City or any officer or employee thereof is named ar
referred to, such referenee shall be deemed to include the suecessor to the powers, duties and
functions,with respect to the management, administration and control of the Electric System, that
are presently vested in the City or such officer or employee, and all the agreements, conditions,
covenants and terms contained herein required to be observed or performed by or on behalf of the
44
City or any officer or employee thereof sha11 bind and inure to the benefit of the respective
successors thereof whether so expressed or not.
SECTION 10.04. Execution of Documents b_y Owners. Any request,
declaration or other instrument which the Tndenture may require or permit to be executed by
Owners may be in one or more instruments of similar tenor and sha11 be executed by Owners in
person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution
by any Owner or his attorney of such request, declaration or other instrument, or of such writing
appointing such attorney, inay be proved by the certificate of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded in the state, territory or
commonwealth in which he purports to act that the person signing such request, declaration 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 of�cer.
Any request, declaration or other instrument or writing of the Owner of any 2026
Bond shall bind all future Owners of such 2026 Bond in respect of anything done or suffered to be
done by the City in good faith and in accordance therewith.
SECTION 10.05. Waiver of Personal Liability. No member of the City
Council or officer or employee of the City sha11 be individ�ually or personally liable for the payment
of the interest on or the principal of or the redemption premiums, if any, on the 2026 Bonds; but
nothing contained herein shall relieve any member of the City Council or officer or employee of
the City from the performance of any official duty provided by law or provided herein.
SECTION 10.06. Acquisition of 2026 Bonds by the City. A11 2026 Bonds
acquired by the City,whether by purchase or gift or otherwise, sha11 be surrendered to the Trustee
for cancellation and destruction.
SECTION 10.07. Content of Certificates and Re�orts. Every certificate or
report with respect to compliance with an agreement,condition,covenant or term contained herein
shall include (a) a statement that the person or persons making or giving such certificate or report
have read such agreement, condition, covenant or term 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 or opinions contained in such certificate or report 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 term has been complied with; and (d) a statement as to whether, in the
opinion of the signers, such agreement, condition, covenant or term has been complied with.
Any such certificate made or given by an officer of the City may be based, insofar
as it relates to legal matters, upon a certificate or opinion of or representation by counsel unless
such officer knows that the certificate or opinion or representation with respect to the matters upon
which his certificate may be based, as aforesaid, are erroneous, or in the exercise of reasonable
care should have known that the same were erroneous. Any such certificate or opinion ar
45
representation inade or given by counsel may be based, insofar as it relates to factual matters
information with respect to which is in the possession of the City, upon the opinion of or
representation by an officer or officers of the City unless such counsel knows that the opinion or
representation with respect to the matters upon which his opinion or representation may be based,
as aforesaid, are erroneous, or in exercise of reasonable care should have known that the same
were erroneous.
SECTION 10.08. Notice to Owners and Securities Depositories. Any notice
required to be given by mail to any Owners or to any securities depositories sha11 be given by
mailing a copy of such notice, first class postage prepaid, or by electronic means of
communication, to such Owners at their addresses appearing in the registration books required to
be kept by the Trustee pursuant to the provisions of Section 2.08 or to such securities depositories
not less than twenty (20) days nor more than sixty (60) days prior to the event concerning which
notice thereof is required to be given; provided, that neither failure to receive any such notice nor
any immaterial defect contained therein shall affect the sufficiency or validity of the proceedings
taken in connection with the action or the event concerning which such notice was given.
SECTION 10.09. Maintenance of Funds. Any fund required hereby to be
established and maintained by the City or the Trustee may be established and maintained in the
accounting records of the City or the Trustee either as an account or fund,and may,for the purposes
of such records, any audits thereof and any reports or statements with respect thereto, be treated
either as an account or as a fund; but all such records with respect to all such funds shall at all
times be maintained in accordance with sound accounting practices and with due regard for the
protection of the security of the 2026 Bonds and the rights of the Owners.
SECTION 10.10. Business Davs. 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 that 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 10.1 l. Article and Section Heading;s, Gender and References. The
headings or titles of the several articles and sections hereof(and in the table of contents appended
hereto) shall be solely for convenience of reference and shall not affect the meaning, construction
or effect hereof, and words of any gender shall be deemed and construed to include a11 genders,
and 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,"
"hereto," "herewith," "hereunder" and other words of similar import refer to the Indenture as a
whole and not to any particular article, section, subdivision ar clause hereof.
SECTION 10.12. Governin_.g Law. The Indenture shall be governed and
construed in accordance with the Law and the laws of the State of California.
SECTION 10.13. Notices. Whenever any notice is required to be given to the
City or the Trustee hereunder, such notice shall be mailed, first class mail, postage prepaid to the
following parties at the following addresses:
46
If to the Citv:
City of Redding
777 Cypress Avenue
Redding, CA 96001
Attention: Financial and Business Services/CFO
If to the Trustee:
U.S. Bank Trust Company, National Association
101 N. 1 st Ave., Suite 1600
Phoenix, AZ 85003
Attention:
Unless otherwise requested by the City or the Trustee, any notice required to be given
hereunder may be given through means of telecopy, telegraph, telegram, telex, facsimile
transmission, e-mail or other similar electronic means of communication confirmed by writing or
written transmission.
SECTION 10.14. Partial Invaliditv. If any one or more of the agreements,
conditions, covenants or terms or portions thereof provided herein to be observed or performed on
the part of the City or of the Trustee should be contrary to law,then such agreement or agreements,
such condition or conditions, such covenant or covenants, such term or terms or such portions
thereof shall be null and void and shall be deemed separable from the remaining agreements,
conditions, covenants and terms or portions thereof and sha11 in no way affect the validity hereof
or of the 2026 Bonds, and the Owners shall retain all the rights and benefits accorded to them
under the Law or any other applicable provisions of law. The City hereby declares that it would
have executed the Indenture and each and every other section, paragraph, subdivision, sentence,
clause and phrase hereof and would have authorized the issuance of the 2026 Bonds pursuant
hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions, sentences,
clauses or phrases of the Indenture or the application thereof to any person or circumstance may
be held to be unconstitutional, unenforceable or invalid.
SECTION 10.15. Execution in Several Counterparts. The Indenture may be
executed in any number of counterparts and each of such counterparts sha11 for all purposes be
deemed to be an original; and all such counterparts, or as many of them as the City and the Trustee
shall preserve undestroyed, shall together constitute but one and the same instrument.
SECTION 10.16. Transaction by Electronic Means. Each of the parties
hereto agrees that the transaction consisting of this Indenture may be conducted by electronic
means. Each party agrees, and acknowledges that it is such party's intent, that if such party signs
this Indenture using an electronic signatur�, it is signing, adopting, and accepting this Indenture
and that signing this agreement using an electronic signature is the legal equivalent of having
placed its handwritten signature on this Indenture on paper. Each party acknowledges that it is
being provided with an electronic or paper copy of this Indenture in a usable format.
47
48
IN WITNESS WHEREOF, the City of Redding has caused the Indenture to be
executed in its name and on its behalf by the City Manager and U.S. Bank Trust Company,
National Association, as Trustee, in token o�its acceptance of the trusts created hereunder, has
caused the Indenture to be executed in its corporate name by its duly authorized officer, all as of
the date and year first above written.
CITY OF REDDING
By
City Manager
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as Trustee
By
Authorized Officer
S-1
4147-8150-4612.4
EXHIBIT A
[FORM OF 2026 BONDS]
No. $
CITY OF REDDING
ELECTRIC SYSTEM REFUNDING REVENUE BOND,
SERIES 2026
Interest Rate Maturity Date Bond Date CUSIP
% June 1, [Closing Date], 2026
REGISTERED OWNER: Cede& Co.
PRINCIPAL AMOUNT: DOLLARS
The City of Redding, a municipal corporation duly organized and existing under
and by virtue of the laws of the State of California(the"City"),for value received hereby promises
to pay (but only from the Revenues and the other funds hereinafter referred to) to the registered
owner set forth above on the maturity date set forth above the principal amount set forth above
(subject to any right of prior redemption hereinafter provided for), together with interest thereon
computed on the basis of a 360-day year of twelve (12) 30-day calendar months from the interest
payment date next preceding the date of authentication of this 2026 Bond (unless this 2026 Bond
is authenticated on a day during the period from the day prior to a Record Date (as that term is
hereinafter de�ned) for an interest payment date to such interest payment date, both dates
inclusive, in which event it shall bear interest from such interest payment date, or unless it is
authenticated on a day on or before the Record Date for the �rst interest payment date, in which
event it shall bear interest from [Closing Date], 2026) until the principal hereof shall have been
paid, at the interest rate per annum set forth above, payable on [December 1, 2026], and
semiannually thereafter on December 1 and June 1 in each year. The interest on this 2026 Bond
due on ar before the maturity or prior redemption hereof sha11 be payable only to the person whose
name appears in the registration books required to be kept by U.S. Bank Trust Company,National
Association (the "Trustee") at its Principal Corporate Trust Of�ce (as that term is defined in the
Indenture hereinafter referred to, and herein the "Principal Corporate Trust Off ce") as the
registered owner hereof at the close of business as of the fifteenth (15th) day of the month next
preceding each interest payment date (each, a "Record Date"), with such interest to be paid by
check mailed by first class mail on each interest payment date to such registered owner at his
address as it appears on such books, except that in the case of a registered owner of one million
dollars ($1,000,000) or more in aggregate principal amount of 2026 Bonds then outstanding,
payment shall be made at such owner's option by wire transfer on eaeh interest payment date of
immediately available funds to an account in a bank or trust company or savings bank that is a
member of the Federal Reserve System and that is located in the United States of America
according to written instructions given by such owner to the Trustee by the applicable Record
Date. The prineipal of and redemption premium, i�any, on this 2026 Bond shall be payable only
A-1.
4147-8150-4612.4
to the person whose name appears in such registration books as the registered owner hereof, such
principal and redemption premium, if any, to be paid upon surrender of this 2026 Bond to the
Trustee at its Principal Corporate Trust Office at maturity or upon priar redemption. The interest
on and principal of and redemption premium, if any, on this 2026 Bond are payable in lawful
money of the United States of America.
This 2026 Bond is one of a duly authorized issue of bonds of the City in the
aggregate principal amount of[ dollars] ($[Series 2026 Par]) designated the "City
of Redding Electric System Refunding Revenue Bonds, Series 2026" (the "2026 Bonds")
authorized by the City Council of the City and issued by the City to provide funds to the City
which will be sufficient to provide for the payment and prepayment of [a portion of] the City's
outstanding Prior Installment Payments relating to the Prior Bonds executed and delivered to
finance the acquisition and construction of facilities for the generation, transmission and
distribution of electricity, which 2026 Bonds are issued under and pursuant to Articles 10 and 11
of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California
(collectively, the "Law"), and under and pursuant to the provisions of an Indent�ure executed and
entered into as of July 1, 2026 (the "Indenture") by and between the City and the Trustee, all of
like tenor and date (except for such variations, if any, as may be required to designate varying
numbers, denominations, maturities, interest rates or redemption provisions). All the 2026 Bonds
are equally and ratably secured in accordance with the terms and conditions of the Indenture
(copies of which are on file at the office of the City Clerk and at the Principal Corporate Trust
Office of the Trustee), and reference is hereby made to the Law and to the Indenture and any and
all amendments thereof and supplements thereto for a description of the terms on which the 2026
Bonds are issued and for the rights of the registered owners of the 2026 Bonds; and all the terms
of the Law and the Indenture are hereby incorporated herein and constitute a contract between the
City and the registered owner from time to time of this 2026 Bond, to all the provisions of which
the registered owner of this 2026 Bond, by his acceptance hereof, agrees and consents; and each
registered owner hereof sha11 have recourse to all the provisions of the Law and the Indenture and
shall be bound by all the terms and conditions thereof.
The 2026 Bonds are subject to redemption prior to maturity as described in the
Indenture.
Notice of redemption of any 2026 Bonds shall be mailed by first class mail by the
Trustee, not less than twenty (20) nor more than sixty (60) days prior to the redemption date, to
(i) the respective registered owners of the 2026 Bonds designated for redemption at their addresses
appearing on the registration books kept by the Trustee pursuant to the Indenture as the registered
owners thereof, and(ii) to those securities depositories selected by the City in accordance with the
Indenture and designated in writing to the Trustee. Each such notice sha11 state that on such
redemption date there will become due and payable on each of the 2026 Bonds to be redeemed the
redemption price thereof and,in the case of a 2026 Bond to be redeem�d in part only,the specified
portion of the principal amount thereof to be redeemed, and that from and after such redemption
date interest on such 2026 Bonds or such portions thereof shall cease to accrue, and each such
notice shall require that sueh 2026 Bonds be then surrendered at the Prineipal Corporate Trust
Office of the Trustee for payment of the redemption price thereof or of such portion thereof;
A-2
4147-8150-4612.4
provided,that neither failure to receive any such notice nor any immaterial defect contained therein
shall invalidate any of the proceedings taken in connection with any such redemption.
THE 2026 BONDS ARE SPECIAL OBLIGATIONS OF THE CITY PAYABLE
SOLELY FROM THE NET REVENUES AND MONEYS 1N THE ELECTRIC REVENUE
FUND AS PROVIDED IN THE INDENTURE AND DO NOT CONSTITUTE A DEBT OF THE
CITY OR OF THE STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION
THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT
LIMITATION OR RESTRICTION. THE GENERAL FUND OF THE CITY IS NOT LIABLE
AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY IS
PLEDGED FOR THE PAYMENT OF THE PRINCIPAL OF THE 2026 BONDS OR THE
INTEREST ON THE 2026 BONDS OR THE PERFORMANCE OR SATISFACTION OF ANY
OTHER OBLIGATION OF THE CITY UNDER THE 1NDENTURE.
The City has covenanted and warranted that, for the payment of the interest on and
principal of and redemption premium, if any, on this 2026 Bond and all such existing and
additional leases and installment sale agreements and a11 such additional revenue bonds when due,
there has been created and will be maintained by the Electric Revenue Fund(as that term is defined
in the Indenture)into which all Revenues shall be deposited, and as an irrevocable charge the City
has allocated the Revenues to the payment of the interest on and principal of and redemption
premiums, if any, for the 2026 Bonds and a11 such existing and additional leases and installment
sale agreements and all such additional revenue bonds, and the City will pay promptly when due
the interest on and principal of and redemption premium,if any,on this 2026 Bond and other bonds
of this issue and all such existing and additional leases and installment sale agreements and all
such additional revenue bonds out of the Revenues and such other funds, a11 in accordance with
the terms and provisions set forth in the Indenture.
If an Event of Default (as that term is defined in the Indenture) shall occur, the
principal of a112026 Bonds may be declared due and payable upon the conditions, in the manner
and with the effect provided in the Indenture; provided, that the Indenture provides that in certain
events such declaration and its consequences may be rescinded by the registered owners of at least
a majority in aggregate principal amount of the 2026 Bonds then outstanding.
The 2026 Bonds are issuable in the form of fully registered bonds in denominations
of five thousand dollars ($5,000) or any integral multiple of five thousand dollars ($5,000) (not
exceeding the principal amount of 2026 Bonds maturing at any one time). The registered owner
of any 2026 Bond or 2026 Bonds may surrender the same (together with a written instrument of
exchange satisfactory to the Trustee duly executed by the registered owner or his duly authorized
attorney)in exchange for an equal aggregate principal amount of 2026 Bonds of the same maturity
date of authorized denominations in the same aggregate principal amount,subj ect to the conditions
and upon payment of the charges provided in the Indenture.
The registration of this 2026 Bond is transferable on the registration books kept by
the Trustee by the registered owner hereof or by his duly authorized attorney upon surrender of
this 2026 Bond, together with a written instrument of transfer satisfactory to the Trustee duly
A-3
4147-8150-4612.4
executed by the registered owner or his duly authorized attorney, and thereupon a new 2026 Bond
or 2026 Bonds of the saine maturity date of authorized denominations in the same aggregate
principal amount will be issued to the transferee in exchange therefor in the manner, subject to the
conditions and tenns and upon payment of the charges provided in the Indenture. The City and
the Trustee may deem and treat the person in whose name this 2026 Bond is registered as the
absolute owner hereof for the purpose of receiving payment of,or on account of,the interest hereon
and principal hereof and redemption premium, if any, hereon and for all other purposes.
The rights and obligations of the City and of the registered owners of the 2026
Bonds may be amended or supplemented at any time in the manner, to the extent and upon the
terms provided in the Indenture, and in certain circumstances without the consent of such
registered owners,but no such amendment or supplement sha11(1) extend the maturity of this 2026
Bond, or reduce the interest rate hereon or otherwise alter or impair the obligation of the City to
pay the interest hereon or principal hereof or any redemption premium hereon at the time and place
and at the rate and in the currency and from the funds provided in the Indenture without the express
written consent of the registered owner of this 2026 Bond, or (2) reduce the percentage of 2026
Bonds required for the written consent to any amendment of or supplement to the Indenture, or(3)
modify any rights or obligations of the Trustee without its prior written assent thereto; all as more
fully set forth in the Indenture.
This 2026 Bond sha11 not be entitled to any benefits under the Indenture or become
valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall
have been manually signed by an authorized signatory of the Trustee.
A-4
4147-8150-4612.4
It is hereby certified 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 2026 Bond do
exist, have happened and have been performed in due time, form and manner as required by law
and that the ainount of this 2026 Bond, together with all other obligations of the City, does not
exceed any limit prescribed by the laws of the State of California and is not in excess of the
principal amount of the 2026 Bonds permitted to be issued under the Indenture.
IN WITNESS WHEREOF, the City of Redding has caused this 2026 Bond to be
executed in its name and on its behalf by the manual or facsimile signature of the Mayor of the
City and countersigned by the manual or facsimile signature of the City Clerk, and has caused this
2026 Bond to be dated [Closing Date], 2026.
CITY OF REDDING
By
Mayor
Countersigned:
City Clerk
A-5
4147-8150-4612.4
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
TO APPEAR ON 2026 BONDS]
This is one of the 2026 Bonds described in the within-mentioned Indenture which
has been authenticated on [Closing Date], 2026.
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By
Authorized Signatory
[FORM OF ASSIGNMENT TO APPEAR ON 2026 BONDS]
For value received the undersigned do(es) hereby sell, assign and transfer unto
the within 2026 Bond and do(es) hereby irrevocably constitute and
appoint attorney to transfer the same on the bond register of the Trustee,
with full power of substit�ution in the premises.
Dated:
SIGNATURE GUARANTEED BY:
NOTE: The signature(s) to this Assignment must correspond with the name(s) as written
on the face of the within 2026 Bond in every particular, without alteration or
enlargement or any change whatsoever, and the sigr�ature(s)must be guaranteed by
an eligible guarantor institution.
Social Security Number,Taxpayer ldenti�cation Number or other identifying number of Assignee:
[DTC LEGEND TO APPEAR ON 2026 BONDS]
Unless this 2026 Bond is presented by an authorized representative of The
D�pository Trust Company, a New York corporation ("DTC"), to the City or the Trustee for
registration of transfer, exchange, or payment, and any 2026 Bond issued is registered in the name
of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER LJSE HEREOF FOR VALUE
A-6
4147-8150-4612.4
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof Cede & Co., has an interest herein.
A-'7
4147-8150-4612.4
DRAFT 5/18/26
DIRECTION TO MAIL CONDITIONAL NOTICE OF REDEMPTION
This DIRECTION TO MAIL CONDITIONAL NOTICE OF REDEMPTION, dated June
, 2026,
WITNESSETH:
WI�EREAS, the City of Redding (the "City") and the Redding Joint Powers Financing
Authority(the "Authority")have entered into a 2015 Installment Sale Agreement, dated as of
December 1, 2015 (the "Installment Sale Agreement"); and
WHEREAS, the Authority and U.S. Bank National Association, as Trustee, have entered
into a Trust Agreement, dated as of December 1, 2015 (the "Trust Agreement"), pursuant to
which the A�uthority has issued its Redding Joint Powers Financing Authority Electric System
Revenue Bonds, 2015 Series A (the `Bonds"), $26,155,000 aggregate principal amount of which
remains outstanding; and
WI�EREAS, U.S. Bank Trust Company,National Association(the "Trustee"), is the
successor trustee to U.S. Bank National Association under the Trust Agreement; and
W�IEREAS, the City has determined to prepay,pursuant to Section 3.03(a) of the
Installment Sale Agreement, all of the unpaid 2015 Installment Sale Payments (as defined in the
Installment Sale Agreement) together with interest thereon on July [8], 2026 (the "Redemption
Date"); and
W�IEREAS,pursuant to Section 3.03(b) of the Installment Sale Agreement, the Trustee
has determined that the written notice of such prepayment set forth herein is a number of days
prior to such prepayment acceptable to the Trustee; and
WHEEAS,pursuant to Section 2.03 of the Trust Agreement, the proceeds of such
prepayment by the City shall be applied to the redemption of the Bonds on the Redemption Date
at a price egual to the principal amount thereof plus interest thereon accrued to the Redemption
Date; and
WHEREAS,pursuant to Section 2.03 of the Trust Agreement, the Trustee shall mail
notice of such redemption to the Holders (as defined in the Trust Agreement) not less than 20
days prior to the Redemption Date; and
WI�EREAS,pursuant to Section 2.03 of the Trustee Agreement, the Authority may, at its
option,prior to the date fixed for redemption rescind and cancel any notice of redemption.
NOW THEREFORE, in consideration of the premises, the City and the Authority hereby
direct the Trustee to mail, on or before June [_], 2026, in accordance with the Trust Agreement,
notice of the redemption of the Bonds in whole on the Redemption Date and to state in such
notice that such redemption shall be conditioned upon the successful issuance by the City, on or
prior to the Redemption Date, of its City of Redding Electric System Refunding Revenue Bonds,
Series 2026, in a principal amount sufficient to provide �unds sufficient to pay the redemption
4154-1804-4261.1
price of the Bonds on the Redemption Date and that the Authority may, at its option, prior to the
Redemption Date,rescind and cancel such notice of redemption.
CITY OF REDDING
By:
City Manager
REDDING JOINT POWERS FINANCING
AUTHORITY
By:
Executive Director
Acknowledged and Agreed:
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
2
4154-1804-4261.1
DRAFT 5/18/26
DIRECTION TO REDEEM BONDS
This DIRECTION TO REDEEM BONDS, dated July [8], 2026,
WITNESSETH:
WHEREAS, the City of Redding (the "City") and the Redding Joint Powers Financing
Authority(the "Authority") have entered into a 2015 Installment Sale Agreement, dated as of
December 1, 2015 (the "Installment Sale Agreement"); and
WI�EREAS, the Authority and U.S. Bank National Association, as Trustee, have entered
into a Trust Agreement, dated as of December 1, 2015 (the "Trust Agreement"),pursuant to
which the Authority has issued its Redding Joint Powers Financing Authority Electric System
Revenue Bonds, 2015 Series A (the "Bonds"), $26,155,000 aggregate principal amount of which
remains outstanding; and
WHEREAS, U.S. Bank Trust Company,National Association (the "Trustee"), is the
successor trustee to U.S. Bank National Association under the Trust Agreement; and
WHEREAS, the City has determined to prepay, pursuant to Section 3.03(a) of the
Installment Sale Agreement, all of the unpaid 2015 Installment Sale Payments (as defined in the
Installment Sale Agreement) together with interest thereon on the date hereof and has provided
the Trustee written notice of such prepayment; and
WHEREAS,pursuant to Section 2.03 of the Trust Agreement, the proceeds of such
prepayment shall be applied to the redemption of the Bonds on the date hereof at a price equal to
the principal amount of the Bonds plus interest thereon accrued to the date hereof; and
WI�EREAS, on June_, 2026, the City and the Authority delivered to the Trustee a
Direction to Mail Conditional Notice of Redemption(the "Direction"); and
WI�EREAS, pursuant to the Direction and Section 2.03 of the Trust Agreement, the
Trustee mailed notice of the redemption of the Bonds on the date hereof to the Holders (as
defined in the Trust Agreement) on June_, 2026; and
WHEREAS, the Trustee has advised the City and the Authority that on the date hereof
the Bonds are outstanding in the aggregate principal amount of$26,155,000 and that the amount
of interest on the Bonds accrued to the date hereof and unpaid is $ ; and
WIIEREAS, on the date hereof the City has issued its City of Redding Electric System
Refunding Revenue Bonds, Series 2026, pursuant to an Indenture, dated as of July 1, 2026,
between the Authority and U.S. Bank Trust Company, National Association, as Trustee (the
"2026 Trustee"); and
WI�EREAS, all conditions to the redemption of the Bonds on the date hereof have been
satisfied.
4143-0688-16371
NOW THEREFORE, in consideration o�the premises, the City and the Authority hereby
direct the Trustee to accept a transfer from the 2026 Trustee in the amount of$ on
the date hereof and to apply such amount to the redemption of the Bonds on the date hereof.
CITY OF REDDING
By:
City Manager
REDDING JO1NT POWERS FINANCING
AUTHORITY
By:
Executive Director
Acknowledged and Agreed:
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
2
4143-0688-16371
Norton Rose Fulbright IIS LLP draft dated 2-3-26
$[PAR AMOUNT]
City of Redding
Electric System Refunding Revenue Bonds,Series 2026
PURCHASE CONTRACT
[ �, 2026
City of Redding, California
Redding, California
Ladies and Gentlemen:
The undersigned, J�.P. Morgan Secur�ities LLC (the "Underwriter"), hereby offers to enter into
this Purchase Contract(the "Purchase Contract") with the City of Redding (the "City"), which, upon
the acceptance of this offer by the City,will be binding upon the City and the Underwriter. This offer
is made subject to written acceptance by the City prior to 11:59 P.M., California time, on the date
hereo£ If this offer is not so accepted,this offer will be subject to withdrawal by the Underwriter upon
notice delivered to the City at any time prior to acceptance by the City. Upon acceptance,this Purchase
Contract shall be in full force and effect in accordance with its terms and shall be binding upon the
City and the Underwriter. All capitalized terms used herein and not otherwise defined herein shall
have the respective meanings ascribed thereto in the Official Statement(as defined herein).
1. Purchase, Sale and Delivery of the Bonds.
(a) Subject to the terms and conditions, and in reliance upon the representations,
warranties and agreements set forth herein, the Underwriter hereby agrees to purchase and the City
agrees to sell and deliver to the Underwriter all (but not less than all) of the $[PAR AMOLTNT] City
of Redding Electric System Refunding Revenue Bonds, Series 2026 (the `Bonds"). The Bonds shall
be dated the date of delivery thereof and shall mature on such dates and shall bear interest at such rates
set forth in Sched�ule I attached hereto. Interest on the Bonds shall be payable semiannually on J�une 1
and December 1 of each year, commencing [June 1], 2026. The purchase price for the Bonds shall be
$[ ] (consisting of the aggregate principal amount of the Bonds plus $[ ] of[net] original
issue premium, less $[ ] of Underwriter's discount).
(b) The Bonds shall be issued pursuant to Articles 10 and 11, Chapter 3, Part 1,
Division 2, Title 5 of the Government Code of the State of California, and an Indenture, dated as of
[ ] 1, 2026 (the "Indenture"), by and between the City and U.S. Bank Trust Company, National
Association, as trustee (the "Trustee"), substantially in the form previously submitted to the
Underwriter with only such changes therein as shall be agreed upon by the City and the Underwriter.
3012129593 1
The Bonds shall be substantially in the form described in,and sha11 be issued and secured under
the provisions of, the Indenture. The Bonds are payable from, and secured by, a pledge of and lien on
N�et Revenues of the City's Electric System and moneys in the City's Electric Revenue Fund.
The proceeds of the Bonds will be used to (i)refund [a portion/all] of the City's obligation to
make installment sale payments (the "Refunded Obligations") under the 2015 Installment Sale
Agreement, dated as of December 1, 2015, by and between the City and the Redding Joint Powers
Financing Authority (the "Authority"), and thereby redeem [a corresponding portion of the/the
outstanding] Redding Joint Powers Financing Authority Electric Revenue Bonds, 2015 Series A (the
"2015A Bonds"); and(ii)pay costs of issuance of the Bonds.
The City will undertake,pursuant to a Continuing Disclosure Agreement relating to the Bonds
(the "Continuing Disclosure Agreement"), to provide certain annual financial information and
operating data relating to the Electric System and notices of the occurrence of certain events. A
description of this undertaking and the proposed form of Continuing Disclosure Agreement are set
forth in the Preliminary Official Statement (as defined herein) and will be set forth in the Official
Statement(as defined herein).
The Indenture, the Continuing Disclosure Agreement and this Purchase Contract are herein
referred to as the"Financing Documents."
(c) At 8:00 A.M., California time, on [CLOSING DATE], 2026, or at such other
time or on such other date as mutually agreed upon by the City and the Underwriter (such time and
date herein referred to as the "Closing Date"),the City will, subject to the terms and conditions hereof,
sell and deliver, or cause to be delivered, the Bonds to the Underwriter, in definitive form, duly
executed and authenticated, together with the other documents mentioned herein, and subject to the
terms and conditions hereof, the Underwriter will accept such delivery and pay the purchase price of
the Bonds as set forth in subparagraph (a) above in immediately available funds (such delivery and
payment being herein referred to as the "Closing") to the order of the Trustee. Sale, delivery and
payment as aforesaid shall be made at the offices of Orrick, Herrington & Sutcliffe LLP (`Bond
Counsel"), San Francisco, California, or such other place as shall have been mut�ually agreed upon by
the City and the Underwriter, except that the Bonds shall be delivered through the Trustee via the
F.A.S.T. delivery book-entry system of The Depository Trust Company ("DTC") in New York, New
York, or at such other place as shall have been mutually agreed upon by the City and the Underwriter,
in fully registered book-entry eligible form (which may be typewritten) and registered in the name of
Cede & Co. as nominee of DTC.
2. Offerin�; Determination of Issue Price.
(a) The Underwriter agrees to make a bona fide public offering of all of the Bonds
at prices not in excess of the initial public offering prices or at yields not lower than the initial public
offering yields set forth in the Official Statement. The Underwriter reserves the right to change such
initial offering prices or yields from time to time after such offering as they shall deem necessary in
connection with the marketing of the Bonds. Except as set forth in subsection (d) below, the
Underwriter reserves the right to change such initial offering prices after such offering as they sha11
deem necessary in connection with the marketing of the Bonds.
(b) The Underwriter agrees to assist the City in establishing the issue price of the
Bonds and shall execute and deliver to the City at Closing an "issue price" or similar certificate,
301212959.3
2
together with the supporting pricing wires or equivalent communications, substantially in the form
attached hereto as E�iibit D, with such modifications as may be appropriate or necessary, in the
reasonable judgment of the Underwriter, the City and Bond Counsel, to accurately reflect, as
applicable,the sales price or prices or the initial offering price or prices to the public of Bonds.
(c) Except as otherwise set forth in Schedule I attached hereto, the City will treat
the first price (meaning single) at which 10% of each maturity of the Bonds (the"10%test")is sold to
the public as the issue price of that maturity (if different interest rates apply within a maturity, each
separate CUSIP number within that maturity wi11 be subject to the 10% test). At or promptly after the
execution of this Purchase Contract,the Underwriter shall report to the City the price ar prices at which
it has sold to the public each maturity of Bonds. If at that time the 10%test has not been satisfied as to
any maturity of the Bonds, the Underwriter agrees to promptly report to the City the prices at which it
sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue,whether
ar not the date of Closing has occurred, until either (i) the Underwriter has sold all Bonds of that
maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the
Underwriter's reporting obligation after the date of Closing may be at reasonable periodic intervals or
otherwise upon request of the City or Bond CounseL For purposes of this Section, if Bonds mature on
the same date but have different interest rates, each separate CUSIP number within that maturity will
be treated as a separate maturity of the Bonds.
(d) The Underwriter confirms that it has offered the Bonds to the public on or
before the date of this Purchase Con�ract at the o�fering price or prices (the "initial offering price"), or
at the corresponding yield or yields, set forth in Schedule T attached hereto, except as otherwise set
forth therein. Schedule I also sets forth, as of the date of this Purchase Contract, the maturities, if any,
of the Bonds for which the Underwriter represents that (i) the 10% test has been satisfied (assuming
orders are confirmed by the end of the day immediately following the day of execution of this Purchase
Contract) and(ii)the 10%test has not been satisfied and for which the City and the Underwriter agree
that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the
initial offering price to the public of each such maturity as of the sale date as the issue price of that
maturity (the "hold-the-offering-price rule"). So long as the hold-the-offering-price rule remains
applicable to any maturity of the Bonds, the Underwriter will neither offer nor se11 unsold Bonds of
that maturity to any person at a price that is higher than the initial offering price to the public during
the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (Sth)business day after the sale date; or
(2) the date on which the Underwriter has sold at least 10%of that maturity
of the Bonds to the public at a price that is no higher than the initial offering price to the public.
The Underwriter will advise the City promptly after the close of the fifth (Sth) business day
after the sale date whether it has sold 10% of that mat�urity of the Bonds to the public at a price that is
no higher than the initial offering price to the public.
(e) The Underwriter confirms that:
(i) any selling group agreement and any third-party distribution agreement relating
to the initial sale of the Bonds to the public,together with the related pricing wires, contains or
will contain language obli�ating each dealer who is a member of the sellin� �roup and each
broker-dealer that is a party to such third-party distribution agreement, as applicable:
301212959.3
3
(A) (1) to report the prices at which it sells to the public the unsold Bonds of
each maturity allocated to it, whether or not the date of Closing has occurred, until
either all Bonds o�that maturity allocated to it have been sold or it is notified by the
Underwriter that the 10% test has been satisfied as to the Bonds of that maturity,
provided that, the reporting obligation after the date of Closing may be at reasonable
periodic intervals or otherwise upon request of the Underwriter,and(B)to comply with
the hold-the-offering-price rule, if applicable, if and for so long as directed by the
Underwriter,
(B) to promptly notify the Underwriter of any sales of Bonds that, to its
knowledge, are made to a purchaser who is a related party to an underwriter
participating in the initial sale of the Bonds to the public(each such term being used as
defined below), and
(C) to acknowledge that,unless otherwise advised by the dealer or broker-
dealer,the Underwriter shall assume that each order submitted by the dealer or broker-
dealer is a sale to the public.
(ii) any selling group agreement relating to the initial sale of the Bonds to the
public, together with the related pricing wires, contains or will contain language obligating
each dealer that is a party to a third-party distribution agreement to be employed in connection
with the initial sale of the Bonds to the public to require each broker-dealer that is a party to
such third-party distribution agreement to (A) report the prices at which it se11s to the public
the unsold Bonds of each maturity allocated to it, whether or not the date of Closing has
occurred, until either a11 Bonds of that maturity allocated to it have been sold or it is notified
by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that
maturity,provided that,the reporting obligation after the date of Closing may be at reasonable
periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply
with the hold-the-offering-price rule, if applicable, if and for so long as directed by the
Underwriter or the dealer and as set forth in the related pricing wires.
(� The City acknowledges that, in making the representations set forth in this
section, the Underwriter wi11 rely on (i) in the event a selling group has been created in connection
with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the
selling group to comply with the requireinents for establishing issue price of the Bonds,including,but
not limited to,its agreement to comply with the hold-the-offering-price ru1e,if applicable to the Bonds,
as set forth in a selling group agreement and the related pricing wires, and(ii)in the event that a third-
party distribution agreement was employed in connection with the initial sale of the Bonds to the
public, the agreement of each broker-dealer that is a party to such agreement to comply with the
requirements for establishing issue price of the Bonds, incl�uding, but not limited to, its agreement to
comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party
distribution agreement and the related pricing wires.
(g) The Underwriter acknowledges that sales of any Bonds to any person that is a
related party to an underwriter participating in the initial sale of the Bonds to the publie (eaeh sueh
term bein�used as defined below) shall not constitute sales to the public for purposes of this section.
Further, for purposes of this section:
(1) "public"means any person other than an underwriter or a related party,
301212959.3
4
(2) "underwriter" means (A) any person that agrees pursuant to a written
contract with the City(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 third-party distribution agreement participating in the
initial sale of the Bonds to the public);
(3) 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) more than
50% common ownership of the voting power or the total value of their stock, if both
entities are corporations (including direct ownership by one corporation of another),
(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
(4) "sale date"means the date of execution of this Purchase Contract by a11
parties.
3. Use and Preparation of Official Statement. The City hereby ratifies, confirms and
approves of the use and distribution by the Underwriter prior to the date hereof of an official statement
in preliminary form dated [ ], 2026 relating to the Bonds (which, together with all appendices
thereto, is referred to herein as the "Preliminary Official Statement"). The City has deemed final the
Preliminary Official Statement as of its date for purposes of Rule 15c2-12 promulgated under the
Securities Exchange Act of 1934 ("Rule 15c2-12"), except for information permitted to be omitted
therefrom by Rule 15c2-12. The City hereby agrees to deliver or cause to be delivered to the
Underwriter, within seven (7) business days of the date hereof and at least in sufficient time to
accompany any orders or confirmations that request payment from any customer, copies of the final
official statement, dated the date hereof(which, together with all information previously permitted to
have been omitted by Rule ]Sc2-]2 and any amendments or supplements to such official statement as
have been approved by the City and the Underwriter is referred to herein as the "Official Statement")
in sufficient quantity to enable the Underwriter to com�ply with the rules of the Securities and Exchange
Commission and the Municipal Securities Rulemaking Board. The City hereby approves of the use
and distribution by the Underwriter of the Official Statement in connection with the offer and sale of
the Bonds. At the time of or prior to the Closing Date, the Underwriter shall file a copy of the Official
Statement in printed or electronic form with,and as permitted by,the M�unicipal Securities R�ulemaking
Board through its Electronic M�unicipal Market Access System. The Underwriter shall advise the City
of the date of such filing.
4. Representations, Warranties and A�reements of the City. The City hereby represents,
warrants and agrees with the Underwriter as follows:
(a) The City is a municipal corporation duly or�anized and existing under and by
virtue of the laws of the State of California and has a11 necessary power and authority to enter into and
perform its duties under the Financin�Documents and,when executed and delivered by the respective
301212959.3
5
parties thereto, the Financing Documents and the Bonds will constitute the legal, valid and binding
obligations of the City in accordance with their respective terms.
(b) By all necessary official action of the City prior to or concurrently with the
acceptance hereof, the City has duly approved the distribution of the Preliminary Official Statement
and the execution, delivery and distribution of the Official Statement, and has duly authorized and
approved the execution and delivery of, and the performance by the City of the obligations on its part
contained in, the Financing Documents and the consummation by it of all other transactions
contemplated by the Preliminary Official Statement, the Official Statement and the Financing
Documents.
(c) The City is not in breach of or default under any applicable constitutional
provision, law or administrative regulation to which it is subject or any applicable judgment or decree
ar any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the
City is a party or to which the City or any of its property or assets is otherwise subject, and no event
has occurred and is continuing which with the passage of time or the giving of notice, or both, would
constitute such a default or event of default in any material respect under any such instrument; and the
issuance of the Bonds, the delivery of the Preliminary Official Statement and the execution and
delivery of the Official Statement and the Financing Documents and compliance with the provisions
on the City's part contained herein and therein, will not in any material respect conflict with or
constitute a breach of or default under any law, administ�ative regulation, judgment, decree, loan
agreement,indenture,bond,note,resolution,agreement or other instrument to which the City is a party
or is otherwise subject, nor will any such execution, delivery, adoption or compliance result in the
creation or imposition of any lien, charge or other security interest or encumbrance of any nature
whatsoever upon any of the properties or assets of the City under the terms of any such law,
administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution,
agreement or other instrument, except as provided in the Indenture.
(d) There is no action,suit,proceeding,inquiry or investigation,at law or in equity,
before or by any court, governmental agency,public board or body,pending or,to the best knowledge
of the City after reasonable investigation, threatened against the City in any material respect affecting
the existence of the City or the titles of its officers to their respective offices or affecting or seeking to
prohibit, restrain or enjoin the issuance, sale or delivery of the Bonds or contesting or affecting, as to
the City, the validity or enforceability of the Bonds or the Financing Documents or contesting the
powers of the City or its authority to enter into, adopt or perform its obligations under any of the
foregoing,or contesting in any way the completeness or accuracy of the Preliminary Off cial Statement
or the Official Statement, or any amendment or supplement thereto, wherein an unfavorable decision,
ruling or finding would materially adversely affect the validity or enforceability of the Financing
Documents.
(e) All authorizations, approvals, licenses, permits, consents and arders of any
governmental authority, legislative body, board, agency or commission having jurisdiction of the
matter which are required for the due authorization by,or which would constitute a condition precedent
to or the absence of which would materially adversely affect the due performance by, the City of its
obligations in connection with the issuance of the Bonds under the Indenture have been duly obtained,
eXcept for such approvals, consents and orders as may be required under the B1ue Sky or securities
laws of any state in connection with the offering and sale of the Bonds; and, except as described in or
contemplated by the Preliminary Official Statement and the Official Statement, all authorizations,
approvals, licenses, permits, consents and orders of any governmental authority, board, agency or
301212959.3
6
commission having jurisdiction of the matter which are required for the due authorization by, or which
would constitute a condition precedent to or the absence of which would materially adversely affect
the due performance by, the City of its obligations under the Financing Documents have been duly
obtained.
(� The City will furnish such information,execute such instruments and take such
other action in cooperation with the Underwriter as the Underwriter may reasonably request in order
(i) to qualify the Bonds far offer and sale under the Blue Sky or other securities laws and regulations
of such states and other jurisdictions of the United States as the Underwriter may designate and(ii)to
determine the eligibility of the Bonds for investment under the laws of such states and other
jurisdictions,and will use its best efforts to continue such qualification in effect so long as required for
distribution of the Bonds; provided, however, that in no event shall the City be required to take any
action which would subject it to service ofprocess in any jurisdiction in which it is not now so subject.
(g) As of its date and the date hereof,the Preliminary Official Statement(excluding
information concerning DTC and the book-entry system as to which no representation is made) did
not,except as to the information permitted to be omitted by Rule 15c2-12,contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(h) As of the date thereof and at all times subsequent thereto to and including the
date which is 25 days following the End of the Underwriting Period (as such term is hereinafter
defined) for the Bonds, the Of�cial Statement(excluding information concerning DTC and the book-
entry system and the information under the caption"UNDERWRTTING" (collectively, the `Bxcluded
Information"))as to which no representation is made)did not and will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(i) If between the date hereof and the date which is 25 days after the End of the
Underwriting Period for the Bonds, an event occurs which might or would cause the information
contained in the Official Statement, as then supplemented or amended, to contain an untrue statement
of a material fact or to omit to state a material fact necessary to make the statements therein,in light of
the circumstances under which they were made, not misleading, the City will notify the Underwriter,
and, if in the opinion of the City, the Underwriter or their respective counsel, such event requires the
preparation and publication of a supplement or amendment to the Official Statement, the City will
forthwith prepare and furnish to the Underwriter (at the expense of the City) a reasonable number of
copies of an amendinent of or supplement to the Official Statement(in farm and substance satisfactory
to the Underwriter) which will amend or supplement the Official Statement so that it will not contain
an untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances eXisting at the time the Official Statement is
delivered to prospective purchasers, not misleading. For the purposes of this subsection, between the
date hereof and the date which is 25 days after the End of the Undervvriting Period for the Bonds, the
City will furnish such information with respect to itself as the Underwriter tnay from time to time
reasonably request.
(j) If the infonnation contained in the Official Statement is ainended or
supplemented pursuant to paragraph(i)of this Section 4, at the time of each supplement or amendment
thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all
times subsequent thereto up to and including the date which is 25 days after the End of the
301212959.3
7
Underwriting Period for the Bonds,the portions of the Official Statement so supplemented or amended
(other than Excluded Information as to which no representation is made) will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements therein,in
the light of the circumstances under which they were made, not misleading.
(k) After the Closing Date, the City will not participate in the issuance of any
amendment of or supplement to the Official Statement to which,after being furnished with a copy,the
Underwriter shall reasonably object in writing.
(1) As used herein and for the purposes of the foregoing, the term `Bnd of the
Underwriting Period"for the Bonds shall mean the earlier of(i)the Closing Date unless the City shall
have been notified in writing to the contrary by the Underwriter on or prior to the Closing Date, or(ii)
the date on which the End of the Underwriting Period for the Bonds has occurred under Rule 15c2-12;
provided, however, that the City may treat as the End of the Underwriting Period for the Bonds the
date specified as such in a notice from the Underwriter stating the date which is the End of the
Underwriting Period.
(m) The City will apply, or cause the application of, the proceeds of the Bonds in
accordance with the Indenture.
(n) Any certificate signed by any authorized official of the City, and delivered to
the Underwriter in connection with the delivery of the Bonds, shall be deemed a representation and
warranty by the City to the Underwriter as to the statements made therein.
(o) After the Closing Date, the City will not participate in the issuance of any
amendment of or supplement to the Official Statement to which,after being furnished with a copy,the
Underwriter sha11 reasonably object in writing.
(p) Other than as described in the Off'icial Statement, as of the time of acceptance
hereof and as of the Closing Date the City does not and will not have outstanding any indebtedness
which is secured by a lien on the Net Revenues (as defined in the Official Statement)or moneys in the
City's Electric Revenue Fund superior to or on a parity with the lien of the Bonds thereon.
(� Between the date of this Purchase Contract and the Closing Date, the City will
not, without the prior written consent of the Underwriter, and except as disclosed in the Preliminary
Official Statement and the Official Statement, offer or issue any bonds, notes or other obligations for
borrowed money,or incur any material liabilities,direct or contingent,payable from the Net Revenues.
(r) Except as disclosed in the Preliminary Official Statement and the Official
Statement, the City has not failed to comply in all material respects with the terms of any continuing
disclosure obligation under Rule 15c2-12 within the past five years.
(s) The financial statements of, and other financial information regarding the
Electric System, in the Preliminary Official Statement and the Official Statement fairly present the
financial position and results of the Electric System as of the dates and far the periods therein set forth.
5. Conditions to the Obligations of the Underwriter. The Underwriter hereby enters into
this Purchase Contract in reliance upon the representations and warranties of the City contained herein
and the representations and warranties of the City to be contained in the documents and instruments to
301212959.3
8
be delivered on or prior to the Closing Date and upon the performance by the City of its obligations
both on and as of the date hereof and as of the Closing Date. Accordingly, the Underwriter's
obligations under this Purchase Contract to purchase, to accept delivery of and to pay for the Bonds
shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the
representations and warranties of the City contained herein as of the date hereof and as of the Closing
Date, to the accuracy in all material respects of the statements of the officers and other officials of the
City made in any certificate or other document furnished pursuant to the provisions hereof, to the
performance by the City of its obligations to be performed hereunder and under such documents and
instruments at or priar to the Closing Date, and also shall be subject to the following additional
conditions:
(a) The Underwriter shall receive,within seven(7)business days of the date hereof
and at least in sufficient time to accompany any orders or confirmations that request payment from any
customer,copies of the Official Statement(including all information previously permitted to have been
omitted by Rule 15c2-12 and any amendments or supplements as have been approved by the
Underwriter), in such quantity as the Underwriter shall have requested pursuant to Section 2 hereof;
(b) The representations and warranties of the City contained herein shall be true
and correct on the date hereof and on the Closing Date, as if made on and at the Closing Date;
(c) As of the Closing Date, the Financing Documents shall have been duly
authorized, executed and delivered by the respective parties thereto, and the Official Statement shall
have been duly authorized,executed and delivered by the City,all in substantially the forms heretofore
submitted to the Underwriter, with only such changes as shall have been agreed to in writing by the
Underwriter, and such Financing Documents shall be in full force and effect and shall not have been
amended, modified or supplemented and the Official Statement shall not have been supplemented or
amended, except in any such case as may have been agreed to by the Underwriter; and there shall be
in full force and effect such resolution or resolutions of the City Council of the City as, in the opinion
of Bond Counsel, shall be necessary or appropriate in connection with the transactions contemplated
hereby;
(d) Between the date hereof and the Closing Date, the market price or
marketability, at the initial public offering prices set forth in the Official Statement, of the Bonds sha11
not have been materially adversely affected,in the reasonable judgment of the Underwriter(evidenced
by a written notice to the City terminating the obligation of the Underwriter to accept delivery of and
make any payinent for the Bonds),by reason of any of the following:
(1) an amendment to the Constitution of the United States or the State of
California shall have been passed or legislation shall have been introd�uced in or enacted by the
Congress of the United States or the legislature of any state having jurisdiction of the subject matter or
legislation pending in the Congress of the United States shall have been amended or legislation shall
have been recommended to the Congress of the United States or to any state having j urisdiction of the
subject matter or o�lierwise endorsed for passage (by press release, other form of notice or otherwise)
by the President of the United States, the Treasury Department of the United States, the Internal
Revenue Service or the Chairman or ranking zninority member of the Committee on Finance of the
United States Senate or the Committee on Ways and Means of the United States House of
Representatives, or legislation shall have been proposed for consideration by either such Committee
by any meinber thereof or presented as an option for consideration by either such Committee by the
staff of such Committee or by the staff of the Joint Committee on Taxation of the Congress of the
301212959.3
9
United States, or legislation shall have been favorably reported for passage to either House of the
Congress of the United States by a Committee of such House to which such legislation has been
referred for consideration, or a decision shall have been rendered by a court of the United States or of
the State of California or the Tax Court of the United States, or a ruling shall have been made or a
regulation or temporary regulation shall have been proposed or made or any other release or
announcement sha11 have been made by the Treasury Department of the United States, the Internal
Revenue Service or other federal or State of California authority, with respect to federal or State of
California taxation upon revenues or other income of the general character to be derived by the City or
upon interest received on obligations of the general character of the Bonds which may have the purpose
or effect, directly or indirectly, of af�ecting the tax status of the City, its property or income, its
securities (including the Bonds) or the interest thereon, or any tax exemption granted or authorized by
State of California legislation;
(2) legislation enacted, introduced in the Congress or recommended for
passage by the President of the United States to the effect that obligations of the general character of
the Bonds,or the Bonds,including any or all underlying arrangements,are not exempt from registration
under the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification
under the Trust Indenture Act of 1939, as amended;
(3) the outbreak or escalation in military hostilities or declaration by the
United States of a national or international emergency or war or other calamity or crisis or the
escalation thereof affecting the financial markets of the United States or elsewhere;
(4) an order,decree or injunction of any court of competent jurisdiction,or
order,ruling,regulation or official statement by the Securities and Exchange Commission,or any other
governmental agency having jurisdiction of the subject matter, issued or made to the effect that the
issuance, offering or sale of obligations of the general character of the Bonds, or the issuance,offering
or sale of the Bonds, including any or all underlying obligations, as contemplated hereby or by the
Preliminary Official Statement and the Official Statement, is or would be in violation of the federal
securities laws as amended and then in effect;
(5) the withdrawal or downgrading of any rating of the Bonds or any other
outstanding debt of the City's Electric System by Fitch,Inc. or the rating on the Bonds sha11 have been
placed on"Negative Outlook"by Fitch, Inc.; or
(6) except as disclosed in or contemplated by the Preliminary Official
Statement and the Official Statement,any material adverse change in the affairs of the Electric System
sha11 have occurred.
(e) No declaration of a general banking moratorium by federal, New York or
California authorities, or the general suspension of trading on any national securities exchange, or a
major financial crisis or a material disruption in commercial banking or securities settlement or
clearances services shall have occurred.
(� No event shall occur or be discovered which makes untrue or incorrect in any
material respect,as of the time of such event,any statement or information contained in the Preliminary
Official Statement or the Official Statement or which is not reflected in the Preliminary Official
Statement or the Official Statement but should be ref(ected therein in order to make the statements
301212959.3
1�
contained therein not misleading in any material respect and requires an amendment of or supplement
to the Official Statement.
(g) No imposition by the New York Stock Exchange or other national securities
exchange, or any governmental authority, of any material restrictions not now in force with respect to
the Bonds or obligations of the general character of the Bonds or securities generally, or the material
increase of any such restrictions now in force, including those relating to the extension of credit by, or
the charge to the net capital requirements of, the Underwriter.
(h) No decision rendered by a court established under Article III of the Constitution
of the United States or by the Tax Court of the United States, or an order, ruling, regulation (final,
temporary or proposed) or official statement issued or made by or on behalf of the Securities and
Exchange Commission, or any other governmental agency having jurisdiction of the subject matter
sha11 have been made or issued to the effect that obligations of the general character of the Bonds, or
the Bonds, including any or all underlying arrangements, are not exempt from registration under the
Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under the
Trust Indenture Act of 1939, as amended.
(i) At or prior to the Closing Date, the Underwriter shall have received the
following documents, in each case satisfactory in form and substance to the Underwriter:
(1) The Preliminary Official Statement and the Official Statement and each
supplement or amendment, if any, thereto, executed by the City.
(2) Copies of each of the Financing Documents, each duly executed and
delivered by the respective parties thereto.
(3) The unqualified approving opinion of Bond Counsel,dated the Closing
Date and addressed to the City, in substantially the form attached to the Official Statement as
Appendix [F] thereto.
(4) The supplemental opinion of Bond Counsel dated the Closing Date and
addressed to the Underwriter in substantially the form attached hereto as Exhibit A.
(5) The opinion of Stradling Yocca Carlson & Rauth LLP, as disclosure
counsel,dated the Closing Date and addressed to the City and the Underwriter in substantially the form
attached hereto as Exhibit B.
(6) The opinion of the City Attorney of the City, dated the Closing Date
and addressed to the Underwriter, in substantially the form attached hereto as Exhibit C.
(7) The opinion of counsel to the Trustee, dated the Closing Date and
addressed to the City and the Underwriter, to the effect that (i) the Trustee has duly accepted
appointment as Trustee under the Indenture,has duly authorized,executed and delivered the Indenture
and the Continuing Disclosure Agreement and duly authenticated and delivered the Bonds on the
Closing Date; and (ii) the Indent�ure and the Continuing Disclosure Agreement constitute the legally
valid and binding obligations of the Trustee, enforceable against the Trustee in accordance with their
terms, except that the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reor�anization, moratorium and other laws in effect from time to time affecting the rights of creditors
301212959.3
11
generally and except to the extent that the enforceability thereof may be limited by the application of
general principles of equity.
(8) The opinion of Norton Rose Fulbright US LLP ("Underwriter's
Counsel"),dated the Closing Date and addressed to the Underwriter,in form and substance satisfactory
to the Underwriter.
(9) A certificate or certificates, dated the Closing Date, signed by a duly
authorized official of the City satisfactory to the Underwriter,in form and substance satisfactory to the
Underwriter, to the effect that (i) the representations and warranties of the City contained in this
Purchase Contract and the other Financing Documents are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the Closing Date; (ii)there is no action,
suit, proceeding, inquiry or investigation pending or, to the best knowledge of such official after
reasonable investigation,�lireatened(a)to restrain or enj oin the execution and delivery of the Financing
Documents or the performance of the City's obligations thereunder, (b) in any way contesting or
affecting the validity of the Financing Documents or(c) in any way contesting the existence or powers
of the City, nor to the best knowledge of such official after reasonable investigation, is there any basis
for any such action, suit,proceeding, inquiry or investigation,wherein an unfavorable decision, ruling
or finding would make invalid or materially adversely affect the authorization, execution, delivery or
performance by the City of the foregoing; (iii) nothing has come to the City's attention which would
cause the City to believe that the Preliminary Official Statement (excluding information permitted to
be omitted therefrom under Rule 15c2-12 and the infonnation concerning DTC and the book-entry
system included therein and Appendix [F] thereto), as of its date and as of the date hereof, and the
Official Statement (excluding the information concerning DTC and the book-entry system included
therein,the information under the caption"L7NDERWRTTTNG"and Appendices [E and F] thereto),as
of its date and as of the Closing Date, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and (iv) since June 30, 2025, except as
referred to in or as contemplated by the Official Statement,with respect to its Electric System,the City
has not incurred any financial liabilities,direct or contingent, or entered into any transactions and there
has not been any adverse change in the condition, financial or physical, of the Electric System, in any
case that would materially and adversely affect the ability of the City to meet its obligations under the
Indenture and the Bonds.
(10) A certificate, dated the Closing Date, signed by a duly authorized
official of the Trustee, satisfactory in form and substance to the Underwriter, to the effect that: (i) the
Trustee is a national banking association organized and existing under and by virtue of the laws of the
United States of America,having the full power and being qualified to enter into and perform its duties
under the Indent�ure and the Continuing Disclosure Agreement; (ii) the Trustee is duly authorized to
enter into the Indent�ure and the Continuing Disclosure Agreement and to authenticate and deliver the
Bonds to the Underwriter pursuant to the terms of the Indent�ure; (iii)the execution and delivery of the
Indenture and the Continuing Disclosure Agreement and compliance with the provisions on the
Trustee's part contained therein,and the authentication and delivery of the Bonds wi11 not conflict with
or constitute a breach of or default under any law, administrative regulation,judgment, decree, loan
agreement, indenture, bond, note,resolution, agreement or other instrument to which the Trustee is a
party or is otherwise subject(except that no representation,warranty or agreeinent is inade with respect
to any federal or state securities or Blue Sky laws or regulations),nor will any such execution,delivery,
adoption or compliance result in the creation or imposition of any lien,charge or other security interest
or encumbrance of any nature whatsoever upon any of the properties ar assets held by the Trustee
301212959.3
IZ
pursuant to the lien created by the Indenture under the terms of any such law,administrative regulation,
judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument,
except as provided by the Indenture; and (iv) there is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, governmental agency,public board or body,
served on, or, to the best knowledge of such officer, threatened against, the Trustee, affecting the
existence of the Trustee or the titles of its officers to their respective offices, or in any way contesting
or affecting the validity or enforceability of the Indenture and the Continuing Disclosure Agreement
against the Trustee,or contesting the power of the Trustee or its authority to enter into,adopt or perform
its obligations under the Indenture or the Continuing Disclosure Agreement, wherein an unfavorable
decision, ruling or finding would materially adversely affect the validity or enforceability of the
Indenture or the Continuing Disclosure Agreement against the Trustee or the authentication and
delivery of the Bonds.
(11) A certified copy of the general resolution of the Trustee authorizing the
execution and delivery of the Indenture and the Continuing Disclosure Agreement.
(12) A certified copy of the resolution of the City authorizing the execution
and delivery of the Financing Documents and the Official Statement.
(13) Evidence satisfactory to the Underwriter that the rating on the Bonds
described in the Official Statement is in full force and effect as of the Closing Date.
(14) A copy of the Preliminary Blue Sky Survey with respect to the Bonds,
if any,prepared by Underwriter's Counsel.
(15) A copy of the audited financial statements of the City's Electric Utility
Fund included as Appendix [A] to the Official Statement.
(16) Tax certifications by the City in forin and substance acceptable to Bond
Counsel.
(17) Evidence that a federal tax information form 8038-G has been prepared
for filing with respect to the Bonds.
(18) A copy of the Notice of Final Sale required to be delivered to the
California Debt and Investment Advisory Commission pursuant to Section 8855 of the California
Government Code.
(19) Such additional legal opinions, certificates, proceedings, instruments
and other documents as the Underwriter, Underwriter's Counsel or Bond Counsel may reasonably
request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the
representations of the City herein and of the statements and information contained in the Preliminary
Official Statement and the Official Statement, and the due performance or satisfaction by the City on
or prior to the Closing Date of all agreements then to be performed and all conditions then to be
satisfied by the City in connection with the transactions contemplated hereby and by the Preliminary
Official Statement and the Official Statement and the Financing Documents.
If the City shall be unable to satisfy the conditions to the Underwriter's obligations contained
in this Purchase Contract or if the Underwriter's obli�ations shall be terminated for any reason
301212959.3
13
permitted herein, all obligations of the Underwriter hereunder may be terminated by the Underwriter
at, or at any time prior to, the Closing Date by written notice to the City and neither the Underwriter
nar the City shall have any further obligations hereunder.
6. Reserved.
7. Expenses.
(a) The Underwriter shall be under no obligation to pay, and the City shall pay,
any expenses incident to the performance of the City's obligations hereunder including,but not limited
to: (i)the cost of preparation, printing and distribution of the Financing Documents, the Preliminary
Official Statement, the Official Statement and any supplements or amendments thereto, including a
reasonable number of certified or con�ormed copies thereof; (ii)the cost of preparation and printing of
the Bonds; (iii)the fees and disbursements of Bond Counsel and disclosure counsel; (iv) the fees and
disbursements of any engineers, accountants and other experts, consultants, advisors, dissemination
agents or other service providers retained by the City; (v) fees for bond ratings (which include fees of
rating agencies and travel expenses of the City); and (vi) the Underwriter's out-of-pocket expenses
incurred with respect to the financing, including (a) air travel and hotel costs in connection with the
pricing of the Bonds, any investor meetings, any rating agency trips and the Closing, (b) meals and
transportation for the City, the Underwriter and other working group personnel during such trips,
(c) expenses related to attending working group meetings, such as parking, meals and transportation,
and(d) any other miscellaneous costs related to the Closing.
(b) The LTnderwriter shall pay: (i) the cost of preparation and printing of this
Purchase Contract and the Preliminary Blue Sky Survey; (ii) all advertising expenses and B1ue Sky
filing fees in connection with the public offering of' the Bonds; (iii) fees, if any, payable to the
California Debt and Investment Advisory Commission, the iVlunicipal Securities Rulemaking Board
and the fees associated with obtaining CUSIP numbers for the Bonds in connection with the execution
and delivery of the Bonds; and (iv) all other expenses incurred by them in connection with the public
offering of the Bonds not outlined in(a) above, including the fees and disbursements of Underwriter's
Counsel.
(c) The City acknowledges that it has had an opportunity,in consultation with such
advisors as it may deem appropriate, if any, to evaluate and consider the fees and expenses being
incurred as part of the issuance of the Bonds.
8. Notices. Any notice or other communication to be given (i) to the City under this
Purchase Contract may be given by delivering the same in writing to the City, 777 Cypress Avenue,
Redding, California 96001, and (ii) to the Underwriter under this Purchase Contract may be given by
delivering the same in writing to the Underwriter: J.P. Morgan Securities LLC, 560 Mission Street,
Floor Three, San Francisco, California 94105,Attention: Tyler Old.
9. Survival of Re�resentations and Warranties. The City's representations, warranties
and agreements contained in this Purchase Contract or made in any certificate delivered hereunder
shall remain operative and in full force and effect, regardless o£ (i) any investigations or statements
made by or on behalf of the Underwriter; and (ii) delivery of and payment for the Bonds pursuant to
this Purchase Contract.
301212959.3
14
10. Effectiveness and Counterpart Si�natures. This Purchase Contract shall become
effective and binding upon the respective parties hereto upon the execution of the acceptance hereof
by duly authorized officers o�the City and shall be valid and enforceable as of the time of such
acceptance. This Purchase Con�ract may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
11. Parties in Interest. This Purchase Contract is made solely for the benefit of the City
and the Underwriter(including the successors or assigns of the Underwriter) and no other person shall
acguire or have any right hereunder or by virtue hereof.
12. No Fiduciarv. The City acknowledges and agrees that(i) the purchase and sale of the
Bonds pursuant to this Purchase Contract is an arm's-length commercial transaction between the City
and the Underwriter, and that the Underwriter has financial and other interests that differ from those
of the City, (ii) in connection therewith and with the discussions,undertakings and procedures leading
up to the consummation of such transaction,the Underwriter is and has been acting solely as principal
and is not acting as the agent or fiduciary of the City, (iii)the Underwriter has not assumed an advisory
or fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or the
discussions,undertakings and procedures leading thereto (irrespective of whether the Underwriter has
provided other services or are currently providing other services to the City on other matters) and the
Underwriter has no obligation to the City with respect to the offering contemplated hereby except the
obligations expressly set forth in this Purchase Contract and (iv) the City has consulted its own legal,
financial and other advisors to the extent its has deemed appropriate.
13. Electronic Si nag tures. Each of the parties hereto agrees that the transaction consisting
of this Purchase Contract may be conducted by electronic means. Each party agrees,and acknowledges
that it is such party's intent,that if such party signs this Purchase Contract using an electronic signature,
it is signing, adopting, and accepting this Purchase Contract and that signing this Purchase Contract
using an electronic signature is the legal equivalent of having placed its handwritten signat�ure on this
Purchase Contract on paper. Each party acknowledges that it is being provided with an electronic or
paper copy of this Purchase Contract in a usable format.
14. Waiver of Jurv Tria1. TO THE EXTENT PERMITTED BY LAW, THE CITY AND
THE UNDERWRITER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY
WAIVE ANY RIGHT TO TRIAL BY JURY THE CITY OR THE UNDERWRITER MAY HAVE
1N ANY ACTION OR PROCEEDING, iN LAW OR IN EQUITY, IN CONNECTION WITH THIS
PURCHASE CONTRACT OR ANY TRANSACTIONS RELATED HERETO.
15. Headin�s. The headings of the sections of this Purchase Contract are inserted for
convenience only and shall not be deemed to be a part hereof.
[Signat�ure page follows.]
301212959.3
IS
16. Governin� Law. This Purchase Con�ract shall be construed in accordance with the
laws of the State of California.
Very truly yours,
J.P. MORGAN SECURITIES LLC
By:
Executive Director
Accepted:
CITY OF REDDING
By:
City Manager
ACCEPTED at p.m. California time this
[_th] day of[ ], 2026
3012129593 S-1
SCHEDULEI
City of Redding
Electric System Refunding Revenue Bonds, Series 2026
MATURITY SCHEDULE
Payment Dates PrincipaZ Interest
(June 1)[�J Amount Rate Yield Price
$ % %
$[ ] [_]%Term 2026A Bonds due June l, 20[_]�*�—Yield: [_]%; Price: [ ]
$[ ] [_]%Term 2026A Bonds due June 1, 20[_]�*�—Yield: [_]%; Price: [ ]
C Priced to par call on J�une 1, 20[_]
* All maturities are 10%Test Mat�urities
301212959.3
1-�.
Redemption of the Bonds
Optional Redemption. The Bonds maturing on or before June 1, 20[___] are not subject to optional
redemption prior to maturity.The Bonds maturing on or after June 1,20[_] are subject to redemption prior
to their respective stated maturities at the direction of the City, from moneys deposited by the City from
any source of available funds, as a whole or in part on any date(in such maturities as are designated by the
City, or if the City fails to designate such maturities, in inverse order of maturity and by lot within a
maturity)on or after June 1,20[_],at a redemption price equal to the principal amount of the Bonds called
for redemption together with accrued interest to the date fixed for redemption,without preinium.
Mandatory Redemption. The term Bonds maturing on June l, 20[_] (the"20[_] Term Bonds")
are subj ect to mandatory redemption prior to maturity, in part by lot, coinmencing on June 1, 20[_] and
on each June 1 thereafter to and including June 1, 20[_], from scheduled Mandatory Sinking Fund
Payments made by the City on such dates,at a redemption price equal to the principal amount of the 20[_]
Term Bonds to be redeemed,together with accrued interest thereon to the date fixed for redemption,without
premium, according to the following schedule(subject to modification in the event of optional redemption
as described above):
20�] Term Bonds
Redemption Date Principal
(June 1) Amount
$
20[_]�
T Final Maturity.
The term Bonds maturing on June l, 20[� (the "20[_] Term Bonds") are subject to mandatory
redemption prior to maturity, in part by lot, commencing on June 1, 20[_] and on each June 1 thereafter
to and including June 1, 20[_], from scheduled Mandatory Sinking Fund Payments made by the City on
such dates, at a redemption priee equal to the prineipal amount of the 20[� Term Bonds to be redeemed,
together with acerued interest thereon to the date fixed for redemption, without premium, aecording to the
following schedule(subject to modifieation in the event of optional redemption as described above):
20�] Term Bonds
Redemption Date Principal
(June 1) Amount
$
20[_]�
� Final Maturity.
301212959.3
1-2
ExxIBIT a
FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL
, 2026
J.P. Morgan Securities LLC,
San Francisco, California
Re: $[PAR AMOUNT] City of Redding Electric System Refunding Revenue Bonds, Series 2026
Ladies and Gentlemen:
This letter is addressed to you, as LJnderwriter, pursuant to Section 5(i)(4) of the Purchase
Contract, dated [ ], 2026 (the "Purchase Contract"), between you and the City of Redding (the
"City"),providing for the purchase of$[PAR AMOLJNT]principal amount of City of Redding Electric
System Refunding Revenue Bonds, Series 2026 (the `Bonds"). The Bonds are being issued pursuant
to an indenture, dated as of[ ] 1, 2026 (the"Tndenture"), between the City and U.S. Bank Trust
Company, National Association, as trustee (the "Trustee"). Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Indenture or, if not defined in the Indenture, in
the Purchase Contract.
We have delivered our final legal opinion (the `Bond Opinion") as bond counsel to the City
concerning the validity of the Bonds and certain other matters, dated the date hereof and addressed to
the City. You may rely on such opinion as though the same were addressed to you.
In connection with our role as bond counsel to the City, we have reviewed the Purchase
Contract, the Indenture, the Tax Certi�cate, dated the date hereof (the "Tax Certificate"), certain
provisions of the posted preliminary official statement of the City, dated[ ], 2026, with respect
to the Bonds(the"Preliminary Official Statement"),certain provisions of the posted official statement
of the City, dated [ ], 2026, with respect to the Bonds (the "Official Statement"), opinions of
counsel to the City and the Trustee, certificates of the City, the Trustee and others, and such other
documents, opinions and matters to the extent we deemed necessary to render the opinions set forth
herein.
The opinions expressed herein are based on an analysis of existing laws, regulations, rulings
and court decisions and eover certain inatters not directly addressed by such authorities. Such opinions
may be affeeted by aetions taken or oinitted or events occurring after the original delivery of the Bonds
on the date hereof. We have not undertaken to determine, or to inform any person, whether any such
actions are taken or omitted or events do occur or any other matters come to our attention after the
original delivery of the Bonds on the date hereof. We have assumed the genuineness of all documents
and signatures provided to us and the due and legal execution and delivery of each such document by
each party thereto other than the City and that each such document constitutes a valid and binding
agreement of such party. We have assumed, without undertaking to verify, the accuracy of the factual
matters represented, warranted or certified in the documents, and of the legal conclusions contained in
the opinions, referred to in the third paragraph hereof. We have further assumed compliance with all
covenants and agreements contained in sueh doeuinents. In addition, we eall attention to the fact that
the rights and obligations under the Bonds,the Indenture,the Tax Certificate and the Purehase Contract
301212959.3
A-1
and their enforceability may be subject to bankruptcy, insolvency, receivership, reorganization,
arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors'
rights, to the application of eguitable principles, to the exercise of judicial discretion in appropriate
cases and to the limitations on legal remedies against governmental entities such as the City in the State
of California. We express no opinion with respect to any indemnification, contribution, liquidated
damages, penalty(including any remedy deemed to constitute a penalty), right of set-off, arbitration,
judicial reference,choice of law,choice of forum,choice of venue,non-exclusivity of remedies,waiver
or severability provisions contained in the foregoing documents, nor do we express any opinions with
respect to the state or quality of title to ar interest in any real or personal property described in or as
subject to the lien of the Indenture or the accuracy or sufficiency of the description contained therein
o�, or the remedies available to enfarce liens on, any such property. Finally, we undertake no
responsibility for the accuracy, except as expressly set forth in numbered paragraph 3 below,
completeness or fairness of the Preliminary Official Statement,the Official Statement or other offering
material relating to the Bonds and express no view with respect thereto.
Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of
the following opinions:
1. The Bonds are not subject to the registration requirements of the Securities Act of 1933,
as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of
1939, as amended.
2. The Purchase Contract has been duly executed and delivered by,and constitutes a valid
and binding agreement of, the City.
3. The statements contained in the Preliminary Official Statement and in the Official
Statement under the captions "THE 2026A BONDS,""SECURITY AND SOURCES OF PAYMENT
FOR THE 2026A BONDS," and "TAX MATTERS," and in "APPENDIX [D] — SUMMARY OF
CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS," and "APPENDIX [F� —
PROPOSED FORM OF OPINION OF BOND COLTNSEL," excluding any material that may be
treated as included under such captions by cross reference or reference to other documents or sources,
insofar as such statements expressly summarize certain provisions of the Indent�ure,and certain matters
addressed in the Bond Opinion, are accurate in al1 material respects.
This letter is furnished by us as bond counsel to the City. No attorney-client relationship has
existed or exists between our firm and you in connection with the Bonds or by virtue of this letter. We
disclaim any obligation to update this letter. This letter is delivered to you as underwriter of the Bonds,
is solely for your benefit as such underwriter in connection with the original delivery of the Bonds on
the date hereof, and is not to be used, circulated, quoted or otherwise referred to or relied upon for any
other purpose or by any other person. This letter is not intended to, and may not, be relied upon by
owners of the Bonds or by any other party to whom it is not specifically addressed.
Very truly yours,
301212959.3
A-2
EXHIBIT B
FORM OF OPINION OF DISCLOSURE COUNSEL
[Closing Date], 2026
City of Redding
Redding, California
J.P. Morgan Securities LLC,
as Underwriter
San Francisco, California
Re: $[PAR AMOUNTJ City of Redding Electric System Refunding Revenue Bonds,
Series 2026
Ladies and Gentlemen:
We have acted as Disclosure Counsel to the City of Redding (the "City") in connection with the
offering and sale of the City of Redding Electric System Refunding Revenue Bonds, Series 2026 in the
aggregate principal amount of$[PAR AMOLTNT] (the `Bonds"). The Bonds are being issued pursuant to
Articles 10 and 1 l,Chapter 3,Part 1,Division 2,Title 5 of the Government Code of the State of California,
and a Indenture, dated as of[ ] 1, 2026, by and between the City and U.S. Bank Tnzst Coinpany,
National Association, as trustee. The Bonds were sold by the City to J.P. Morgan Securities LLC, as
underwriter (the "Underwriter"), and are being delivered on the date hereof, pursuant to a Purchase
Contract, dated[ ],2026 (the"Purchase Contract"),between the City and the Underwriter.
We have reviewed the Preliminary Official Statement dated [ ], 2026 with respect to the
Bonds(the"Prelim.inary Off'icial Statement")and the Off"1cia1 Statement dated[ ],2026 with respect to
the Bonds(the"O�cial Statement"),the letters,certificates and opinions delivered pursuant to the Purchase
Contract and otherwise in connection with the Bonds on the date hereof, and such other recards, opinions
and documents, and we have made such investigations of law and fact, as we have deemed appropriate as
a basis for the conclusions hereinafter expressed. Unless otherwise indicated,capitalized terms used herein
have the respective meanings given to such terms in the Official Statement.
We have assumed, but not independently verif`1ed, that the signatures on all documents, letters,
opinions and certificates which we have examined are genuine, and that a11 documents submitted to us are
authentic and were duly and properly executed by the parties thereto. We have also assumed, without
undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the
documents, and of the legal conclusions contained in the opinions, referred to in the second paragraph.
hereof.
The conclusions that are expressed herein are based on an analysis of existing laws, regulations,
rulings and court decisions and cover certain matters not directly addressed by such authorities. Such
conclusions may be affected by actions taken or omitted or events occurring after the date hereof.We have
not undertaken to determine, or to inform you or any other person, whether any such actions are taken or
omitted or whether such events do occur or any other matters come to our attention after the date hereof.
301212959.3
B-1
In our capacity as Disclosure Counsel, we have rendered certain legal advice and assistance to the
City in connection with the preparation of the Preliminary Official Statement and the Official Statement.
Rendering such legal advice and assistance involved, among other things, discussions and inquiries
concerning various legal matters,review of certain records, documents and proceedings, and participation
in conferences with, among others, representatives of the City, the City Attorney, Orrick, Herrington &
Sutcliffe LLP, as Bond Counsel, PFM Financial Advisors LLC, as municipal advisor to the City, the
Underwriter, Norton Rose Fulbright US LLP, as counsel to the Underwriter, and others, during which
conferences the contents of the Preliminary Official Statement and the Official Statement and related
matters were discussed. On the basis of the information made available to us in the course of the foregoing
(but without having undertaken to determine or verify independently, or assuming any responsibility for,
the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official
Statement or the Official Statement), as of the date hereof no facts have come to the attention of the
personnel in our firm directly involved in rendering legal advice and assistance in connection with the
preparation of the Preliminary Official Statement and the Official Statement that causes us to believe that
(a)the Preliminary Official Statement as of its date and as of the date of the Purchase Contract contained
any untrue statement of a material fact or omitted to state a material fact necessary in order to make the
stateinents made therein, in the light of the circumstances under which they were made, not misleading
(excluding therefrom any financial,statistical or economic data or forecasts,numbers,charts,tables,graphs,
estimates, projections, assumptions or expressions of opinion contained in the Preliminary Official
Statement, information in the Appendices to the Preliminary Official Statement,information on the inside
front cover of the Preliminary Official Statement, CUSIl' numbers, information under the caption
"UNDERWRITING," any information that is incorporated by reference into the Preliminary Official
Statement,any information about book-entry or The Depository Trust Company("DTC")included therein,
or information permitted to be omitted therefrom pursuant to Rule 15c2-12 promulgated under the
Securities Exchange Act of 1934, as amended ("Ru1e 15c2-12"), as to all of which no opinion or view is
expressed), or (b)the Official Statement as of its date or as of the date hereof contained or contains any
untrue statement of a inaterial fact or omitted to state a material fact necessary to inake the statements
therein,in the light of the circumstances under which they were made,not misleading(excluding therefrom
any fmancial, statistical or economic data or forecasts, nuinbers, charts, tables, graphs, estimates,
projections, assumptions or expressions of opinion contained in the Official Statement, information in the
Appendices to the Official Statement, information on the inside front cover of the Official Statement,
CUSIP numbers,information under the caption"LTNDERWRITING,"any information that is incorporated
by reference into the Official Statement and any information about book-entry or DTC included therein, as
to a11 of which we express no view). We advise you that, other than reviewing the various certificates and
opinions required by the Purchase Contract regarding the Preliminary Official Statement and the Official
Statement,we have not taken any steps since the date of the Official Statement to verify the aecuraey of the
statements eontained in the Preliminary Offieial Statement or the Official Statement as of the date hereof.
Ln connection with the Bonds, we were not requested to, and did not,undertake an independent review on
the Electronic Municipal Market Aeeess website of the City's past compliance with any continuing
disclosure undertaking of the City pursuant to Rule 15e2-12. Our serviees as Disclosure Counsel to the City
did not involve the rendering of financial or other non-legal advice to the City or any other party to the
transaction.
By acceptance of this letter,you acknowledge that the preceding paragraph is neither a legal opinion
nor a guarantee regarding the Official Statement; rather it is a statement of negative assurance regarding
factual information that did not come to the attention of attorneys in our firm working on this matter during
the limited activities that we performed as Diseiosure Counsel concerning the Officiai Statement. Further,
in accepting this letter the City recognizes and acknowledges that(i)the scope of those activities performed
by us were inherently limited and do not encompass all activities that the City may be responsible to
undertake in preparing the Official Statement, (ii)those activities performed by us relied substantially on
representations,warranties, certifications and opinions made by representatives of the City and others, and
301212959.3
B-2
are otherwise subject to the matters set forth in this letter, and (iii) while such statements of negative
assurance are customarily given to underwriters of municipal bonds to assist them in discharging their
responsibilities under federal securities laws, the responsibilities of the City under those laws may differ
from those of underwriters in material respects, and the preceding paragraph may not serve the same
purpose or provide the same utility to them as it would to the underwriters.
The conclusions expressed in this letter are limited to matters governed by the federal securities
law of the United States, and we assume no responsibility with respect to the applicability or effect of the
laws of any other jurisdiction.
We are furnishing this letter as Disciosure Counsel to the City, and not as counsel to the
Underwriter. No attorney-client relationship has existed or exists between our firm and the Underwriter in
connection with the Bonds or by virtue of this letter. We note that the Underwriter are represented by
separate counsel retained by thein in connection with the sale of the Bonds. This letter is delivered in
connection with such transaction, and may not be used,circulated, quoted or otherwise referred to or relied
upon by, any other person, �rm, corporation or other entity, or filed with any governmental or other
administrative agency for any purpose, without our prior written consent. Our engagement with respect to
this lnatter terminates upon the delivery of this letter to you on the date hereof, and we have no obligation
to update this letter.
Very truly yours,
301212959.3
B-3
ExxIBIT c
FORM OF OPINiON OF CITY ATTORNEY
, 2026
J.P. Morgan Securities LLC
Los Angeles, California
$[PAR AMOUNT]
City of Redding
Electric System Refunding Revenue Bonds, Series 2026
Ladies and Gentlemen:
I have served as counsel to the City of Redding(the "City") in connection with the issuance of
$[PAR AMOLTNT1 principal amount of City of Redding Electric System Refunding Revenue Bonds,
Series 2026(the`Bonds"). The Bonds are being issued pursuant to a Indenture,dated as of[ ] 1,
2026(the"Indenture"),by and between the City and U.S. Bank Trust Company,National Association,
as trustee (the "Trustee"). I have examined the following documents: (i) the Indenture, (ii) the
Continuing Disclosure Agreement dated [CLOSTNG DATE], 2026 (the "Continuing Disclosure
Agreement"), by and between the City and the Trustee, as Dissemination Agent, (iii) the Purchase
Contract, dated [ 1, 2026 (the "Purchase Contract"), by and between J.P. Morgan Securities LLC
and the City, (iv) the Preliminary Official Statement, dated [ ], 2026 (the"Preliminary Official
Statement") relating to the Bonds, and (v) the Official Statement, dated [ ], 2026 (the "Official
Statement") relating to the Bonds, and have made such other investigations of law and fact as I have
deemed necessary to render the following opinion. Terms used herein and not defined shall have the
meanings given such terms in the Purchase Contract.
It is my opinion that:
(1) The City is a generallaw city and municipal corporation, duly created, organized and
existing under and pursuant to the Constitution and laws of the State of California and duly qualified
to furnish electric service within said City.
(2) The City has the authority and right to execute,deliver and perform the Indenture,the
Continuing Disclosure Agreement and the Purchase Contract (the "Financing Documents"), and the
City has complied with the provisions of applicable law in all matters relating to the transactions
contemplated by the Financing Documents.
(3) The resolution of the City(the"Resolution")approving and authorizing the execution
and delivery of the Financing Documents and approvin� the delivery and distribution of the
Preliminary Official Statement and the execution, delivery and distribution of the Official Statement
was duly adopted at a regular meeting of the City Council,which was called and held pursuant to law
and with al1 public notice required by 1aw and at which a quorum was present and acting throughout.
The Resolution is in full force and effect and has not been alnended, modified, supplemented or
rescinded.
301212959.3
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(4) The Financing Documents have been duly authorized, executed and delivered by the
City and, assuming due authorization, execution and delivery by and enforceability against the other
parties thereto,the Financing Documents constitute the legal,valid and binding agreements of the City,
enforceable in accordance with their respective terms, subject in each case to the laws relating to
bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium or other
laws relating to or affecting the enforcement of creditors' rights generally and the application of
equitable principles if equitable remedies are sought, including without limitation concepts of
materiality, reasonableness, good faith and fair dealing, to the possible unavailability of specific
performance or injunctive relief, and to the limitations on legal remedies against public agencies in the
State of California.
(5) No approval, consent or authorization of any governmental or public agency,
authority or person is required for the execution,delivery and performance by the City of the Financing
Documents, or the performance by the City of its obligations thereunder which has not been obtained.
Under the laws of the State of California, the City has the authority to determine, fix, impose and
collect rates and charges for electric service and is not presently subject to the regulatory jurisdiction
of any state, regional or local governmental regulatory authority.
(6) The execution and delivery of the Financing Documents by the City and compliance
with the provisions thereof will not conflict with or constitute a breach of or default under any
instrument relating to the organization, existence or operation of the City, or commitment, agreement
or other instrument to which the City is a party or by which it or its property is bound or affected, or
any ruling, regulation, ordinance,judgment, order or decree to which the City or any of its officers in
their respective capacities as such are subject or any provision of the laws of the State of California
relating to the City and its affairs.
(7) Based upon my participation in the preparation of the Preliminary Official Statement
and the Official Statement and without having undertaken to determine independently the accuracy,
completeness or fairness of the statements contained in the Preliminary Official Statement or the
Official Statement, nothing has come to my attention that would lead me to believe that (a) the
Preliminary Official Statement as of its date and as of the date of the Purchase Contract contained any
untrue statement of a material fact or omitted 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
(excluding therefrom any financial, statistical or economic data or forecasts, numbers, charts, tables,
graphs, estimates, projections, assuinptions or expressions of opinion contained in the Preliminary
Official Statement, information in the Appendices to the Preliminary Official Statement, information
on the inside front cover of the Preliminary Official Statement, CUSIP numbers,information under the
caption "UNDERWRITING," any information that is incorporated by reference into the Preliminary
Official Statement, any information about book-entry or The Depository Trust Company ("DTC")
included therein, or information permitted to be omitted therefrom pursuant to R�ule 15c2-12
promulgated under the Securities Exchange Act of 1934, as amended ("R�ule 15c2-12"), as to all of
which no opinion or view is expressed),or(b)the Official Statement(excluding therefrom the financial
statements, the statistical data and the infonnation concerning The Depository Trust Company, the
book-entry system, the information under the caption "tTNDERWRITING" and in Appendix [A] and
Appendices [C through G] thereto, as to which no opinion is expressed), as of its date and the date
hereof, contained or contains any untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading.
301212959.3
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(8) There is no action, suit, proceeding, inquiry or investigation at 1aw or in equity, or
before any court,public board or body,pending or,to the best of my knowledge, threatened against or
affecting the City or any entity affiliated with the City or any of its officers in their respective capacities
as such (nor to the best of my knowledge, is there any basis therefor)that questions the powers of the
City referred to in paragraph 2 above or in connection with the transactions contemplated by the
Preliminary Official Statement and the Official Statement, or the validity of the proceedings taken by
the City in connection with the authorization, execution or delivery of the Financing Documents, or
wherein any unfavorable decision, ruling or finding would adversely affect the transactions
contemplated by the Financing Documents, the Preliminary Official Statement or the Official
Statement, or that, in any way, would adversely affect the validity or enfarceability of the Financing
Documents or, in any material respect, the ability of the City to perform its obligations under the
Financing Documents.
Very truly yours,
301212959.3
C-3
EXHIBIT D
[FORM OF UNDERWRITER ISSUE PRICE CERTIFICATE]
$[PAR AMOUNT]
City of Redding
Electric System Refunding Revenue Bonds,Series 2026
ISSUE PRICE CERTIFICATE
The undersigned,J.P. Morgan Securities LLC (the"Underwriter"),hereby certifies as set forth
below with respect to the sale and issuance of the above-captioned obligations (the `Bonds") of the
City of Redding(the"Issuer").
1. Sale of the General Rule Maturities. As of the date of this certificate, for each
1Vlaturity of the General Rule Maturities,the first price at which at least 10%of such Maturity was sold
to the Public is the respective price listed in Schedule A.
2. Initial Offering Price of the Hold-the-Offering-Price Maturity.
(a) The Underwriter has offered the Hold-the-Offering-Price Maturity to the Public for
purchase at its initial offering price listed in Schedule A(the "Initial Offering Prices")on or before the
Sa1e Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this
certificate as Schedule B.
(b) As set forth in the Purchase Contract dated[ ],2026,between the Underwriter and
the Issuer, the Underwriter agreed in writing on or prior to the Sale Date that, (i) for the Hold-the-
Offering-Price Maturity, they would neither offer nor sell any of the Bonds of such iVlaturity to any
person at a price that is higher than the Initial Offering Price far such Maturity during the Holding
Period for such Maturity(the"hold-the-offering-price rule"),and(ii) any selling group agreement shall
contain the agreement of each dealer who is a member of the selling group, and any third-party
distribution agreement shall contain the agreement of each broker-dealer who is a party to the third-
party distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such
agreement, the Underwriter has not offered or sold any of the Allocated Portion of the Hold-the-
Offering-Price Maturity at a price that is higher than its Initial Offering Price for that Maturity of the
Bonds during the Holding Period.
3. Defined Terms.
(a) Allocated Po�tion means that portion of the Hold-the-Offering Price Maturity that was
retained by or allocated to the Underwriter, as identified in Schedule A.
(b) General Rule Matu�ities means those Maturities of the Bonds listed in Schedule A
hereto as the "General Rule Maturities."
(c) Hold-the-0ffering-Price Maturity means that Mat�urity of the Bonds listed in
Schedule A hereto as the"Hold-the-Offering-Price Mat�urity."
(d) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period
starting on the Sale Date and ending on the earlier of(i) the close of the fifth business day after the
301212959.3
�-1
Sa1e Date, or(ii)the date on which the Underwriter sold at least 10% of such Hold-the-Offering-Price
Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-
Offering-Price Maturity.
(e) Matu�ity means Bonds with the same credit and payment terms. Bonds with different
maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as
separate maturities.
(� 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.
(g) Sale Date means the first day on which there is a binding contract in writing for the
sale of a Nlaturity of the Bonds. The Sale Date of the Bonds is [ ], 2026.
(h) Unde�v�iter 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 third-party 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 the undersigned'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 wi11 be relied upon by the
Issuer with respect to certain of the representations set forth in the Tax Certificate with respect to the
Bonds and with respect to compliance with the federal income tax rules affecting the Bonds, and by
Orrick, Herrington & Sutcliffe LLP 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$038-G, and other federal income tax advice that it may give to the Issuer from
time to time relating to the Bonds.
IN WITNESS WHEREOF, the undersigned has executed this certificate on this [_th] day of
[ ], 2026.
J.P. MORGAN SECURITIES LLC
By:
Name:
Title:
301212959.3
D-2
scxE�uLE a
SALE PRICES OF THE GENERAL RULE MATURITIES AND
INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITY
(Attachec�
301212959.3
D-3
scxE�uLE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attachec�
301212959.3
D-4
Stradling DYaft of S/19/26
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the "Disclosure Agreement"), dated , 2026, is
executed and delivered by the City of Redding, California(the"City")and U.S. Bank Trust Company,
National Association in its capacity as dissemination agent(the"Dissemination Agent")in connection
with the issuance of$[Par] aggregate principal amount of City of Redding Electric System Refunding
Revenue Bonds, Series 2026 (the `Bonds"). The Bonds are being issued pursuant to an Indenture,
dated as of July 1, 2026 (the "Indenture"), by and between the City and U.S. Bank Trust Company,
National Association, as trustee (the "Trustee"). In connection therewith the City and the Trustee
covenant and agree as follows:
Section 1. Purpose of this Disclosure A�reement. This Disclosure Agreement is being
executed and delivered by the City and the Dissemination Agent for the benefit of the Holders and
Bene�cial Owners of the Bonds and in order to assist the Participating Underwriter(as defined herein)
in complying with Securities and Exchange Commission Rule 15c2-12(b)(5).
Section 2. Definitions. In addition to the definitions set forth above and in the Indenture,
which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this
Section 2, the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the City pursuant to, and as
described in, Sections 3 and 4 of this Disclosure Agreement.
`Beneficial Owner"shall mean any person who(a)has the power,directly or indirectly,to vote
or consent with respect to, or to dispose of ownership of, any Bonds(including persons holding Bonds
through nominees,depositories or other intermediaries); or(b) is treated as the owner of any Bonds for
federal income tax purposes.
"Disclosure Representative" sha11 mean the City Manager or the Director of Finance of the
City, or such other officer or employee as the City shall designate in writing to the Trustee from time
to time.
"Dissemination Agent" sha11 mean initially, U.S. Bank Trust Company,National Association,
acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent
designated in writing by the City and which has filed with the Trustee a written acceptance of such
designation.
"Holder" sha11 mean either the registered owners of the Bonds or, if the Bonds are registered
in the naine of The Depository Trust Company or another recognized depository, any applicable
participant in such depository system.
"Listed Event"sha11 mean any of the events listed in Section 5(a)of this Disclosure Agreement.
"MSRB" shall mean the Municipal Securities Rulemaking Board established pursuant to
Section 15B(b)(1)of the Securities Exchange Act of 1934 or any other entity designated or authorized
by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise
designated by the MSRB or the Securities and EXchange Commission, filings with the MSRB are to
be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently
located at http://emrna.ms�b.org.
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4916-3645-5085v2/200986-0003
"Official Statement" shall mean the Official Statement dated , 2026, relating to the
Bonds.
"Participating Underwriter" shall mean any of the original underwriter of the Bonds listed on
the cover page of the Official Statement required to comply with the Rule in connection with offering
of the Bonds.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange Act
of 1934, as the same may be amended from time to time.
"SEC" shall mean the United States Securities and Exchange Commission.
Section 3. Provision of Annual Re�orts.
(a) The City shall, or shall cause the Dissemination Agent to, not later than 2'70
days after the end of the City's Fiscal Year(which Fiscal Year presently ends on June 30),commencing
with the report for the 2025-26 Fiscal Year,provide to the MSRB an Annual Report which is consistent
with the requirements of Section 4 of this Disclosure Agreement. The Annual Report must be
submitted in electronic format, accompanied by such identifying information as prescribed by the
MSRB. The Annual Report may be submitted as a single document or as separate documents
comprising a package, and may cross-reference other information as provided in Section 4 of this
Disclosure Agreement;p�ovided that if the audited financial statements of the City's Electric Utility
Fund are not available by the date required above for the filing of the Annual Report, the City shall
submit the audited financial statements as soon thereafter as available. If the City's Fiscal Year
changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5.
(b) If the City is unable to provide to the IVISRB an Annual Report by the date
required in subsection(a),the City shall,or sha11 cause the Dissemination Agent to, send to the MSRB
a notice in substantially the form attached hereto as Exhibit A.
(c) The Dissemination Agent shall:
(i) determine the electronic filing address of, and then-current procedures
for submitting Annual Reports to, the MSRB each year prior to the date for providing
the Annual Report; and
(ii) file a report with the City and (if the Dissemination Agent is not the
Trustee,the Trustee)certifying that the Annual Report has been provided to the MSRB
pursuant to this Disclosure Agreement, and stating the date it was provided.
Section 4. Content of Annual Re�orts. The City's Annual Report sha11 contain or include
by reference the following categories or similar categories of information updated to incorporate
information for the most recent Fiscal Year (the tables referred to below are those appearing in the
Official Statement relating to the Bonds):
(i) The audited financial statements of the City's Electric Utility F�und
(which may be included as a component of the City's city-wide audited financial
statements) for the most recently completed Fiscal Year, prepared in accordance with
generally accepted accounting principles for governmental enterprises as prescribed
from time to time by any regulatory body with jurisdiction over the City and by the
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4916-3645-5085v2/200986-0003
Governmental Accounting Standards Board. If the City's Electric Utility Enterprise
Fund audited financial statements are not available by the time the Annual Report is
required to be filed pursuant to Section 3(a),the Annual Report shall contain unaudited
financial statements in a format similar to the audited financial statements, and the
audited financial statements shall be filed in the same manner as the Annual Report
when they become available.
(ii) Updated information comparable to the information in the table entitled
"CITY OF REDDING ELECTRIC UTILITY DEPARTMENT POWER SUPPLY
RESOURCES" as it appears in the Official Statement;
(iii) Updated information comparable to the information in the table entitled
"CITY OF REDDING ELECTRIC UTILITY DEPARTMENT CUSTOMERS,
SALES, REVENUES AND DEMAN�D" as it appears in the Official Statement;
(iv) Updated information comparable to the information in the table entitled
"CITY OF REDDING ELECTRIC UTILITY DEPARTMENT SUMMARY OF
OPERATING RESULTS" as it appears in the Official Statement; and
(v) Updated information comparable to the information in the table entitled
"CITY OF REDDING ELECTRIC UTILITY DEPARTMENT OUTSTANDING
DEBT OF JOINT POWERS AGENCIES" as it appears in the Official Statement.
Financial and operating information relating to the City referenced in items (ii)-(v) above may
be updated from time to time, and such updates may involve displaying data in a different format or
eliminating data that is no longer material.
Any ar all of the items listed above may be included by specific reference to other documents,
including official statements of debt issues of the City or related public entities, which have been
submitted to the MSRB or the SEC.If any document included by reference is a final official statement,
it must be available from the MSRB. The City shall clearly identify each such other document so
included by reference.
Section 5. Reportin�of Listed Events.
(a) Pursuant to the provisions of this Section 5, upon the occurrence of any of the
following events (in each case to the extent applicable)with respect to the Bonds, the City sha11 give,
or cause to be given by so notifying the Dissemination Agent in writing and instructing the
Disseinination Agent to give, notice of the occurrence of such event, in each case,pursuant to Section
5(c)hereof:
1. principal or interest payment delinquencies;
2. non-payment related defaults, if material;
3. unscheduled draws on the debt service reserves reflecting financial difficulties;
4. unscheduled draws on the credit enhancements reflecting financial difficulties;
5. substit�ution of credit or liquidity providers, or their fail�ure to perform;
3
4916-3645-5085v2/200986-0003
6. adverse tax opinions or the issuance by the Internal Revenue Service of
proposed or final determinations of taxability,Notices of Proposed Issue (IRS
Form 5701-TEB) or other material notices or determinations with respect to
the tax status of the Bonds, or other material events affecting the tax status of
the Bonds;
7. modifications to the rights of the Bondholders,if material;
8. optional, contingent or unscheduled calls, if material, and tender offers;
9. defeasances;
10. release, substitution or sale of property securing repayment of the Bonds, if
material;
ll. rating changes;
12. bankruptcy, insolvency, receivership or similar proceedings of the City, which
sha11 occur as described below;
13. the consummation of a merger, consolidation,or acquisition involving the City
or the sale of all or substantially all of the assets of the City's Electric System
other than in the ordinary course of business, the entry into a definitive
agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if
material;
14. appointment of a successor or additional trustee or the change of name of a
trustee, if material;
15. incurrence of a Financial Obligation of the City with respect to the Electric
System, if material, or agreement to covenants, events of default, remedies,
priority rights, or other similar terms of a Financial Obligation of the City with
respect to the Electric System, any of which affects Holders of the Bonds, if
material; or
16. default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a Financial Obligation of the City with
respect to the Electric System, any of which reflect financial difficulties.
For these purposes, (i) any event described in item 12 of this Section 5(a) is considered to occur
when any of the following occur: the appointment of a receiver,fiscal agent,or similar officer for the City
in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal
law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets
or business of'the City or its Electric System,or if such jurisdiction has been assumed by leaving the existing
governing body and officials or officers in possession but subject to the supervision and orders of a court
or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or
liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of
the assets or business of the City or its Electric System; and (ii)the City intends to comply with the
provisions hereof for the Listed Events described in subparagraphs (15) and(16) of this Section 5(a), and
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4916-3645-5085v2/200986-0003
the de�nition of the "Financial Obligation" in Section 2, with reference to the Rule, any other applicable
federal securities laws and guidance provided by the SEC in its Release No. 34-83885 dated August 20,
2018 (the "2018 Release"), any further amendments or written guidance provided by the SEC or its staff
with respect to the amendinents to the Rule effected by the 2018 Release.
(b) Upon receipt of notice from the City and instruction by the City to repart the
occurrence of any Listed Event, the Dissemination Agent shall provide notice thereof to the MSRB in
accardance with Section 5(c) hereof. In the event the Dissemination Agent shall obtain actual
knowledge of the occurrence of any of the Listed Events, the Dissemination Agent shall, immediately
after obtaining such knowledge, contact the Disclosure Representative, inform such person of the
event, and request that the City promptly notify the Dissemination Agent in writing whether or not to
report the event pursuant to Section 5(c). For purposes of this Disclosure Agreement, "actual
knowledge"of the occurrence of such Listed Event sha11 mean actual knowled�e by the Dissemination
Agent, if other than the Trustee, and if the Dissemination Agent is the Trustee, then by the officer at
the corporate trust office of the Trustee with regular responsibility for the administration of matters
related to the Indenture. The Dissemination Agent shall have no responsibility to determine the
materiality, if applicable, of any of the Listed Events.
(c) The City, or the Dissemination Agent, if the Dissemination Agent has been
instructed by the City to report the occurrence of a Listed Event pursuant to Section 5(b), shall file a
notice of the occurrence of any of the events listed in Section 5(a) hereof with the 1VISRB in a timely
manner not more than ten(10)business days after the occurrence of the event.
Section 6. Termination of Reportin�� ag tion. The City's obligations under this
Disclosure Agreement sha11 terminate with respect to all Bonds upon the maturity, legal defeasance,
prior redemption or payment in full of all of the Bonds and with respect to any Bonds upon the maturity,
defeasance,prior redemption or payment in full of such Bonds.
Section 7. Dissemination A�ent. The City may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and
may discharge any such Dissemination Agent, with or without appointing a successor Dissemination
Agent. If at any time there is not any other designated Dissemination Agent, the Trustee, upon notice
from the City, shall be the Dissemination Agent. The initial Dissemination Agent sha11 be the Trustee.
The Dissemination Agent sha11 not be responsible in any manner for the content of any notice or report
prepared by the City pursuant to this Disclosure Agreement. The Dissemination Agent shall receive
compensation for the services provided pursuant to this Disclosure Agreement.
Section 8. Amendment• Waiver. Notwithstanding any other provision of this Disclosure
Agreement,the City and the Dissemination Agent may amend this Disclosure Agreement, (and,to the
extent that any such amendment does not materially change or increase its obligations hereunder, the
Dissemination Agent shall agree to any amendment so requested by the City), and any provision of
this Disclosure Agreement may be waived;provided, that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Section 3(a), Section 4
or Section 5(a), it may only be made in connection with a change in circumstances that arises from a
change in legal requirements, change in law, or change in the identity, nature or stat�us of an obligated
person with respect to the Bonds, or the type of business conducted;
5
4916-3645-5085v2/200986-0003
(b) The undertaking, as amended or taking into account such waiver,would,in the
opinion of nationally recognized bond counsel,have complied with the reguirements of the Rule at the
time of the original issuance of the Bonds, after taking into account any amendments or interpretations
of the Rule, as well as any change in circumstances; and
(c) The amendment or waiver does not, in the opinion of nationally recognized
bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds.
In the event of any amendment or waiver of a provision of this Disclosure Agreement,the City
shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative
explanation of the reason for the amendment ar waiver and its impact on the type (or in the case of a
change of accounting principles, on the presentation) of financial information or operating data being
presented by the City. In addition,if the amendment relates to the accounting principles to be followed
in preparing financial statements, (i) notice of such change shall be given in the same manner as for a
Listed Event under Section 5(c), and(ii) the Annual Report for the year in which the change is made
should present a comparison (in narrative form and also, if feasible, in quantitative form)between the
financial statements as prepared on the basis of the new accounting principles and those prepared on
the basis of the former accounting principles.
Section 9. Filings with the MSRB. All information, operating data, financial statements,
notices and other documents provided to the MSRB in accordance with this Disclosure Agreement
shall be provided in an electronic format prescribed by the MSRB and shall be accompanied by
identifying information as prescribed by the MSRB.
Section 10. Additional Information.Nothing in this Disclosure Agreement shall be deemed
to prevent the City �rom disseminating any other information, using the means of dissemination set
forth in this Disclosure Agreement or any other means of communication, or including any other
information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which
is required by this Disclosure Agreement.If the City chooses to include any information in any Annual
Report or notice of occurrence of a Listed Event in addition to that which is specifically required by
this Disclosure Agreement, the City shall have no obligation under this Disclosure Agreement to
update such information or incl�ude it in any fut�ure Annual Report or notice of occurrence of a Listed
Event.
Section 11. Default. In the event of a failure of the City or the Dissemination Agent to
comply with any provision of this Disclosure Agreement, the Trustee may(and, at the request of any
Participating Underwriter or the Holders of at least 25% of the aggregate principal amount of
Outstanding Bonds and upon provision of indemnification satisfactory to the Trustee, shall), or any
Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate,
including seeking mandate or specific performance by court order, to cause the City or the
Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure
Agreement.A default under this Disclosure Agreement shall not be deemed an Event of Default under
the Indent�ure, and the sole remedy under this Disclosure Agreement in the event of any failure of the
City or the Disseinination Agent to coinply with this Disclosure Agreement sha11 be an action to coinpel
performance hereunder.
Section 12. Duties, Immunities and Liabilities of Trustee and Dissemination A�;ent. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Agreement, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors,
6
4916-3645-5085v2/200986-0003
employees and agents,harmless against any 1oss, expense and liabilities which it may incur arising out
of or in the exercise or performance of its powers and duties hereunder, including the costs and
expenses(including attorneys' fees)of defending against any claim of liability,but excluding any loss,
expense and liabilities due to the Dissemination Agent's negligence or willful misconduct. The
obligations of the City under this Section 12 shall survive resignation or removal of the Dissemination
Agent and payment of the Bonds.
Section 13. Notices. Any notices or communications to or among any of the parties to this
Disclosure Agreement may be given as follows:
To the Citv: To the Dissemination A�ent:
City o�Redding U.S. Bank Trust Company,National Association
'77'7 Cypress Avenue One California Street, Suite 1000
Redding, California 96001 San Francisco, California 94111
Attention: Finance Officer Attention: Global Corporate Trust Services
Phone: (530) 225-4087 Phone: (415) 677-3597
Fax: (530) 225-4324 Fax: (415) 677-3769
Section 14. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of
the City, the Trustee, the Dissemination Agent, the Participating Underwriter and the I�olders and
Bene�cial Owners from time to time of the Bonds, and shall create no rights in any other person or
entity.
[Remainder of page intentionally left blank.]
7
4916-3645-5085v2/200986-0003
Section 15. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which sha11 be an original and all of which shall constitute but one and the same
instrument.
CITY OF REDDING, CALIFORNIA
By
City Manager
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION,
as Dissemination Agent
By
Authorized Officer
ACKNOWLEDGED:
U.S. BANK TRLTST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By
Authorized Officer
8
4916-3645-5085v2/200986-0003
EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: CITY OF REDDTNG
Name of Bond Issue: ELECTRIC SYSTEM REFUNDING REVENUE BONDS, SERIES 2026
Date of Issuance: , 2026
NOTICE IS HEREBY GIVEN that the City of Redding, California (the "City") has not
provided an Annual Report with respect to the above-named Bonds as required by Section 5.07 of the
Indenture, dated as of July 1, 2026, by and between the City and U.S. Bank Trust Company,National
Association,as trustee,and the Continuing Disclosure Agreement,dated July_,2026,by and between
the City and U.S. Bank Trust Company, National Association, as Dissemination Agent. The City
anticipates that the Annual Report will be filed by , 20_.
Dated: , 20
U�.S. BANK TRU�ST COMPANY,NATIONAL
ASSOCIATION, as Dissemination Agent on behalf of
the City of Redding
By:
Authorized Officer
cc: City of Redding, California
9
4916-3645-5085v2/200986-0003
Draft of S/19/26
� ,_,
� �
Q �
� � l��2�L,Il�ti:�'�tl��'�1+1�ICI�L,�T',�i7'�;(�I�;N't'l�f�'i'�;C�J[Il��;____�2026
� �
o .�
� _�- NEW ISSUE-FULL BOOK-ENTRY ONLY RATING: Fitch: "[_]"
� ° (See"RATING"herein.)
� �� In the opinion of Or•ric1� Herrington & Sutcliffe LLP, Bond Counsel to the Ciry, based u�on an analysis of existing laws,
° � rez;ulations, rzclings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance
�, � with certain covenants, interest on the 2026 Bonds is excluded from gross income for federal income tax puYposes under Section 103
� �'" of the Internal Revenue Code of 1986 and is exempt f�om State of California personal income tcrxes. In the furtheN opinion of Bond
� a Counsel, interest on the 2026 Bonds is not a specific preference item for purposes of the federal individual alternative min�imum tax.
�" � Bond Counsel observes that interest on the 2026 Bonds included in adjusted financial statement income of certain cov�porations is not
�; �� excluded fi^om the fede�al corpvrate alternative minimum ta�. Bond Counsel expresses no opinion Negarding any other tczx
� � consequences related to the ownership or disposition of, or the amount, acerual or receipt of interest on, the 2026 Bonds. See "TAX
�� MATTERS"herein.
� �
� p. $[Par]�
�� � CITY OF REDDING
� � ELECTRIC SYSTEM REFUNDING REVENUE BONDS,
,� �
� ; SERIES 2026
� .�
� � Dated:Date of Delivery Due: June 1,as shown on the inside cover
� � This cover page eontains certain information for general refeNence only.It is not intended to be a summaNy of the seeurity or
� � terms of this issue.Investors are advised to read the e�atire Official Statement to obtain information essential to the maki�ag of an
� ; informed investment decision. Capitalized terms used on this cover page and not otherrvise defined shall have the rreeanings set
� � forth her^ein.
U ._
� � The City of Radding, California(the "City") is issuing its Electric System Refunding Revenue Bonds, Series 2026 (the "2026
� �� Bonds")for the purpose of providing funds to(i) refund the Redding Joint Powers Financing Authority's outstanding Electric System
� � Revenue Bonds,2015 Series A and the related installment sale payments and(ii)pay eosts of issuance of the 2026 Bonds, as further
� .� described herein. See"PLAN OF REFiTNDING"herein.
c��i �o
� ,� The 2026 Bonds will be dated their date of delivery. Interest on the 2026 Bonds will be payable on June 1 and December 1 of
� � each year, comznencing December 1,2026. The 2026 Bonds are being delivered in fu11y registered form and,when delivered,will be
� .� registered in the name of Cede&Co., as nominee of The Depository Trust Company,New York,New Yark("DTC"). DTC will act
-� � as securities depository for the 2026 Bonds. Individual purchases will be made in book-entry form only, in denominations of$5,000
� ' principal ainount or any integral multiple thereo£Payments of principal of and interest on,the 2026 Bonds are payable by the Trustee
c �� to DTC, which is obligated in turn to remit such principal and interest to its DTC Participants for subsequent disbursement to the
� � beneficial owners of the 2026 Bonds,as described herein.
s�,.�
� � The 2026 Bonds are subjecY Yo redemption prior to maturity as described herein.
� �� The 2026 Bonds are being issued pursuant to an Indenture, dated as of July 1, 2026 (the"Indenture"),by and between the City
'' and U,S.Bank Trust Com an National Association,as trustee the"Trustee" The 2026 Bonds are a able from,and secured b a
� � P Y, � )• P Y Y�
�.� pledge of and lien on Net Revenues of the City's Eleetric System and moneys in the City's Electrie Revenue Fund on parity with the
; .� City's outstanding and future Pariry Obligations. As of June 2,2026, the City bad outstanding bonds and installment sale payments
� �� payable from Net Revenues of the Electric Systein, all constituting Parity Obligations, in the aggregate principal amount of$127.7
�� � million(of which approximately$23.8 uiillion is being refunded by the 2026 Bonds).The City may hereafter issue or incur additional
� �, Parity Obligations pursuant to the terms of the Indenture. Maintenance and Operation Costs of the Electric System(including certain
� � take-or-pay obligarions under contracts with joint powers agencies) are payable by tbe City from Revenues of the Electric System
�� o prior to the payment of Pariry Obligations.
� ; The 2026 Bonds are special obligations of the City payable solely from Net Revenues of the ElecYric System and moneys in
G � the Electric Revenue Fund as provided in the Indenture.The 2026 Bonds do not constitute a debt of the City or of the State of
��, � California or of any poliYical subdivision Yhereof within Yhe meaning of any constiYuYional or staYuYory debt limitation or
� � restricYion. The General Fund of the City is not liable and neiYher the faith and crediY nor the Yaxing power of the City is
•� � pledged for the payment of the principal of the 2026 Bonds or the interest on the 2026 Bonds or the performance or
� �
�, � satisfacYion of any oYher obligation oP the City under the Indenture.
� � o
� � ,�
� Q � MATURITY SCHEDULE
� � �� (see inside front cover)
� � '�
� o � The 2026 Bonds will be offered when, as and if issued and received by the Underwriter, subject to the approval of le�ality by
�' ,; �^ Orrick, HeNrin�ton&Sutcliffe LLP, Bond Counsel to the City, and certain other conditions. Certain legal matte�s will be passec�
� u on or the Ci b the Cit Attorne o the Ci o Reddin� and or the UndeYw�iter b Norton Rose Pulbri ht US LLP. Stv�adlin
�o o � l� f �' Y Y Y f tJ' f S f Y g g
� � � Yocca Carlson &Rauth LLP is acting as Disclosur�e Counsel to the City in connection with the 2026 Bonds. It is expected that the
� � �
�, o � 2026 Bonds will be available for delivery throu�h the DTC book-entry system in New York; New York by Fast Automated Securities
� o .- Transfer(FAST)on or about July= 2026.
� � .�
� U .�
� �
� � �
� � �
� o � �Preliminary,subject to ehange.
4909-8297-8690v6/200986-0003
J.P.Morgan
Dated: ,2026
4909-8297-8690v6/200986-0003
$[Par]�
CITY OF REDDING
ELECTRIC SYSTEM REFUNDING REVENUE BONDS,
SERIES 2026
MATURITY SCHEDULE
$[ ]" Serial 2026 Bonds
Maturity Date Principal Interest Price or CUSIP�
(June 1)� Amount� Rate Yieid (Base No. 75728T)
$ � %Term 2026 Bonds due June 1,20 ,Price or Yield %; CUSIP-�: 75728T
$ ` %Term 2026 Bonds due June 1,20 ,Price or Yield %; CUSIl'�: 75728T
� Preliminary, subject to cbange.
r CUS]P� is a registered trademark of the American Bankers Association. CUSIP data herein are provided by
CUS]P Giobal Services, managed by FactSet Reseaxch Systems Inc. on behalf of the American Bankers
Association. CUSIP numbers have been assigned by an independent com�pany not affiliated with the City or the
Underwriter and are included solely for the convenience of the holders of the 2026 Bonds. Neither of the City
nor the Underwriter is responsible for the selection or use of these CUSIP numbers and no representation is
made as to their correctness on the 2026 Bonds or as indicated above.The CUSIP number for a specific maturity
is subject to being changed after the issuance of the 2026 Bonds as a result of various subsequent actions
including,but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of
secondary market portfolio insurance or other similar enhancement by investors that is applicable to a11 or a
portion of the 2026 Bonds.
4909-8297-8690v6/200986-0003
CITY OF REDDING
777 Cypress Avenue
Redding, California 96001
CITY COUNCIL
Mike Littau,Mayo�
Dr.Paul Dhanuka, Vice MayoN
Erin Resner,Mayor Pro Tempo�-e
Tenessa Audette, Council Member
Jack Munns, Council Member
CITY OFFICIALS
William S. Tarbox
City Manage�^
Benjamin L. Stock
Interim City AttoNney
Nicholas Zettel
Director of ElectNic Utility
Joseph Bowers
Assistant Electric Utility Di�ector, Resources
SPECIAL SERVICES
Orrick, Herrington& Sutcliffe LLP Stradling Yocca Carlson&Rauth LLP
San Franeiseo, California Newport Beaeh, California
Bond Counsel Disclosure Counsel
PFM Financial Advisors LLC U.S.Bank Trust Company,National Association.
Los Angeles, California Phoenix,Arizona
Municipal Advisor Trustee
4909-8297-8690v6/200986-0003
No dealer, broker, salesperson or other person has been authorized by the City or the Underwriter to
give any information or to make any representations other than those contained herein and, if given or made,
such other information or representations must not be relied upon as having been authorized by the foregoing.
This Official Statement does not constitute an offer to sell or the solicitation of an offer to b�uy nor shall there
be any sale of the 2026 Bonds in any jurisdiction in which it is unlawfui to make such offer, solicitation or
sale. This Official Statement is no�to be construed as a contract with the purchasers of the 2026 Bonds.
The information set forth herein has been furnished by�he City and other sources which are believed
to be reliable, but it is not guaranteed as to accuracy or completeness by, and is not to be construed as a
representation by, the Underwriter. 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 fact. The information and expressions of opinions herein are
subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder
shall, under any circumstances, create any implication that�here has been no change in the affairs of the City
or the Electric System since the date hereo£ This Official Statement, inciuding any supplement or amendment
hereto, is intended to be deposited with the Municipal Securities Rulemaking Board through the Electronic
Municipal Market Access(EMMA)website.
The Underwriter has provided the following sentence for inclusion in this Officiai Statement: The
Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its
responsibilities to investors under the federal securities laws as applicable to the facts and circumstances of this
transaction,but the Underwriter does not guarantee the accuracy or completeness of such information.
IN CONNECTION WITH THE OFFERING OF THE 2026 BONDS THE UNDERWRITER
MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE 2026 BONDS AT LEVELS ABOVE THOSE WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.
CAUTIONARY STATEMENTS REGARDiNG
FORWARD-LOOKING STATEMENTS iN
THIS OFFICIAL STATEMENT
Certain statements included or incorporated by reference in this Official Statement and the
Appendices hereto constitute "forward-looking statements." Such statements are generally identifiable by the
terminology used such as "plan,""expect," "estimate,""budget"or other similar wards. Such forward-looking
statements include, but are not limited to, certain statements contained in the information under the captions
"THE ELECTRIC SYSTEM," "RATE REGULATION," and "CERTAIN FACTORS AFFECTING THE
ELECTRIC UTILITY INDUSTRY" in this Official Statement. Forward-looking statements in this Official
Statement are subject to risks and uncertainties, including particularly those relating to naturai gas costs and
availability, wholesale and retail electric energy and capacity prices, federal and state legislation and
regulations, the impact of weather on the ener�y market, industry restructuring, changes in consumer
electriciry demand and use patterns,and the economy of the service area of the City's Electric System.
The achievement of any results or the realization of other expectations contained in such forward-
looking statements involve known and unknown risks, uncertainties and other factors that may cause actual
results, performance or achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. The City does not plan to issue any
updates or revisions to those forward-looking statements.
The City maintains a website. However, the information presented therein is not part of this Official.
Statement and should not be relied upon in making inveshnent decisions with respect to the 2026 Bonds.
References to website addresses presented herein are for informational purposes only and may be in the form
of a hyperlink solely for the reader's convenience. Unless specified otherwise, sueh websites and the
information or links contained therein are not incorporated into, and are not part of, this Official Statement for
purposes of,and as that term is defined in, S.E.C. Rule 15c2-12(b)(5).
4909-8297-8690v6/200986-0003
TABLE OF CONTENTS
Page
INTRODUCTION .................................................................................................................................3
Purpose; Authority for Issuance.........................................................................................................3
TheCity .............................................................................................................................................3
Security and Sources of Payment for the 2026 Bonds.......................................................................4
RateCovenant....................................................................................................................................5
ContinuingDisclosure .......................................................................................................................5
OtherMatters.....................................................................................................................................6
PLANOF REFUNDING.......................................................................................................................6
General...............................................................................................................................................6
Refunding of 2015 RJPFA Electric System Bonds ...........................................................................6
ESTIMATED SOURCES AND USES OF FUNDS .............................................................................8
THE2026 BONDS................................................................................................................................8
General...............................................................................................................................................8
Redemption........................................................................................................................................9
SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS..........................................10
PledgeUnder the Indenture .............................................................................................................10
Allocation of Revenues Under the Indenture...................................................................................l l
F1ow of Funds Under the Indenture.................................................................................................12
RateCovenant..................................................................................................................................13
No Debt Service Reserve Fund........................................................................................................14
Outstanding Electric System Revenue Obligations.........................................................................14
Additional Electric System Revenue Obligations............................................................................16
Investmentof Funds.........................................................................................................................17
Limitationson Remedies .................................................................................................................17
THE ELECTRIC SYSTEM.................................................................Error! Bookmark not de�ned.
CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY..... Error! Bookmark
not defined.
CONSTITUTIONAL LIMITATIONS iN CALIFORNIA AFFECTiNG FEES AND CHARGES
..............................................................................................................Error! Bookmark not de�ned.
TAXMATTERS..................................................................................................................................67
LITIGATION.......................................................................................................................................69
RATING ..............................................................................................................................................70
CONTINUINGDISCLOSURE...........................................................................................................70
UNDERWRITiNG ..............................................................................................................................71
CERTAIN RELATIONSHIPS ............................................................................................................71
CERTAIN LEGAL MATTERS...........................................................................................................71
MUNICIPALADVISOR.....................................................................................................................72
AUDITED FINANCIAL STATEMENTS ..........................................................................................72
EXECUTION AND DELIVERY........................................................................................................73
i
4909-8297-8690v6/200986-0003
TABLE OF CONTENTS
(continued)
Page
APPENDIX A EXCERPTS OF THE AUDITED FINANCIAL STATEMENTS OF THE
CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2025..................................A-1
APPENDIX B CERTAIN INFORMATION CONCERNING THE CITY OF REDDING..........B-1
APPENDIX C BOOK-ENTRY ONLY SYSTEM ........................................................................C-1
APPENDIX D SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE...................D-1
APPENDIX E PROPOSED FORNI OF CONTINUING DISCLOSURE AGREEIVIENT...........E-1
APPENDIX F PROPOSED FORM OF OPINION OF BOND COUNSEL................................. F-1
APPENDIX G DEBT SERVICE SCHEDULE .............................................................................G-1
ii
4909-8297-8690v6/200986-0003
OFFICIAL STATEMENT
$[Par]*
CITY OF REDDING
ELECTRIC SYSTEM REFUNDING REVENUE BONDS,
SERIES 2026
INTRODUCTION
This Int�oduction is subject in all Nespects to the moNe complete information contained
elsewhere in this Official Statement, and the offering of the 2026 Bonds to potential investors is made
only by means of the entire Official Statement. Terms used in this Introduction o� other�wise in this
O�cial Statement and not otherwise defined herein shall have the respective meanings assigned to
them in Appendix D he�eto.
Purpose; Authority for Issuance
The purpose of this Official Statement, which includes the cover page and appendices hereto,
is to set forth certain information concerning the issuance and sale of $[Par]* principal amount of
City of Redding Electric System Refunding Revenue Bonds, Series 2026 (the "2026 Bonds"). The
2026 Bonds are being issued pursuant to Articles 10 and 11, Chapter 3, Part 1, Division 2, Title 5 of
the Government Code of the State of California (the "Refunding Act"), and an Indenture, dated as of
Ju1y 1, 2026 (the "Indenture"), by and between the City of Redding, California (the "City") and U.S.
Bank Trust Company,National Association, as trustee (the"Trustee").
The 2026 Bonds are being issued for the purpose of providing funds to (i)refund the Redding
Joint Powers Financing Authority's (the "Authority") outstanding Electric System Revenue Bonds,
2015 Series A (the "Refunded 2015A Bonds") and the related installment sale payments payable by
the City to the Authority pursuant to the 2015 Installment Sale Agreement, dated as of December 1,
2015 (the "2015A Installment Sale Agreement"), by and between the Authority and the City, and
(ii)pay costs of issuance of the 2026 Bonds, as further described herein. See "PLAN OF
REFUNDING."
The City
The City is a general 1aw city of the State of California, comprising approximately 60 square
miles, located at the northern end of the Sacramento Valley, approximately 160 miles north of
Sacramento and 230 miles northeast of San Francisco. As a general law city, the City has the power
to furnish electric utility service to its inhabitants. In connection therewith, the City has the powers of
eminent domain, to contract, to construct works, to f�rates and charges for cominodities or services
furnished and to incur indebtedness. To provide electric service within its service area (which is
coterminous with the City's corporate city boundaries), the City owns and operates an electric system
(the "Electric System" as more fully defined in Appendix D) that includes generation, transmission
and distribution facilities. The City also purchases power and transmission service from others. For
the Fiscal Year ended June 30, 2025, the City Electric System served approximately 45,591 customer
accounts, had total sales of approximately 770.5 million kWh and had a peak demand of 240.9 MW.
�Preliminary,subj ect to change.
4909-8297-8690v6/200986-0003
See "THE ELECTRIC SYSTEM" and "APPENDIX B — CERTATN INFORMATION
CONCERI`1ING THE CITY OF REDDING."
Security and Sources of Payment for the 2026 Bonds
The 2026 Bonds are special obligations of the City payable solely from and secured solely by
a pledge of and lien on Net Revenues of the Electric System and all moneys on deposit in the Electric
Revenue Fund of the City. The pledge of and lien on Net Revenues of the Electric System and
amounts on deposit in the Electric Revenue Fund for the payment of the 2026 Bonds is on parity
with and equal to the charge and lien upon such Net Revenues and amounts on deposit in the Electric
Revenue Fund securing all Parity Obligations (hereinafter defined) hereto�ore or hereafter issued or
incurred by the City as described herein.
As of June 2, 2026, the City had outstanding Parity Obligations in the aggregate principal
amount of approximately $12'7.'7 million, comprised of (i) City of Redding Electric System
Refunding Revenue Bonds, Series 2017 (the "2017 Electric System Bonds") outstanding in the
principal amount of$22.9 million, (ii) City of Redding Electric System Refunding Revenue Bonds,
Series 201$ (the "2018 Electric System Bonds") outstanding in the principal amount of $15.0
million, (iii)installment sale payments related to the Authority Electric System Revenue Bonds, 2015
Series A (the "2015 RTPFA Electric System Bonds") outstanding in the principal amount of$23.8
million (all of which is being refunded by the 2026 Bonds) and(iv) installment sale payments related
to the Authority Electric System Revenue Bonds, 2025 Series A (the "2025 RJPFA Electric System
Bonds") outstanding in the principal amount of$66.0 million.
The City may issue or incur additional obligations payable from Net Revenues and moneys
on deposit in the Electric Revenue Fund on a parity with the 2026 Bonds, the 2017 Electric System
Bonds, the 2018 Electric System Bonds, and the installment sale payments relating to the 2025
R7PFA Electric System Bonds, subject to the terms and conditions set forth in the Indenture. All
obligations heretofore or hereafter issued or incurred by the City the payment of which constitutes a
charge and lien on the Net Revenues and moneys in the Electric Revenue Fund equal to and on a
parity with the charge and lien on the Net Revenues and moneys in the Electric Revenue Fund for the
payment of the 2026 Bonds are herein referred to as"Parity Obligations."
The City has, and may in the future, also issue or incur obligations the payments under and
pursuant to which are payable from Net Revenues, subject and subordinate to the 2026 Bonds and to
all other Parity Obligations ("Subordinate Obligations"). The City and the Authority have entered
into an Amended and Restated Revolving Credit Agreement, dated as of May 1, 2023 (the
"Revolving Credit Agreement") with U.S. Bank National Association (the "Credit Bank"), under
which the Credit Bank has agreed to advance funds to the Authority, from time to time, in an amount
up to $25.0 million, for the benefit of the City Electric System. The term of the Revolving Credit
Agreement extends to November 1, 2028, unless eXtended or earlier terminated pursuant to its terms.
Barrowings under the Revolving Credit Agreement are payable from, and secured by, certain
instaIlment sale payments required to be made by the City to the Authority under the terms of a
Subordinate Installment Sale Agreement, dated as of October 1, 2020 (the "Subardinate Installinent
Sale Agreeinent"), by and between the City and the Authority, the installment sale payments to be
made by the City under which Subordinate Installment Sa1e Agreeinent constitute Subordinate
Obligations. As of June 2, 2026, there were no outstanding borrowings by the City under the
Revolvin�Credit Agreeinent.
4
4909-8297-8690v6/200986-0003
As of June 2, 2026, the City had outstanding approximately $19.9 million principal amount
of take-or-pay obligations related to debt of the joint powers agencies in which it participates, which
obligations constitute Maintenance and Operation Costs of the Electric System and are payable from
Revenues of the Electric System prior to the 2026 Bonds and other Parity Obligations. The City may
incur additional obligations pursuant to its agreements with such joint power agencies in which it
now, or in the future may, participate or enter into other contacts or leases for the purchase of
facilities,properties, structures or works or electric output, capacity or other electrical services for the
Electric System which are Maintenance and Operation Costs of the Electric System, payable from
Revenues of the Electric System prior to the 2026 Bonds and other Parity Obligations.
See "SECURITY AND SOURCES OF PAYMENT FOR THE 2026 Bonds — Outstanding
Electric System Revenue Obligations" and"—Additional Electric System Revenue Obligations."
The 2026 Bonds are special obiigations of the City payable solely from Net Revenues of
the Electric System and moneys in the Electric Revenue Fund as provided in the Tndenture.
The 2026 Bonds do not constitute a debt of the City or of the State of California or of any
political subdivision thereof within the meaning of any constitutional or statutory debt
limitation or restriction. The Generai Fund of the City is not liable and neither the faith and
credit nor the taxing power of the City is pledged for the payment of the principal of the 2026
Bonds or the interest on the 2026 Bonds or the performance or satisfaction of any other
obligation of the City under the Tndenture.
Rate Covenant
Pursuant to the Indenture, the City has covenanted to fix, prescribe and collect rates and
charges for the services, facilities and electricity of the Electric System during each Fiscal Year
which will be at least sufficient to yield (a) Adjusted Annual Revenues for such Fiscal Year at least
equal to the sum of the following for such Fiscal Year: (i) Maintenance and Operation Costs,
(ii)Adjusted Annual Debt Service, and(iii) all other payments required to meet any other obligations
of the City which are charges, liens or encumbrances upon or payable from the Electric Revenue
Fund, including all amounts owing under Subordinate Obligations; and (b) Adjusted Annual Net
Revenues for such Fiscal Year egual to at least 110% of the Adjusted Annual Debt Service for such
Fiscal Year. See "SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS — Rate
Covenant."
Continuing Disclosure
The City has covenanted for the benefit of the holders and beneficial owners of the 2026
Bonds to provide certain financial information and operating data relating to the City and the Electric
System by not later than 270 days following the end of the City's Fiscal Year (which Fiscal Year
presently ends June 30) (the "Annual Report"), commencing with the report for the 2025-26 Fiscal
Year, and to provide notices of the occurrence of certain enumerated events. See "CONTINUING
DISCLOSURE." These covenants have been made in arder to assist the Underwriter in complying
with S.E.C. Rule 15c2-12(b)(5) (the "Rule"). See also "CONTINUING DISCLOSURE" and
"APPENDIX E—PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT."
5
4909-8297-8690v6/200986-0003
Other Matters
This Official Statement includes summaries of the terms of the 2026 Bonds, the Indenture,
the Continuing Disclosure Agreement and certain contracts and other arrangements for the supply of
capacity and energy. The summaries of and references to all documents, statutes, reports and other
instruments referred to herein do not purport to be complete, comprehensive or definitive, and each
such summary and reference is qualified in its entirety by reference to each document, statute, report
or instrument. The capitalization of any word not conventionally capitalized, or otherwise defined
herein, indicates that such word is defined in a particular agreement or other document and, as used
herein, has the meaning given it in such agreement or document.
Copies of the Indenture and the Continuing Disclosure Agreement are available for
inspection at the offices of the Trustee or the Redding Electric Utility Department (the `Blectric
Utility Department"), and will be available upon request and payment of duplication costs from the
Trustee.
Additional information regarding the Official Statement may be obtained by contacting the
Trustee or contacting the City at: City of Redding, 777 Cypress Avenue, Redding, California 96001,
Attention: Assistant Electric Utility Director, Resources.
PLAN OF REFUNDING
General
The 2026 Bonds are being issued for the purpose of providing funds to (i) refund the
Authority's 2015 RJPFA Electric System Bonds and the related installment sale payments payable by
the City pursuant to the 2015A Installment Sale Agreement and(ii)pay costs of issuance of the 2026
Bonds
Refunding of 2015 RJPFA Electric System Bonds
The 2015 RTPFA Electric System Bonds were issued on December 17, 2015, in the aggregate
principal amount of$37,955,000 to (i) finance the costs of design, acquisition and construction of a
new administrative building for the City's electric utility and other related facilities; (ii) prepaying
and refunding the City's then outstanding Electric System revenue certificates of participation and
(iii)pay costs of issuance of the 2015 RJPFA Electric System Bonds. The 2015 RJPFA Electric
System Bonds are primarily payable from installment sale payments made by the City under the
2015A Installment Sale Agreement. As of the date hereof, $23,750,000 aggregate principal amount
of the 2015 RJPFA Electric System Bonds remain outstanding. See also "SECURITY AND
SOURCES OF PAYMENT FOR THE 2026 Bonds — Outstanding Electric System Revenue
Obligations — Parity Obligations." A portion of the proceeds of the 2026 Bonds will be used to
refund the outstanding principal amount of the 2015 RJPFA Electric System Bonds maturing on and
after June 1, 2027. The Refunded 2015A Bonds will be called for redemption on July_, 2026 (the
"Redemption Date"), the date of issuance of the 2026 Bonds.
The refunding of the Refunded 2015A Bonds is being undertaken to achieve net present
value and debt service savings. The following table details the maturity dates and principal amounts
of the 2015 RJPFA Electric System Bonds to be refunded.
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Refunded 2015A Bonds
Outstanding
CUSIP� Principal
Maturity Date (Base No.: Amount to be Redemption Redemption
(June 1) 75728L) Prepaid Interest Rate Date Price
2027 BD7 $2,530,000 5.000% July_,2026 100%
2027 BES 2,650,000 5.000 July_,2026 100
2029 BF2 2,790,000 5.000 July_,2026 100
2030 BGO 2,925,000 5.000 July_,2026 100
2031 BH8 2,345,000 5.000 July_,2026 100
2032 BJ4 2,465,000 5.000 July_,2026 100
2033 BKl 2,590,000 3.625 July_,2026 100
2034 BL9 2,680,000 3.650 July_,2026 100
2035 BM7 2,775,000 3.750 July_,2026 100
Total $23,750,000
j� CUSIP�is a registered trademark of Ameriean Bankers Assoeiation. CUSIP�data herein are provided by CUSIP Global
Services,managed by FactSet Researeh Systems Inc. on behalf of Ameriean Bankers Association.Neither the City nor the
Underwriters is responsible for the selection or correctness of the CUSIP numbers set farth herein.
The refunding of the Refunded 2015A Bonds will be eff'ected by depositing a portion of the
proceeds of the 2026 Bonds into the Refunding Fund created under the Indenture. Amounts deposited
in the Refunding Fund will be sufficient to pay on the Redemption Date the redemption price (i.e.,
100% of the principal amount) of the Refiinded 2015A Bonds plus accrued interest thereon to such
Redemption Date. On the Redemption Date, the Trustee wi11 transfer all money in the Refunding
Fund to U.S. Bank Trust Company, National Association, as trustee under the Trust Agreement,
dated as of December 1, 2015 (the "2015A Trust Agreement"), by and between the Authority and
U.S. Bank Trust Company, National Association, as successor trustee, pursuant to which the
Refunded 2015A Bonds were issued in accordance with a Written Order of the City to pay the
redemption price of the Refunded 201 SA Bonds.
Upon sueh deposit, the liability of the Authority with respeet to the Refunded 201 SA Bonds
wi11 eease and the Refunded 2015A Bonds wi11 no longer be outstanding under the 2015A Trust
Agreement. In addition, upon such deposit, the liability of the City with respect to the installment
sale payments relating to the Refunded Bonds payable under the 2015 Installment Sale Agreement
will cease in accordance with the terms of the 2015 Installment Sale Agreement.
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ESTIMATED SOURCES AND USES OF FUNDS
The estimated sources and uses of funds in connection with the 2026 Bonds, are as follows:
Sources:
Principal Amount of 2026 Bonds......................... $
[Net] Original Issue [Premium/Discount] ............
Total Sources............................................. $
Uses:
Deposit to Refunding Fund�i�................................ $
Costs of Issuance �2�..............................................
TotalUses.................................................. $
�r� To be used to pay the redemprion price of the Refunded 2015A Bonds on the Redemprion Date. See "PLAN
OF REFUNDING—Refunding of 2015 RJPFA Electric System Bonds."
�'> Includes Underwriter's discount, legal fees, fees of the Trustee, municipal advisory fees, rating agency fees,
printing costs and other miscellaneous e�enses.
THE 2026 BONDS
The following is a summary of certain provisions of the 2026 Bonds. Reference is made to
the 2026 Bonds for the complete text thereof and to the Indenture for a more detailed description of
such provisions. The discussion herein is qualified by such reference. See "APPENDIX D—
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE."
General
The 2026 Bonds wi11 be issued in the aggregate principal ainount set forth on the inside cover
page of this Official Statement. The 2026 Bonds are being delivered in fully registered form, and
when delivered, will be registered 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 2026 Bonds.
Principal of and interest on the 2026 Bonds are payable by the Trustee to DTC, which is obligated in
turn to remit such principal and interest to its DTC Participants for subsequent disbursement to the
beneficial owners of the 2026 Bonds. See "APPENDIX C—BOOK-ENTRY ONLY SYSTEM."
The 2026 Bonds wi11 be dated the date of delivery thereof. Ownership interests in the 2026
Bonds will be in$5,000 denominations or any integral multiple thereof. Interest on the 2026 Bonds is
payable on June 1 and December 1 of each year commencing December 1, 2026 (each, an "Interest
Payment Date"), calculated on the basis of a 360-day year and twelve 30-day months. The 2026
Bonds will mature on the dates and in the principal amounts, and the interest thereon sha11 be
computed at the per annum interest rates, a11 as set forth on the inside cover page of this Official
Statement.
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Redemption
Optional Redemption.* The 2026 Bonds maturing on and after June 1, 20 are subject to
optional redemption by the City prior to their respective stated maturity dates, as a whole or in part
from such maturity dates determined by the City, on any date on or after June 1, 20_, from any
source of available funds, at a redemption price equal to the principal alnount of the 2026 Bonds to
be redeemed plus accrued interest to the redemption date,without premium.
Mandatory Redemption.* The term 2026 Bonds maturing on June 1, 20 are subject to
mandatory redemption prior to maturity, in part by 1ot, commencing on June 1, 20 and on each
June 1 thereafter to and including June 1, 20 , at a redemption price equal to the principal amount
of the 2026 Bonds to be redeemed, together with accrued interest thereon to the date f�ed for
redemption, without premium, according to the following schedule (subject to modification in the
event of optional redemption as described above):
2026 Bonds maturing
on June l,20_
Redemption Date Principal
(June 1) Amount
,
� Final Maturity.
Selection of 2026 Bonds for Redemption. If less than all of the 2026 Bonds are to be called
for redemption, the City may select the maturities of the 2026 Bonds to be redeemed. Subject to
DTC's procedures relating to the selection of bonds for redemption (see "APPENDIX C — BOOK-
ENTRY ONLY SYSTEM"), if less than a11 of the 2026 Bonds of any one maturity date are to be
redeemed at any one time, the Trustee shall, select the 2026 Bonds or portions thereof of such
maturity date not previously called for redemption to be redeemed in integral multiples of $5,000
randomly by lot in any manner which the Trustee deems appropriate and fair.
Notice of Redemption of 2026 Bonds. Notice of redemption of any 2026 Bonds shall be
given by the Trustee by mail, first-class postage prepaid, or by electronic means of communication,
not less than 20 nar more than 60 days prior to the redemption date to the Owners of all 2026 Bonds
selected for redemption in whole or in part, and to all securities depositories and securities
information services selected by the City to comply with custom or the rules of any securities
exchange or commission or brokerage board or otherwise as may be determined by the City in its
sole discretion. Neither failure to receive any such notice nor any immaterial defect contained therein
shall affect the sufficiency ar validity of the proceedings taken in connection with any such
redemption. So long as DTC is acting as securities depository far the 2026 Bonds, notice of
redemption will be given in accordance with DTC proced�ures only to DTC or its nominee, not to the
beneficial owners of the 2026 Bonds. See"APPENDIX C—BOOK-ENTRY ONLY SYSTEM."
�Preliminary; subj ect to change.
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In the event of an optional redemption of 2026 Bonds, the Trustee shall give notice of
redemption only after receipt of a Written Order of the City; provided, that if the City sha11 not have
deposited or otherwise made available to the Trustee the money required for the payment of the
redemption price of the 2026 Bonds to be redeemed at the time of such mailing, such notice of
redemption shall state that the redemption is expressly conditioned upon the timely deposit of
sufficient funds therefor with the Trustee.
Effect of Redemption of 2026 Bonds. If notice of redemption has been duly given and
money for the payment of the principal of and redemption premiums, if any on, together with
accrued interest to the redemption date on, the 2026 Bonds or portions thereof so called far
redemption is held by the Trustee, then on the redemption date designated in such notice, such 2026
Bonds or such portions thereof shall become due and payable, and from and after the date designated
for redemption, interest on the 2026 Bonds or portions thereof so called for redemption shall cease to
accrue and the Owners of such 2026 Bonds shall have no rights in respect thereof except to receive
payment of the principal or such portions thereof and the redemption premiums, if any, thereon and
the interest accrued thereon to the redemption date.
SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS
Pledge Under the Indenture
The 2026 Bonds are special obligations of the City payable solely from and secured solely by
a pledge of and lien on "Net Revenues" (as de�ned below) of the Electric System and all moneys on
deposit in the Electric Revenue Fund, The pledge of and lien on Net Revenues of the Electric System
and amounts on deposit in the Electric Revenue Fund for the payment of the 2026 Bonds is on parity
with and equal to the charge and lien upon such Net Revenues and amounts on deposit in the Electric
Revenue Fund securing the obligation of the City to pay the Parity Obligations (consisting of electric
system refunding bonds and installment sale payments relating to the Authority bonds) outstanding
as of June 2, 2026 in the aggregate principal amount of $127.7 million (of which approximately
$23.8 million is being refunded by the 2026 Bonds). See "- Outstanding Electric System Revenue
Obligations - Outstanding Parity Obligations" below. The City may issue or incur additional Parity
Obligations payable from Net Revenues of the Electric System on parity with the 2026 Bonds and
the outstanding Parity Obligations subject to the terms of the Indenture. See "- Outstanding Electric
System Revenue Obligations" and"-Additional Electric System Revenue Obligations"below.
The term "Net Revenues" is defned in the Indenture to mean, for any period of time in
question, the Revenues during such period less the Maintenance and Operation Costs during such
period.
"Revenues" is defined in the Indenture to consist of all gross income and revenue received or
receivable by the City from the ownership or operation of the Electric System, including all rates and
charges received by the City for the Electric Service and the other services and facilities of the
Electric System, all proceeds of insurance covering business interruption loss relating to the Electric
System and all other income and revenue howsoever derived by the City from the ownership or
operation of the Electric System or otherwise arising from the Electric System, including all Payment
Agreement Receipts, and all income from the deposit or investment of any money in the Electric
Revenue Fund, but excluding (i)proceeds of taxes and (ii)refundable deposits made to establish
credit and advances or contributions in aid of construction and line extension fees. See
"APPENDIX D-SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE -Definitions."
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"Maintenance and Operation Costs" is defined in the Indenture to mean the costs paid or
incurred by the City for maintaining and operating the Electric System, including, but not limited to,
(a) all costs of electric energy and power generated or purchased by the City for resale, costs of
transmission, fuel supply and water supply in connection with the foregoing, (b) all expenses of
management and repair and other expenses necessary to maintain and preserve the Electric System in
good repair and working order, (c) all administrative costs of the City that are charged directly or
apportioned to the operation of the Electric System, such as salaries and wages of employees,
overhead, taxes (if any) and insurance premiums, (d) all other reasonable and necessary costs of the
City or charges required to be paid by it to comply with the terms of the Indenture or of any
resolution authorizing the execution of the Indenture ar of any resolution authorizing the issuance or
incurrence of any Parity Obligations or of such Parity Obligations, such as compensation,
reimbursement and indemnification of the trustee, remarketing agent or surety costs �or the 2026
Bonds or other Parity Obligations, letter of credit fees relating to Parity Obligations, fees and
expenses of Independent Certified Public Accountants, (e) all amounts required to be paid by the
City under contracts with a joint powers agency for the purchase of capacity, energy, transmission
capability or any other commodity or service in connection with the foregoing, which contract
requires payments to be made by the City thereunder to be treated as maintenance and operation
costs of the Electric System (see "—Outstanding Electric System Revenue Obligations—Take-or-Pay
Power Sales Cont�acts" below), (� all deposits to be made to the Rebate Fund pursuant to the Tax
Certificate and all deposits in comparable accounts established with respect to Parity Obligations
required to be deposited pursuant to the proceedings authorizing such Parity Obligations, and(g) any
other cost or expense which, in accordance with Generally Accepted Accounting Principles, is to be
treated as a cost of operating or maintaining the Electric System; but excluding in a11 cases,
depreciation, replacement and obsolescence charges or reserves therefor and amortization of
intangibles. See "APPENDIX D — SUMMARY OF CERTAIN PROVISIONS OF T�IE
INDENTURE—Definitions."
The 2026 Bonds are special obiigations of the City payable solely from Net Revenues of
the Electric System and moneys in the Electric Revenue Fund as provided in the Indenture.
The 2026 Bonds do not constitute a debt of the City or of the State of California or of any
political subdivision thereof within the meaning of any constitutional or statutory debt
limitation or restriction. The General Fund of the City is not liable and neither the faith and
credit nor the taxing power of the City is pledged for the payment of the principal of the 2026
Bonds or the interest on the 2026 Bonds or the performance or satisfaction of any other
obligation of the City under the Indenture.
Allocation of Revenues Under the Indenture
Pursuant to the Indenture, the City agrees and covenants that all Revenues received by it shall
be deposited when and as received in the "City of Redding Electric Revenue Fund" (the "Electric
Revenue Fund") established by the City. The City shall pay all Maintenance and Operation Costs
(including amounts reasonably required to be set aside in contingency reserves for Maintenance and
Operation Costs the payment of which is not then immediately required) from the Electric Revenue
Fund as they become due and payable, and all remaining money on deposit in the Electric Revenue
Fund shall be set aside and deposited by the City at the following times:
On or before the fourth Business Day before each Interest Payment Date, the City sha11, from
the money in the Electric Revenue Fund, transfer to the Trustee for deposit in the "City of Redding
2026 Electric System Refunding Revenue Bonds Debt Service F�und" (the "Debt Service F�und")
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(which fund the Trustee shall establish and maintain), a sum equal to the amount of interest
becoming due on the 2026 Bonds on the next succeeding Interest Payment Date, plus, if a principal
payment is due on such succeeding Interest Payment Date, the amount of principal becoming due on
the 2026 Bonds on the next succeeding June l; provided, no deposit need be made in the Debt
Service Fund if the amount available and contained therein is at least equal to the amount of interest
becoming due on the 2026 Bonds on the next succeeding June 1 or December 1, as the case may be,
p1us, if a principal payment is due on such succeeding Interest Payment Date, the amount of principal
becoming due on the 2026 Bonds on the next succeeding June 1.
The City shall a1so, from such remaining moneys in the Electric Revenue Fund, pay to the
party entitled thereto or transfer or cause to be transferred to any applicable debt service or other
payment fund or account for any Parity Obligations, without preference or priority between transfers
made as described in this sentence and the transfers made for the payment of the 2026 Bonds as
described in the immediately preceding paragraph, and in the event of any insufficiency o� such
moneys ratably without any discrimination or preference, on the dates specified in the proceedings
relating to such Parity Obligations, the sum or sums required to be paid or deposited in such debt
service or other payment fund or account with respect to principal, premium, if any, and interest on
Parity Obligations (or in the case of Parity Payment Agreements, the net payments due) in
accordance with the terms of such Parity Obligations.
After making the foregoing deposits and transfars, the City shall apply any remaining money
in the Electric Revenue Fund for any lawful purpose of the City, including for the payment of any
obligations of the City, the payments under and pursuant to which are payable from Net Revenues,
subject and subordinate to the 2026 Bonds and to a11 Parity Obligations ("Subordinate Obligations")
in accordance with the insxruments authorizing such Subordinate Obligations; provided, however,
that no moneys in the Electric Revenue Fund shall be applied to any purpose not related to the
expansion of the facilities or business of the Electric System or replacement of facilities thereof,
including the payment of any Subordinate Obligations, in any Fiscal Year unless amounts remaining
on deposit in the Electric Revenue Fund shall be sufficient to make the remaining transfers
hereinabove described required to be made in such Fiscal Year with respect to the 2026 Bonds and
a11 Parity Obligations.
The City sha11 distribute Net Revenues available for the payment of the Outstanding 2026
Bonds and payments on all outstanding Parity Obligations on a pro rata basis without regard to
whether each such Parity Obligation has a funded debt service reserve or a surety bond or other
similar funding instrument.
Flow of Funds Under the Indenture
Pursuant to the Indenture, the Trustee will establish the Debt Service F�und for the receipt of
moneys transferred by the City from the Electric Revenue F�und as described above. The moneys in
the Debt Service Fund shall be set aside by the Trustee in the following respective special accounts
within the Debt Service F�und (each of which is created under the Indenture and each of which the
Trustee agrees and covenants to maintain) and the Trustee shall apply, use and withdraw inoneys in
the Debt Service Fund only for the following purposes:
(1) InterestAccount. On each June 1 and December 1, commencin� Deceinber 1,
2026, the Trustee shall set aside from the Debt Service Fund and deposit in the Interest
Account that amount of money which is equal to the aggregate amount of interest becoming
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due and payable on all Outstanding 2026 Bonds on such June 1 or December 1, as the case
may be.
No deposit need be made in the Interest Account if the amount contained therein is at
least equal to the aggregate amount of interest becoming due and payable on all Outstanding
2026 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 2026 Bonds as it shall become due and payable
(including accrued interest on any 2026 Bonds purchased or redeemed prior to maturity).
(2) P�incipal Account. On each June 1, commencing June 1, 20[_], the Trustee
sha11 set aside from the Debt Service Fund and deposit in the Principal Account an amount of
money equal to the aggregate principal amount of all Outstanding 2026 Bonds maturing on
such June l.
No deposit need be made in the Principal Account if the amount contained therein is
at least equal to the aggregate amount of the principal of all Outstanding 2026 Bonds
maturing by their terms on such June 1.
A11 money in the Principal Account shall be used and withdrawn by the Trustee
solely for the purpose of paying the principal of the 2026 Bonds as they shall become due
and payable,whether at maturity or redemption.
(3) Surplus Account. The Trustee, on or before June 1 of each year shall deposit
in the Surplus Account all money remaining in the Debt Service Fund after the deposits
required by the City's tax covenants and the deposits described in paragraphs (1) and (2)
above have been made. On June 16 of each year, the Trustee, if the City is not then in default
under the Indenture, sha11 disburse the money in the Surplus Account to the City.
Rate Covenant
The City covenants under the Indenture to fix, prescribe and collect rates and charges for the
services, facilities and electricity of the Electric System during each Fiscal Year which will be at
least sufficient to yield:
(a) Adjusted Annual Revenues for such Fiscal Year at least equal to the sum of
the following for such Fiscal Year. (i) Maintenance and Operation Costs, (ii) Adjusted
Annual Debt Service, and (iii) a11 other payments required to meet any other obligations of
the City which are charges, liens or encumbrances upon or payable from the Electric
Revenue Fund, including all amounts owing under Subordinate Obligations; and
(b) Adjusted Annual Net Revenues for such Fiscal Yeax equal to at least 110% of
the Adjusted Annual Debt Service far such Fiscal Year.
The City may make adjustments from time to time in such rates and charges and may make
such classification thereof as it deems necessary, but covenants not to reduce the rates and charges
then in effect unless the Adjusted Annual Revenues and Adjusted Annual Net Revenues from such
reduced rates and charges will at all times be sufficient to meet the requirements described above.
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"Adjusted Annual Net Revenues" means for any Fiscal Year or any designated 12-month
period in question, the Adjusted Annual Revenues during such Fiscal Year or 12-month period less
Maintenance and Operation Costs during such Fiscal Year ar 12-month period.
"Adjusted Annual Revenues" means for any Fiscal Year or any designated 12-month period
in question, the Revenues during such Fiscal Year or 12-month period, less, for purposes of
determining compliance with the rate covenant and conditions for the execution of Parity
Obligations, any Payment Agreement Receipts taken into account in calculating Annual Debt Service
with respect to payment of interest on Parity Obligations, plus, for purposes of determining
compliance with the rate covenant only, the amount of Available Reserves on deposit, or which the
City has authorized to be deposited, in the Electric Revenue Fund as of the first day of such Fiscal
Year or 12-month period.
"Adjusted Annual Debt Service" means for any Fiscal Year or any designated 12-month
period in question, the Annual Debt Service for such Fiscal Year or 12-month period minus the sum
of the amount of the Annual Debt Service with respect to Outstanding Parity Obligations to be paid
during such Fiscal Year or 12-month period, from the proceeds of Parity Obligations or interest
earned thereon (other than interest deposited into the Electric Revenue Fund), all as set forth in a
Certificate of the City.
"Available Reserves" means as of any date of calculation,the amount of unrestricted funds in
the Electric Revenue Fund designated as "Available Reserves" for purposes of the Indenture by the
City and then available to pay 1Vlaintenance and Operation Costs ancUor Annual Debt Service which
may include transfers to the Electric Revenue Fund from any fund which is legally available for
deposit in the Electric Revenue Fund.
For definitions of certain other terms used herein, see "APPENDIX D — SUMMARY OF
CERTAIN PROVISIONS OF T�IE INDENTURE—Definitions."
No Debt Service Reserve Fund
No debt service reserve fund will be established for the 2026 Bonds. Amounts held in or
credited to any other debt service reserve fund established in connection with the Outstanding 2017
Electric System Bonds, 2018 Electric System Bonds, 2025 RJPFA Electric System Bonds or any
other Parity Obligations of the City do not secure, and are not available for, the payment of the 2026
Bonds.
Outstanding Electric System Revenue Obligations
Take-oN-Pay; Joint PoweNs Agency Obligations. As described herein, the City has entered
into certain power sales contracts for the purchase of energy and certain other agreements for the
payment of its share of the costs of certain projects in which it is participating through joint powers
agencies, including M-S-R Public Power Agency ("M-S-R PPA"), M-S-R Energy A�uthority ("M-S-
R EA") and the Transmission Agency of Northern California("TANC"). As of June 2, 2026, the City
had outstanding approximately $19.9 million principal amount of obligations related to debt of the
joint powers agencies in which it participates (exclusive of obligations relating to debt of M-S-R EA
which debt is nonrecourse to the City). See "THE ELECTRIC SYSTEM —Power Supply Resources
— Joint Powers Agency Resources" and "— Indebtedness." The City's obli�ations under such
contracts constitute a portion of the Maintenance and Operation Costs of the Electric System,payable
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from Revenues of the Electric System priar to the 2026 Bonds and other Parity Obligations. The City
may incur additional obligations pursuant to its agreements with such joint power agencies in which
it participates or enter into other contacts or leases for the purchase of facilities, properties, structures
or works or electric output, capacity or other electrical services for the Electric System which are
Maintenance and Operation Costs of the Electric System, payable from Revenues of the Electric
System prior to the 2026 Bonds and other Parity Obligations. See also "—Rate Covenant" above.
Outstanding Parity Obligations. As of June 2, 2026, the City had outstanding Parity
Obligations in the aggregate principal amount of $127,710,000, comprised of(i) the 2017 Electric
System Bonds outstanding in the principal amount of $22,945,000, (ii) the 2018 Electric System
Bonds outstanding in the principal amount of$14,970,000 (iii) installment sale payments related to
the 2015 RJPFA Electric System Bonds outstanding in the principal amount of$23,750,000 (all of
which is being refunded by the 2026 Bonds) and (iv) installment sale payments related to the 2025
RJPFA Electric System Bonds outstanding in the principal amount of$66,045,000.
The 2017 Electric System Bonds were issued pursuant to an Indenture, dated as of
April l, 2017 (the "2017 Indenture"), by and between the City and U.S. Bank Trust Company,
National Association, as successor trustee. The 2018 Electric System Bonds were issued pursuant to
an Indenture, dated as of March 1, 2018 (the "2018 Indenture"), by and between the City and U.S.
Bank Trust Company, National Association, as successor trustee. The 2015 RJPFA Electric System
Bonds were issued pursuant to a xrust agreement, dated as of December 1,2015, by and between the
Authority and U�.S. Bank Trust Company, N�ational Association, as successor trustee. The 2015
RJPFA Electric System Bonds are payable primarily from certain installment sale payments required
to be made by the City to the Authority under the terms of the 2015A Installment Sale Agreement,by
and between the City and the Authority (all of which is being refunded by the 2026 Bonds, See
"PLAN OF REFLJNDING"). The 2025 RJPFA Electric System Bonds were issued pursuant to a trust
agreement, dated as of April 1, 2025, by and between the Authority and U.S. Bank Trust Company,
National Association, as trustee. The 2025 RJPFA Electric System Bonds are payable primarily from
certain installment sale payments required to be made by the City to the Authority under the terms of
a 2025 Installment Sale Agreement, dated as of April 1, 2025 (the "2025 Installment Sale
Agreement"),by and between the City and the Authority.
The 2026 Bonds are payable from Net Revenues of the City's Electric System on a parity
with the payment from such Net Revenues of the 2017 Electric System Bonds, the 2018 Electric
System Bonds, and the installment sale payments payable pursuant to the 2025 Installment Sa1e
Agreement relating to the 2025 RJPFA Electric System Bonds.
The City may hereafter incur additional Parity Obligations which are payable from Net
Revenues on a parity with the outstanding Parity Obligations in accardance with the terms of the
Indenture as described below.
Outstanding Subor�dinate Obligations. In May 2023, the City and the Authority entered into
the Revolving Credit Agreement with the Credit Bank. Under the Revolving Credit Agreement, the
Credit Bank has agreed to advance funds to the Authority, from time to tiine, in an amount up to
$25.0 million, for the benefit of the City's Electric System. The term of the Revolving Credit
Agreement extends to November 1, 2028, unless extended or earlier terminated pursuant to its terms.
Borrowings under the Revolving Credit Agreement are payable from, and secured by, installment
sale payments required to be inade by the City to the Authority under the Subordinate Installment
Sale Agreement, by and between the City and the Authority. The installment sale payments required
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to be made by the City under the Subordinate Installment Sale Agreement constitute Subordinate
Obligations,payable from Net Revenues of the Electric System of the City subject and subordinate to
the City's obligation to pay the 2026 Bonds and the other Parity Obligations. As of June 2, 2026,
there were no borrowings by the City outstanding under such Revolving Credit Agreement. See also
"THE ELECTRIC SYSTEM — Indebtedness" for additional information regarding the terms of the
Revolving Credit Agreement, including certain circumstances and the terms under which the
installment sale payment obligations of the City under the Subordinate Installment Sale Agreement
relating thereto may be accelerated or otherwise become due prior to maturity. The City may incur
additional Subordinate Obligations in the future in accordance with the terms of the Indenture as
described below.
Additional Electric System Revenue Obligations
Additional Take-or�-Pay and Other ContNacts. The City may incur additional obligations
pursuant to its agreements with such joint power agencies in which it now, or in the future may,
participate or enter into other contacts or leases for the purchase of facilities, properties, structures or
works or electric output, capacity or other electrical services for the Electric System which are
Maintenance and Operation Costs of the Electric System, payable from Revenues of the Electric
System prior to the 2026 Bonds and other Parity Obligations. See also "—Rate Covenant" above.
Additional Pa�^ity Obligations. The City will covenant pursuant to the Indenture that it will
not incur additional obligations payable from and secured by a lien on Net Revenues of the Electric
System or moneys in the Electric Revenue F'und prior to the lien and charge securing the 2026
Bonds. In addition to the City's obligation to pay the Parity Obligations to be outstanding upon the
delivery of the 2026 Bonds, the City may at any time execute and deliver any additional Parity
Obligations, the payment of which is payable from and secured by a lien and charge on the Net
Revenues and moneys in the Elec�ric Revenue Fund on a parity with the charge and lien on the Net
Revenues and moneys in the Electric Revenue Fund securing the 2026 Bonds and such outstanding
Parity Obligations, subject to certain conditions, incl�uding among others, that:
(a) either—
(1) during any 12 consecutive calendar months out of the immediately
preceding 18 calendar month period, the Adjusted Annual Net Revenues were at least
equal to 110% of the Maximum Annual Debt Service for a11 Outstanding 2026 Bonds
and a11 Outstanding Parity Obligations plus the Parity Obligation proposed to be
executed; or
(2) as evidenced by a Certificate of the City, the projected Adjusted
Annual Net Revenues during the succeeding first complete Fiscal Year following
issuance of such Parity Obligation in which interest is not capitalized in whole or in
part from the proceeds of Parity Obligations, is at least equal to 110% of the
Maximum Annual Debt Service for all Outstanding 2026 Bonds and a11 Outstanding
Parity Obligations plus the Parity Obligation proposed to be executed; and
(b) no Event of Default (or any event which would become an Event of Default
once all notice or grace periods have passed) exists unless such Event of Default or default
shall be cured upon such issuance.
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Notwithstanding the foregoing, the provisions described in paragraph (a) above shall not
limit the ability of the City to execute any Parity Obligations at any time to refund any Outstanding
Parity Obligations which results in a present value savings to the City, inclusive of all costs of such
refunding.
SuboYdinate Obligations. The Indenture provides that the City may incur Subordinate
Obligations without meeting the tests set forth above.
Investment of Funds
A11 funds held under the Indenture are required to be invested in certain Permitted
Investments as provided under the Indenture. See "APPENDIX D— SUMIVIARY OF CERTAIN
PROVISIONS OF THE INDENTURE—Definitions"for the definition of Permitted Investments.
Funds held by the City are invested by the City in accordance with the City's Investment
Policy as authorized by Section 53600 etseq. of the Government Code of the State of California.
Allowable investments under the Investment Policy are those authorized by California Government
Code Sections 53601 and 53630. See "THE ELECTRIC SYSTEM — City Investment Policy." All
investments, including the Permitted Investments and those authorized by law from time to time for
investments by public agencies, contain a certain degree of risk. Such risks include, but are not
limited to, a lower rate of return than expected and loss or delayed receipt of principaL The
occurrence of these events with respect to amounts held under the Indenture, or other amounts held
by the City, could have a material adverse effect on the City's finances.
Limitations on Remedies
The rights of the owners of the 2026 Bonds are subject to the limitations on legal remedies
against public agencies in the State. Additionally, enforceability of the rights and remedies of the
owners of the 2026 Bonds, and the obligations incurred by the City, may become subject to the
following: the Federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally,
now or hereafter in effect; equity principles which may limit the specific enforcement under State
law of certain remedies; the exercise by the United States of America of the powers delegated to it by
the Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the
police powers inherent in the sovereignty of the State and its governmental bodies in the interest of
serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of
powers by the federal or State government, if initiated, could subject the owners of the 2026 Bonds to
judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may
entail risks of delay, limitation, or modification of their rights.
THE ELECTRIC SYSTEM
General
The City is a general law city of the State of California. As a general law city, the City has the
power to furnish electric utility service to its inhabitants. In connection therewith, the City has the powers
of eminent domain, to contract, to construct works, to fix rates and charges for commodities ar services
furnished and to incur indebtedness. Specifically, the City Council is authorized by the Redding
Municipal Code to establish electric utility rates for all electric utility subscribers, and any rate changes
are not subject to regulatory agency review.
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The City provides electric utility service through the Electric Utility Department. The legal
responsibilities and powers of the Electric Utility Department, including the establishment of rates and
charges, are exercised through the five-member City Council. The members of the City Council are
elected City-wide for staggered four-year terms. The Electric Utility Departtnent is under the direction of
the Director of the Electric Utility Department who is appointed by the City Manager.
To provide electric service within its service area(which is coterminous with the City's corporate
city boundaries), the City owns and operates an Electric System that includes generation, transmission
and distribution facilities. The City also purchases power and transmission service from others. In
addition, the City provides normal city services to its inhabitants such as police and fire protection and
water and sewer service.
Since 1921, the City has provided electric service within its boundaries. For the Fiscal Year
ended June 30, 2025, the City served approximately 45,591 customer accounts, had total sales of
approximately 770.5 million kWh and a peak demand of 240.9 MW.
Management
The City's electric utility operations are carried out under the direction of the Director of the
Electric Utility Department and in accordance with the City Council's directives and policies.
Nick Zettel is the Electric Utility Director for the City of Redding Electric Utility. Mr. Zettel
holds a Bachelor of Science degree in Financial Management and has worked at the Electric Utility
Department for over 20 years holding various positions in resource planning, energy trading, market
operations, and leadership team development. He is a member of the Central Valley Project O&M
Governance Board, the Central Valley Project Corporation Board of Directors, and Commissioner of the
Balancing Authority of Northern California, the Transmission Agency of Northern California, and the
M-S-R Public Power Agency and M-S-R Energy Authority.
Power Supply Resources
The following table sets forth information concerning the Electric Utility Department's power
supply resources and the percent of total energy supplied by each during the Fiscal Year ended June 30,
2025.
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CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
POWER SUPPLY RESOURCES
(For the Fiscal Year Ended June 30,2025)
Capacity
Available Actual Energy Percent of
Source (MW)�'� (GWh) Total Ener�y���
Purchased Power:
Western Base Resource 128.5 279.3 25.6%
M-S-R PPA/Big Horn I Wind Project 23.0 165.9 15.2
Short-Term Purchases�3> N/A 417.5 38.3
Total Purchased Power�l> 151.5 862.7 79.1
Generation Facilities:
Redding Power Plant�4� 183.1 221.4 203
Whiskeytown 3.5 7.2 0.7
Total Generated Power 186.6 228.6 20.9
Total(Generated and Purchased)��� 338.1 1,091.3 100.0
Total Energy Sold and
Exchanged at Wholesale N/A 307.9 28.2
System Requirement for Retail N/A 783.4 71.8
�'� Capaciries listed may not be available at ali tiines and do not necessarily represent values used for resource
planning.
��> Totals may not add due to rounding.
�3> Includes power purchases for resale. See"—Wholesale Energy Trading"below.
�4> Capaciry listed is nameplate capacity(EIA860 dEfined)for Redding Power Piant.
Source: City of Redding.
The City's Redding Power Plant serves as its prunary local generation resource(although the City
substitutes market purchases when economical to do so). The Redding Power P1ant has a total nameplate
capacity of 183.1 MW, or approximately 1,300 GWh of available energy per year. The plant was
expanded to its current capacity in 2011 with the addition of Unit 6, a natural gas-fired combined cycle
generator which added 42.5 MW of capacity to the plant. This addition was designed, in part, to offset an
expected decrease in energy to be received by the City as a result of the expiration of certain previously
existing power supply arrangements. See "— Joint Powers Agency Resources-Purchased Power,
Generation and Transmission — M-S-R PPA — San Juan Retained Obligations" below. The Redding
Power P1ant, together with the City's other existing power supply resources and additional renewable
resources anticipated to be acquired by the City to meet future regulatory requirements, are currently
expected by the City to be sufficient to supply the City's projected energy needs through the foreseeable
future.
Each of the City's power supply resources are briefly described below.
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Generating Facilities
Redding Power Plant. The Redding Power Plant is located on a site owned by the City within the
city limits of Redding. The Redding Power Plant presently consists of the following components: (i) a
two-on-one combined cycle power generating plant that uses two Siemens SGT-800 gas turbines, one
with a 40 MW nameplate capacity and one with a 42.5 MW nameplate capacity, operating in combined
cycle with a 26.8 MW GE steain turbine, and (ii)three GE Fraine 5 simple cycle combustion turbines,
with a combined nameplate capacity of'73.8 MW, for a total station nameplate capacity of 1831 MW.
The initial steam unit at the Redding Power Plant was acquired by the City in August 1991 and was
converted from biomass fuel to natural gas in 1994. The three simple cycle combustion turbines were
added to the Redding Power Plant site in October 1996. The first SGT-800 gas turbine, Unit No. 5, was
placed into commercial operation in June 2002. Unit No. 6, the second SGT-800 gas turbine with a heat
recovery steam generator,was placed into commerciai operation in August 2011. See also"—Fuel Supply"
below.
Whiskeytown Project. The City owns and operates a 3.5 MW hydroelectric generating plant
located at the United States Bureau of Reclamation (the "U.S. Bureau of Reclamation") Whiskeytown
Dain near Redding, California. This project, completed in 1986, has produced average annual energy in
the amount of approximately 25 GWh. In some years, temporarily high flow releases have been captured
by the flexibility of the dual runners installed in the Whiskeytown unit and additional energy has been
generated. The City estimates that under miniinum flow releases, this hydroelectric generation facility
will produce approximately 10 GWh per year. The City estimates that this hydroelectric generation
facility will produce approximately 23 GWh in Fiscal Year 2025-26. The City has received full California
Energy Commission ("CEC") certification for the Whiskeytown hydroelectric facility as a California
Renewable Portfolio Standard ("RPS") `Bligible" renewable resource. The Whiskeytown hydroelectric
facility has been registered with the Western Renewable Energy Generation Information System
("WREGIS"), and the associated renewable energy credits ("RECs") will either be retained by the City
elec�ric utility for RPS compliance purposes or utilized for wholesale sales.
Joint Powers Agency Resources—Purchased Power,Generation and Transmission
TANC California-Oregon Transmission Project. The City, together with fourteen other northern
California cities, utility districts and one rural electric cooperative, is a member or associate member of a
California joint powers agency known as the Transmission Agency of Northern California (referred to
herein as TANC). TANC, together with Western Area Power Administration ("Western") and PG&E
(collectively, the "COTP Participants"), own the California-0regon Transmission Project (the "COTP"),
a 339-mile long, 1,'700 IVIW (as most recently re-rated), 500 kV transmission project between southern
Oregon and central California. The COTP was placed in service on March 24, 1993, at an original cost of
approximately$430 million.
To utilize the full transfer capability of the COTP on a fum basis and maximize the benefits of
the line, the COTP is operated on a coordinated basis with the Pacific AC Intertie (the "Intertie"), a two-
line system which, like the COTP, connects California utilities with those in the Pacific Northwest. The
Intertie lines are owned by PG&E, PacifiCorp and Western and are operated by the California
Independent System Operator Corporation (the "CAISO"). Rate schedules are on file with the Federal
Energy Regulatory Commission ("FERC") to accomplish this coordination. The three-line system
comprised of'the COTP and the Intertie is collectively referred to as the California-Oregon Intertie.
Pursuant to Project Agreement No. 3 for the COTP (the "TANC Agreeinent"), TANC has agreed
to provide to the City and 12 other members of TANC(the "TANC 1Vlember-Participants") a participation
percentage of TANC's entitlement (currently approximately 1,505.6 M� of COTP transfer capabilily. In
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return, each TANC Member-Participant has severally agreed to pay TANC a corresponding percentage of
TANC's share of the COTP construction costs, including debt service on TANC's revenue bonds and
other obligations issued by TANC to finance its ownership share of the COTP. A TANC Member-
Participant's obligations to make payments to TANC are not dependent upon the operation of the COTP
and are not subject to reduction. Upon an unremedied default by one TANC Member in making a
payment required under the TANC Agreement, the non-defaulting TANC Member-Participants are
required to increase pro-rata their participation percentage by the amount of the defaulting TANC
Member-Participant's entitlement share, provided that no such increase can result in a greater than 25%
increase in the participation percentage of a non-defaulting TANC Member-Participant. See "—
Indebtedness"below.
The City gains access to its COTP entitlements (representing approximately 148 MW of COTP
scheduling rights as more fully described below) tl�rough a long-term transmission service contract with
Western. See "— Interconnections, Transinission and Distribution." The City is currently using a portion
of its COTP transfer capability to provide transmission of renewable wind capacity and energy purchased
through M-S-R PPA. See "M-S-R PPA Purchased Power-Big Horn I Wind Energy Project" below. The
remaining transfer capability is used to make spot market purchases of firm and non-finn energy and as
reliability backup for the City's firm power purchases and sales commitments.
TANC's current ownership interest in the COTP includes certain COTP transmission assets
(representing an approximately 121 MW entitlement) purchased by TANC in April 2008 from Vernon
Light & Power of the City of Vernon, California ("Vernon"), one of the original owners of the COTP.
The City, as well as six other TANC Members, participated in the acquisition from Vernon and share in
the increase in COTP entitlement rights and are responsible for the associated cost obligation for this
TANC interest. In addition, effective as of January 1, 2025, TANC accepted the assignment and transfer
from the City of a 1.'7496% share (approximately 25 MV� ownership interest in the COTP purchased by
the City in Apri12005 from the City of Shasta Lake, another original owner of the COTP. The City will
retain its rights to utilize such COTP entitlement previously owned by the City and transferred to TANC,
and the City is responsible for the associated cost obligation. Also effective as of January l, 2025, TANC
accepted the assignment and transfer of certain interests in the COTP (representing approximately 2 MW)
aequired by the City of Roseville ("Roseville") and the Turlock Irrigation District ("TID") from the San
Juan Water District and Carmichael Water District, as original owners of the COTP. Roseville and TID
enjoy the COTP entitlement rights represented by these COTP interests and are responsible for the
associated cost obligations.
TANC financed its interest in the COTP through the issuance of California-Oregon Transmission
Project revenue bonds, of which approximately $152.1 million principal amount was outstanding as of
January 1, 2026. In November 2021, TANC approved a 20-year capital replacement plan for the COTP.
In August 2024, TANC approved the exeeution and delivery of a Credit Agreement with JPMorgan
Chase Bank, National Association (the "TANC Credit Agreement"), establishing a line of eredit pursuant
to which TANC may borrow,pay down, refund and re-borrow,through the issuance and sale from time to
time of short-term variable rate notes ("TANC short-term notes"), an aggregate amount outstanding at
any time of up to $120,000,000 for the purpose of financing improvements to the COTP on an interim
basis. TANC executed the TANC Credit Agreement in September 2024. On August 1, 2025, TANC
amended the TANC Credit Agreement to extend the maturity date from September 3, 2025, to September
3, 202'7. As of June 2, 2026, $91.'7 million aggregate principal amount of TANC short-term notes were
outstanding under the TANC Credit Agreement. See "— Indebtedness — Joint Powers Agency
Obligations."
Pursuant to the TANC Agreement(and the effect of the subseguently acquired interests described
above), the City is obligated to pay 10.04°/o of TANC's COTP operating and maintenance expenses and
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approximately 8.4% of TANC's debt service on its outstanding bonds and notes. The City will be
obligated to pay approximately 10.04%of TANC's debt service on future TANC indebtedness incurred in
connection with the currently ongoing 20-year COTP capital replacement plan (inciuding the anticipated
take-out financing of the outstanding notes issued). See "— Indebtedness — Take-or-Pay; Joint Powers
Agency Obligations." The City is entitled to 10.04% of TANC's share of COTP transfer capability
(approximately 148 MW net of life-of-the asset third-party layoffs by TANC) on an unconditional
take-or-pay basis. The City' share of annual operating and maintenance expenses and debt service
payable to TANC pursuant to the TANC Agreement is estimated to be approximately $6.6 million per
year. The City's payments to TANC, including payments for debt service on TANC's revenue bonds and
other debt obligations, constitute Maintenance and Operation Costs of the City's Electric System.
The COTP is operated within the Balancing Authority of Northern California ("BANC")
balancing authority area. A balancing authority perfonns a balancing function in which customer usage
and resources are matched on a moinent-by-inoment basis. In addition, a balancing authority operates the
xransmission system, monitoring power lines to ensure they are operated within the reliable limits of the
system in addition to coordinating the operation with neighboring balancing authorities. The City is a
member of BANC. See"—Interconnections, Loeal Transmission and Distribution Facilities"below. Under
BANC, the City enjoys the benefits of direct scheduling energy transactions over the COTP within the
balancing authority area,free of the CAISO tariff, charges, eongestion and encumbrances.
As the 340-inile COTP transmission line runs from Klamath County in Southern Oregon to the
Tesla Substation loeated south of the City of Tracy in San Joaquin County, in central Califomia,
approximately 34% of the transmission line runs through the "elevated"Tier 2 fire risk zone and 1% runs
through the "extreme" Tier 3 �re rislc zone as identified on the CPUC's Fire-Threat Map. TANC employs
a fire risk management plan to mitigate its wildfire risk exposure that includes semi-annual aerial
inspections; a series of annual ground inspections; a rigorous vegetation management program; as well as
limiting crops and vegetation height in orchard areas. The COTP is constructed entirely of steel lattice
towers or single pole steel structures which includes a 200 foot right-of-way far the majority of the COTP
that is kept clear of trees and large vegetation. TANC has submitted its wildfire initigation plan for the
COTP to the California Wildfire Safety Advisory Board(the "Wildf'ire Advisory Board") as required by
California Senate Bill 901 ("SB 901"). See "CERTAIN FACTORS AFFECTING THE ELECTRIC
UTILITY INDUSTRY — State Legislation and Regulatory Proceedings — Legislation Relating to
Wildfires;Related Risks."
Tesla-Midway Transmission Service. The southern physical terminus of the COTP is near
PG&E's Tesla Substation near Tracy, California. TANC has arranged for PG&E to provide TANC and
certain TANC Members with 300 MW of firm, bi-directional transmission capacity on its transmission
system between PG&E's Tesla Substation and the Midway Substation in Buttonwillow, California (the
"Tesla-Midway Service") under a long-term agreement known as the South of Tesla Prineiples. The
City's share of Tesla-Midway Service is 31 MW. This transmission serviee enhances the value of the
COTP to TANC and the TANC Member-Participants by increasing opportunities for energy purchases,
sales and other utility arrangements. The City has utilized its full alloeation of Tesla-Midway
transmission service for firm and non-firm power transactions.
M-S-R PPA Purchased Power Big Ho�n I Wind Energy Project. The City, along with the
Modesto Irrigation District ("Modesto") and the City of Santa Clara ("Santa Clara"), is a member of a
California joint powers agency known as the 1V1-S-R Public Power Agency (referred to herein as M-S-R
PPA). In 2005, M-S-R PPA entered into a series of power purchase agreements with Avangrid
Renewables, Inc. (originally PPM Energy, Inc. and formerly Iberdrola Renewables, Inc.) ("Avangrid"),
certain of which agreements have been assigned to Avangrid's subsidiary, Big Horn I, LLC, for the
purchase of energy from the Big Horn I wind energy project (the `Big Horn I Project") located near the
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town of Bickleton, in Klickitat County, Washington. The 1995 MW project consists of 133 1.5 MW GE
wind turbines. The City participates in the purchase of a 35% share of the output from the Big Horn I
Project through M-S-R PPA. The City's share equates to approximately a 70 MW share of the project
output. The cost for the City's 70 MW output share equates to a cost roughly comparable to combined
cycle gas—�red generation. Power deliveries commenced on October 1, 2006, and will continue through
September 30, 2026. Through an amendment of the original agreements M-S-R PPA has an obligation to
continue to take the same output through September 30, 2031, or if the Big Horn I Project is repowered,
M-S-R PPA will have a right of first offer to negotiate a long-term power purchase for such repowered
project. Recently, M-S-R PPA members were notified that the current Big Horn PPA provider intends to
exercise an option that would terminate the agreement earlier than 2031. M-S-R PPA members (including
the City) are evaluating several options to either continue with Big Horn or secure a replacement
resource. The project interconnects with the high voltage transinission grid through an 11-mile
transmission line at the Spring Creek Substation of Bonneville Power Administration (`BPA"). Through
the shaping and firming agreement between M-S-R PPA and Avangrid, Avangrid receives Big Horn I
Wind energy, as generated, and delivers such energy to M-S-R PPA at the California-Oregon border
pursuant to firm pre-established delivery schedules. The City uses a portion of its COTP transfer
capability to provide for transmission of the output from the Big Horn I Project from the California-
Oregon border to the City.
The Big Horn I Project is operated within the Avangrid balancing authority (which began
operating in mid-2018) and delivered through the BPA balancing authority area. On October 1, 2009,
BPA began imposing a wind integration charge for the purpose of recovering its costs to provide within-
hour generation balancing services for wind generators. Pursuant to a series of amendments of the power
purchase agreements between M-S-R PPA and Avangrid effective September 18, 2019, M-S-R PPA
agreed to pay to Avangrid, following the effective date of operation of the Avangrid balancing authority
on Ju1y 31, 2018, in lieu of responsibility for payment of any wind integration charges to BPA, a wind
integration charge of $1.10/kW month through December 31, 2018 and $1.01/kW month thereafter.
Through a collaborative effort between Avangrid and M-S-R PPA, the Big Horn I Project has obtained
California RPS certification as an"Eligible" renewable resource by the CEC. The Big Horn I Project has
been registered with the WREGIS by Avangrid with BPA acting as the Qualified Reporting Entity. The
RECs are transferred from Avangrid, the originator, to M-S-R PPA and fmally to the members of M-S-R
PPA, for either retirement or wholesale sales by such members.
BPA establishes rates to be charged for power and transmission services in biennial formal
evidentiary hearing processes. Changes in BPA rates indirectly affect the Big Hom I Project costs through
formulaic adjustments to prices paid to Avangrid.
M-S-R PPA—San Juan Retained Obligations. The City's resources acquired through M-S-R
PPA previously included an entitlement to a portion of the output of M-S-R PPA's prior ownership
interest in Unit No. 4 of the San Juan Generating Station(hereinafter,the "1V1-S-R PPA San Juan Unit No.
4 Interest"), a coal-f`lred steam electric generating unit located in San Juan County, New Mexico, which
was constructed and operated by the Public Service Company of New 1Vlexico ("PNM"). M-S-R PPA
divested its M-S-R PPA San Juan Unit No. 4 Interest on December 31, 201'7, although it retains certain
liabilities for a share of the costs of environmental remediation obligations and plant decommissioning
and mine reclamation, as described below. The final operating unit of the San Juan Project, Unit No. 4,
pern�anently ceased operations on September 29, 2022.
M-S-R PPA purchased its 28.8°/o (approximately 146 MW) M-S-R PPA San Juan Unit No. 4
Interest on December 31, 1983 and began dispatching power from such interest in May 1995. M-S-R PPA
financed the acquisition of its M-S-R PPA San Juan Unit No. 4 Interest, and certain costs of related
transmission arrangements, through the issuance of its San Juan Project revenue bonds, all of which were
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retired as of July 1, 2022. The City purchased from M-S-R PPA, on a take-or-pay basis, a 15%
entitlement share in the M-S-R PPA San Juan Unit No. 4 Interest pursuant to a power sales agreement
(the"M-S-R PPA Agreement"), among M-S-R PPA and its members.
The divestiture of M-S-R PPA's interests in San Juan Unit No. 4 (referenced above) was
completed pursuant to a number of agreements (the "San Juan Restructuring Agreements") between and
among the prior San Juan Generation Station owners (the "San Juan Participants"), which provided for
the interests of M-S-R PPA and certain other San Juan Participants(the "Divested San Juan Participants")
in the San Juan Generation Station to be transferred to the remaining San Juan Participants effective
December 31, 2017. In addition to the ownership divesture, the San Juan Restructuring Agreements
provide for, among other things, the allocation of ongoing responsibility for decommissioning costs, mine
reclamation costs and any environmental remediation obligations among the Divested San Juan
Participants and the remaining San Juan Participants, and the establishment and funding of �nine
reclamation and plant decommissioning trust funds.
Pursuant to the San Juan Restructuring Agreements, M-S-R PPA and the other Divested San Juan
Participants retain certain liabilities for a share of the costs of San Juan Generation Station
decommissioning and pre-exit date mine reclamation costs. Under the San Juan Restructuring
Agreements, M-S-R PPA was required to inaintain a balance of approximately $10.5 million in the mine
reclamation trust funds as of December 31, 2025 to fund its currently expected share of ongoing and final
reclamation costs, which requireinent was met by a year-end balance at such date of approximately $10.5
million. In addition, under the San Juan Restructuring Agreements, M-S-R PPA was required to maintain
a balance of approximately $0.80 million in the decommissioning trust fund as of December 31, 2025 to
fund its currently expected share of the initial work for known asset removal and remediation activities in
connection with demolition of the San Juan Generation Station, which requirement was met by a year-end
balance at such date of approximately $0.80 million. As of December 31, 2025, M-S-R PPA's future
liabilities for mine reclamation and plant demolition costs are approximately $10 million and 1.5 million,
respectively, as documented in the 2026 Ten-Year Resource and Legacy Liability Cost Forecast accepted
by the 1VI-S-R PPA Commission on February 18, 2026. However, 1V1-S-R PPA's final total proportionate
share of San Juan Generation Station decommissioning and mine reclamation costs cannot yet be
determined and will depend on a number of factors, including, among other things, actual costs for the
demolition and site remediation work. Additional deposits to the trust funds may be required in the future
if' trust earnings are below expectations or if determined necessary by future decommissioning and
reclamation costs study updates.
Pursuant to the M-S-R PPA Agreement, the City is unconditionally obligated thereunder to pay
its entitlement share (35%) of a11 of M-S-R PPA's costs associated with the M-S-R PPA San Juan Unit
No. 4 Interest, including any remaining liabilities for environmental remediation obligations,
decommissioning and mine reclamation of the plant associated with the M-S-R PPA San Juan Unit No. 4
Interest. The City's payments to 1V1-S-R PPA under the M-S-R PPA Agreement constitute Maintenance
and Operation Costs of the City's Electric System. The City's obligations to make payments under the
1V1-S-R PPA Agreement are not dependent upon the continued ownership or operation of the San Juan
Unit No. 4 and are not subject to reduction. Pursuant to the 1VI-S-R PPA Agreement, upon failure of any
M-S-R PPA member to make any payment thereunder which failure constitutes a default under the
M-S-R PPA Agreement, the participation percentage of each non-defaulting member automatically will
be increased for the remaining term of the 1V1-S-R PPA Agreement in proportion to its participation
percentage; provided, however, that the sum of such increase for any non-defaulting meinber shall not
exceed 25%ofits original participation percentage.
In light of the divesture of its active ownership interest in San Juan Unit No. 4, the majority of
M-S-R PPA activities are currently related to renewables (including the Big Horn I Project described
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above). Coordinating, regulatory, and compliance services costs of M-S-R PPA are shared among the
M-S-R PPA members as follows: the City— 20%; Modesto — 40%; and Santa Clara— 40%. Renewable
administrative services, electric product, delivery and environmental attribute rights, benefits and costs
are shared in accordance with contracted participation ratios described above.
NCPA. The City is a member of the Northern California Power Agency ("NCPA"). NCPA owns
certain electric generating projects. The City is not currently a participant in any of the NCPA projects.
As a member of NCPA, the City participates in NCPA's state and federal legislative and regulatory
matters.
Purchased Power
Western. The City receives a significant portion of its supply of power from the Central Valley
Project (the "CVP") pursuant to a contract with Western. The CVP, for which Western serves as
marketing agency,is a series of federal hydroelectric facilities in Northern California operated by the U.S.
Bureau of Reclamation. Delivery of purchased power from Western is made by Western over the CVP
xransmission system at the City's two interconnection points with Western: (1) the Keswick Dam
Switchyard, a Western facility located approximately 0.5 miles from the City, and (2)the Ciry's Airport
Substation, which is jointly owned by Western and the City, and located in the southeastern part of the
City. The rates and terms of this service is in accordance with Western's then-current rate schedule and
Open Access Transmission Tariff("OATT"). Power is transmitted to the City's distribution substations
over the City's 115 kV transmission lines.
The City previously purchased low-cost hydroelectricity from the CVP under a 20-year
agreement with Western which began on January 1, 2005 and continued through 2024 (and which
agreement replaced a prior agreement which expired December 31, 2004). Under such agreement, the
City initially received a 7.7% "slice of the system" base resource allocation froin Western. As of
January 1, 2015, Western revised its allocation percentages, and the City's allocation increased to 8159%
for the then remaining term. The power marketed by Western to the City is provided on a take-or-pay
basis wherein Western's annual costs are allocated to all CVP preference customers based on their CVP
participation percentage. Western then allocates the annual take-or-pay charges to the CVP preference
customers based on a monthly percentage that is designed to reflect the anticipated seasonal energy
deliveries. The City is obligated to pay its preference customer share of the costs associated with
operating the CVP facilities.
In January 2021, the City executed a 30-year agreement with Western for the continued purchase
of hydroelectricity from the CVP, the term of which agreement began on January l, 2025 and will
continue through December 31, 2054 (unless earlier terminated). The agreement is similar to the City's
prior contract with Western, but the City's base resource allocation deereased to '7.99604% beginning in
2025. In addition, in 2040, the allocation of CVP to Western eustomers (ineluding the City) will be
reduced by 1% to allow for new Western customers. Under the new agreement, the City may reduce its
CVP quantity or terminate the agreement when a new rate sehedule is adopted or extended (whieh will
occur at least every five years).
The Ci1y's contract with Western includes power from numerous hydroelectric plants around the
Sierra Nevada region, some of which qualify as a California RPS "Eligible"renewable resource. The City
partieipates in Western's Sierra Nevada region program(the "sinall hydro program") to receive the RECs
from the qualifying hydroeleetrie projeets. RECs from these qualifying hydroeleetrie facilities (under 30
MW)account for approximately 3.0%of the City's base resource allocation from Western.
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The table below shows the deliveries and wholesale power rates charged by Western for Fiscal
Years 2021-22 through 2024-25 and the projected deliveries and power rates to be charged by Western
for Fiscal Year 2025-26. Energy made available for delivery to the City under its agreement with Western
is subject to the annual hydrology of the CVP, and can vary signi�cantly from year to year. Deliveries in
Fiscal Years 2021-22 through 2022-23 reflect the then ongoing drought conditions in California. For
planning purposes, Western provides estimates of projected deliveries based upon Western's assessment
of current and expected hydrologic conditions. The projected deliveries for Fiscal Year 2025-26 are based
upon amounts received to November 2025 and Western's estimates as of December 2025, and will be
subject to hydrologic conditions for the remainder of the Fiscal Year.
Western Area Power Administration
Wholesale Power Rates and Deliveries
(Historical and Projected—Fiscal Years 2021-22 through 2025-26)
Energy Price
Fiscal Year (GWh) $/MWh
2021-22 122,059 $47.10
2022-23 128,052 40.09
2023-24 285,228 14.44
2024-25 232,022 18.21
2025-26�'� 243,161 17.37
�i> Projected Fiscal Year 2025-26 power rates and deliveries based on actual amounts to November
2025 and Western's estimates as of December 2025.
Source: City of Redding.
Hydrology in California can be highly variable from year to year. In an average water year,
approximately 30% of the City's power supply resources are derived from hydroelectric sources,
including both the Whiskeytown Project and power purchased from Western. In the event of reduced
hydroelectric generation, it is necessary for the City to generate additional energy or to purchase
additional energy on the wholesale market to meet its retail sales and load obligations, both of which
incur additional costs.
Renewable Resources
Current Energy Mix. The City has a diversi�ed renewable portfolio that includes wind power
purchase agreements and hydroelectric resources. As described above, these currently include the City's
purchase through M-S-R PPA of a portion of the output of the Big Horn I Project(wind energy), as well
as the City's participation in Western's small hydro program. The City also owns and operates its small
hydroelectric generating plant at the base of Whiskeytown Dam. Additionally, the City has also entered
into a long-tenn and short-term renewable energy power purchase agreements to purehase eligible
renewable energy from various generators in various quantities.
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The table below set forth the City's estimated mix of power resources used to generate the
electricity sold to customers for calendar year 2024.
CITY OF REDDING
ELECTRIC UTII,ITY DEPARTMENT
GENERATION MIX PERCENTAGES
(2024)t')
Redding
Power Mix
Energy Resource Type Percentage�>>
Eligible Renewable��� 27%
Biomass and Biowaste 0
Geothermal 0
Eligible Hydroelectric 3
Solar 0
Wind 23
Coal 0
Large Hydroelectric 42
Natural Gas 30
Nuclear 1
Other 0
Unspecified Sources of Power�3> 0
Total 100%
�'> Based on the City's calendar year 2024(most recent)Annuai Power Content label submission to the CEC.
��> The eligible renewable percentage in table above does not reflect RPS compliance, which is detennined using
a different methodology.
�3> Unspecified power is ElEctricity that has been purchased through open market transactions and is not traceable
to a specific genEration source.
Source: City of Redding.
City Renewable PortfoZio Standard. Over the last two decades,the City has taken numerous steps
towards satisfying the RPS targets set forth in State legislation, and has pursued cost-effective contracts
and ownership opportunities for renewable resources. In response to the adoption of California Senate
Bill 10�8 in 2002, the City first formally adopted a Renewables Portfolio Standard (RPS) in 2003 which
stated that the City would meet or exceed a standard of 20% of the City's annual energy needs to be
provided by state qualified renewable resources by 201'7. Following the development by the California
Air Resources Board ("CARB") of a Renewable Energy Standard, the City updated its RPS policy in
2011 to include a 33%by 2020 goal. In accordance with the California Renewable Energy Resources Act,
enacted in 2011 as SBX1-2 ("SBX1-2"), the City was required to develop and implement a renewable
energy resources plan which provided that a specified average of the Electric System's retail sales must
be procured from eligible renewable energy resources during specified compliance periods through 2020.
The Ci1y was "deemed in com�pliance" with the RPS procurement requirements for Compliance Period 1
(20ll-2013) by the CEC, satisfying its RPS obligation with an optional compliance measure. The City
satisfied the RPS target for Compliance Period 2 (from 2014 through 2016), meeting the compliance
requirement of 20% of retail sales in 2014 and 2015, and 25% of retail sales in 2016. The City also
satisfied the RPS target for Compliance Period 3 (from 2017 through 2020), meeting the compliance
requirement of 2'7% of retail sales in 2017, 29% of retail sales in 2018, 31% of retail sales in 2019, and
33% of retail sales in 2020), through the use of banked RECs from prior excess procurement. California
Senate Bill 350 ("SB 350")requires that the target amount of electricity generated each year from eligible
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renewable energy resources be increased to at least 50% of total retail sales by December 31, 2030.
California Senate Bill 100 ("SB 100") accelerates the State's RPS target as established by SB 350 from
50%by 2030 to 60%by 2030 and sets interim compliance targets to achieve such goaL The City intends
to exercise optional compliance measures in satisfaction of the interim tar�et under SB 100 of 40% of
retail sales to be made from eligible renewable energy resources from January 1, 2021 through December
31, 2024. In addition, the City is preparing to ineet the accelerated eligible renewable energy compliance
requirement of 60% of retail sales by December 31, 2030, including interim targets for 2025-29, in
accordance with SB 100. The City has registered with WREGIS to track, transfer, retire and sell RECs.
The City's RPS compliance obligation is increasing due to rising customer demand primarily driven by
electrification adoption. The City intends to meet the RPS compliance targets,but plans to utilize eligible
optional compliance measures in the event it falls short of the revised RPS requirements. See "CERTAIN
FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY — State Legislation and Regulatory
Proceedings—CalifoYnia Renewables Portfolio Standard."
Dist�^ibuted EneNgy—SolaN ProgNams. In 2007, the City adopted a solar initiative program
designed to meet Senate Bill 1 ("SB 1") requirements for the promotion of solar photovoltaic projects
through rebates and incentives. As of December 31, 2024, over 2,200 solar photovoltaic ("PV")projects
with a capacity of over 21 MW have been installed within the City. The projects range from 1 kW to
700 kW and are located on City-owned and customer-owned facilities throughout the City. The City
offered significant rebates through September 30, 2010. The City Council approved a 700 kW project at
the municipal airport in December 2010 which, combined with several other scalable sized projects,
effectively exhausted funds available to incentivize solar photovoltaic projects with rebates through July
2014. In August 2014, the City reopened the rebate program with $700,000 in funding; those funds were
exhausted in less than two business days through 105 applications with a total installed capacity of 1.3
MW. Since that time, the City has continued to see growth in installed PV systems. On September 13,
2016, the City again re-opened the solar rebate program and provided a $0.50/watt rebate, up to
maximum of $5,000. After meeting the goals of SB 1, application for the prograin was ciosed on
October 31, 2017 with approximately�1.1 million in rebates having been provided through December 31,
2017. The City continues to see additional PV system installations in the City,prompted at least in part by
the California building code standards requirements for PV installations in various new construction
residential and nonresidential buildings.
Energy Efficiency Programs
To operate cost-effectively, the City developed several load-management and energy-
conservation programs, including public awareness campaigns, technical conservation assistance, rebates
on energy-efficient products and technologies, renewable technologies, and energy-ef�cient streetlights.
Ln Fiscal Year 2021-22, the City developed its Demand-Side Integrated Resource Plan (DSM-IRP) and
determined that decarbonization programs (i.e., electrification) were more cost-effective than energy-
efficiency programs due to their ability to produce downward rate pressure from the increased retail load.
The electrification rebate programs, which help reduce carbon emissions by including incentives for
switching appliances from natural gas to electric technologies, were launched at the beginning of Fiscal
Year 2022-23. The City also developed various electrification programs for income-qualified customers,
which provide electrification equipment and installation at no cost or poi.nt-of-sale vouchers for electric
vehicle or e-bike purchases to reduce up-front costs.
Future Power Supply Resources
The City maintains a future power supply plan to ensure that resources to meet both the capacity
and energy needs of the City(including reliability reserves) are planned, developed and tested before their
load service duty begins. The City's interest in the 1V1-S-R PPA power purchase agreements for wind
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energy from the Big Horn I Proj ect (see "—Power Supply Resources —Joint Powers Agency Resources -
Purchased Power, Generation and Transmission — M-S-R PPA Purchased Power—Big Horn I Wind
Energy Project" above), account for nearly 25% of the City's retail energy needs, and over 75°/o of its
current renewable energy requirements. As part of its future power supply planning, the City is exploring
options, such as new solar and storage projects, to replace the Big Horn Wind PPA starting in 202'7. As
noted above, the City is forecasted to have sufficient renewable resources to ineet the minimum
renewable energy procurement targets mandated by State law through approximately 2030. See
"DEVELOPMENTS IN THE CALIFORNIA ENERGY MARKETS — State Legislation — Renewables
Portfolio Standard." Options for the City to meet increased requireinents of any new legislation or
requirements beyond 2030 would include: renewing current power purchase agreements for renewable
energy; acquiring renewable energy through new power purchase agreements; acquiring new City-owned
renewable projects; and/or purchasing qualifying RECs. These options are regularly assessed by the
Electric Utility Department and explored in accordance with best utility practices to have the least impact
on rates, reliability and safety. The City will continue to look for cost effective, conventional, and
renewable resources that wi11 complement the City's existing diversified resource portfolio and reliably
meet the future electricity needs of the City's customers, as we11 as regulatory requirements.
Fuel Supply
Natural gas is the primary fuel and the primary variable operating cost of the Redding Power
Plant. See "— Power Supply Resources — Generating Facilities — Redding Power Plant" above. The
Redding Power Plant can require delivery of up to 40,000 million British Thermal Units ("MMBtu") of
natural gas per day, with current average daily requirements of 8,500 MMBtu per day. The City has
developed a comprehensive natural gas program to both manage supply and price volatility. This includes
the procurement of a supply of natural gas at a discount from the monthly index price pursuant to a gas
prepayment arrangement,forward purchases of natural gas at fixed prices, and storage options.
M-S-R Energy Authority— Gas Prepay. The M-S-R PPA members have formed a joint powers
authority known as the M-S-R Energy Authority (referred to herein as M-S-R EA). 1V1-S-R EA was
created for the purpose of entering into contracts and issuing bonds to assist the TVI-S-R EA participants in
financing the acquisition of supplies of natural gas for use in each participant's respective electrical
generation stations. In 2009, the City participated in the M-S-R EA Gas Prepay Project. The Gas Prepay
Project provides the City, through a Gas Supply Agreeinent with M-S-R EA (the "Gas Supply
Agreement"), a reliable, long-term supply of natural gas of 5,000 MMBtu daily (or 1,825,000 MMBtu
annually) through September 30, 2039. The Gas Supply Agreement provides this supply at a discounted
price below the monthly market index price(the PG&E Citygate index) over the 30-year term. M-S-R EA
entered into a prepaid gas purchase agreement with Citigroup Energy, Inc. ("CEI") to provide this gas
supply, and issued $200.4 million principal amount of its Gas Project Revenue Bonds, Series 2009C (the
"M-S-R EA 2009C Gas Bonds") to fuzance the prepayment for the City, of whieh $1863 million was
outstanding as of June 2, 2026. Under the terms of the Gas Supply Agreement, M-S-R EA will bill the
City for actual quantities of natural gas delivered each month on a "take-and-pay" basis. The obligations
of CEI are guaranteed by Citigroup Inc., and responsibility for bond repayment is non-reeourse to the
City. Moreover, any defauit by the other Gas Prepay Project participants, Modesto and Santa Clara, is
also non-recourse to the City.
Fixed P�ice Forward Purchases. In addition to natural gas procured through the M-S-R EA Gas
Prepay Project,the City has entered into a number of fixed price purchase agreements to purchase natural
gas through Fiscal Year 2027-28. The following tables provides on a yearly basis, the amount and
approximate purchase dollar amount of current fixed price natural gas purchases for which the City is
obligated:
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Fixed Price Forward Natural Gas Purchases
Fiscal Year 2025-26 2026-27 2027-28
Dth/dy
(Decatherm per day) 7,479 3,500 1,750
Purchase Cost
($in million) $14.1 $6.3 $3.5
$/Dth $5.15 $4.92 $5.48
Currently, the City's forecasted gas requirements range from approximately 6,000 to
approximately 10,000 Decatherms per day ("Dth/dy") (a decatherm is equal to one MMBtu) for the next
10 years. The City employs a laddered hedging strategy with specified minimums when considering
additional gas purchases; specifically, the smaller of the volume needed to hedge index priced gas or the
forward generation requirement as then modeled to meet forecasted load.
In connection with the City's gas hedging activities, the City may be required to post collateral to
various counterparties based upon contract mark-to-market values and credit exposure limits under such
contracts. During the last five years, the City has not been required to post collateral at any time. While
the posting of collateral is not an expense to the City, it can encuinber unrestricted cash balances when
required.
Storage. To further manage seasonal, weather, and price volatility, the City has, since 2004,
contracted for natural gas storage within California. In 2010, under a 28-year term contract with Gill
Ranch Storage, the City commenced utilizing storage rights in Gill Ranch, a gas storage facility located in
central California. Under the agreement, the City has leased cushion gas valued at $13.57 million to Gill
Ranch Storage and Gill Ranch Storage provides the City with approximately 600,000 Dth of natural gas
storage. At the end of the contract term in 2038, the cushion gas will be returned to the City, unless the
lessee executes the option to purchase the gas. If the option is exercised, the purchase price wi11 be equal
to the original cost of the gas escalated at a rate of 1.08%per annum.
Interconnections,Transmission and Distribution
The City is a member of the Balancing Authority of Northern California (referred to herein as
BANC). In January 2005, the City became part of the Sacramento Municipal Utility District ("SMUD")
balancing authority area. In 1VIay 2009, SMUD, the City, Modesto and Roseville executed a joint exercise
of powers agreement creating BANC to consolidate balancin� authority activities. The transition to
operation of BANC occurred on May 1, 2011, at which time the operations of the SMUD balancing
authority were turned over to BANC. Since that time, the Trinity Public Utilities District and the City of
Shasta Lake have also become members of BANC. STVIUD acts as the balancing authority operator under
contract and performs balancing authority functions on behalf of BANC. As provided in the BANC
member agreement, liability for penalties associated with balancing autbority-related Reliability
Standards are shared on a pro rata basis among the members of BANC. The BANC joint exercise of
powers agreement assigns cost responsibility for BANC operations based on member load within the
BANC balancing authority. The City's cost responsibility share for BANC operations based upon
BANC's budget for 2026 is approximately 4.9%.
On Apri13, 2019, SMUD, the largest BANC member, began its participation in the CAISO
Energy Imbalance Market (`BIM"), a real-time wholesale power trading market that operates in parts of
eight western states, including Washington, Oregon, California, Nevada, Idaho, Wyoming, Utah, and
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Arizona. In addition to modest economic benefits,participation in the EIM is expected to enhance BANC
members' ability to integrate renewable energy,provide additional sources of real-tune supply to augment
reliability resources, increase regional resource diversity, and maintain access to a robust pool of
resources and counterparties. The remaining BANC members, including the City, began participating in
the EIM in March 2021.
Western's Sierra Nevada region operates as a sub-balancing authority area within BANC's
balancing authority area. Western provides access to the City to Western's high voltage transmission
facilities via an interconnection with the City's distribution system. Under a transmission service contract
with Western,power needed to meet the City's system loads that are not met by generation assets within
its service area can be iinported using Western transmission service. The City's transmission service
contract with Western, executed in August 1995, is effective for 40 years, subject to a termination right of
either party upon five years' notice. Under the transmission service contract, Western agrees to provide
on a firm basis, both long-term transmission service and short-terin COTP transmission service to the
City.
As discussed herein, the City has firm transmission rights on the COTP. Through its participation
in TANC, the City has firm transmission rights to approximately 148 MW of the COTP. The City gains
access to its COTP participation rights though its transmission service contract with Western. See "—
Power Supply Resources — Joint Powers Agency Resources — Purchased Power, Generation and
Transmission—TANC California-Oregon Transmission Project"above.
Delivery of all power froin sourees outside of the City is inade to the City at the Keswick
Switchyard and the Airport 230/115 kV Substation. These two facilities provide the City with a reliable
interconnection capacity of 275 MW from Western's 230 kV transmission system. The City owns and
operates a 115/13.8 kV generation step-up substation at the Redding Power Plant. The City aiso jointly
owns the Airport Substation with Western. The City owns and operates 72 miles of 115 kV transmission
system lines which deliver energy to 11 existing distribution substations that step the voltage down to
12 kV. The City also owns and operates '767 miles of 12 kV distribution system lines. The City's system
typieally experienees approximately 49 minutes of outage time per customer per year (exeluding major
storm events).
Wholesale Energy Trading
As previously noted, the City plans for its future conventional and renewable power supplies. In
addition to making market purchases when cost-effective, the City se11s excess capacity and energy that is
surplus to its needs. The City operates and manages its power supply and transmission resources using an
"economie dispatch" model that is designed to produce energy at the iowest eost to reliably serve
consumers,recognizing any operational limits of generation and transmission facilities. Under this model,
the City participates in trading in the wholesale ener�ry markets in order to capture the maximum value of
its generation assets and to ininimize the cost of purchased power. Additionally, the City optimizes its gas
purehases and sales within the year to coordinate with wholesale energy costs. In the three Fiseal Years
ended June 30, 2023 through June 30, 2025, gross revenue associated with these trading activities has
averaged $32.826 million. Net revenue is signifieantly less but is not independently determinable as it is
reflected in the overall cost to serve retail load. For financial forecasting and planning purposes, the City
only assumes revenues from wholesale trading activities that are under contract at the time of the forecast.
The City expects to continue optimizing its generation and transmission assets using the wholesale market
for the benefit of its retail electric customers and anticipates that wholesale trades will continue at some
level in the future.
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Risk Management Program
In support of its wholesale market transactions, the Electric Utility Departinent has maintained a
formai risk committee since September 17, 2001. A newly re-chartered Energy Risk Management
Committee (`BRC") was established on March 14, 2017. Energy Risk policies were revised in February
2024. The ERC meets periodically to implement rislc policies, review wholesale marlcet activities, and
establish counterparty credit, among other activities.
As of the date of this Official Statement,the City has never experienced a loss as a result of credit
quality or transaction performance defaults.
Cybersecurity Measures
The City has a computer usage and manageinent of electronic records policy and has adopted a
risk-based cybersecurity strategy. The Elec�ric Utility Department has computer security procedures, and
security practices documents. The Electric Utility Department launched a comprehensive upgrade to the
cybersecurity program in 2021 that is coinpliant with the North American Electric Reliability Corporation
("NERC") Critical Infrastructure Protection("CIP") Standards.NERC's CIP Standards protect the critical
infrastructure of the North American electric grid by establishing mandatory cybersecurity regulations
designed to safeguard the Bulk Electric System from cyber threats, ensuring the reliable operation of the
power grid by mitigating risks posed by cyberattacks on critical assets like power generation and
xransmission systems. These Reliability Standards were developed by NERC and approved by FERC
pursuant to the Energy Policy Act of 2005 (`BPAct 2005"). See "CERTAIN FACTORS AFFECTING
THE ELECTRIC UTII,ITY INDUSTRY—Federal Energy and Environmental Policies and Legislation—
Energy Policy Act of 2005." See also "CERTAIN FACTORS AFFECTING THE ELECTRIC UTILTTY
INDUSTRY—Federal Policy on Cybersecurity"and"—Cybersecurity Risks."
Wildfire Mitigation Measures
Approximately 50% of the territory of the City's Electric System service area is in a
geographical area classified by the CPUC's Fire Threat Map as a "Tier 2" or "Tier 3" fire-threat area
(i.e., an area of elevated or extreme risk froin utility-associated wildfires),including 18,000 acres adjacent
to Electric System equipment and facilities and 120 miles of overhead power lines. In connection with the
operation of its facilities and equipment, the City currently has in place or is implementing a number of
wildfire prevention strategies and programs. These programs and measures include ongoing vegetation
management activities, annual inspection of overhead electric utility equipment, enhanced situational
awareness though use of surveillance and communications technology, and the ability to eliminate the
automatic restoration function on certain transmission lines to require that power to a tripped line is only
restored after manual inspection and confirmation that it may be operated safely under established
conditions. The City also has established protocols and procedures for operations for emergency
preparedness and response. Pursuant to the requirements of SB 901, the City Council approved the City's
Wildfire Mitigation Plan on December 3, 2019. The City's Wildfire Mitigation Plan (accompanied by an
Independent Evaluator Report) was submitted to the Wildfire Advisory Board. The plan is updated
annually, most recently in May 2025, consistent with statutory requirements, and with consideration of
the recommendations of the Wildfire Advisory Board regarding its prior plans. See also "CERTAIN
FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY — State Legislation and Regulatory
Proceedings—Legislation Relating to Wildfires;Related Risks"and"—Insurance"below.
In addition, the City has adopted a Community Wildfire Protection Plan, which was developed
with an external consultant, and with collaboration from the Redding Fire Department, the Electric Utility
Department, and other agencies. The Community Wildfire Protection Plan was prepared as a tool to
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assess the City's wildfire risks, community preparedness and defensibility, and to identify and provide
potential wildfire hazard mitigation projects for the City. The City's Community Wildfire Protection Plan
was accepted by the City Council in January 2025. Significant fires can and have occurred in the City's
Electric System Service Area, including the Carr Fire in 2018. It is impossible to predict the occurrence
and impact of future fires on the City or its Electric System.
Insurance
The insurable property and facilities of the Electric System are covered under the City's general
insurance program. The City's insurance program currently consists of a combination of commercial
insurance policies and self-insurance. Properiy insurance is administered as a co-insurance plan. The City
is self-insured for claims up to $250,000 for all risk and up to $500,000 for wildfires. Additionally, the
City has acquired coverages for Redding Power Plant up to $100 million, with various sub-limits and
deductibles for different types of losses. The City does not insure its physical assets against the risk of
physical loss or damage due to earthquakes. Effective January 1, 2025, the City has also secured certain
cybersecurity insurance coverage to protect the Redding Power Plant assets.
The City is self-insured for general and liability claims up to $750,000. Any claims from
$750,001 to $40.0 miilion are administered through a governmental pooling joint powers authority, the
California Joint Powers Risk Management Authority. In addition, the City is self-insured up to $750,000
per claim for workers' compensation claims, with an insurance company co-insuring claims from
$750,001 to $50.0 million.
The City records liabilities for unpaid claims when they are probable of occurrence and the
amount can be reasonably estimated. Funds determined to be at risk are charged a percentage of the total
estimated insurance and claim expense. The City periodically evaluates its insurance program and may
modify the current configuration of commercial insurance and self-insurance with respect to the City and
the Electric System. Limits maintained by the City are subject to change depending on insurance market
conditions and assessments by the City as to risk exposure.
Rates and Charges
The City Council is authorized by the Redding Municipal Code to establish electrical utility rates
for all electric utility subscribers. Rate changes are not subject to regulatory agency review. The City has
maintained rates sufficient, together with other available funds, to pay for(a) operations and maintenance
of the system; (b) additions and betterments to the system; (c) amortization of all depreciation and
obsolescence within the system; (d) a11 debt service liability incurred in the construction or extension of
the system; and (e) establishment and maintenance of a reserve fund to provide for extensions and
betterments of the system and unforeseen contingencies. See also"—Cash Reserves."
In December 2023, the City Council approved a change in electric rates (4.0% rate increases per
year) effective with the January 2024 and January 2025 billing cycles, and an increase in the bene�t of
the residential energy discount for income-qualified households. The general rate inereases of 4.0% per
year are eonsistent with the anticipated rate inereases eontemplated in the City's approved biennial budget
for Fiscal Years 2023-24 and 2024-25, and the Electric Systein's five-year financial plan presented in
connection with such budget. The City is currently in the process of evaluating future increases in its
electric rates.
The following table presents a history of electric rate increases for the last four years.
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4909-8297-8690v6/200986-0003
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
RATE INCREASES
Date Percent Change
January 1, 2025 4.00%
January 1, 2024 4.00
January 1, 2023 2.00
January 1, 2022 2.00
Sou�ce: City of Redding.
The City's current primary rate schedules far residential, commercial and industrial
customers of the Electric System are set forth below.
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
PRIMARY RATE SCHEDULES FOR RESIDENTIAL, COMMERCIAL
AND INDUSTRIAL CUSTOMERS
(As of January l, 2025)
Tvpe and Description of Service
General Residential Service(Basic):
Fixed Charge,per meter,per month $ 40.00
Energy Charge(to be added to Network Access Charge):
Per kWh for all kWh in billing period 0.1492
Multi-Family Residential Service(Basic):
Fixed Charge,per meter,per month $ 38.00
Energy Charge(to be added to Netwark Access Char�e):
Per kWh for all kWh in billing period 0.1492
General Service Sma11 Commercial Customers:
Fixed Charge,per meter,per month $ 70.00
Energy Charge(to be added to Netwark Access Char�e):
Per kWh for all kWh in billing period 0.1649
General Service Large Commercial and Industrial Customers:
Fixed Charge,per meter,per month $ 95.00
Energy Charge(to be added to Netwark Access Char�e):
Per kWh for all kWh in billing period 0.1086
Demand Charge,per kW $ 21.50
Source: City of Redding.
The table below sets forth the average billing price per kWh for the various customer classes
during the Fiscal Year 2024-25.
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CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
AVERAGE BILLING PRICE (CENTS)PER KILOWATT-HOUR
(RETAIL SALES)
(For Fiscai Year 2024-25)
Residential.............................................. $0.1838
Commercial............................................ 0.1804
Industrial................................................. 0.203 8
Other....................................................... 0.1924
System Averages.................................... 0.1833
Source: City of Redding.
Comparison of Selected Monthly Residential Electric Bills
The City's residential rates for average usage continue to be below PG&E's rates (for other than
baseline (subsidized) residential service). The following table shows a comparison of selected monthly
residential electric bills for regional utilities as of August 2025.
COMPARISON OF SELECTED MONTHLY
RESIDENTIAL ELECTRIC BILLS
(As of Aagust 2025)
850 kWh 1,500 kWh
Average Monthly Average Monthly
PG&E $369.62 $701.51
1Vlodesto Irrigation District 215.84 369.50
SMUD 210.08 349.18
City of Palo Alto 198.98 355.75
Redding 167.93 265.75
Silicon Valley Power 149.25 264.80
Turlock Irrigation District 144.46 260.85
Notes:
Excludes state surcharge and taxes,if any.
Differences in time-of-use periods and rate adjustments make exact comparisons difficult.
Source: City of Redding.
Major Customers
Based upon energy usage for the Fiscal Year ended June 30, 2025, the ten largest electric utility
accounts (including state and federal government accounts) of the City represent approximately 14.13%
of total kWh sales and approximately 12.68% of total revenues. The largest account, the City's other
departments and activities, consumed approximately 4.29% of the electric utility's total kWh sales and
contributed approximately 4.09% of total revenues, and the smallest of the ten largest accounts consumed
approximately 0.62% of total kWh sales and contributed approximately 0.52%of revenues.
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CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
TEN LARGEST CUSTOMERS�i�
(Fiscal Year 2024-25)
% of Total Totai % of Total
Total kWh System Electric System
Customer Usage Usage Charge Revenue
City of Redding 32,989,571 4.29% $5,824,233 4.09%
State of California 13,479,167 1.75 2,304,272 1.62
Mercy Healthcare Center 12,433,977 1.62 1,848,521 1.30
Shasta County 8,660,117 1.13 1,577,112 l.11
Prime Health Care Shasta LLC 9,813,392 1.28 1,481,504 1.04
Mt. Lakes Manufacturing LLC 7,301,200 0.95 1,233,632 0.87
Redding Rancheria Utility Corp 8,241,297 1.07 1,230,962 0.87
Saraf, Simmon 5,773,200 0.75 952,780 0.67
AT&T Services 5,058,275 0.66 839,806 0.59
Costco Utility Bills 4,792,400 0.62 740,204 0.52
Total 108,542,596 14.13% $18,033,026 12.68%
S�urce: City of Redding.
Customers,Sales,Revenues and Demand
The average number of customers, kWh sales, revenues derived from sales, by classification of
service, and peak demand during the past five Fiscal Years, are listed below. Combined customer electric
requirements created the City's historic distribution system peak demand of 253.0 MW on July 24, 2006.
[Reinainder of page intentionally left blank.]
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4909-8297-8690v6/200986-0003
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
CUSTOMERS, SALES,REVENUES AND DEMAND
(Fiscal Years Ended June 30)
2021 2022 2023 2024 2025
Number of Customers�'>:
Residential...................... 38,587 38,572 38,706 39,019 39,089
Commercial.................... 4,975 5,088 5,092 5,101 5,212
Industrial ........................ 353 351 336 326 329
Other............................... 966 970 974 967 961
Total Customers.......... 44,881 44,981 45,108 45,413 45,591
Kilowatt-Hour Sales:
Residential...................... 393,403,666 375,817,815 394,986,058 372,342,493 392,467,877
Commercial.................... 302,067,356 300,596,737 308,605,996 305,667,285 315,896,990
Industrial........................ 11,552,342 12,155,405 12,152,344 12,127,995 12,876,886
Other............................... 50,105,459 49,924,125 46,678,248 46,467,017 49,253,384
Total kWh................... 757,128,823 738,494,082 762,422,646 736,604,790 770,495,137
Revenues from Sale of
Energy:
Residential...................... $ 64,644,393 $ 61,245,910 $ 66,247,872 $ 65,060,311 $ 72,152,657
Commercial.................... 48,851,836 49,535,399 52,376,793 53,321,173 57,003,353
Industrial........................ 2,168,208 2,273,909 2,366,791 2,411,381 2,624,585
Other............................... 8,085,886 8,200,232 8,029,169 8,598,261 9,474,696
Total Revenues from
Sale ofEnergy��>: .... $123,750,323 $121,255,450 $129,020,625 $129,391,126 $141,255,291
Peak Demand(k� ........... 225,400 233,900 239,]00 234,200 240,900
�'� The Number of Customers values includes every point at which electriciry is used as of the last month of the
Fiscal Year.
��> Differs from Retail Revenue as shown in the table entitled "Summary of Financial Operating Results" due to
timing differences in meter readings, accruals and billings in the application of data for billing system and
accounting system data.
SouNce: City of Redding,Utility Billing System Detailed Marketing Report of Quarterly NAICS Usage.
All electric bills are due and payable upon receipt of billing and become delinquent 20 days
thereafter. If such bills remain unpaid on the 42nd day after billing, all electric services are subject to
termination until all fees, charges, penalties and the entire delinquent balance have been paid. Delinquent
fees and charges may be made a lien against the property, placed on the tax roll of Shasta County and
collected in the same manner as ad valorem taxes.
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4909-8297-8690v6/200986-0003
The City considers its write-offs for uncoliectible accounts to be low by electric utility industry
standards for urban areas. The write-offs for uncollectible accounts for the past five Fiscal Years are
presented in the following table:
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
UNCOLLECTIBLE REVENUES
As of Uncollectible Percent of
June 30 Revenues Gross Billings
2021 230,576 0.18
2022 1,947�'� <O.Ol�I>
2023 289,651 0.22
2024 178,072 0.13
2025 225,431 0.16
�i� The lower uncollectible revenues in Fiscal Year 2022 reflects the recovery by the City for past due
accounts under the 2021 California Arrearage Payment Program (CAPP) which provided financiai
assistance for California energy utility customers to help reduce past due energy bill balances that
were incurred during the COVID-19 pandemic.
Source: City of Redding.
Transfers to the General Fund
Commencing with Fiscal Year 1944-�9, it has been the practice of the Electric System to make a
monthly payment in-lieu of taxes ("PII,OT") to the City's general fund, in addition to paying its
proportionate share of the City's operating expenses ariributable to the Electric System. The City's
payment in-lieu of taxes represents 1% of installed assets with selected depreciation. For the Electric
System, this formula includes the systein's share of joint powers agency installed assets, and currently
results in an in-lieu payment of approximately 5.03% of budgeted retail revenues.
The following table sets out the transfers from the electric utility to the City's general fund for the
five Fiscal Years 2020-21 through 2024-25 and the budgeted transfer for Fiscal Year 2025-26.
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
TRANSFERS TO THE GENERAL FUND
Fiscal Year Transfer Amount
2020-21 $6,097,590
2021-22 5,464,000
2022-23 6,246,800
2023-24 7,270,600
2024-25 6,614,200
2025-26�'� 5,996,600
�'� Fiscal Year 2025-26 Budgeted amount.
Source: City of Redding.
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Litigation challenging the PILOT was filed against the City in 2011. On August 27, 2018, the
California Supreine Court rendered a decision uphoiding the City's PILOT. See "CONSTITUTIONAL
LIMITATIONS IN CALIFORNIA ON TAXES AND FEES."
Capital Requirements
The City expects capital requirements for general Electric System improvements to average
approximately $8.75 inillion per year for the next five Fiscal Years. The planned i�nprovements primarily
consist of ongoing routine capital projects for the Electric System, including transmission and distribution
system improvements, such as construction of distribution lines,property acquisition, transformers,poles,
conductors, metering equipment, and other miscellaneous routine capital facilities. In addition to the
ongoing routine capital requirements, the City's capital plan for the next five years includes the
expenditure of approximately $7.0-8.0 million per year for special projects, including substation
construction, and the funding of scheduled generation facility unprovements and enhancements. The City
currently expects that these capital requireinents will be funded primarily from Electric System Revenues
and proceeds of the 2025 RJPFA Electric System Bonds.
Employees
Labor Relations. As of June 30, 2025, the Electric Utility Departinent had 202.0 authorized full-
time equivalent("FTE") staff positions, including 173.5 FTEs for the Electricity Services Divisions, 18.5
FTEs for the Customer Service Division and 10.0 FTEs for the Field Service(meter reading) Division.
Distribution, Field Services, and Generation employees (made up of three bargaining units:
Electric,Maintenance and Power Production) are represented by the International Brotherhood of Electric
Workers under labor contracts("MOUs")which expire or expired as follows: (i)Electric bargaining unit,
MOU expiring November"7, 2026; (ii)Maintenance bargaining unit, MOU expired December 3, 2025
(negotiations for a new MOU are underway) and (iii)Power Production bargaining unit, MOU expiring
April 4, 2026 (negotiations for a new MOU are underway). Clerical employees (made up of two
bargaining units: Supervisory/Confidential and Clerical, Technical and Professional) are represented by
Redding Independent Employees Organization ("RIEO") under labor contracts which expired on Ju1y 19,
2025 (negotiations for a new MOU are underway, but have reached an impasse). Technical office
employees throughout the utility are represented by United Public Employees of California under labor
contracts which expire on June 30, 2026 (negotiations are scheduled to begin the last week of January
2026). The City and a11 other employee organizations are continuing to negotiate successor labar
contracts. Until successor contracts are executed, the terms of the expired eontracts will continue to
govern. Mana�;ement and professional employees receive substantially the same fringe bene�t package
as the represented employees. Redding's wage and fringe benefits are generally comparable to those
offered by other local public agencies.
Pension Plans. Retirement benefits to City employees, including those assigned to the Electric
Utility Department, are provided through the City's participation in the California Public Employees
Retirement System ("CaLPERS"), an agent multiple-einployer plan administered by Ca1PERS, which acts
as a common investment and administrative agent for participating public employers within the State.
Ca1PERS issues a separate annual comprehensive financial report. Copies of the Ca1PERS annual
financial report may be obtained from the Ca1PERS Executive Office, 400 Q Street, Sacramento,
California 95814.
The City's defined benefit pension plans, the 1Vliscellaneous Plan and the Safety Plan of the City
of Redding, provide retirement and disability benefits, annual cost-of-living adjustments, and death
benefits to plan members and beneficiaries. Benefit provisions under the plans are established by State
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4909-8297-8690v6/200986-0003
statute and local government resolution. No employees assigned to the Electric Utility Department
participate in the Safety Plan.
The cost of the Miscellaneous Plan is funded through bi-weekly contributions from employees
and from employer contributions by the City. Active Miscellaneous Plan members hired prior to
January 1, 2013 are required to contribute 7.00% of their annual covered salary and those hired on or after
January 1, 2013 are required to contribute 8.00% of their annual covered salary. The member contribution
can be paid by the employee or by the City on the employee's behalf in accordance with applicable labar
agreements. The required member contributions are currently paid by the employees. The City's
employer contribution rate is detennined annually by the actuary effective on the July 1 following notice
of a change in rate. Funding contribution amounts are detennined annually on an actuarial basis as of
June 30 by Ca1PERS. The actuarially determined rate is the estimated amount necessary to finance the
costs of benefits earned by employees during the year,with an additional ainount to finance any unfunded
accrued liability. The City is required to contribute the difference between the actuarially determined rate
and the conxribution rate of employees. The actuarial methods and assumptions used are those adopted by
the Ca1PERS Board of Administration. The contribution requirements of the plan members are
established by State statute and the employer contribution rates are established, and may be amended, by
CaIPERS.
In addition to the defined pension plan through Ca1PERS, the City approved the establishment of
a Public Agency Retirement System ("PARS") defined benefit Retirement Enhancement Plan ("REP")
effective January 1, 2005, in order to provide a supplemental retirement benefit for all eligible City
employees, including those assigned to the Electric Utility Department. The REP is an agent multiple-
employer defined benefit plan. Pursuant to the California Public Employees' Pension Reform Act of
2013, as of January 1, 2013 the REP is closed to new participants. Employees are required to contribute
between 1.71% and 2.70% of their of their annually covered salary to the REP to participate. Active
represented REP members (not including management and professional employees) assigned to the
Electric Utility Department are not required to contribute to the REP to participate. The City is required to
make all other required contributions to fund the REP benefits for participating members. The REP
became fully funded in fiscal year 2025-26.
The Electric Utility Department is allocated its portion of the City's required contributions for the
1Vliscellaneous Plan and the REP. This allocation is based on eligible employee wages.
The table below sets forth the Electric Utility Department's allocated share of the City's
actuarially determined required contributions to the 1Vliscellaneous Plan and the REP Plan for the past five
Fiscal Years and the amount budgeted for its allocated share of' the City's estimated required
contributions to sueh plans for the eurrent Fiseal Year.
Miscellaneous Plan REP Plan
Electric Utility Total City Electric Utility Total City
Department Required Department Required
Allocated Share Contribution Allocated Share Contribution
Fiscal Year of Contribution Amount of Contribution Amount
2020-21 $5,788,940 $15,066,353 $2,639,123 $7,158,333
2021-22 6,563,152 16,765,328 3,645,286 9,589,481
2022-23 7,364,449 18,428,744 3,634,079 9,823,669
2023-24 7,501,976 19,675,937 7,595,688 17,077,760
2024-25 8,'748,942 22,652,395 3,326,323 7,481,9'77
2025-26�i> 9,161,666 24,128,798 77,261��> 255,893���
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4909-8297-8690v6/200986-0003
�i> Fiscal Year 2025-26 Budgeted amounts.
��> The REP Plan became fully funded in fiscal year 2025-26.
Source: City of Redding.
The market value of assets for the Miscelianeous Plan as of June 30, 2024 (the most recent
actuarial information available) was $382,090,536 and the entry age normal accrued liability was
$595,447,797,resulting in a total unfunded actuarial accrued liability for the City's Miscellaneous Plan of
$213,357,261 and a funded ratio of 64.2% as of such date. The market value of assets for the REP as of
July 1, 2023 (the most recent actuarial information available) was $79,545,153 and the actuarial accrued
liability was $94,451,621, resulting in a total unfunded actuarial accrued liability for the REP of
$14,906,468 and a funded ratio of 84.22°/o as of such date.
The City's required contributions to CalPERS fluctuate each year and include a normal cost
component and a component equal to an ainortized amount of the unfunded liability. Many assumptions
are used to estimate the ultimate liability of pensions and the contributions that will be required to meet
those obligations. The Ca1PERS Board of Administration has adjusted and may in the future further
adjust certain assumptions used in the Ca1PERS actuarial valuations, which adjustments may increase the
City's required contributions to Ca1PERS in future years. Actuarial assumptions used by PARs in
calculating actuarially determined contributions and other actuarially determined amounts are generally
consistent with those used by CalPERS. Accordingly, the City cannot provide any assurances that the
City's required contributions to CalPERS and PARS in future years will not significantly increase (or
otherwise vary)from any past or current projected levels of contributions.
The announcement on July 12, 2021 that CaIPERS achieved a preliminary invesxinent return of
21.3% for the period from July l, 2020 through June 30, 2021 caused the CaiPERS Board of
Administration to lower Ca1PERS' discount rate from 7.0%to 6.8% on November 15, 2021 in accordance
with a risk mitigation policy that was adopted in 2015, which ca11s for the discount rate to be lowered if
returns exceed the then-current discount rate by two or more percentage points. Lowering the discount
rate generally means that employers which contract with CalPERS to administer their pension plans will
see increases in their normal costs and unfunded actuarial liabilities.
Effective for the Fiscal Year ended June 30, 2015, the City adopted Governmental Accounting
Standards Board ("GASB") Statement No. 68 ("GASB 68"), affecting the reporting of pension liabilities
for accounting purposes. Under GASB 68, the City is required to report the Net Pension Liability(i.e.,the
difference between the Total Pension Liability and the Pension Plan's Net Position or market value of
assets) in its financial statements. The GASB 68 standards apply to financial reporting but not to the
actuarial calculation of annual employer pension contributions, which continue to be determined
actuarially by each plan.
The table below summarizes certain information relating to the Net Pension Liability of the
1Vliseellaneous Plan and the REP Plan for the measurement periods ended June 30, 2020 through June 30,
2024, as reported in the City's audited financial statements for the Fiscal Year ended June 30, 2025.
[Remainder of page intentionally left blank.]
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Miscellaneous Plan�'� REP Plan���
Net Position Net Pension Net Position Net Pension
as a%of Liability as a as a% of Liability as a
Total % of Total %of
Measurement Net Pension Pension Covered Net Pension Pension Covered
Period Liability Liability Payroll Liability Liability Payroll
2019-20 157,087,984 66.95 365.54 29,044,412 67.27 135.25
2020-21 109,430,508 77.67 243.93 14,809,606 83.65 73.46
2021-22 178,526,513 65.77 368.82 22,940,246 75.37 ll9.84
2022-23 190,628,671�3> 65.13 359.02 14,906,46$�4� 84.22 77.52
2023-24 191,667,956�5> 66.60 359.02 (1,374,081)�6> 101.40 (6.99)
�l> Measured using prior fiscal year annual actuarial valuation rolled forward to measurement date using standard
update procedures.
��> Determined by actuarial valuation as of valuation date projected forward to the measurement date.
�3> $72,682,269 of the Net Pension Liability of the Miscellaneous Plan as of June 30, 2023 was determined to be
allocable to the Electric Utility Fund.
�4� $6,629,962 of the Net Pension Liability of REP Plan as of June 30, 2023 was determined to be allocable to the
Electric Urility Fund.
�s� $74,027,130 of the Net Pension Liability of the Misceilaneous Plan as of June 30, 2024 was determined to be
allocable to the Electric Uriliry Fund.
�6� $(610,8�5) of the Net Pension Liability of RBP Plan as of June 30, 2024 was determined to be aliocable to the
Electric Utility Fund.
SouYce: City of Redding.
As of the June 30, 2024 measurement date, the city-wide Total Pension Liability for the
Miscellaneous P1an was $5'73,939,461 and the Plan Fiduciary Net Position was $382,2'71,506,resulting in
the city-wide Miscellaneous Plan Net Pension Liability of$191,667,955. In the June 30, 2023 actuarial
valuation utilized for measuring the pension liability for the Miseellaneous Plan as of the June 30, 2024
measurement date, the Entry Age Normal Actuarial Cost Method was used. The actuarial valuation
assumptions used for determining pension liabilities included(a) a'7.00%investment rate of return(net of
pension plan investment expenses); (b)projeeted salary increases that vary based on age and type of
service; (c)an inflation component of 2.50% per year; (d)payroll growth of 2.75%; and (e) a discount
rate of 6.90°/o.
As of the June 30, 2024 measurement date, the Total Pension Liability for the REP was
$98,393,890 and the Plan Fiduciary Net Position was $99,767,971, resulting in the REP Net Pension
Liability of $(1,374,081). In the June 30, 2023 actuarial valuation utilized for measuring the pension
liability for the REP as of the June 30, 2024 measurement date, the Entry Age Normal Aetuarial Cost
1Vlethod was used. The actuarial valuation assumptions used for determining pension liabilities included
(a) a 7.00% investment rate of return; (b)projected salary increases that were graded rates based on years
of serviee, and 3.34% after 30 years of service; (e) an inflation component of 2.30% per year; and (d) a
discount rate of 7.00%.
Reti�ee Health Benefits. The City also provides medical and dental benefits to eligible City
employees and their spouses, including City employees assigned to the Electric Utility Department, who
retire from the City, through the City of Redding PARS Post-Retirement Health Care Plan (the "OPEB
Plan"). The OPEB Plan is a single-employer defined benefit healthcare plan administered by Phase II
Systems, dba Public Agency Retirement Services. The Redding City Council has the authority to
establish and amend benefit provisions to the OPEB Plan. The authority for this coverage is union
contracts for union employees and council resolution for all other employees. The contribution
requirements of the plan members are established and may be amended by the Redding City Council. The
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4909-8297-8690v6/200986-0003
required contribution is based on projected pay-as-you-go financing requirements, with an additional
amount (if any) to pre-fund benefits as determined annually by the Redding City Council. The City does
not, and historically did not, pre-fund any portion of the plan. The City's cost of current premiums,
financed on a pay-as-you-go basis, can be up to 50% of the premium costs (with the remaining portion
paid by retirees) based on employee years of service, subject to each of the City's eight labor
organization/employee group's bargaining agreements. The Electric Utility Department is allocated its
portion of the City's annual full cost for current premiums based on employee eligibility.
Effective beginning for Fiscal Year 2017-18, the City follows the provisions of GASB Statement
No. 75,Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions ("GASB
No. 75") affecting the reporting of OPEB liabilities for accounting purposes. GASB No. 75 establishes
standards for employers with other postemployment liabilities for recognizing and measuring net OPEB
liabilities, along with deferred inflows and outflows of resources, and expenses/expenditures related to the
other postemployment liability. GASB No. 75 does not establish requirements for funding.
The table below sets forth the certain information regarding the City's annual actuarially
determined contribution, the Electric Utility Department's allocated share of the City's contribution
amount for the OPEB plan, the contribution deficiency or excess and the Net OPEB liability. The
actuarially determined contribution represents the level of funding that, if paid on an ongoing basis, is
projected to cover normal cost each year and amortize any unfunded liabilities over a closed period not to
exceed 30 years. As noted above, the City does not currently pre-fund any portion of the plan.
OPEB Plan
Electric Utility
Department City
Allocated Share of Required Contribution Net OPEB
Fiscal Year Contribution Contribution Deficiency(Excess) Liability<1>
2020-21 $988,708 $3,646,314 -- $40,637,719
2021-22 1,238,492 4,601,018 -- 54,940,168
2022-23 '788,709 3,021,637 -- 51,564,892
2023-24 1,135,258 4,312,188 -- 78,992,8ll��>
2024-25 1,242,091 4,633,703 [ ] 80,141,961
2025-26��> 1,006,340 4,668,240 [�]�4> �]�4>
�'� As reported for such fiscal year based on prior�scal year measurement pEriod.
��> $20,796,229 of the Net OPEB Liability as of the June 30, 2023 measurement date was determined to be
allocable to the Electric Utility Fund.
�3> Fiscal Year 2025-26 Budgeted amounts.
�4> Information not yet available.
SouNce: City of Redding.
Pursuant to GASB No. 75, for the Fiscal Year ended June 30, 2025, the City reported a Net
OPEB Liability of $80,141,961 as of the June 30, 2024 measurement date, of which $21,482,516 was
allocable to the Electric LJtility Fund. The covered payroll(annual payroll of active einployees covered by
the OPEB Plan was $87,775,715 and the ratio of the Net OPEB liability to the covered payroll was
91.30%. The Net OPEB Liability was measured as of June 30, 2024, and the actuarial valuation used to
calculate the Net OPEB Liability was as of June 30, 2024. In the June 30, 2024 actuarial valuation, the
actuarial assumptions used in determining tbe Total OPEB liability include (a) a 3.93% discount rate at
June 30, 2024 and a 3.65% discount rate at June 30, 2023; (b) a 3.50% expected net long-term investment
rate of'return at J�une 30, 2024 and 2023; (c) aggregate projected salary increases of 2.'75°/o annually;
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4909-8297-8690v6/200986-0003
(d) an inflation component of 2.50% per year; and (e) a healthcare cost trend of 8.50% for 2025,
decreasing to an ultimate rate of 3.45% in year 2076 for Non-Medicare participants, and 7.50°/o for 2025,
decreasing to an ultimate rate of 3.45%in year 2076 for Medicare participants.
Additional information regarding the City's retirement plans and other post-employment benefits,
including further information regarding the assumptions used to determine the pension and OPEB
liabilities and the funding requirements therefor, can be found in Notes 16 and 17 and the Required
Supplementary Information to the City's audited financial statements included in Appendix A hereto and
in the City's annual comprehensive �nancial report ("ACFR") which may be obtained at the following
website:
https://www.cityofi�edding.gov/government/depart�nents/finance/accounting/financial reports/index.php#
Doc2849.
Indebtedness
Parity Electric Revenue Obligations. As of June 2, 2026, the City had $127,710,000 outstanding
aggregate principal amount of long-term Elec�i�ic System obligations constituting Parity Obligations and
payable from Net Revenues of the Electric System and amounts on deposit in the Electric Revenue Fund
on a parity with the 2026 Bonds eonsisting of: (i)the installment sale payments payable under the
instalhnent sale agreement relating to the 2015 RJPFA Electrie System Bonds (which are being refunded
with the proceeds of the 2026 Bonds); (ii)the 2017 City Electric System Refunding Bonds, (iii)the 2018
City Eleetric System Refunding Bonds and (iv) the installment sale payments payable under the
installment sale agreeinent relating to the 2025 RJPFA Eleetrie System Bonds. All of the outstanding
Parity Obligations bear interest at a fixed rate. The outstanding Parity Obligations are summarized in the
table below.
CITY OF REDDING
OUTSTANDING ELECTRIC SYSTEM INDEBTEDNESS
(as of June 2,2026)
Original Principal Principal Amount
Name of Issue Amount Outstanding
RJPFA Bonds
Electric System Revenue Bonds,2015 Series A....................... $ 37,955,000 $23,750,OOO�i>
Electric System Revenue Bonds,2025 Series A....................... 67,175,000 66,045,000
City Refunding Bonds
Electric System Refunding Revenue Bonds, Series 2017 ......... 55,785,000 22,945,000
Electric System Refunding Revenue Bonds, Series 2018 ......... 39,510,000 14,970,000
Total $200,425,000 $127,710,000
�'�To be refunded with proceeds of the 2026 Bonds. See"PLAN OF REFUNDING."
Source: City of Redding.
See also APPENDIX G —"DEBT SERVICE SCHEDULE" far information regarding the City's
annual debt service requirements for the outstanding Parity Obligations.
Subo�dinate Revolving Credit Agreement. The City and tbe Authority have entered into the
Revolving Credit Agreement with the Credit Bank, under which the Credit Bank has agreed to advance
funds to the Autharity, from time-to-time, in an amount up to $25,000,000, for the benefit of the City, in
order to provide liquidity to the City, if necessary. Such funds may be borrowed, paid down, and re-
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borrowed under the terms of the Revolving Credit Agreement through November 1, 2028, unless such
commitment by the Credit Bank to advance funds thereunder is earlier terminated pursuant to its terms.
The obligation of the Authority to repay borrowings advanced by the Credit Bank under the Revolving
Credit Agreement is evidenced by promissory notes of the Authority (which may be taxable or tax-
exempt, as applicable), which notes are payable from, and secured by, certain installment sale payments
required to be inade by the City to the Authority under the terms of the Subordinate Installment Sale
Agreement by and between the City and the Authority. The installment sale payments to be made by the
City under the Subordinate Installment Sale Agreement constitute Subordinate Obligations, payable from
Net Revenues of the City's Electric System subject and subordinate to the City's obligation to make
payments with respect to the 2026 Bonds and the other Parity Obligations.
Notes under the Revolving Credit Agreement bear interest at a fluctuating rate of interest per
annum equal to: (a)for taxable borrowings, the one-inonth secured overnight financing rate plus
0.11448% as determined in accordance with the Revolving Credit Agreement for each monthly interest
accrual period("Term SOFR")plus a spread of 0.75% (so long as the current credit ratings on the City's
senior lien Parity Obligations are maintained); and (b)for tax-exempt borrowings, 45% of the Term
SOFR plus a spread of 0.65% (so long as the current credit ratings on the City's senior lien Parity
Obligations are maintained). Any outstanding borrowings under the Revolving Credit Agreement which
have not been paid (which borrowings may be paid from, among other sources,proceeds of future long-
term financings of the City or the Authority) on or prior to the facility maturity date of the Revolving
Credit Agreement (i.e., currently Noveinber l, 2028, unless extended) will be automatically converted to
term loans on such date, so long as no default or event of default by the Authority or the City shall have
occurred and be continuing and all representations and warranties of the Authority and the City under the
Revolving Credit Agreement are true and correct in all inaterial respects as of such date. Any term loans
made by the Credit Bank under the Revolving Credit Agreement will bear interest at a fluctuating rate of
interest per annum equal to, for each day: (1) during the first 90 days commencing on the facility maturity
date, the greatest of(i) the Prime Rate in effect at such time plus 1.0%; (ii)the Federal Funds Rate in
effect at such time plus 2.0%; and (iii) 7.5% (such applicable rate, the `Base Rate"); and (2) during the
period commencing on the 91 st day after the facility maturity date to and including the 180tb date after the
facility maturity date, the Base Rate then in effect plus 1.0%; and (3) during the period commencing on
the 181s`day after the facility maturity date and thereafter,the Base Rate plus 2.0%. Principal on any such
term loans would be payable in quarterly installments over three years.
Under the Revolving Credit Agreement, upon a failure by the Authority to pay principal or
interest of any borrowing thereunder, a failure by the Authority or the City to perfonn or observe its
covenants, a default by the Authority or the City in the payment of other specified indebtedness payable
from Net Revenues of the Electric System, certain acts of bankruptcy or insolvency, or other specified
events of default (including if any of 1Vloody's, S&P or Fitch shall have assigned a credit rating below
`Baal" or `BBB+" to any of the senior lien Parity Obligations, or any credit rating assigned by any of
such rating agencies has been suspended or withdrawn for any credit related reason), the Credit Bank has
the right to terminate its commitment to extend further credit under the Revolving Credit Agreement and
may accelerate (depending on the event, seven days after the occurrence, or for certain events, only after
180 days' notice, or, in connection with certain acts of bankruptcy or insolvency or in the event of an
acceleration or right to cause an acceleration of Authority or Ci1y debt by another lender, credit enhancer
or swap counterparty, immediately) the Authority's obligation to repay any borrowings under the
Revolving Credit Agreement. Upon the occurrence and during the continuance of an event of default
under the Revolving Credit Agreement, outstanding borrowings thereunder may bear interest at a default
rate equal to the then applicable Base Rate plus a spread of 4.0%.
As of June 2, 2026, the aggregate principal amount of borrowings outstanding under the
Revolving Credit Agreement was $0.
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Take-or-Pay;Joint PoweNs Agency Obligations. As previously discussed, the City participates in
several joint powers agencies, including M-S-R PPA, M-S-R EA and TANC, which have issued joint
powers agency indebtedness to finance the costs of certain projects on behalf of their respective project
participants. The City does not participate in any NCPA-financed generation or transmission projects and
therefore has no obligation in connection with any NCPA indebtedness. Obligations of the City under its
agreements with respect to M-S-R PPA and TANC constitute Maintenance and Operation Costs of the
Electric System payable prior to any payments required to be made in connection with the 2026 Bonds
and the City's other Parity Obligations described above. Agreements with M-S-R PPA and TANC are on
a "take-or-pay" basis, which requires payments to be made whether or not projects are completed or
operable, or whether output from such projects is suspended, interrupted or terminated. These agreements
contain "step-up" provisions obligating the City to pay a share of the obligations of a defaulting
participant. As described herein, the City also participates in M-S-R EA and has certain payment
obligations in connection therewith which constitute Maintenance and Operation Costs of the City's
Electric System. However, the City's payment obligation to M-S-R EA is with respect to actual quantity
of natural gas delivered each month on a take-and-pay (rather than take-or-pay) basis. Responsibility for
bond repayment is non-recourse to the City. See "— Fuel Supply — M-S-R Energy AuthoNity — Gas
Prepay" above.
All of M-S-R PPA's debt was retired as of July l, 2022. The City's participation and share of
debt service obligation(without giving effect to any"step-up"provisions)for the TANC COTP project in
which it participates are shown in the following table.
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
OUTSTANDING DEBT OF JOINT POWERS AGENCIES
(Doliar Amounts in Millions)
(as of June 2,2026)
City Share of
Outstanding City Outstanding
Debt�i� Participation��� Debt
TANC
COTP Bonds....................................... $128.0 8.36%�3� $10.7
COTP Notes........................................ 91.7 10.04%�3? 9.2
Tota1 $219.7 $19.9
�i> Outstanding principal amount.
��> Participation obligation is subject to increase upon default of another project participant. Such increase
should not exceed,without prior written consent of a non-defauiting participant, an accumulated maximum
of 25%of such non-defaulting participant's original participation.
�3> As described herein, the City's obligation for debt service differs from its TANC COTP entitlement
participation percentage due to the varying shares of each TANC member-participant with respect to prior
bond issues refunded by the outstanding TANC bonds and the portion of bonds allocable to South of Tesla
transmission.
Source: City of Redding.
For the fiscal year ended June 30, 2025, the City's annual obligations for debt service in
connection with tbe TANC COTP joint powers agency obligations described in the table above
aggregated approximately $1.3 million. The City's share of debt service on such TANC COTP joint
powers agency obligations is expected to increase, with the City's annual obligations for debt service
costs estimated at approximately$13 million in fiscal year 2025-26 through fiscal year 2038-39 (the final
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maturity of the TANC COTP bonds). This projection does not include any future debt issuances that may
occur. The outstanding TANC COTP bonds included in the above table are fixed rate debt. As described
under"—Power Supply Resources—Joint Powers Agency Resources—Purchased Power, Generation and
Transmission — TANC California-Oregon Transmission Project," in August 2024, and extended in
August 2025, TANC authorized the issuance pursuant to the TANC Credit Agreement of up to $120.0
million of variable rate TANC short term notes to be outstanding at any time for the purpose of financing
certain improvements to the COTP on an interim basis. TANC short term notes issued pursuant to the
TANC Credit Agreement will mature in September 202'7 (with a corresponding amount proportionate to
the City's debt service obligations under the TANC Agreement due from the City), unless the
commitment of the lender under the TANC Credit Agreement is extended in accordance with its terms. It
is expected that TANC will refinance any TANC short term notes issued pursuant to the TANC Credit
Agreement from the proceeds of TANC bonds on or before their maturity date. The City will be obligated
to pay approximately 10.04% of TANC's debt service on any such future TANC indebtedness.
Cash Reserves
The City maintains cash reserves for a mm�ber of reasons, including operating cash requirements,
construction cash requirements, dealing with the cost impaets of dry hydroelectric conditions, gas and
electric market volatility, and to allow the City the flexibility to increase rates on a scheduled basis. When
circumstances warrant, the City has determined that it is appropriate to use a portion of its unrestricted
cash balanees and reserves to stabilize or subsidize its electric rates in the near term and to increase rates
when appropriate.
in November 2014, the City Council adopted the Electric Utility Financial Management Policy
(the `Blectric Utiliry Financial Management Policy"), which became effective January 1, 2015. The
Electrie Utility Financial Manageinent Poliey establishes guidelines for prudently managing the financial
profile of the Ciry electric utility, including a target of 1.80 times debt service coverage without use of
reserves; and a target of unrestricted r�serves sized at a minimum of 75 days' cash up to 140 days' cash.
The Electric Utility Finaneial Management Policy also recommends that the City Council consider
different rate adjustments under different conditions.
In Fiscal Year 2021-22, in alignment with the quarterly financial updates presented to the City
Couneil, the Electric Utility Department alloeated a portion of its eash reserves to help offset operational
costs for the fiscal year. The aetual cost of Redding Power Plant generation was higher than foreeast due
to an increase in load, the ongoing drought's impact on hydroelectric deliveries, the price of natural gas
due to the war in Ukraine, and the inclusion of gas purchases for wholesale energy sales. As of June 30,
2025, the level of unrestrieted operating eash reserves maintained by the Electric System was
approximately $45.2 million, representing 123 days' of operating cash on hand. The current minimum
unrestricted operating cash balance, as established by the Electric Utility Financial Management Policy,
would be approximately$27.5 million.
In addition to unrestricted operating cash reserves addressed in the Electric Utility Finaneial
Management Policy, the electric utility currently maintains a variety of other cash reserves, which
together with the Electric Utility Financial Management Policy reserve amount totaled approximately
$'73.0 million as of J�une 30, 2025. These available cash reserves (as reflected in the table entitled
"Summary of Operating Results"below) include certain set-aside amounts that are excluded for purposes
of the Electric Utility Financial Management Policy reserve calculation.
Colleetively, these reserves are designated to help insulate the City from market volatility. In
addition, the documents pursuant to whieh the City's outstanding Parity Obligations were issued or
incurred permit the use of unrestricted cash balances and reserves to satisfy the City's rate covenants with
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its bond holders. These reserves are not available for transfer to the City's general fund. The City Council
has a policy that limits in-lieu transfers to the general fund to 1% of the electric utility's asset base each
year. See"—Transfers to the General Fund"above.
City Investment Policy
Funds of the City which are not pledged for the payment of debt are invested by the City
Treasurer in accordance with the City's Investment Policy. Allowable investments under the Investment
Policy are those authorized by California Government Code Sections 53600 et seq. The Investment Policy
is reviewed and updated if necessary no less than annually. The current Investment Policy was most
recently approved by the City Council on July 30,2024.
The Investment Policy may be changed at any tiine at the discretion of the City Council (subject
to the State law provisions relating to authorized investments) and as the California Government Code is
amended. There can be no assurance, therefore,that the State law and/or the Investment Policy will not be
ainended in the future to allow for investments which are currently not permitted under such State law or
the Investment Policy, or that the objectives of the City with respect to investments will not change. All
investments, including those authorized by law from time to time for investments by public agencies,
contain a certain degree of risk. Such risks include, but are not limited to, a lower rate of return than
expected and loss or delayed receipt of principal. The occurrence of these events with respect amounts
held by the City could have a material adverse effect on the City's finances.
Summary of Condensed Operating Results and Fund Net Position Information
A surmnary of operating results and condensed statement of fund net position for the City's
Electric Utility Fund for the five Fiscal Years ended June 30, 2021 through June 30, 2025 is shown in the
following tables. The information for the Fiscal Years ended June 30, 2021 through June 30, 2025 was
prepared by the City on the basis of its audited financial infarination for such Fiscal Years. The following
table also sets forth debt service coverage ratios with respect to the City's outstanding Parity Obligations
for the years indicated. See also"—Cash Reserves"above.
[Remainder of page intentionally left blank.]
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CITY OF REDDING
ELECTRIC UTILITY FUND
SUMMARY OF OPERATING RESULTS
Fiscal Year Ended June 30,
2021 2022 2023 2024 2025
Revenue
Retail Revenue $ 126,419,111 $ 123,439,749 $ 131,400,744 $ 132,448,887 $ 144,112,668
Wholesale Revenue�'� 25,726,030 30,351,930 44,591,721 30,153,666 23,732,890
Misc. Other Income��> 6,1�4,975 5,994,359 23,374,061�13> �,190,474 8,536,730
Totai Revenue $ 158,320,116 $ 159,786,038 $ 199,366,526 $ 169,793,027 $ 176,382,288
Operating Expenses�3>
CostofPower��� $ 52,810,777 $ 62,709,514 $ 80,993,472 $ 53,212,490 $ 52,835,271
Maintenance Operations
and Adininistration
M-S-R Payments 4,486,291 4,530,947 321,609 59,560 387,832
TANC Payments 2,740,288 2,361,697 2,604,247 3,656,589 3,707,551
Other Operating Expenses 79,407,830 69,457,550 83,274,523 84,039,379 92,536,694
Add/(Less)OPEB Expenses�s> (737,360) (735,482) (1,136,682) (1,955,260) (2,519,875)
Add/(Less)Pension Expense�b> (7,535,001) 6,199,814 18,334 3,791,794 (2,010,656)
In Lieu Tax Payment
to General Fund�'> 6,097,590 5,464,000 6,246,800 7,270,600 6,614,200
Total Expenses $ 137,270,415 $ 149,9E�E�,040 $ 172,322,303 $ 150,075,152 $ 151,551,016
NetRevenue $ 21,049,701 $ 9,797,998 $ 27,044,223 � 19,717,875 $ 24,831,272
Available Reserves�8> $ 87,201,242 $ 71,970,574 $ 70,486,678 � 59,881,615 $ 72,996,573
In Lieu Tax Payment
to General Fund��� $ 6,097,590 $ 5,464,000 $ 6,246,800 � 7,270,600 $ 6,614,200
Funds Available for Debt Service $ 114,348,533 $ 87,232,571 $ 103,777,701 � 86,870,090 $ 104,442,045
Debt Service�9� $ 12,780,320 $ 12,785,570 $ 14,304,520 � 14,298,520 $ 14,299,520
Remaining Funds�10> $ 101,568,213 $ 74,447,001 $ 89,473,181 $ 72,571,570 $ 90,142,525
Debt Service Coverage�"� 8.95 6.82 7.25 6.08 7.30
Current Debt Service Coverage�'�� 1.65 0.77 1.89 1.38 1.74
�I� Primarily represents spot market sales of both electricity and natural gas.
��� Developer fees (available for debt service), Earnings on Electric Utility Fund balance plus Earnings on the Acquisition Fund,
Debt Service Fund and the Reserve Fund for the Ciry's then outstanding Parity Obligations.
�3> Excludes depreciation and amartization expenses.
�4> This fluctuates in relation to the volume of wholesale revenue in a given year.
�s> The City is not currently pre-funding its OPEB liability.In addition to the portion of the cost of current retiree heaith insurance
premiums allocable to the Electric Utility Department,the operating expenses of the Electric Utility Department for accounting
purposes include an amount necessary to reflect the Electric Utility Department's allocable share of the City's OPEB liability
as of the end of the Fiscal Year. This amount is excluded for calculation of debt service coverage as it is a non-cash item and
does not reduce cash available for debt payments. See"—Employees—Retiree Health Benefits"above.
�6� Represents adjustment for cash used for opErating activities related to pension expense. Certain changes in net pension
liabilities are recarded as deferred inflows of resources or deferred outflows of resources depending on the nature of the
change.
��� Represents 1% of installed assets with selected depreciation. Payments are made annually to the City general fund and are
reflected as Transfers Out on the Electric Utility Fund Statement of Revenues,Bxpenses and Changes in Net Assets.
�8> This represents the amount of unrestricted funds in the Electric Utility Fund available to pay Maintenance and Operation Costs
andlar annual debt service on the outstanding Parity Obligations. Available Reserves are taken into account for purposes of
coinpliance with the rate covenant under the documents pursuant to which the outstanding Parity Obligations were issued.
Available Reserves exclude electric utility funds held in a margin account as posted collateral. See"—Fuel Supply"above.
(Footnot�s to table continue on the next page)
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(Footnotes to table continued fi^om the prior page)
�9> Reflects installment sale payments under installment sale agreements and debt service on bonds comprising the
outstanding Parity Obligations. Tnterest payments are net of capitalized interest(if any)and final debt service payments
made froin bond reserve funds(if applicable).
�io� Available for capital expenditures and other lawful purposes.
�i'� Funds available for Debt Service divided by Debt Service.
�i�� Net Revenues divided by Debt Service. The documents pursuant to which the outstanding Parity Obligations were
issued have no requirement respecting debt service coverage from then current year's revenues. In certain past years,
the City has utilized a portion of its cash reserves to fund part of its annual costs. See"—Cash Reserves"above.
�13� Includes $15.9 million in one-time, unanticipated settlement proceeds received in April 2023 from the Central Valley
Project Improvement Act(CVPIA)litigation.
Source:City of Redding.
CITY OF REDDING
ELECTRIC UTILITY FUND
CONDENSED STATEMENT OF NET POSITION
Fiscai Year Ending June 30,
2021 2022 2023 2024 2025
Assets:
Net Urility Plant $195,970,192 $194,812,072 $197,472,790 $201,007,916 $209,044,205
Restricted Assets 11 643 12,030 17,827 47,122,825
Current Assets 116,91�,989 98,058,068 96,321,693 90,129,737 108,784,076
Non-Current Assets 23,703,977 26,078,543 25,485,377 26,626,743 27,219,480
Deferred Outflow
ofResources 22,901,1�3 25,070,370 37,354,666 44,609,555 34,196,586
Total Assets $359,494,352 $344,019,696 �356,646,556 $362,391,778 $426,367,172
Liabilities and Equity:
Current Liabiliries $ 25,212,444 $ 25,971,831 $ 27,107,920 $ 29,965,643 $ 32,041,631
Long Term LiabilitiEs 85,738,547 67,014,428 97,399,523 103,158,884 99,252,833
Retained Earnings�'> 133,516,316 130,373,590 135,612,411 145,811,761 155,136,165
Long TErm Debt 114,216,448 103,408,368 94,995,093 82,417,528 138,662,977
Deferred Inflows
of Resources 810,59� 17,251,479 1,531,609 1,037,962 1,273,566
Total Liabilities
and Equity $359,494,352 $344,019,696 $356,646,556 $362,391,778 $426,36�,1�2
�l> Retained Earnings inciude contributed capital which represents improvements built by developers at no cost to the
Electric System and amounts contributed by other municipal departments.
SouNce: City of Redding Finance Department.
Management's Discussion of Summary of Fiscal Year 2024-25 Operating Results
As reflected in the table above entitled "Summary of Operating Results," in Fiscal Year 2025,
Electric System retail sales revenues were approximately $144.1 million, representing an increase of
approximately$11.7 million, as compared to the prior year. This reflects a stable retail customer base and
the 4.0%rate increase effective on January 1, 2025. Wholesale sales revenues declined by approximately
$6.4 million (approximately 21.3%). Total expenses increased by approximately $1.5 inillion
(approximately 1%). Overall, Available Reserves of the electric utility increased by approximately $13.1
million from $59.9 million as of June 30, 2024 to $'73 million as of June 30, 2025. The increase of
approximately $13.1 million in the electric utility's aggregate Available Reserves from June 30, 2024, to
June 30, 2025,was primarily due to reimbursement of previously incurred capital expenditures with Bond
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proceeds. "Available Reserves" as defined in the indentures and installment sale agreements relating to
the outstanding Parity Obligations include, among other things, custoiner service deposits and reserves,
public benefits program funds,the power plant maintenance fund, and greenhouse gas allowance receipts.
Litigation Affecting the Electric System
At any given time, including the present, there are certain other claims and disputes, including
those currently in litigation, that arise in the normal course of the Electric Utility Departinent's activities.
Such matters could, if determined adversely to the City, affect expenditures by the Electric Utility
Department, and in some cases,its Electric Revenues. The management of the Electric Utility Department
and the Redding CiLy Attorney are of the opinion that no pending actions are likely to have a material
adverse effect on the City's ability to make the payments due in connection with the 2026 Bonds. See also
"LITIGATION."
In addition, from time-to-tiine, there are ongoing proceedings that involve projects in which the
City has an interest and which comprise a portion of the current resource portfolio of the City's Electric
Utility. Although the City is generally not a party to such litigation, the outcome of such proceedings may
impact the costs and operations of the affected project. The City is not aware of any such presently
ongoing proceedings that, if determined adversely, wouid be expected to materially adversely affect the
financial position or operations of the Electric Utility.
RATE REGULATION
The City sets rates, fees and charges for electric service. The authority of the City to impose and
collect rates and charges for electric power and energy sold and delivered is not subject to the general
regulatory jurisdiction of the California Public Utilities Commission (the "CPU�C"), and currently
neither the CPUC nor any other regulatory authority of the State of California nor FERC approves such
rates and charges. It is possible that future legislative and/or regulatory changes could subject the rates
and/or service area of the City to the jurisdiction of the CPUC or to other limitations or requirements. See
also"CONSTITUTIONAL LIMITATIONS TN CALIFORNIA ON TAXES AND FEES" for a discussion
of certain voter-approved constitutional measures affecting the imposition of fees and charges by
governmental agencies in the State.
FERC potentially could assert jurisdietion over rates of licensees of hydroelectrie projects and
customers of such licensees under Part I of the Federal Power Act, although it as a practical matter has not
exercised or sought to exercise such jurisdiction to modify rates that would legitimately be charged. Even
if it did assert sueh jurisdiction, the City's small hydroelectrie projeet represents only approximately one
percent of the available capacity of the City's total power supply resources.
Under provisions of the Federal Power Act, FERC has the authority, under certain circumstances
and pursuant to eertain procedures, to order certain utilities (munieipal, distribution cooperative or
otherwise) to provide transmission access to others at FERC-approved rates. See"CERTAIN FACTORS
AFFECTING THE ELECTRIC UTILITY INDUSTRY."
The CEC is authorized to evaluate rate policies for electric energy as related to the goals of the
Energy Resources Conservation and Development Act and to make recommendations to the Governor,
the Legislature and loeal,publicly-owned eleetrie utilities("POUs").
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CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRI'
The following discussion of legislative, regulatory and other factors affecting the electric utility
industry should be considered when evaluating the Electric System and considering an investment in the
2026 Bonds. This discussion does not purport to be comprehensive or definitive, and these matters are
subject to change subsequent to the date hereo£ The electric industry has historically been subject to
continuing legislative and administrative reform. The City cannot predict at this time whether any
additional legislation or rules will be enacted which will affect the Electric System's fmances or
operations, but the impacts could be significant. Extensive information on the electric utility industry is
available from the legislative and regulatory bodies and other sources in the public domain, and potential
purchasers of the 2026 Bonds should obtain and review such infarmation. Such information is not
incorporated herein by reference.
The election of new administrations, including the President of the United States, could also
impact substantially the current environmental standards and regulations and other matters described
herein. For example, upon taking office in January 2025, President Trump issued a series of executive
orders affecting executive actions and policies implemented by the prior adminisxration. One such
executive order revoked a number of executive actions taken by the Biden administration, including
revoking certain executive orders of the Biden administration relating to climate change and clean energy,
requiring federal agencies to review all federal govern�nent actions taken pursuant to the revoked orders
and to take necessary steps to rescind, replace or amend such actions. In addition, the President issued a
separate executive order directing the heads of all federal agencies to review a11 agency actions affecting
the development of domestic energy resources, such as oil, natural gas, coal, hydropower, biofuels,
critical mineral, and nuclear energy, and within 30 days of identifying any agency action that unduly
burdens the production of domestic energy resources, to develop and begin action plans to rescind or
revise the agency actions. Further, the agencies were directed to notify the Attorney General so that
appropriate action may be taken in any pending litigation, including the request of a stay, related to the
identified agency action. A number of legislative, regulatory and other actions have been taken by federal
agencies pursuant to such executive orders. Certain of these actions have been the subject of judicial
challenges. The ultimate outcome of these and any other executive orders that the President may issue, or
other actions Congress or any federal agencies may take, relating to federal energy policy is not yet
known. See also "— Federal Energy and Environmental Policies and Legislation — Inflation Reduction
AcP'and"—Changing Laws and Requirements Generally."
Federal Energy and Environmental Policies and Legislation
Energy PoZicy Act of 2005. Although the City is exempt from most federal rate regulation
pursuant to Seetion 201(f) of the Federal Power Aet(see "RATE REGULATION"), EPAet 2005 imposed
speeifie exceptions. In partieular, FERC was given authority over the behavior of market participants.
Under FERC's authority it can impose penalties on any seller for using a manipulative or deceptive
device, including market manipulation, in eonnection with the purchase or sale of energy or of
transmission service. The Commodity Futures Trading Commission ("CFTC") also has jurisdietion to
prohibit certain types of market manipulation or deceptive claims under the Commodity Exchange Act.
EPAct 2005 authorized FERC to issue permits to construct or modify transmission facilities
located in a national interest electric transmission corridor if FERC determines that the statutory
conditions are met. EPAct 2005 also required the ereation of an electric reliability arganization ("ERO")
to establish and enforce, under FERC supervision, mandatory Reliability Standards to increase system
reliability and minimize blackouts. The Reliability Standards apply to users, owners and operators of the
Bulk-Power System, as more specifically set forth in each Reliability Standard. In February 2006, FERC
issued Order 672, which certified NERC as the ERO. Many Reliability Standards have since been
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approved by FERC. Such Reliability Standards pertain not only to the planning, operations, and
maintenance of Bulk-Power System facilities, but also to cyber and physical security of systems that
could affect the reliable operation of the electric grid. The Reliability Standards are frequently being
amended to address emerging reliability issues.
The ERO or the entities to which NERC has delegated enforcement authority through an
agreement approved by FERC ("Regional Entities"), such as the WECC, may enforce the Reliability
Standards, subject to FERC oversight, or FERC may independently enforce them. Potential monetary
sanctions include fines in excess of$1 million per violation per day. FERC Order 693 further provided
the ERO and Regional Entities with the discretion necessary to assess penalties for such violations, while
also having discretion to calculate a penalty without collecting the penalty if circumstances warrant.
Federal Regulation of Transmission Access. EPAct 2005 authorizes FERC to compel "open
access"to the transmission systems of certain utilities that are not generally regulated by FERC,including
municipal utilities if the utility sells inore than four million MWhs of electricity per year. Under open
access, a transmission provider must allow all customers to use the system under standardized rates, terms
and conditions of serviee.
FERC Order No. 888 requires the provision of open access transmission services on a
nondiseriminatory basis by all "jurisdietional utilities" (which, by definition, does not include municipal
entities like the City) by requiring all such utilities to fi1e Open Access Transmission Tariffs (OATTs, as
defined above). Order No. 888 also requires "non jurisdictional utilities" (which, by definition, does
include the City) that purchase transmission services from a jurisdictional utility under an open access
tariff and that owns or controls transmission facilities to provide open access service to the jurisdictional
utility under terms that are comparable to the service that the non jurisdictional utility provides itself.
Section 211A of the EPAct 2005 authorizes, but does not require, FERC to order unregulated
xransmission utilities to provide transmission services. Specifically, FERC may require an unregulated
xransmitting utility to provide access to their transmission facilities (1) at rates that are comparable to
those that the unregulated transmitting utility charges to itself; and (2) on terms and conditions (not
relating to rates) that are comparable to those under which the unregulated transmitting utility provides
transmission serviees to itself that are not unduly discriminatory or preferential.
On February 16, 200'7, FERC issued Order 890, whieh coneluded that reform of its pro forma
OATT was neeessary to reduee the potential for undue discrimination and provide clarity in the
obligations of transmission providers and customers. Signi�cantly, in Order 890 FERC stated that it will
implement its authority under Section 2llA with respect to unregulated transmitting utilities on a case-
by-case basis and retain the current reciprocity provisions.
On July 21, 2011, FERC issued Order 1000, which among other things requires public utility
(jurisdictional) transmission providers to participate in a regional transmission planning process that
produees a regional transinission plan and that ineorporates a regional and inter-regional cost alloeation
methodology. Further, FERC states that it has the authority to allocate costs to benefieiaries of
transmission services, even in the absence of a contractual relationship between the owner of the
transmission faeilities and the benefieiary. Under EPAct 2005, FERC may not require munieipal utilities
to join regional transmission organizations, in whieh participating utilities allow an independent entity to
oversee operation of the utilities' transtnission facilities. FERC has stated, however, that FERC expects
such utilities to participate in the regional processes for transmission planning and that FERC will pursue
associated complaints against such utilities on a case-by-case basis.
On May 13, 2024, FERC issued Order 1920 to reform the planning of the nation's transmission
system as well as the allocation of costs for new transmission projects. Order 1920, among other things,
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requires public utility(jurisdictional)transmission providers to conduct and periodically update long-term
regional transmission planning to anticipate future needs, consider a broad set of benefits when planning
new facilities, identify opportunities to modify in-kind replacement of existing transmission facilities to
increase their transfer capability, propose methods of cost allocation to pay for selected long-term
regional transmission facilities, and increase transparency regarding local transmission planning
information. Order 1920 expands the role of states throughout the process of planning, selecting and
determining how to pay for new transmission facilities. On November 21, 2024, FERC issued Order No.
1920-A, revising its original Order 1920 in response to numerous requests for rehearing and clarification.
The revisions to Order 1920 provide state regulators with a larger role in the long-term regional
transmission planning process, particularly in shaping scenario development and cost allocation, by
requiring transmission providers to inciude state input about how future scenarios in the long-term
regional transmission planning will be developed and to include any state-agreed cost allocation proposals
in their compliance plans. The revised rule also eliminates the requirement for transmission planners to
use several recommended economic and reliability costs factors when evaluating potential long-term
xransmission projects. The City is evaluating the implications of Order 1920 with respect to the operations
of the Electric System.
FedeNal Policy on Cybersecurity. In February 2013, then-President Obama issued Executive
Order 13636 "Improving Critical Infrastructure Cybersecurity" (the"Cybersecurity Order"). Among other
things, the Cybersecurity Order called for improved information sharing and processing of security
clearances for owners and operators of critical infrastructure. The Cybersecurity Order further required
the Secretary of Commerce to direct the National Institute of Standards and Technology("1VIST") to lead
the development of a framework ("Framework") to reduce cyber risks to critical infrastructure. The
voluntary Framework continues to be updated and improved as industry provides feedback on
implementation. The City will continue to monitor developments in order to help ensure that the
Framework continues to recognize the existing cybersecurity efforts in the electric sector, and does not
undermine them by creating duplicative or inconsistent processes.
The Cybersecurity Information Sharing Act of 2015 was signed into law in December 2015. It
created an industry-supported, voluntary cybersecurity information sharing program to facilitate the
secure sharing of cyber-related threat information among both public and private sector entities. The City
participates in sharing and receiving information about cybersecurity threats in real time through several
hubs, including the Electricity Information Sharing and Analysis Center (E-ISAC) and the National
Cybersecurity and Communication Integration Center, as tools to actively manage risk related to potential
cyber intrusion. The Cybersecurity Information Sharing Act expired on September 30, 2025, and efforts
to reauthorize it have not yet resulted in an eXtension or reauthorization.
Regulatory Actions Under the Clean Air �4ct. The United States Environmental Protection
Agency (the "EPA") regulates greenhouse gas ("GHG") emissions under eXisting law by imposing
monitoring and reporting requirements, and through its permitting programs. Like other air pollutants,
GHGs are regulated under the Clean Air Act through the Prevention of Significant Deterioration("PSD")
Permit Program and the Title V Permit Program. A PSD permit is required before commencement of
construction of new major stationary sources or major modifications of a major stationary source and
requires best available control technologies (`BACT") to control emissions at a facility. Title V permits
are operating permits for major sources that consolidate all C1ean Air Act requirements (arising, for
example, under the Acid Rain, New Source Performance Standards, National Emission Standards for
Hazardous Air Pollutants, and/or PSD programs) into a single document and the permit process provides
for review of the documents by the EPA, state agencies and the public. GHGs from major natural gas-
fired facilities are regulated under both permitting programs through performance standards imposing
efficiency and emissions standards.
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In May 2023, the EPA proposed new regulations under the Clean Air Act that would establish
greenhouse gas einission limits, based on pollution controi technology or lower-carbon fuels, for new gas
plants, existing gas plants, and existing coal plants, as specified. In February 2024, the EPA announced
that it would remove the elements that would have applied to existing natural gas-fired power plants from
the final version of the rule. Instead, the EPA stated that it would commence a new rulemaking process
that would apply to existing natural gas-fired plants and regulate additional pollutants. In Apri12024, the
EPA finalized the rule establishing carbon dioxide ("CO2") emissions standaxds and guidelines for newly
built and reconstructed stationary combustion turbines (generally natural gas-fired) and existing and
modified fossil fuel-fired steam generating units (generaliy coal-fired). The finai rule identified a standard
of performance reflecting the application of best systeins for emissions reduction (BSER), taking into
account costs, energy requirements and other statutory factors. Under the final rule, emissions standards
and guidelines were established for different subcategories of power plants according to unit
characteristics such as their generating technology, capacity, level of operations, and anticipated
remaining operational life of the unit.
In June 2025,the EPA proposed to repeal all GHG emissions standards for fossil-fuel fired power
plants under Section 111 of the Clean Air Act, relating to emissions from new and existing stationary
sources of air pollution. The EPA is also proposing, as an alternative, to repeal a narrower set of
requirements that include the emission guidelines for existing fossil fuel-fired steam generating units, the
carbon capture and sequestration/storage ("CCS")-based standards for coal-fired steam generating units
undertaking a large modification, and the CCS-based standards for new base load stationary combustion
turbines.
In February 2026, the EPA issued a final rule rescinding a greenhouse gas endangerment
finding as it applies to regulating emissions from new motor vehicles and new motor vehicle engines.
This is expected to result in the EPA removing greenhouse gas regulations for light- medium-, and
heavy-duty on-highway vehicles. The repeal of such endangerment finding itself does not directly
impact existing regulations. Changing existing regulations will require separate actions. However, it
is widely expected that the EPA's action will trigger multiple lawsuits regarding both the finding
itself and air emissions regulations related to it. These issues are expected to be litigated for some
time. The EPA's action does not apply directly to stationary sources, including oil and gas facilities
and power plants. While the action is targeted at vehicles (i.e., mobile sources), this EPA action
could have broader ramifications in the future, including impacts related to how and when the EPA
does or does not regulate other sources of greenhouse gases.
Inflation Reduction Ac� On August 16, 2022, then President Biden signed the Inflation
Reduction Act of 2022 (the "IRA"). The IRA introduced a large amount of funding and grants for
govermnental and non-profit organizations. Among the inost signifieant energy-related grants are grants
for"zero-emissions technologies"and other GHG reduction activities as determined the EPA. Pursuant to
the IRA, public power utilities and other tax-exempt entities are also given aeeess to refundable direct
payment tax eredits. Among the energy-related tax credits that may be available if eertain requirements
are met are a clean hydrogen production tax credit, a biogas and energy storage credit, and enhancements
to the credit for carbon capture. The IRA also expanded and extended the renewable electricity production
tax credit and tbe investment tax credits for renewable energy sources.
On July 4, 2025, the President signed the "One Big Beautiful Bill Act," that is expected to
significantly impact the IRA's clean energy tax credits, effectively accelerating their repeal or
significantly restricting them, especially those related to electric vehicles and clean electricity production.
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State Legislation and Regulatory Proceedings
A number of bi11s affecting the electric utility industry have been introduced or enacted by the
California Legislature in recent years. In general, these bills reflect California cli�nate policy
developments by regulating GHG emissions and providing for greater investment in energy ef�ciency
and environmentally friendly generation and storage alternatives,principally through more stringent RPS
requirements and more aggressive emissions reduction programs to combat the effects of climate change.
Legislation enacted in recent years has also focused on addressing issues relating to wildf'�re risks and
occurrences in California, including imposing certain requirements on electric utilities in connection with
planning for and�nitigating such occurrences and risks. Set forth below is a brief summary of certain of
these bills and regulatory proceedings.
Calif�rnia Climate ProgNam. In September 2006, then-Governor Arnold Schwarzenegger signed
into law Assembly Bill 32, the California Global Warming Solutions Act of 2006 ("AB 32" or the
"Global Warming Solutions Act"). This law, which became effective on January 1, 2007,required CARB
to adopt enforceable GHG emission limits and emission reduction measures in order to reduce GHG
emissions from within the State to 1990 levels by 2020. In September 2016, then-Governor Jerry Brown
signed into law Senate Bill 32 ("SB 32"), an amendment to the Global Warming Solutions Act, that
requires CARB to take such actions to ensure that statewide GHG emissions from within the State are
reduced to at least 40%below 1990 levels by 2030.
SB 350, the Clean Energy and Pollution Reduction Act of 2015, signed into law by then-
Governor Brown in October 2015, ainong other things, requires CARB, in consultation with the CPUC
and the CEC, to establish 2030 GHG emission targets for each electric utility in the State. SB 350 was
superseded by SB 100, adopted in 2018, which set a 100% zero-carbon by 2045 requirement and
accelerated RPS targets to 50%by 2025 and 60%by 2030. At present, these targets are non-binding, and
primarily intended to help the State measure progress toward the 2030 statewide goal outlined in SB 32.
The targets, however, are an input to the development of the Integrated Resource Plans that are required
of the State's utilities with over '700 GWh annual retail sales, which includes the City. See "— California
Renewables Portfolio Standard"below.
The Global Warming Solutions Act established an annual mandatory reporting requirement for a11
investor-owned utilities ("IOUs"), POUs, and other load-serving entities (electric utilities providing
energy to end-use customers) to inventory and report GHG emissions to CARB. It required CARB to
adopt regulations for si�,mi�cant GHG emission sources and gave CARB the authority to enforce such
regulations beginning in 2012. The City is complying with the applicable reporting requirements under
the Global Warming Solutions Act.
In September 2022, Governor Newsom signed into law Assembly Bill 1279 ("AB 1279"), which
became effective on January 1, 2023, and established additional GHG emission reduction goals. AB 1279
declares the policy of the State both to achieve net-zero GHG emissions as soon as possible, but no later
than 2045, and achieve and maintain net negative GHG emissions thereafter, and to ensure that by 2045,
Statewide anthropogenic GHG emissions are reduced to at least 85% below the 1990 levels. Under AB
12'79, "net zero GHG emissions" means emissions of GHGs to the atmosphere are balanced by removals
of GHG emissions over a period of time. The bill directs CARB to ensure that its scoping plan identifies
and recommends measures to achieve these policy goals. The State Legislative Analyst's Office is
required to conduct an independent assessment of progress toward the bill's objectives every two years
and to make its findings available to the public.
In September 2022, Senate Bill 1020 ("SB 1020"), the Clean Energy, Jobs, and Affordability Act
of 2022, was signed into law. Under SB 100, it is the policy of the state that eligible renewable energy
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resources and zero-carbon resources supply 100% of all retail sales of electricity to California end-use
customers and 100% of electricity procured to serve all state agencies by Deceinber 31, 2045. SB 1020
revised the state policy to provide that eligible renewable energy resources and zero-carbon resources
supply 90% of all retail sales of electricity to California end-use customers by December 31, 2035, 95%
of by December 31, 2040, 100% by December 31, 2045, and 100% of electricity procured to serve all
state agencies by December 31,2035,as specified.
Cap-and-Ti^ade Regulations. CARB has implemented the Global Warming Solutions Act
through a series of regulations (collectively referred to as the "Cap-and-Trade Regulations")that imposed
declining aggregate emissions li�nitations on entities in California that meet �ninunum reporting
thresholds. The Cap-and-Trade Regulations require all regulated entities, including the City, to report
annual GHG emissions and to obtain and submit to CARB compliance instruments (allowances and/or
offsets) that represent GHG emissions related to its industrial processes within the State. For electric
utilities, this includes generation and GHG einissions associated with imported electricity from out-of-
state resources. Like other electric utilities, the City receives an administrative allocation of allowances
for compliance. Entities that emit GHGs at levels above those for which they receive administrative
allocations, if any, must purchase the additional allowances they require at quarterly CARB auctions or
from other covered entities with surplus allowances.
In July 2017, then-Governor Brown signed into law Assembly Bi11 398 ("AB 398"), extending
the Cap-and-Trade Regulations from 2021 to 2030. The bill passed both chambers with a 2/3
supermajority vote, which protects the legislation from certain legal challenges. Under AB 398, CARB
was directed to address the following: establish a price ceiling, offer non-tradeable allowances at two
price containment points below the price ceiling,transfer current vintages unsold for more than 24 months
to the allowance price containment reserve, evaluate and address allowance over-allocation concerns, set
industry assistance factors for allowance allocation, and establish allowance banking rules. Under AB
398, CARB was directed to include cost containment provisions to keep allowance prices from rising too
high and pushing business expansion outside of the state (referred to as"leakage"). AB 398 was passed in
conjunction with AB 61'7, which strengthens the monitoring of criteria air pollutants and toxic air
contaminants in 1oca1 communities. Amendments to the Cap-and-Trade Regulations to reflect the
requirements of AB 398 were adopted by CARB and went into effect on April 1,2019.
In September 2025,AB 120'7 was signed into law. AB 1207 reauthorizes and extends California's
cap-and-trade program from 2030 to 2045 (which program is to be now referred to as the California Cap-
and-Invest Program pursuant to the provisions of AB 120'7).
At this time, the City is unable to predict the full impact of the Cap-and-Trade Regulations over
the long-term on the City's Electric System, on the electric utility industry generally, or whether any
additional changes to the adopted pro�,�ram will be made. Since the advent of the cap-and-trade program in
2012, regulations by CARB have provided the electric sector, including the City on behalf of its
ratepayers, with sufficient allocated GHG allowances or credits to cover existing operations in meeting
retail load obligations. The City may bank allocated allowances in its compliance account to satisfy a
portion of its ongoing compliance obligations. The City can buy or sell allowances in the quarterly
auctions or on the bilateral market to meet its additional compliance obligations. Currently, the City is
sufficiently positioned for compliance.
CARB is in the process of developing amendments to the Cap-and-Trade Regulations. The scope
of the potential amendments under consideration by CARB includes, among other things, using an
updated integrated energy forecast to adjust (reduce) allowance allocations through 2030, reducing the
total number of budgeted allowances starting in 2027, and requiring POUs to consign al1 allocated
allowances to auction (similar to investor-owned utilities). The City could be adversely affected if its
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GHG emissions exceed its allocated allowances, which would require additional compliance instruments
to be purchased from the market to meet retail load compliance obligations. Com�nents on the proposai
are due March 9, 2026, after which it is anticipated that there will be additional "15-day changes"
proposed by CARB, before a targeted May 2$, 2026 hearing to consider the proposal. CARB is aiming to
finalize the rulemaking by September 2026, in time to influence allowance allocation for 2027. The City
is monitoring developments in connection with this proposed ruleinaking. Although the regulations from
CARB are not yet finalized, the current proposal suggests a potential impact of approximately $2.4
million through 2030.
GHG Emissions Performance Standard and Financial Commitment Limits. Senate Bill 1368
("SB 1368")became effective as law on January 1, 2007. SB 1368 provided for an emission performance
standard (`BPS") restricting new investments in baseload electric generating resources exceeding a
specified rate of GHG emissions. SB 1368 allows the CEC to establish a regulatory framework to enforce
the EPS for POUs. Pursuant to SB 1368, the CEC adopted a GHG EPS for electric generating facilities of
1,100 pounds of CO2 per MWh for"covered procurements"by POUs. SB 1368 also prohibits POUs from
making any "long-term financial commitment" in connection with "baseload generation" that does not
satisfy the EPS. GeneraIly, a "long-tenn financial commitment" is any new or renewed power purchase
agreement with a term of five years or more, the purchase of an interest in a new power plant, or any
investment(other than routine maintenance)in an existing power plant that extends the life of the plant by
more than five years or results in an increase in its rated capacity. `Baseload generation" means a power
plant that is intended to operate at an annualized capacity factor of 60% or more.
As modified, the EPS regulations require a POU to post a public meeting notice at which its
governing board will consider any expenditure over $2.5 million to meet environmental regulatory
requirements at a non-EPS-compliant baseload facility. In addition, each POU is required to file an annual
notice identifying all investments over $2.5 million that it anticipates making during the subsequent 12
months on non-EPS-compliant baseload facilities to comply with environmental regulatory requirements.
This requirement is waived for any POU that has entered into a binding agreement to divest within five
years of all baseload facilities exceeding the EPS. CEC staff has confirmed that the$2.5 million threshold
applies to an individual investment by each utility, and not the combined investment of a11 participants in
a proj ect.
Any future procurement or investment by the City in a baseload generating resource of greater
than 10 MW or with a term of five years ar more (or extending the life of an existing plant by more than
five years)will be subject to the requirements of SB 1368.
Energy Procurement and Efftciency Reporting. Senate Bill 103'7 ("SB 103'7") was signed into
law by then-Governor Schwarzenegger in September 2005. It requires that each POU, including the City,
first acquire all available energy efficiency, demand reduction, and renewable resources that are cost-
effective,reliable, and feasible prior to procuring new energy generation resources. SB 1037 also requires
each POU to report annually to its customers and to the CEC its investment in energy efficieney and
demand reduetion programs. The City is complying with these ongoing reporting requirements.
Further, Assembly Bi112021 ("AB 2021"), signed into law by then-Governor Schwarzenegger in
Septeinber 2006, requires that POUs establish, report, and explain the basis of the annual energy
efficiency and demand reduction targets by June 1, 200'7, and every three years thereafter for a ten-year
horizon. A subsequent amendment, Assembly Bill 2227, extended the reporting timeframe from three to
four years. The City is complying with these ongoing reporting requirements. The information obtained
from the POUs is being used by the CEC to present progress made by the State to double energy
efficiency savings in electricity and natural gas final end uses by 2030, to the extent doing so is cost-
effective, feasible, and does not adversely impact public health and safety, as prescribed in SB 350.
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California Renewables PoNtfolio Standard. California's legislature and executive branch have
been active in promoting increasingly stringent renewable energy procurement requirements since 2002.
Early efforts established a renewables portfolio standard (RPS) of 20% of renewable electricity
generation by 2017. Since then, both legislative and executive branch initiatives have raised that standard
in multiple phases.
SBX1-2, the California Renewable Energy Resources Act, was signed into law by then-Governor
Brown in April 2011. SBX1-2 required each POU to adopt and implement a renewable energy resource
procurement plan and establish targets for specified compliance periods for the procurement of at least the
following amounts of electricity products from eligible renewable energy resources (which could include
RECs) as a proportion of total kilowatt hours sold to the utility's retail end-use customers: (i) over the
2011-2013 compliance period, an average of 20% of retail sales from January 1, 2011 to December 31,
2013, inclusive; (ii) over the 2014-2016 compliance period, a total equal to 20% of 2014 retail sales, 20%
of 2015 retail sales, and 25% of 2016 retail sales; (iii) over the 2017-2020 compliance period, a total
equal to 27% of 2017 retail sales, 29% of 2018 retail sales, 31% of 2019 retail sales, and 33% of 2020
retail sales; and (iv) for 2021 and each subsequent year, 33% of retail sales for the applicable year. The
governing boards of POUs are responsible for implementing the requireinents of SBX1-2,rather than the
CPUC, as is the case for the IOUs. In addition, the CEC was given certain enforcement authority for
POUs and CARB was given the authority to set penalties. The CEC developed detailed rules to
impleinent SBX1-2, and has adopted regulations for the enforcement of the RPS program requirements
for POUs,which regulations have been subsequently amended from time to time.
SB 350, the Clean Energy and Pollution Reduction Act of 2015, as enacted, establishes an RPS
target of 50% by December 31, 2030, for the amount of electricity generated and sold to retail customers
from eligible renewable energy resources for retail sellers and POUs, including interim targets of(i) 40%
of retail sales from eligible renewable energy resources by December 31, 2024; (ii) 45% of retail sales
from eligible renewable energy resources by December 31, 202'7; and (iii) 50% of retail sales from
eligible renewable energy resources by December 31,2030.
SB 100, signed into law in 2018, supersedes and builds upon the goals of SB 350 by raising the
RPS target to 60%by December 31, 2030, and establishes a new policy that a11 electricity in California be
carbon-free by 2045. This policy effectively accelerates and expands the renewable energy targets,
requiring retail sellers and POUs to achieve 60% by December 31, 2030. The passage of SB 100
significantly increases the com�pliance requirements under the RPS and reinforces the long-term
commitment to achieving a carbon-free electricity grid statewide.
SB 350 requires each retail seller of electricity (including IOUs, most POUs above a certain size
threshold, community choice aggregators, and energy service providers) to provide a renewable ener�,ry
procurement plan on an annual basis, and a11 POUs with demand greater than 700 gigawatt hours to
develop an integrated resource plan ("IRP") at least onee every five years, commencing no later than
January l, 2019. The City is subjeet to this requirement. As required in the statute, all IRPs are to be
submitted to the CEC, including information outlined in the CEC's POU 1RP Guidelines. The City f'11ed
its first IRP with the CEC in April 2019. In accordance with SB 350, the City's 2024 TRP was approved
by the City Council in November 2023 and filed with the CEC by April 30, 2024. The CEC formally
approved the City's 2024 IRP at a public hearing in 1VIay 2025.
In December 2020, the CEC adopted regulations to update its RPS enforcement procedures for
POUs, including to update regulations amended by both SB 350 and SB 100, among other enacted bills.
This includes implementing a provision relating to the long-term procurement of renewable resources
which requires, beginning January 1, 2021, that at least 65% of renewable procurement must be for a
duration of 10 years or more. The regulations implement the new RPS procurement requirements for the
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compliance periods between 2021 and 2030, establish soft procurement targets for the intervening years
of the coinpliance periods to demonstrate reasonable progress in meeting the RPS procurement target for
the compliance periods, and establish three-year compliance periods beginning after 2030. The
regulations also define requirements for 10-year procurement contracts for purposes of satisfying the
long-term procurement requirement.
Senate Bill 1020("SB 1020"), the Clean Energy, Jobs, and Affordability Act of 2022,was signed
into law by Governor Newsom in September 2022 and became effective on January 1, 2023. SB 1020
revises SB 100's State policy on eligible renewable energy resources and zero-carbon resources supply,
and establishes that it is the policy of the State that eligible renewable energy resources and zero-carbon
resources supply (i) 90%of all retail sales of electricity to California end-use custoiners by December 31,
2035, (ii) 95% of all retail sales of electricity to California end-use customers by December 31, 2040,
(iii) 100% of all retail sales of electricity to California end-use customers by Deceinber 31, 2045, and
(iv) 100% of electricity procured to serve all state agencies by December 31,2035.
Legislation Relating to Wildfires; Related Risks. Senate Bi11 1024 ("SB 1028") was signed into
law by then-Governor Brown in September 2016. SB 102� requires that each POU and each electric
cooperative in the State construct, inaintain, and operate its electrical lines and equipment in a manner
that will ininimize the risk of catastrophic wildfire posed by those electrical lines and equipment. SB 1028
required the governing board of each POU to determine,based on historical fire data and local conditions,
and in consultation with the fire departinents or other entities responsible for the control of wildfires
within the geographical area where the utility's overhead electrical lines and equipment are located,
whether any portion of that geographical area has a significant risk of wild�re resulting from those
elecxrical lines and equipment, and if so, to present for its governing board approval wildf'ire mitigation
measures the utility intends to undertake to minimize the risk of its overhead electrical lines and
equipment causing a catastrophic wildfire.
SB 901 was signed into law by then-Governor Brown in September 2018. SB 901 amends certain
provisions of SB 1028 requiring POUs and electric cooperatives to prepare wildfire mitigation measures
if the utilities' overhead electrical lines and equipment are located in an area that has a significant risk of
wild�re resulting from those electrical lines and equipment. Under SB 901, each POU or electric
cooperative is required to prepare before January 1, 2020 and annually thereafter, a wildfire mitigation
plan. SB 901 requires specified information and elements to be considered as necessary, at ininimum, in
the wildfire mitigation plan. The POU or electric cooperative is required to present each wildfire
mitigation plan in an appropriately noticed public meeting, and to accept comments on its wildfire
mitigation plan from the public, other local and state agencies, and interested parties. In addition, SB 901
requires the POU or electric cooperative to contract with a qualified independent evaluator with
experience in assessing the safe operation of electrical infrastructure to review and assess the
comprehensiveness of its wildfire mitigation plan. The report of the independent evaluator is to be made
available to the public and to be presented at a public meeting of the POU's governing board. In
accordance with the requirements of SB 901 and subsequent legislation (AB 1054 discussed below), the
City's initial wildfire initigation plan was approved by the City Council in December 2019. The review
and assessment of the City's wildfire mitigation plan by an independent evaluator was subsequently
completed. In accordance with the requirements of SB 901, the City's wildfire mitigation plan is updated
annually, with comprehensive revisions and independent evaluator review occurring every three years.
The City's wildfire mitigation plan was most recently submitted to the City Council in May of 2024 for
approval and submitted to the Wildfire Advisory Board in July of 2024. See also "THE ELECTRTC
SYSTEM—Wildfire 1Vlitigation Measures."
Assembly Bi11 1054 ("AB 1054") was signed into law by Governor Newsom in July 2019. AB
1054 establishes a Wildfire Fund for IOUs to facilitate payment of eligible, uninsured third-party damage
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claims resulting from future catastrophic wildf'ires. Participation in the Wildfire Fund is exclusive to
IOUs. Each of the majar IOUs in California are now participating in the in the Wildfire Fund. POUs, such
as the City, are not eligible to participate in or receive funding for wildfire claims from the Wildfire Fund.
AB 1054 expands on the existing requirements for POUs established under SB 901 for wildfire
mitigation plans. AB 1054 requires each POU, by July 1 of each year, to submit its wildfire mitigation
plan to the then-newly created Wildfire Advisory Board for review and coinment. Under AB 1054, the
Wildfire Advisory Board is required to provide comments and an advisory opinion to each POU
regarding the content and sufficiency of its plan and to make recommendations on the mitigation of
wildfire risks. AB 1054 requires each POU to comprehensively revise its wildfire mitigation plan at least
once every three years. The City has prepared and subinitted wildfire mitigation plans in accordance with
the provisions of SB 901 and AB 1054 as required. SB 254, signed into law by Governor Newsom in
September 2025 amends the provisions of AB 1054 to provide that, after January 1, 2026, POUs will
instead be required to prepare and submit to the Wildfire Advisory Board wildfire mitigation plans at least
once every four years on a schedule to be determined by the Wildfire Advisory Board.
A number of significant wildfires have occurred in California during the last several years. Under
the doctrine of inverse condemnation(a legal concept that entitles properiy owners to just compensation if
their private property is damaged by a public use), California courts have imposed liability on utilities in
legal actions brought by property holders for damages, where the inherent risks in the utility's
infrastructure, as deliberately designed, constructed or maintained, are determined to be a substantiai
cause of damage to the property. Thus, if the inherent risks associated with the facilities of a utility, such
as its electric distribution and transmission lines, are determined to be the substantial cause of the
plaintiff's damages, and the doctrine of inverse condemnation applies, the utility could be liable without
having been found negligent. In August 2019, in its decision in the case of City of Oroville v. SupeNior
Court of Butte County, 7 Ca1.5th 1091, 446 P.3d 304 (2019), involving damages related to sewage
overflows from a city sewer system, the California Supreme Court held that to succeed on an inverse
condemnation claim, a property owner must demonstrate that the property damage was the probable result
or necessary effect of an inherent risk associated with the design, construction or maintenance of the
relevant public improvement. SB 1028, SB 901 and AB 1054 do not alter the existing 1ega1 doctrine
relating to utilities' liability for wildfires. SB 254 requires the California Earthquake Authority, as
administrator of the wildfire fund established pursuant to AB 1054, to, on or before April 1, 2026, in
consultation with the CPUC and other specified departments and agencies of the State, and with feedback
solicited from stakeholders, prepare and submit to the Legislature, and to the Governor, a report that
evaluates and sets forth recommendations on new models or approaches that mitigate damage, accelerate
recovery, and responsibly and equitably allocate the burdens from natural catastrophes, including
catastrophic wildfires, earthquakes, and other natural disasters, across stakeholders, including insurers,
communities, homeowners, landowners, governments, electrical corporations, and POUs to complement
or replace the fund. How any future legislation or judicial decisions address California's inverse
condemnation doctrine, and liability issues for utilities in the context of wildfires in particular, could be
significant for the electric utility industry, including the City.
Impact of California Energy Market Developments on the City. The effect of the developments
in the California ener�ry markets described above on the City's Electric System cannot be fully
ascertained at this time. Also, volatility in energy prices in California may return due to a variety of
factors that affect both the supply and demand for electric energy in the western United States. These
factors include, but are not limited to, the adequacy of generation resources to meet peak demands at all
titnes, the availability and cost of renewable energy, the impact of economy-wide GHG emission
legislation and regulations, fuel costs and availability,weather effects on customer deinand, the impact of
clilnate change, wildfire mitigation and potential liability cost recovery, insurance costs, transmission
congestion, the strengtb of the economy in California and surrounding states and levels of hydroelectric
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generation within the region (including the Pacific Northwest). This price volatility may contribute to
greater volatility in the City's revenues from the sale (and purchase) of electric energy and, therefore,
could materially affect the City's financial condition. The City, individually andlor through joint powers
agencies in which it participates, undertakes resource planning and risk management activities and
manages its resource portfolio to mitigate such price volatility and spot market rate exposure. See "THE
ELECTRIC SYSTEM."
Changing Laws and Requirements Generally
Electric utilities are subject to continuing environmental regulation. Federal, State and local
standards and procedures which regulate the environmental impact of electric utilities are subject to
change. These changes may arise from continuing legislative, regulatory and judicial action regarding
such standards and procedures. In addition, the election of new administrations,including the President of
the United States, could unpact substantially the current environmental standards and regulations and
other matters described herein. In light of the changing regulatory requirements and standards for electric
utilities, there is no assurance that any facilities or projects of the City wi11 remain subject to the laws and
regulations currently in effect, wi11 always be in compliance with future laws and regulations or wi11
always be able to obtain all required operating permits. An inability to comply with environmental
standards could result in, far example, additional capital expenditures, reduced operating levels or the
shutdown of individual units not in compliance. Increased environmentallaws and regulations may create
certain barriers to new facility development, may require modification of existing facilities and may result
in additional costs for affected resources.
in addition, on both the federal and State levels, legislation is introduced frequently addressing
domestic energy policies and various environmental matters and impacts relating to energy, including the
generation of energy using conventional and unconventional technologies. Issues raised in legislative
proposals in recent years have included implementation of ener�,ry efficiency and renewable energy
standards, addressing transmission planning, siting and cost allocation to support the construction of
renewable energy facilities, cybersecurity legislation, climate change and the reduction or eliinination of
net carbon dioxide emission attributable to the electric grid and financial incentives that could provide
grants and credits to municipal utilities to invest in renewable energy infrastructure. Congress has also
considered other bills relating to energy supplies and development (such as expedited permitting for
natural gas drilling projects, reducing regulatory burdens, climate change and water quality). The City is
unable to predict at this time whether any of these or other legislative proposals will be enacted into law
or what the impact of any such proposals that may ultimately be enacted will be.
General Economic Conditions
The City's costs are affected by numerous factors, many of which are economic variables that are
beyond its control. Some of the factors in recent years include inflation, supply chain disruptions and
delays, labor shortages and rising labor costs, and rising interest rates. More specifically, the rate of
inflation increased during certain periods of recent years, increasing the price of fuel and commodities
integral to the City's Electric System operations. In response to rising inflation, the United States Federal
Reserve increased interest rates a number of times from 2022 to 2023, which would be expected to result
in an increase to the City's costs of capital so long as inflationary pressures continue. These factors may
be further exacerbated by rising labor costs in the United States and global economic and geopolitical
crises. Retail energy sales and aggregate levels of energy use can also be affected by general economic
conditions. The economy may be impacted (directly or indirectly) by, among other things, fluctuations in
business production, consumer prices, or financial markets, unemployment rates, technological
advancements, shortages or surpluses in natural resources, climate change and other environmental
matters, changes in law(including the enforceinent thereo�, changes in federal or state policies (including
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policies with respect to trade, appropriations, immigration, regulation and energy) and funding priorities,
and natural disasters. The occurrence of global, national andlor regional events and changes in general
economic conditions on a local, state, and/or national level and their potential impacts are difficult to
predict but could negatively impact the Electric System's operations and finances and/or the economy of
its service area. See APPENDIX B — "CERTAIN INFORMATION CONCERNING THE CITY OF
REDDING"for general demographic and economic information regarding the City's service area.
Tariff Uncertainty
Recent changes in federal and international trade policies, including the imposition or adjushnent
of tariffs on materials such as steel, solar panels, batteries and other building materials and energy-related
equipment, have introduced uncertainty into the pricing and availability of key components used in the
City's operations and capital projects. While the City monitors these developments, the future impacts of
tariff-related volatility on the City's costs, procurement schedules, and project econoinics are uncertain
and could be material.
Cybersecurity Risks; Physical Security of the Electric System
Physical and cybersecurity are critical concerns for electric utilities as they seek to protect their
infrastructure and technological systems from a range of threats. The electric utility infrastructure is
complex and consists of multiple components, such as power plants, substations, transmission and
distribution lines, and other facilities. The City has policies,processes and procedures in place that outline
the access controls and restrictions for its properties.
The City like many other public and private entities and utilities, relies on computer and other
digital networks and systems to conduct its operations, including operations of the Electric System. In
connection with the use of such technology, the City and the Electric System are potentially subject to
multiple cyber threats, including without liinitation hacking, viruses, ransomware, inalware and other
attacks. United States government a�;encies have in the past issued warnings indicating that critical
infrastructure sectors such as electric systems may be specific targets of cybersecurity threats.
Cybersecurity incidents could result from unintentional events, or from deliberate attacks by unauthorized
entities or individuals attempting to gain access to the City's digital netwarks and systems for the
purposes of misappropriating assets or information or causing operational disruption and damage. To
mitigate the risk of business operations impact and/or damage from cybersecurity incidents or cyber-
attacks, the City invests in inultiple forms of cybersecurity and operational safeguards. Although the City
has a variety of security measures and safeguards in place with respect to the Electric System (as
described under "THE ELECTRIC SYSTEM — Cybersecurity Measures" above), no assurances can be
given that any existing or additional safety and security measures wi11 prove adequate in the event that
cyberattacks or military conflicts or terrorist activities, including cyber terrorism, are directed against the
City's systems technology or the assets of the Electric System. Cyberattacks are becoming more
sophisticated and eertain cyber ineidents, such as surveillanee, inay remain undetected for an extended
period. Attacks direeted at eritical electric sector operations could damage generation, transmission or
distribution assets, cause operational malfunctions and outages, and result in costly recovery and
remediation efforts. The costs of security measures ar of remedying damage from security breaches could
be greater than presently anticipated.
Global Health Emergencies
A pandemic, epidemic or outbreak of an infectious disease can have significant adverse health
and financial impacts on global and local economies. Far example, beginning in 2020, the COVID-19
pandemic negatively affected economic activity throughout the world, including the United States and the
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State of California. The initial impacts of stay-at home orders globally were unprecedented, with
commerce, travel, asset values and financial markets experiencing disruptions worldwide. The City's
ability to provide electric service was not impaired as a result of the COVID-19 pandeinic. The City's
Electric System is in a federally designated critical infrastructure sector and continued to operate
throughout the COVID-19 pandemic. While the COVID-19 pandemic impacted the City in certain
respects, the City did not experience a material adverse impact to the Electric System's operations or its
ability to meet its financial obligations as a result of the COVID-19 pandemic. To help mitigate the
economic impact of COVID-19 and the related governmental regulations on its customers, the City
implemented a suspension of the disconnection of electric services for non-payment of utility bills
beginning in March 2020. Nonnal practices for non-payment resumed in late summer 2021. However,
while the declarations of COVID-19 as a public health emergency have been lifted, future pandemics and
other widespread public health emergencies can and do arise from time to time. The City cannot predict
whether another national or localized outbreak of highly contagious or epideinic disease in the future
could negatively impact the Electric System's operations and finances and/or the economy of its service
area.
Other Factors
The electric utility industry in general has been, or in the future may be, affected by a number of
other factors which could impact the financial condition and competitiveness of many electric utilities and
the level of utilization of generating and transmission facilities. Such factors (a number of which are
further discussed elsewhere in the this Official Statement) include, among others, (a) effects of
compliance with rapidly changing environmental, safety, licensing, regulatory and legislative
requirements other than those described above; (b) changes resulting from conservation and demand-side
management programs on the tiining and use of electric energy; (c) effects on the integration and
reliability of power supply from the increased usage of renewables; (d) changes resulting from a national
energy policy; (e) effects of competition from other electric utilities (including increased competition
resulting from a movement to allow direct access or expanded community choice aggregation or from
mergers, acquisitions, and "strategic alliances" of competing electric and natural gas utilities and from
competitors transmitting less expensive electricity from much greater distances over an interconnected
system) and new methods of, and new facilities for, producing low-cost electricity; (�the repeal of
certain federal statutes that would have the effect of increasing the competitiveness of many IOUs;
(g) increased competition from independent power producers and marketers, brokers and federal power
marketing agencies; (h) "self-generation" or "distributed generation" (such as microturbines, fuel ce11s
and solar installations)by industrial and commercial customers and others; (i)issues relating to the ability
to issue tax-exempt obligations, including restrictions on the ability to sell to nongovernmental entities
electricity from generation projects and transmission service f'rom transmission line projects financed with
outstanding tax-exempt obligations; (j)wildfires and potential liabilities of electric utilities in connection
therewith; (k) effects of inflation on the operating and maintenance costs of an electric utility and its
facilities; (1) changes from projected future load requirements; (m) increases in costs and uncertain
availability of capital; (n) shifts in the availability and relative costs of different fuels (including the cost
of natural gas); (o) changes in the electric market structure for neighboring electric grids, such as the
energy imbalance market operated by the CAISO; (p) sudden and dramatic increases in the price of
energy purchased on the open market that may occur in times of high peak demand in an area of the
country experiencing such high peak demand, such as has occurred in the past in California; (� issues
relating to risk management procedures and practices with respect to, among other things, the purchase
and sale of natural gas, energy and transmission capacity; (r) other legislative changes, voter initiatives,
referenda and statewide propositions; (s) effects of'the changes in the economy, population and demand
of customers within a utility's service area; (t) effects of possible manipulation of the electric markets;
(u) acts of terrorism or cyber-terrorism impacting a utility and/or significant load customers; (v) impacts
of a pandemic or the outbreak of another infectious disease impacting the global, national or local
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economy or a utility's service area; or (w)effects of and regulatory responses to climate change;
(x)natural disasters or other physicai calamities, including, but not limited to, wildfires, earthquakes,
droughts, severe weather and floods; and (y) adverse impacts to the market for insurance relating to
wildfires and other calamities, leading to higher costs or prohibitively expensive coverage, or limited or
unavailability of coverage for certain types of risk. Any of these factars (as well as other factors) could
have an adverse effect on the financial condition of any given electric utiliLy, including the City's Electric
System, and likely will affect individual utilities in different ways.
CONSTITUTIONAL LIMITATIONS IN CALIFORNIA
AFFECTING FEES AND CHARGES
Proposition 62
A statutory initiative ("Proposition 62") was adopted by the voters voting in the State of
California at the November 4, 1986 General Election which (1)requires that any tax for general
governmental purposes imposed by local governmental entities be approved by resolution or ordinance
adopted by two-thirds vote of the governmental agency's legislative body and by a majority of the
electorate of the governmental entity, (2)requires that any special tax (defined as taxes levied for other
than general governmental purposes)imposed by a local governmental entity be approved by a two-thirds
vote of the voters within that jurisdiction, (3)restricts the use of revenues from a special tax to the
purposes or for the service for which the special tax was imposed, (4)prohibits the imposition of ad
valorem taxes on real property by local governmental entities except as perinitted by Articie XIIIA,
(5)prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local
governmental entities and (6)requires that any tax imposed by a local governmental entiry on or after
March 1, 1985 be ratified by a majority vote of the electorate within two years of the adoption of the
initiative or be terminated by November 15, 1988.
Proposition 218
Proposition 218, a State ballot initiative known as the "Right to Vote on Taxes Act," was
approved by the voters of the State of California on November 5, 1996. Proposition 218 added Articles
XIIIC and XIIID to the State Constitution. Article XIIIC unposes a majority voter approval requirement
on local governments (including the City) with respect to taxes for general purposes, and a two-thirds
voter approval requirement with respect to taxes for special purposes. Article XITID creates additional
requirements for the imposition by most local governments of general taxes, special taxes, assessments
and"property-related" fees and charges. Article XILID explicitly exempts fees for the provision of electric
serviee from the provisions of such artiele.
Article XIIIC expressly extends the people's initiative power to the reduction or repeal of local
taxes, assessments, and fees and charges im�posed prior to its effective date (November 1996). The
California Supreme Court held in Bighorn-De.sert View Water Agency v. Ver^jil, 39 Ca1.4th 205 (2006)
that, under Article XIIIC, loeal voters by initiative may reduee a public ageney's water rates and delivery
charges, as those are property-related fees or charges within the meaning of Article XIIID, and noted that
the initiative power described in Article XIIIC may extend to a broader category of fees and charges than
the property-related fees and eharges governed by Article XIIID. Moreover, in the case of Bock v. City
Council of Lompoc, 109 Ca1.App3d 52 (1980), the Court of Appeal determined that an eleetrie rate
ordinance was not subject to the same constitutional restrictions that are applied to the use of the initiative
process for tax measures so as to render it an improper subject of the initiative process. Thus, electric
service charges (which are expressly exempted from the provisions of Article XIIID) may be subject to
the initiative provisions of Artiele XTTTC, thereby subjecting sueh fees and eharges to reduetion by the
electorate. The City believes that even if the electric rates of the City are subject to the initiative power,
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the electorate of the City would be precluded from reducing electric rates and charges in a manner
adversely affecting the payment of the 2026 Bonds by virtue of the "impairment of contracts clause" of
the United States and California Constitutions.
Proposition 26
The California electorate adopted Proposition 26 at the November 2, 2010 election, amending
Article XIIIC of the California Constitution. Proposition 26 was designed to supplement tax lunitations
California voters adopted when they approved Proposition 13 in 1978 and Proposition 218 in 1996.
Proposition 26 applies by its terms to any levy, charge or exaction imposed, increased or extended by a
local government on or after November 3, 2010. Proposition 26 deems any such levy, charge or fee to be
a"tax,"requiring voter approval unless it comes within one of the listed exceptions or further exceptions
recognized by the courts. Proposition 26 expressly excludes from its definition of a "tax," among other
things, 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
govermnent of providing the service or product.
Proposition 26 is subject to interpretation by California courts. A number of lawsuits have been
filed against public agencies in California relating to electric utility fund transfers. In 2011, two lawsuits
were filed against the City challenging the implementation of the City's "payment in lieu of taxes" (or
"PILOT") transfer from the Electric System to the City's general fund without voter approvaL The City's
PII.,OT is designed to be equivalent to the ad valorem taxes the Electric System would have had to pay if
such electric utility were privately owned. The suits alleged that the PILOT was passed through to the
City's Electric System customers as part of the rates and charges for electric service in excess of the
reasonable costs to the City of providing electric service. The Superior Court of the State of California,
Shasta County, consolidated the two lawsuits and ruled in favor of the City on July 13, 2012. Following
an appeal by the plaintiffs, on February 19, 2015, the Court of Appeal of the State of California, Third
Appellate Division, ruled in Citizens for Fair REU Rates v. City of Redding, holding that the City's
PILOT constituted an unconstitutional "tax" under Proposition 26 for which the City was required to
secure voter approval unless the City proved that the amount collected was necessary to cover the
reasonable costs to the City of providing electric service. In addition, the Court of Appeal noted that
Proposition 26 had no retrospective effect as to local taxes that existed prior to November 3, 2010, but
found that since the PILOT was subject to the City Council's recurring discretion, the PILOT did not
escape the purview of Proposition 26. On March 2, 2015, the City filed a Petition for Review with the
California Supreme Court which was granted. On August 27, 2018, the California Supreme Court
rendered its decision reversing the judgment of the Court of AppeaL The California Supreme Court
determined that the budgetary transfer from the City electric utility to the City's general fund, calculated
by using the PILOT, itself is not the type of exaction that is subject to Article XIIIC of the California
Constitution. The eourt reasoned that it is only the City's eleetric utility rate, not the PILOT, that is
imposed on eustomers for eleetrie service. The California Supreme Court concluded that the ehallenged
rate did not exceed the reasonable costs of providing electric service, and therefore did not constitute a
tax.
Due to evolving case law and the uncertainties regarding potential legislative interpretations of
Proposition 26, the City is unable to predict at this time how Proposition 26 will ultimately be interpreted
by the courts in the context of any particular electric utility rates or what the ultimate impact of
Proposition 26 will be.
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Other Initiatives
Articles XIIIC and XIIID and Propositions 62, 218 and 26 were adopted as measures that
qualified for the ballot pursuant to California's initiative process. From time to time, including presently,
other initiatives have been, and could be,proposed, and if quali�ed for the ballot and approved by voters,
could affect the City's Electric System revenues or operations. Neither the nature and impact of these
measures nor the likelihood of qualification for ballot or passage can be anticipated by the City.
TAX MATTERS
[In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the City, based upon
an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other
matters, the accuracy of certain representations and compliance with certain covenants, interest on
the 2026 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 exempt from State of California personal
income taxes. Bond Counsel is of the further opinion that interest on the 2026 Bonds is not a specific
preference item for purposes of the federal inclividual alternative minimum tax. Bond Counsel
observes that interest on the 2026 Bonds included in adjusted financial statement income of certain
corporations is not excluded from the federal corporate 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 2026 Bonds. 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 2026 Bonds is less than the amount to be
paid at maturity of such 2026 Bonds (excluding amounts stated to be interest and payable at least
annually over the term of such 2026 Bonds), the diff'erence constitutes "original issue discount," the
accrual of which, to the extent properly allocable to each beneficial owner thereof, is treated as
interest on the 2026 Bonds which is excluded from gross incoine for federal income tax purposes and
exempt from State of California personal income taxes. For this purpose, the issue price of a
particular maturity of the 2026 Bonds is the first price at which a substantial amount of such maturity
of the 2026 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 2026 Bonds accrues daily over the term to maturity
of such 2026 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 2026 Bonds to detennine taxable gain or loss upon disposition(including sa1e,
redemption, or payment on maturity) of such 2026 Bonds. Beneficial owners of the 2026 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
2026 Bonds in the original offering to the publie at the first priee at whieh a substantial amount of
such 2026 Bonds is sold to the public.
2026 Bonds purchased, whether at original issuance ar otherwise, for an amount higher than
their principal amount payable at maturity (or, in some cases, at their earlier call date) ("Premium
2026 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 2026 Bonds, the interest on which
is excluded froin gross income for federal incoine tax purposes. However, the amount of tax-exeinpt
interest received, and a beneficial owner's basis in a Premium 2026 Bond, will be reduced by the
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amount of amortizable bond premium properly allocable to such beneficial owner. Beneficial owners
o�Premium 2026 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 2026 Bonds.
The City has made certain representations and covenanted to comply with certain restrictions,
conditions and requirelnents designed to ensure that interest on the 2026 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 2026 Bonds being included in gross income for federal
income tax purposes, possibly from the date of original issuance of the 2026 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 2026 Bonds may adversely affect the value of, or the tax
status of interest on, the 2026 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 2026 Bonds is excluded 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
2026 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 fizture legislative proposals, if enacted into law, clarification of the Code or court
decisions may cause interest on the 2026 Bonds to be subject, directly or indirectly, in whole or in
part, to federal income taxation or to be subject to or exempted from state income taXation, or
otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such
interest. The introduction or enactment of any such legislative proposals, clarification of the Code or
court decisions may also affect, perhaps significantly, the market price for, or marketability of, the
2026 Bonds. Prospective purchasers of the 2026 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 expresses 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 2026 Bonds for federal income tax purposes. It is not binding on the Internal
Revenue Service ("IRS") or the courts. Furthermare, Bond Counsel cannot give and has not given
any opinion or assurance about the future activities of the City, or about the effect of fut�ure changes
in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the
IRS. The City has covenanted, however, to comply with the requirements of the Code.
Bond Counsel's engagement with respect to the 2026 Bonds ends with the issuance of the
2026 Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the City or the
beneficial owners regarding the tax-exempt status of the 2026 Bonds in the event of an audit
examination by the IRS. Under current procedures, beneficial owners would have little, if any, right
to participate in the audit examination process. Moreover, because achieving judicial review in
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connection with an audit examination of 2026 Bonds is difficult, obtaining an independent review of
IRS positions with which the City legitimately disagree may not be practicable. Any action of the
IRS, including but not limited to selection of the 2026 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 2026 Bonds, and may cause the City or the beneficial owners to incur
significant expense.
Payments on the 2026 Bonds generally will be subject to U.S. information reporting and
possibly to "backup withholding." Under Section 3406 of the Code and applicable U.S. Treasury
Regulations issued thereunder, a non-corporate beneficial owner of 2026 Bonds may be subject to
backup withholding with respect to "reportable payments," which include interest paid on the 2026
Bonds and the gross proceeds of a sale, exchange, redemption, retirement or other disposition of the
2026 Bonds. The payor will be required to deduct and withhold the prescribed amounts if (i) the
payee fails to furnish a U.S. taxpayer identification number ("TTN") to the payor in the manner
required, (ii)the IRS notifies the payor that the TIN furnished by the payee is incorrect, (iii) there has
been a "notified payee underreporting" described in Section 3406(c) of the Code or (iv) the payee
fails to certify under penalty of perjury that the payee is not subject to withholding under Section
3406(a)(1)(C) of the Code. Amounts withheld under the backup withholding rules may be refunded
or credited against a beneficial owner's federal income tax liability, if any, provided that the required
information is timely furnished to the IRS. Certain beneficial owners (including among others,
corporations and certain tax-exempt organizations) are not subject to backup withholding. The failure
to comply with the backup withholding rules may result in the imposition of penalties by the IRS.]
LITIGATTON
There is no action, suit or proceeding known to be pending or threatened, restraining or
enjoining the issuance or delivery of the 2026 Bonds, the Indenture or the Continuing Disclosure
Agreement, or in any way contesting or affecting the validity of the foregoing or any proceedings of
the City taken with respect to any of the foregoing.
To the best knowledge of the City, there is no litigation pending or threatened, guestioning
the corporate existence of the City, or the title of the officers of the City to their respective offices, or
the power and authority of the City to execute and deliver the 2026 Bonds, the Indenture or the
Continuing Disclosure Agreement or to perform its obligations under the foregoing. To the best
knowledge of the City, there is no litigation pending or threatened, questioning or affecting in any
material respect any of the financial information with respect to the City's Electric System contained
in this Official Statement.
At any given time, including the present, there are certain other claims and disputes,
including those currently in litigation, that arise in the normal course of the City's activities. Such
matters could, if determined adversely to the City, affect expenditures by the City, and in some cases,
its Electric System revenues. See "THE ELECTRIC SYSTEM — Litigation Affecting the Electric
System" and "CONSTITUTIONAL LIMITATIONS IN CALIFORNIA AFFECTING FEES AND
CHARGES — Proposition 26." The City's tnanagement and its City Attorney are of the opinion that
no pending actions are likely to have a material adverse effect on the City's ability to perform its
obligations under the Indenture and the 2026 Bonds.
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RATING
Fitch Ratings ("Fitch") has assigned the 2026 Bonds the rating of "[�." Fitch's rating
outlook with respect to the 2026 Bonds is "[ ]." No application has been made to any other
rating agency for the purpose of obtaining any additional rating on the 2026 Bonds. Such rating
expresses only the view of the rating agency and an explanation of the significance of such rating
may be obtained only from such rating agency as follows: Fitch Ratings, 33 Whitehall Street, New
York, New York 10004. Generally, a rating agency bases its credit rating on the information and
materials furnished to it (which may include information and material from the City which is not
included in this Of�'icial Statement) and on investigations, studies and assumptions of its own. A
securities rating is not a recommendation to buy, sell or hold securities. There is no assurance that
such rating (or any rating outlook ascribed thereto) will continue for any given period of time or that
it will not be revised ar withdrawn entirely if, in the judgment of such rating agency, circumstances
so warrant. Any such downward revision or withdrawal of such rating could have an adverse effect
on the market price of the 2026 Bonds.
CONTINUING DISCLOSURE
The City has covenanted for the benefit of the holders and beneficial owners of the 2026
Bonds to provide in an Annual Report certain financial information and operating data relating to the
City and the Electric System by not later than 270 days following the end of the City's Fiscal Year
(which Fiscal Year presently ends June 30), commencing with the report for the 2025-26 Fiscal Year,
and to provide notices of the occurrence of certain enumerated events. The Annual Report and
notices of enumerated events will be provided by or on behalf of the City to the Municipal Securities
Rulemaking Board through the Electronic Municipal Market Access (EMMA) system. The specific
nature of the information to be contained in the Annual Report and the notice of'specified events is
summarized in "APPENDIX E— PROPOSED FORM OF CONTINUING DISCLOSURE
AGREEMENT." These covenants have been made in order to assist the Underwriter in complying
with the Rule.
In the last five years, certain deficiencies in performance by the City, including the City, as
the Successor Agency to the Redding Redevelopment Agency (the "Successor Agency") under their
respective continuing disclosure undertakings have occurred. In that period, annual report
information deficiencies are noted for each of the fiscal years identified below, including with respect
to various items of the financial and operating data information specified under the continuing
disclosure undertakings for the: (i) Redding Joint Powers Financing Authority Water and Wastewater
Refunding Revenue Bonds, 2013 Series A and City of Redding Wastewater System Refunding
Revenue Bonds, Series 2020 (Fiscal Years 2020-2022); (ii) Redding Joint Powers Financing
Authority Lease Refunding Revenue Bonds (2019 Capital Projects), Series 2019A (Fiscal Years
2019-2022); and (iii)Redding Redevelopment Agency Canby-Hilltop-Cypress Project Area Housing
Set-Aside Tax Allocation Bonds, 2001 Series B (Fiscal Years 2019 and 2020). In addition, with
respect to the Redding Joint Powers Financing Authority Water and Wastewater Refunding Revenue
Bonds, 2013 Series A and City of Redding Wastewater System Refunding Revenue Bonds, Series
2020, the City did not timely file its annual report with respect to Fiscal Year 2019-20, and did not
file notice of such failure to timely file, but made a filing of such annual report on January 6, 2022,
approXimately 10 lnonths 1ate. With respect to the Transmission Agency of Northern California
California-Oregon Transmission Project Revenue Refunding Bonds, 2016 Series A, the City's
audited financial statements and financial and operating data information were not properly linked to
two of the CUSIPs for those bonds for Fiscal Year 2023. Also in the last five-years, on October 7,
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2021 and June 29, 2023, ratings upgrades were made on the Successor Agency's outstanding tax
allocation bonds, for which the Successor Agency failed to make event notices. The City and the
Successor Agency, respectively, have made the necessary filings, posted to EMIVIA, to address the
deficiencies, including notices of the failures to timely make such filings, for all currently
outstanding bonds identified above.
UNDERWRITING
The 2026 Bonds are being purchased for reoffering by J.P. Morgan Securities LLC (the
"Underwriter") pursuant to a bond purchase contract (the "Purchase Contract"), by and between the
Underwriter and the City. The Underwriter has agreed, subject to certain conditions, to purchase the
2026 Bonds at a price of$ (representing the $ aggregate principal amount
of the 2026 Bonds [plus/less] $ [net] original issue [premium/discount] and less
$ of Underwriter's discount). The Purchase Contract for the 2026 Bonds provides that
the Underwriter is obligated to purchase all of the 2026 Bonds if any are purchased, the obligation to
make such purchase being subject to certain terms and conditions set forth in the Purchase Contract.
The Underwriter may offer and se11 the Bonds to certain dealers and others at prices lower
than the initial public offering prices stated on the inside cover page hereof. The offering prices may
be changed from time to time by the Underwriter.
The following information has been provided by the Underwriter for inclusion in this Official
Statement: J.P. Morgan Securities LLC ("JPMS"), the Underwriter of the 2026 Bonds, has entered
into negotiated dealer agreements (each, a"Dealer Agreement") with each of Charles Schwab & Co.,
Inc. ("CS&Co.") and LPL Financial LLC ("LPL") for the retail distribution of certain securities
offerings at the original issue prices. Pursuant to each Dealer Agreement, each of CS&Co. and LPL
may purchase 2026 Bonds from JPMS at the original issue pr�ice less a negotiated portion of the
selling concession applicable to any 2026 Bonds that such firm sells.
CERTAIN RELATIONSHIPS
The Underwriter and its affiliates are full service financial instit�utions engaged in various
activities, which may incl�ude securities trading, commercial and investment banking, financial
advisory, investment management,principal investment, hedging, financing and brokerage activities.
The Underwriter and its aff'iliates have, from time to time, performed, and may in the future perform,
various investment banking services for the City, for which they received or will receive customary
fees and expenses.
In the ordinary course of their various business activities, the Underwriter and its affiliates
may make or hold a broad array of investments and actively trade debt and equity securities (or
related derivative securities) and financial instruments (which may include bank loans andlor credit
default swaps) for their own account and far the accounts of their customers and may at any time
hold long and short positions in such securities and instruments. Such investment and securities
activities may involve securities and instruments of the City.
CERTAIN LEGAL MATTERS
The validity of the 2026 Bonds and certain other legal matters are subject to the approving
opinion of Orrick, Herrington& Sutcliffe LLP, Bond Counsel to the City. A complete copy of the
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proposed form of Bond Counsel opinion is contained in Appendix F hereto. Bond Counsel
undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement and
expresses no opinion with respect thereto. Stradling Yocca Carlson & Rauth LLP is serving as
Disclosure Counsel to the City in connection with the 2026 Bonds. Certain 1ega1 matters will also be
passed upon for the City by the City Attorney of the City of Redding, and for the Underwriter by
Norton Rose Fulbright US LLP. Bond Counsel and Disclosure Counsel wi11 receive compensation
that is contingent upon the issuance and delivery of the 2026 Bonds.
MUNICIPAL ADVISOR
The City has retained PFM Financial Advisors LLC, Los Angeles, California, as municipal
advisor(the "Nlunicipal Advisor") in connection with the issuance of the 2026 Bonds. The Municipal
Advisor has not undertaken to make an independent verification or to assume responsibility for the
accuracy, completeness, or fairness of the information contained in this O�ficial Statement. The
1Vlunicipal Advisor is an independent financial advisory firm and is not engaged in the business of
underwriting, trading or distributing municipal securities or other public securities. The payment of
certain fees of the Municipal Advisor is contingent upon the issuance and delivery of the 2026
Bonds.
AUDITED FINANCIAL STATEMENTS
The City's Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2025,
including its Basic Financial Statements, are included in Appendix A to this Official Statement. The
City's �Basic Financial Statements as of and for year ended June 30, 2025 have been audited by
CliftonLarsonAllen LLP, independent accountants (the "Independent Accountants") as stated in their
report appearing in Appendix A. The 2026 Bonds are special obligations of the City payable solely
from the Net Revenues of the City's Electric System and moneys in the City's Electric Revenue
Fund.
The financial statements of the City are public documents and the City has not requested nor
did the City obtain permission from the Independent Accountants to incl�ude the Basic Financial
Statements and their report in an Appendix to this Official Statement. Accordingly, the Independent
Accountants have made no representation in connection with inclusion of the audit herein that there
has been no inaterial change in the financial condition of the City or the Electric System since the
most recent audit was concluded. The Independent Accountants have not been engaged to perform
and have not performed, since the date of its report included in Appendix A, any procedures on the
financial statements addressed in that report. The Independent Accountants also have not performed
any procedures relating to this Off'icial Statement.
[Remainder of page intentionally left blank.]
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EXECUTION AND DELIVERY
The execution and delivery of this Official Statement has been duly authorized by the City.
CITY OF REDDING
By
City Manager
By
Director of Electric Utility
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APPENDIX A
EXCERPTS OF THE AUDITED FINANCIAL STATEMENTS OF THE CITY
FOR THE FISCAL YEAR ENDED JUNE 30, 2025
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APPENDIX B
CERTAIN INFORMATION CONCERNING THE CITY OF REDDING
The economic and demo�aphic information regarding the City provided in this Appendix B is
presented as general back�ound data and has l�een collected from sources which the City deems to be
�eliable. The general fund of the City is not liable, and the credit or taxing power of the City is not
pledged,for the payment of the 2026 Bonds or the interest thereon. The 2026 Boncls are not securec�by a
legal or equitable pledge of, or charge, lien oY encumbrance upon, any of the pYoperty of the City, or any
of its income or Neceipts, except the Net Revenues of the City's Electric System and the other funds which
av�e pledged to the payment of the 2026 Bonds pursuant to the IndentuN�. See the section in the Off cial
Statement entitled "SECURITYAND SOURCES OF PAYMENT FOR THE 2026 BONDS."
General Description
The City of Redding (the "City" or "Redding"), eomprising approximately 62 square miles, is
located at the northern end of the Sacramento Valley, approximately 160 miles north of Sacramento and
230 miles northeast of San Francisco. It is the county seat of Shasta County and the major trade,
recreational and cominerce center for the northern central and northeastern portion of California.
The City is situated in the midst of a vast recreational area that ineludes nine national forests, six
wilderness areas, two state parks and one national park. The City experiences hot summers and mild
winters. Annual precipitation is approximately 34.23 inches. Elevation within the area varies from 400
feet above sea level to 10,466 feet at Lassen Park,just outside the County of Shasta(the "County").
Municipal Government
The City was incorporated on October 4, 1887 and operates as a general 1aw city with the
couneil-inanager form of government. The City Council eonsists of five members eleeted "at large" for
four-year staggered terms. Council members must be residents of the City and registered voters both at
the time nomination papers are taken out and assuming of�ce. The Mayor is selected by the City Council
from among its members.
City Council Members. The current members of the City Council are as follows:
MIKE LITTAU, Mayor, was elected to the City Council in November 2024. Mr. Littau moved to
Redding in 1995 and attended Simpson University. Mr. Littau's education includes a bachelor's degree in.
Coinmunications. After graduating from eollege, 1VIr. Littau served in the Army. Following his military
serviee, he began his career working for a loeal bank and insurance eompany in Redding. In 2005, he
opened his own insurance business. Mr. Littau's community involvement includes serving on a local
school board, as well as serving in various leadership roles for the California Soecer Park, Redding Youth
Soccer League, and Simpson Alumni Association. 1VIr. Littau's current term of office ends in December
2028.
DR. PAUL DHANUKA, Vice Mayor, was elected to the City Council in November 2024. Dr.
Dhanuka has served as a medical doctor in the Redding community and North State region for nearly two
decades. He is a farmer Chief of Medical Staff at Mercy Medical Center Redding and at Shasta Regional
Medical Center Redding. Dr. Dhanuka is the current President of the North Va11ey Medical Association,
and an Assistant Professor at the University of California, Davis Sehool of Medieine and California
University of Science and Medicine. He serves on the Shasta County Public Heaith Advisory Board,
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Simpson University's Community Advisory Committees, and Turtle Bay Exploration Park Board of
Regents. Dr. Dhanuka's current term of office ends in December 2028.
ERIN RESNER, Council member and Mayor Pro Tempore, was elected to ihe City Council in
November 2024. Ms. Resner was raised in Redding. Her education includes a bachelor's degree in
Biology, with a minor in Environmental Sciences, from St. Mary's College of California. Ms. Resner and
her husband currently own eight locations of Dutch Bros. Coffee in Redding, Anderson, and Palo Cedro,
California. Ms. Resner's community involvement includes serving as a Court Appointed Special
Advocate for youth in Dependency Court for over a decade and as a Commissioner for the City of
Redding's Community Services Advisory Commission for four years. She is involved in a number of
community focused non-profits and businesses such as One Safe Place and Turtle Bay and is also on the
Children's Legacy Center Board of Directors serving as the Treasurer. Ms. Resner's current term of office
ends in December 2026.
TENESSA AUDETTE, Council member,was elected to the City Council in November 2022. Ms.
Audette's education includes a bachelor's degree in Political Science from Sonoma State University. She
started a small business, Ca11ed to Action Consulting, Inc., which managed campaigns for city council,
county supervisor, district attorney, congressional, assembly and gubernatorial races. Ms. Audette serves
as the First District's Representative for the California State Senate. She is a graduate of Leadership
Redding, a program of the Community Foundation of the North State, the stated purpose of which is to
serve as a catalyst for individuals who seek participation in coinmunity decision-making in voluntary and
governmental organizations. She served on the Leadership Redding Steering Com�nittee, organizing the
government program for five years. She also served as the Data Chair on the Shasta County Republican
Cenxral Committee and was a delegate for the California GOP. Ms. Audette is an Adjunct Instructor
teaching constitutional principles and civics as an elective for Bethel School of Supematural Ministry.
Ms. Audette's current tenn of office ends in December 2026.
JACK MLJNNS, Mayor, was elected to the City Council in November 2022. Mr.Munns was born
and raised in Redding. In 1989, he joined the Reno Police Department where he served for [_] years.
1VIr. 1Vlunns returned to the City in [ ]. 1V1r. Munns' education includes a bachelor's degree in Criminal
Justice and a master's degree in Social Wark, which he obtained while working as a police officer. Mr.
Munns' current term of office encl�s in December 2026.
City Management and Employees. The City Manager is appointed by the City Council and is
responsible for implementation of Council policies and for day-to-day operation of the City. The offices
of City Clerk and City Treasurer are elective, for four-year terms, and the City Attorney is appointed by
the City CouneiL The City is regarded as a full serviee city and municipally provided serviees include
planning and building regulation, police protection, fire protection, recreation and parks, electric, water,
wastewater, storm drainage and solid waste eolleetion and disposal and operation of two airports.
As of June 30, 2025, a staff of [ ] full-time employees and [ ] part-time employees of the
City carried out the functions of inunieipal government. City employees have been represented by various
unions since 1965.
Population Characteristics
Between 1980 and 2020, the City grew significantly, increasing to 93,'746 residents in 2020 from
41,995 residents in 1980. The City's estimated 2025 population of 93,534 represents a slight decrease of
approximately 0.23% from the 2020 U.S. Census tabulation. The City's population represents over 50%
of the County's estimated population of 180,201 in 2025. The following table indicates population growth
for the City and the Counly from 1980 to 2025.
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CITY OF REDDING AND COUNTY OF SHASTA
POPULATION
(1980, 1990, 2000,2010 and 2020 as of April 1;
2021-2025 as of January 1,with 2020 benchmark)
City of Redding County of Shasta
Annualized Annualized
Percent Change Percent Change
Year Number Over Interval Number Over Interval
1980 41,995 — 115,715 —
1990 66,462 5.83% 147,036 2.71%
2000 80,865 2.17 163,256 1.10
2010 89,861 l.11 177,223 0.86
2020 93,746 0.43 182,155 0.28
2021 93,536 (0.22) 181,483 (0.36)
2022 92,642 (0.91) 180,206 (0.70)
2023 92,164 (0.55) 179,122 (0.60)
2024 92,466 0.32 179,195 0.04
2025 93,534 1.16 180,201 0.56
SouYce: State of California, Department of Finance, E-4 Population Estimates for Cities, Counties, and the State,
1980-2020 Census data,2021-2025 with 2020 Census Benchmark. Sacramento,California,May 2025.
Industry and Employment
Timber extraction and the processing of wood by-products, together with agriculture, tourism and
government,have historically been the major sectors of employment in Redding. Over the last decade,the
City's economic base has diversified from resource extraction and processin�;activities,primarily lumber,
to a regional services economy supported by retail and wholesale trade plus educational, recreational,
medieal and government services for an area eovering several eounties. The City has attraeted new
manufacturing industries through a combination of industrial development policies, the availability of a
growing labor pool, comparatively low development and living costs and inexpensive power, A consistent
factor in the growth of the labor force eontinues to be the out-migration of all types of workers from the
population centers of Southern California and the San Franeiseo Bay Area to Shasta County and other
Northern California counties. A large portion of the in-migrants possesses high technical and
adminis�rative skills.
1Vlajor employers in the City and Shasta County include those in medical serviees, government
and utility services. Major non-governmental employers, their products or services, and the number of
their respective employers in 2025 are listed in the following table:
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CITY OF REDDING
MAJOR EMPLOYERS
(as of June 30, 2025)
Percentage
of Total Area
Employer Employees Rank Employment
Mercy Medical Center 2,239 1 2.92%
Shasta County�'� 1,779 2 2.32
City of Redding��> 961 3 1.25
Shasta Regional Medical Center 679 4 0.89
California Transportation Department 599 5 0.78
Shasta Union High School District 582 6 0.76
Shasta Community College 521 7 0.68
Shasta Community Health 500 8 0.65
Win-River Casino 366 9 0.48
Redding Rancheria 351 10 0.46
Total 8,577 1118%
�'> Full-rime equivalent budgeted positions.This inciudes employees who work outside of the City.
��� Full-rime budgeted positions. In Fiscal Year 2024-25, there were [_] full-time and [_] part-time/temporary
posirions filled.
SouYce: City of Redding Annual Comprehensive Financial Report for Fiscal Year 2024-25. Derived roughly from
the State of California Employment Development Department's listing of the top 25 employers in Shasta
County.
The Redding Metropolitan Statistical Area (MSA) is comprised of Shasta County. The following
table summarizes employment by industry in Shasta County in calendar years 2020 through 2024 (most
recent full year information available). The calendar year figures presented are annual averages which are
estimated by the State of California Employment Development Department.
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LABOR FORCE IN SHASTA COUNTY
AVERAGE ANNUAL EMPLOYMENT BY INDUSTRY
2020through 2024
2020 2021 2022 2023 2024
Wage and Salary Employment:
Farm........................................... 800 900 1,000 1,000 1,000
Mining, Logging, and
Construction............................. 4,400 4,400 4,400 4,400 4,500
Manufacturing............................ 2,500 2,800 2,900 2,900 3,000
Trade,Transportation and
Utilities..................................... 13,000 13,400 13,600 13,200 13,000
Information Services.................. 500 500 500 500 500
Financial Activities.................... 2,800 2,800 2,900 3,000 3,100
Professional and Business
Services ................................... 5,800 5,800 6,100 6,200 6,200
Private Education and
Health Services........................ 15,200 15,100 15,600 16,400 16,700
Leisure and Hospitality.............. 6,200 6,900 7,200 7,200 6,900
Other Services............................ 2,300 2,300 2,400 2,600 2,700
Government................................ 13,200 13,100 13,400 14,000 14,700
Tota1�'>................................... 66,600 68,000 69,700 71,100 72,200
�i� Columns may not add to totals due to independent rounding.
Source: California Employinent DevelopmenY Deparhnent. Annual Averages;March 2024 Benchmark.
According to the California Einployment Development Departinent, the City's inetropolitan area
(i.e., Shasta County) annual average unemployment rate was 53%in 2024. The following table sets forth
certain information regarding em�ployment in the Redding Metropolitan Statistical Area from 2020
through 2024.
REDDING 1VIETROPOLITAN STATISTICAL AREA
CIVILIAN LABOR FORCE,EMPLOYMENT AND UNEMPLOYMENT
2020through 2024
Unemployment
Year Labor Force Number Rate
2020 73,300 6,500 8.9%
2021 72,800 5,000 6.9
2022 72,500 3,400 4.7
2023 73,900 3,800 5.1.
2024 79,300 4,200 5.3
Source: California Empioyment Development Department; Revised annual averages (not seasonally adjusted)
March 2024 Benchinark.
Construction Activity
The following table sets forth the valuation and number of units for new single- and multi-family
dwellings and businesses located in the City for the five calendar years 2021 through 2025.
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CITY OF REDDING
BUILDING VALUATIONS AND NUMBER OF UNITS
2021through 2025
(Dollars in Thousands)
2021 2022 2023 2024 2025�4>
Single Family Units......................... 151 234 94 112 163
Val�ue Single Family�'>..................... $42,510.7 $76,110.7 $36,660.3 $45,722.6 $61,464.2
Multi-Family Units.......................... 244 52 0 61 0
Multi-Family Permits��> ................... 3 4 0 3 0
Val�ue Multi-Family Dwellings........ $38,036.4 $9,031.6 $0 $9,295.8 $0
Business Permits ............................. 33 23 23 17 15
Value Business ................................ $46,433.7 $44,679.7 $36,936.1 $34,006.4 $43,458.1
Total Permits�3> ................................ 5,310 4,675 3,883 3,616 3,671
Value Total All Permits�3>................ $164,855.5 $192,655.3 $116,809.5 $144,828.9 $171,678.2
�l> Value of new construction only.
��> Includes hotel and apartment units—"R"occupancies.
�3> Total includes miscellaneous structures and additions,alterations and remodels in addition to new construction.
�4> Figures as of November 30,2025.
SouYce: City of Redding Development Services Department.
Commerce
The City is a regional center of cominerce for several Northern California counties, with many
shopping centers and malls. Support for retail sales is derived from a retail trade area population of
approximately 128,000 in the primary trade area and appro�mately 25'7,000 people in the secondary trade
area. The primary trade area consists of the metropolitan urban area, including the cities of Redding,
Shasta Lake, Anderson and Red Bluff. The secondary trade area consists of Shasta, Trinity, and Tehama
counties.
The following table shows the annual volume of taxable sales within the City since 2020. Taxable
transactions in the City were reported to be approximately$2.51 billion in calendar year 2024.
CITY OF REDDING
TAXABLE TRANSACTIONS
Calendar I'ears 2020 through 2024
(Dollars In Thousands)
Retail and Food Services Total All Outiets Taxable
Year Taxable Transactions Transactions
2020 $1,766,878 $2,276,483
2021 2,044,445 2,608,210
2022 2,001,843 2,607,234
2023 1,940,192 2,560,254
2024 1,901,277 2,516,487
Source: California Department of Tax and Fee Adininistration-Taxable Sales in California
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Personal Income
The United Department of Commerce, Bureau of Economic Analysis (the "BEA") produces
economic accounts statistics that enable government and business decision-makers, researchers, and the
public to follow and understand the performance of the national econoiny.
The BEA defines "personal income" as income received by persons from all sources, including
income received from participation in production as well as from government and business transfer
payments. Personal income represents the sum of compensation of employees (received), supplements to
wages and salaries, proprietors' income with inventory val�uation adjustment and capital consumption
adjustment ("CCAdj"), rental income of persons with CCAdj, personal income receipts on assets, and
personal current transfer receipts, less contributions for government social insurance. Per capita personal
income is calculated as the personal income divided by the resident population based upon the Census
Bureau's annual midyear population estimates.
The following table presents total personal income and per capita personal income for the
Redding Metropolitan Statistical Area (which is the same as the County of Shasta), the State and the
United States for the period 2019 through 2023.
REDDING METROPOLITAN STATISTICAL AREA,
STATE OF CALIFORNIA AND UNITED STATES
PERSONAL INCOME AND PER CAPITA PERSONAL INCOME
Calendar Years 2019 through 2023�i�
Personal Income Per Capita Personal
Year Area (millions of dollars) Income(dollars)
2019 Redding MSA $ 8,321.8 $45,675
California 2,539,747.4 64,219
United States 18,349,584.0 55,566
2020 Redding MSA $ 9,325.8 $51,240
California 2,769,103.0 70,098
United States 19,600,945.0 59,123
2021 Redding MSA $ 9,905.5 $54,385
California 3,009,556.6 76,882
United States 21,403,979.0 64,460
2022 Redding MSA $ 9,788.5 $54,099
California 3,003,826.1 76,941
United States 22,077,232.0 66,244
2023 Redding MSA $ 10,395.7 $57,637
California 3,166,135.4 81,255
United States 23,380,269.0 69,810
�'> Latest available annual data. SAINCI National and State data updated September 2024—revised statistics for
2019-2023;CAINC 1 MSA data updated November 2024—new statistics for 2023;revised statistics for 2019-
2022;data not adjusted for inflation.
Source: Bureau of Economic Analysis: SAINCI National and State data; CAINCI MSA data.
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Transportation
The City enjoys a strategic market location among the Pacific Coast States of California, Oregon
and Washington. Interstate 5, the principal transportation artery running north-south from Mexico to
Canada, connects the City to the entire Pacific Coast marketplace. The City lies an equal distance
(approximately 600 miles) between Los Angeles, California and Seattle, Washington. The City is also
bisected by State Highway 299 and State Route 44, the key east-west transportation arteries in northern
California. Interstate 5 also provides industrial and manufacturing firms in the County with freight-
delivery schedules to the Midwest and the East Coast.
The City is served by Amtrak for rail transportation and Greyhound for bus service. Eight truck
terminals are located in the Counry and daily service is provided by six major carriers.
The Redding Area Bus Authority ("RABA") is the City's multi bus transportation system and
offers 15 different fixed routes and a commuter service to provide transportation to the rural city of
Burney. RABA also operates the Americans with Disability Act (ADA) Paratransit service providing
service for individuals who, because of a disability, are not able to utilize the fixed route system. The
service area of the RABA system covers well over 100 square iniles.
The Redding Regional Airport serves the regional area of Northern California, consisting of
approxiinately 25,000 square miles covering eight counties. Commercial, freight and passenger services
are provided by United Express/S1cyWest Airlines, Alaska Airlines, Avelo Airlines, Federal Express,UPS
and charter service providers. The Redding Municipal Airport features a 32,000 square foot terminal
building to serve the traveling public that was expanded and remodeled in 2014.
Utilities
Electricity, solid waste collection and disposal, water, storm drainage, and wastewater services
are provided by enterprise operations owned and operated by the City. Natural gas is provided by Pacific
Gas and Electric Company(PG&E).
Community Services
Students in the Redding area attend school at one of 45 elementary schools and middle/junior
high schools, 15 charter schools, 1 regional occupation programs and 18 high schools. There are several
higher education institutions in the immediate area offering bachelor's and master's degrees: Chico State
University Center for Regional and Continuing Education (located in the Health Science & University
Center in downtown Redding), National University, Simpson University, and Shasta Bible College &
Graduate School. Shasta Community College, a two-year institution, offers both day and evening courses
to approximately 10,000 students. In addition, several Vocational & Technical schools offer a diverse
range of programs.
The Ci1y's parks system includes 59 developed parks and facilities, encompassing over 482
developed acres. The park system includes nearly 180 acres of natural area parks, 40-plus miles of City-
owned trails, and 1'7 special purpose facilities and almost 1,000 acres of natural open space. The special
purposes facilities include the Redding Civic Auditorium; the Redding Sports Park; the California Soccer
Park; the Redding Aquatics Center; the Senior Citizens Center; the Martin Luther King Jr. Community
Center; the Benton Dog Park; and three boat ramp facilities accessing the Sacramento River.
The City serves as the primary medical center for Northern California. The City's two general
care hospitals serve approximately 330,000 people in Shasta, Tehama, Trinity, Siskiyou, and Lassen
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counties. The two largest hospitals have a total of 492 beds and employ approximately 2,918 full-time
staff employees. In addition, the City has several specialized health care facilities.
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APPENDIX C
BOOK-ENTRY ONLY SYSTEM
General
The Depository Trust Company ("DTC"), New York, New York will act as securities
depository for the 2026 Bonds. The 2026 Bonds will be issued as fully-registered securities
certificates 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 2026 Bond will be
delivered for each maturity of the 2026 Bonds, in the aggregate principal amount of such 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 N�ew 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 o�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 is also available
to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and
clearing corporations that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+.
The DTC Rules applicable to DTC's participants are on file with the Securities and Exchange
Commission. More information about DTC can be found at www.dtcc.com. The information on such
website is not incorporated herein by reference.
Purchases of the 2026 Bonds under the DTC book-entry system must be made by or through
Direct Participants, which will receive a credit for the 2026 Bonds on DTC's records. The ownership
interest of each act�ual purchaser of each 2026 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 2026 Bonds are to be accomplished by entries
made on the books of Direct and Indirect Participants actin� on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership interests in the 2026
Bonds, except in the event that use of the book-entry system for the 2026 Bonds is discontinued.
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To facilitate subsequent transfers, all 2026 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 representatives of DTC. The deposit of 2026 Bonds with DTC and their
registration in the name of Cede & Co. or such other DTC nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2026 Bonds;
DTC's records reflect only the identity of the Direct Participants to whose accounts such 2026 Bonds
are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants
wi11 remain responsible for keeping account of their holdings on 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 the 2026 Bonds may wish
to take certain steps to augment the transmission to them of notices of significant events with respect
to the 2026 Bonds, such as redemptions, defaults and proposed amendments to the Indenture. For
example, Beneficial Owners of 2026 Bonds may wish to ascertain that the nominee holding the 2026
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 bond registrar
and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. Tf less than all of a maturity of the 2026 Bonds
within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest
of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Ca (nor such other DTC nominee) wi11 consent or vote with
respect to the 2026 Bonds unless authorized by a Direct Participant in accordance with DTC's 1VIMT
Procedures. Under its usual procedures, DTC mails an 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 2026 Bonds are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest payments with respect to the 2026 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 City or the Trustee, on each payment date in accordance
with their respective holdings shown on DTC's records. Payments by Participants to Beneficial
Owner will be governed by standing instructions and customer 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 City, subject to any stat�utory 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 City 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 shall
be responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the 2026 Bonds at
any time by giving reasonable notice to the City or the Trustee. Under such circuinstances, in the
event that a successor depositozy is not obtained, 2026 Bonds are required to be printed and
delivered.
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The City may decide to discontinue use of the system of book-entry transfers through DTC
(or a successor securities depository). In that event, certificates will be printed and delivered.
The.foregoing description concerning DTC and DTC's l�ook-entry system is based solely on
inforrrzation furnished by DTC. No representation is made herein by the City oN the Under�w�iter as to
the accuracy or completeness of such information, and the City and the Undenv�iter take no
responsibility for the accu�acy or completeness thereof.
Discontinuance of DTC Services
In the event that (a) DTC determines not to continue to act as securities depository for the
2026 Bonds or(b)the City determines to remove DTC from its functions as a depository, DTC's role
as securities depository for the 2026 Bonds and use of the book-entry system will be discontinued. If
the City fails to select a qualified securities depository to replace DTC, the City will cause the
Trustee to execute and deliver new 2026 Bonds in fully registered form in such denominations and
numbered in the manner determined by the Trustee and registered in the names o�such persons as are
requested in a written request of the City. The Trustee shall not be required to deliver such new 2026
Bonds within a period of less than 60 days from the date of receipt of such written request of the
City. Upon such registration, such persons in whose names the 2026 Bonds are registered will
become the registered owners of the 2026 Bonds for all purposes.
In the event that the book-entry system is discontinued, the following provisions would also
apply: (a) any 2026 Bonds may, in accordance with their terms, be transferred on the books
maintained by the Trustee under the Indenture for such purpose by the person in whose name it is
registered, in person or by the duly authorized attorney of such person, upon payment by the Owner
requesting such transfer of any tax or other governmental charge required to be paid with respect to
such xransfer as a condition precedent to the exercise of such privilege, and upon the surrender of
such 2026 Bond for cancellation accompanied by a duly executed written instrument of transfer in a
form approved by the Trustee; (b) 2026 Bonds may be exchanged at the principal corporate trust
office of the Trustee for a like aggregate principal amount of 2026 Bonds of the same maturity of
other authorized denominations, upon payment by the Owner requesting such exchange of any tax or
other governmental charge required to be paid with respect to such transfer as a condition precedent
to the exercise of sueh privilege; (c)the Trustee shall not be required to register the transfer of or
exchange any 2026 Bonds during the fifteen days preceding each interest payment date, or to register
the transfer of or exehange any 2026 Bond which has been selected for redemption in whole or in
part, from after the day of mailing of a notice of redemption of such 2026 Bond; (d) all interest
payments on the 2026 Bonds will be made on the interest payment dates therefor as provided in the
Indenture to the person whose name appears on the registration books maintained by the Trustee as
the Owner thereof at the close of business on the last day of the month immediately preceding an
interest payment date (the "Record Date"), whether or not such day is a Business Day, such interest
to be paid by check mailed by first-class mail to such registered Owner at the address as it appears in
such registration books on the Record Date, except in the case of an Owner of at least $1,000,000 in
aggregate prineipal amount of 2026 Bonds the Outstanding, payment shal] be made at such Owner's
option by wire transfer of immediately available funds to an aeeount in a bank or trust coinpany or
savings ban.k that is a member of the Federal Reserve System and that is loeated in the United States
of America according to written instructions given by such Owner to the Trustee by the applicable
record date; and (e) al1 payments of principal of and premium, if any, on the 2026 Bonds will be
payable in lawful money of the United States of America by check upon surrender of the 2026 Bonds
at the principal corporate trust office of the Trustee at maturity or upon its priar redemption.
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APPENDIX D
SUMIVIARY OF CERTAIN PROVISIONS OF THE INDENTURE
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APPENDIX E
PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the "Disclosure Agreement"), dated [Closing Date],
2026, is executed and delivered by the City of Redding, California (the "City") and U.S. Bank Trust
Company,National Association in its capacity as dissemination agent (the "Dissemination Agent")in
connection with the issuance of $[Par] aggregate principal amount of City of Redding Electric
System Refunding Revenue Bonds, Series 2026 (the `Bonds"). The Bonds are being issued pursuant
to an Indenture, dated as of July 1, 2026 (the "Indenture"), by and between the City and U.S. Bank
Trust Company, National Association, as trustee (the "Trustee"). In connection therewith the City
and the Trustee covenant and agree as follows:
Purpose of' this Disclosure A�reement. This Disclosure Agreement is being executed and
delivered by the City and the Dissemination Agent for the benefit of the Holders and Beneficial
Owners of the Bonds and in order to assist the Participating Underwriter (as defined herein) in
complying with Securities and Exchange Commission Rule 15c2-12(b)(5).
Definitions. In addition to the definitions set forth above and in the Indenture, which apply to
any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section 2,
the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the City pursuant to, and as
described in, Sections 3 and 4 of this Disclosure Agreement.
`Beneficial Owner" shall mean any person who (a) has the power, directly or indirectly, to
vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding
Bonds through nominees, depositories or other intermediaries); or (b) is treated as the owner of any
Bonds for federal income tax purposes.
"Disclosure Representative" shall mean the City Manager or the Director of Finance of the
City, or such other officer or employee as the City shall designate in writing to the Trustee from time
to time.
"Dissemination Agent" shall mean initially, U.S. Bank Trust Company, National
Association, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination
Agent designated in writing by the City and which has filed with the Trustee a written acceptance of
such designation.
"Holder" shall mean either the registered owners of the Bonds or, if the Bonds are registered
in the naine of The Depository Trust Company or another recognized depository, any applicable
participant in such depository system.
"Listed Event" shall mean any of the events listed in Section 5(a) of this Disclosure
Agreement.
"MSRB" shall mean the Municipal Securities Rulemaking Board established pursuant to
Section 15B(b)(1) of the Securities Exchange Act of 1934 or any other entity designated or
authorized by the Securities and Exchange Commission to receive reports pursuant to the Ru1e. Until
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otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the
MSRB are to be made through the Elect�onic Municipal Market Access (EMIVIA) website of the
MSRB, currently located at http://emma.msrh.o�g.
"Official Statement" shall mean the Official Statement dated [ ], 2026, relating to the
Bonds.
"Participating Underwriter" shall mean any of the original underwriter of the Bonds listed on
the cover page of the Official Statement required to comply with the Rule in connection with offering
of the Bonds.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange
Act of 1934, as the same may be amended from time to time.
"SEC" sha11 mean the United States Securities and Exchange Commission.
Provision of Annual Reports.
The City shall, or shall cause the Dissemination Agent to, not later than 2'70 days
after the end of the City's Fiscal Year (which Fiscal Year presently ends on June 30), commencing
with the report for the 2025-26 Fiscal Year, provide to the MSRB an Annual Report which is
consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report must
be submitted in electronic format, accompanied by such identifying information as prescribed by the
MSRB. The Annual Report may be submitted as a single document or as separate documents
comprising a package, and may cross-reference other information as provided in Section 4 of this
Disclosure Agreement;p�ovided that if the audited financial statements of the City's Electric Utility
Fund are not available by the date required above for the filing of the Annual Report, the City shall
submit the audited financial statements as soon thereafter as available. If the City's Fiscal Year
changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5.
If the City is unable to provide to the MSRB an Annual Report by the date required in
subsection (a), the City shall, or sha11 cause the Dissemination Agent to, send to the MSRB a notice
in substantially the form attached hereto as Exhibit A.
The Dissemination Agent shall:
determine the electronic filing address of, and then-current procedures for
submitting Annual Reports to, the MSRB each year prior to the date for providing the
Annual Report; and
file a report with the City and (if the Dissemination Agent is not the Trustee,
the Trustee) certifying that the Annual Report has been provided to the MSRB
pursuant to this Disclosure Agreement, and stating the date it was provided.
Content of Annual Reports. The City's Annual Report shall contain or include by reference
the following categories or similar categories of information updated to incorporate information for
the most recent Fiscal Year(the tables referred to below are those appearing in the Official Statement
relating to the Bonds):
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The audited fmancial statements of the City's Electric Utility Fund (which
may be included as a component of the City's city-wide audited financial statements)
for the most recently completed Fiscal Year, prepared in accordance with generally
accepted accounting principles for governmental enterprises as prescribed from time
to time by any regulatory body with jurisdiction over the City and by the
Governmental Accounting Standards Board. If the City's Electric Utility Enterprise
Fund audited financial statements are not available by the time the Annual Report is
required to be filed pursuant to Section 3(a), the Annual Report shall contain
unaudited financial statements in a format similar to the audited financial statements,
and the audited financial statements shall be filed in the same manner as the Annual
Report when they become available.
Updated information comparable to the information in the table entitled
"CITY OF REDDING ELECTRIC UTILITY DEPARTMENT POWER SUPPLY
RESOURCES" as it appears in the Official Statement;
Updated information comparable to the information in the table entitled
"CITY OF REDDING ELECTRIC UTILITY DEPARTMENT CUSTOMERS,
SALES, REVENUES AND DEMAND" as it appears in the Official Statement;
Updated information comparable to the information in the table entitled
"CITY OF REDDING ELECTRTC UTILITY DEPARTIVIEN�T SLTMMARY OF
OPERATING RESULTS"as it appears in the Official Statement; and
Updated information comparable to the information in the table entitled
"CITY OF REDDING ELECTRIC UTILITY DEPARTiVIENT OUTSTANDING
DEBT OF JOINT POWERS AGENCIES" as it appears in the Official Statement.
Financial and operating information relating to the City referenced in items (ii)-(v) above
may be updated from time to time, and such updates may involve displaying data in a different
format or eliminating data that is no longer material.
Any or all of the items listed above may be incl�uded by specific reference to other
documents, including official statements of debt issues of the City or related public entities, which
have been subinitted to the MSRB or the SEC. If any document included by reference is a final
official statement, it must be available from the MSRB. The City shall clearly identify each such
other document so included by reference.
Re�ortin�of Listed Events.
(a) Pursuant to the provisions of this Section 5,upon the occurrence of any of the
following events (in each case to the extent applicable)with respect to the Bonds, the City shall give,
or cause to be given by so notifying the Dissemination Agent in writing and instructing the
Dissemination Agent to give, notice of the occurrence of such event, in each case, pursuant to
Section 5(c)hereo£
principal or interest payment delinquencies;
non-payment related defaults, if material;
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unscheduled draws on the debt service reserves reflecting financial difficulties;
unscheduled draws on the credit enhancements reflecting financial difficulties;
substitution of credit or liquidity providers, or their failure to perfarm;
adverse tax opinions or the issuance by the Internal Revenue Service of proposed or
final determinations of taxability,Notices of Proposed Issue(IRS Form 5701-
TEB) or other material notices or determinations with respect to the tax status
of the Bonds, or other material events affecting the tax status of the Bonds;
modifications to the rights of the Bondholders,if material;
optional, contingent ar unscheduled calls,if material, and tender offers;
defeasances;
release, substitution or sale of property securing repayment of the Bonds, if material;
rating changes;
bankruptcy, insolvency, receivership or similar proceedings of the City, which shall
occur as described below;
the consummation of a merger, consolidation, or acquisition involving the City or the
sale of all or substantially all of the assets of the City's Electric System other
than in the ordinary course of business, the entry into a definitive agreement
to undertake such an action or the termination of a definitive agreement
relating to any such actions, other than pursuant to its terms, if material;
appointment of a successor or additional trustee or the change of name of a trustee, if
material;
incurrence of a Financial Obligation of the City with respect to the Electric System, if
material, or agreement to covenants, events of default, remedies, priority
rights, or other similar terms of a Financial Obligation of the City with
respect to the Electric System, any of which affects Holders of the Bonds, if
material; or
default, event of acceleration, termination event, modification of terms, or other
similar events under the terms of a Financial Obligation of the City with
respect to the Electric System, any of which reflect financial difficulties.
For these purposes, (i) any event described in item 12 of this Section 5(a) is considered to occur
when any of'the following occur: the appointment of a receiver, fiscal agent, or similar officer for the
City in a proceeding under the United States Bankruptey Code or in any other proeeeding under state or
federal law in which a court or governmental authority has assumed jurisdiction over substantially a11 of
the assets or business of the City or its Eleetric System, or if such jurisdiction has been assumed by
leaving the existing governing body and officials or officers in possession but subject to the supervision
and orders of a court or governmental authority, or the entry of an order conftrming a plan of
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reorganization, arrangement, or liquidation by a court or governmental authority having supervision or
jurisdiction over substantially all of the assets or business of the City or its Electric System; and (ii)the
City intends to comply with the provisions hereof for the Listed Events described in subparagraphs (15)
and(16) of this Section 5(a), and the definition of the "Financial Obligation" in Section 2, with reference
to the Rule, any other applicable federal securities laws and guidance provided by the SEC in its Release
No. 34-83885 dated August 20, 2018 (the "2018 Release"), any further amendments or written guidance
provided by the SEC or its staff with respect to the amendments to the Rule effected by the 2018 Release.
Upon receipt of notice from the City and instruction by the City to report the
occurrence of any Listed Event, the Dissemination Agent shall provide notice thereof to the MSRB
in accordance with Section 5(c) hereof. In the event the Dissemination Agent shall obtain actual
knowledge of the occurrence of any of the Listed Events, the Dissemination Agent shall,
immediately after obtaining such knowledge, contact the Disclosure Representative, inform such
person of the event, and request that the City promptly notify the Dissemination Agent in writing
whether or not to report the event pursuant to Section 5(c). For purposes of this Disclosure
Agreement, "actual knowledge" of the occurrence of such Listed Event shall mean actual knowledge
by the Dissemination Agent, if other than the Trustee, and if the Dissemination Agent is the Trustee,
then by the officer at the corporate trust office of the Trustee with regular responsibility for the
administration of� matters related to the Indenture. The Dissemination Agent shall have no
responsibility to determine the materiality, if applicable, o�any of the Listed Events.
The City, or the Dissemination Agent, if the Dissemination Agent has been instructed
by the City to report the occurrence of a Listed Event pursuant to Section 5(b), sha11 file a notice of
the occurrence of any of the events listed in Section 5(a) hereof with the MSRB in a timely manner
not more than ten(10)business days after the occurrence of the event.
Termination of Re�orting Obli ag tion. The City's obligations under this Disclosure
Agreement shall terminate with respect to all Bonds upon the maturity, legal defeasance, prior
redemption or payment in full of all of the Bonds and with respect to any Bonds upon the maturity,
defeasance,prior redemption or payment in full of such Bonds.
Dissemination A�ent. The City may, from time to time, appoint or engage a Dissemination
Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge
any such Dissemination Agent, with or without appointing a successor Dissemination Agent. If at
any time there is not any other designated Dissemination Agent, the Trustee, upon notice from the
City, shall be the Dissemination Agent. The initial Dissemination Agent shall be the Trustee. The
Dissemination Agent shall not be responsible in any manner for the content of any notice or report
prepared by the City pursuant to this Disclosure Agreement. The Dissemination Agent shall receive
compensation for the services provided pursuant to this Disclosure Agreement.
Amendment• Waiver. Notwithstanding any other provision of this Disclosure Agreement, the
City and the Dissemination Agent may amend this Disclosure Agreement, (and, to the extent that any
such amendment does not materially change or increase its obligations hereunder, the Dissemination
Agent shall agree to any amendinent so requested by the City), and any provision of this Disclosure
Agreement may be waived;provided, that the following conditions are satisfied:
If the amendment or waiver relates to the provisions of Section 3(a), Section 4 or
Section 5(a), it may only be made in connection with a change in circumstances that arises from a
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change in legal requirements, change in law, or change in the identity, nature or status of an obligated
person with respect to the Bonds, or the type of business conducted;
The undertaking, as amended or taking into account such waiver, would, in the
opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at
the time of the original issuance of the Bonds, after taking into account any ainendments or
interpretations of the Rule, as well as any change in circumstances; and
The amendment or waiver does not, in the opinion of nationally recognized bond
counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds.
In the event of any amendment or waiver of a provision of this Disclosure Agreement, the
City shall describe such amendment in the next Annual Report, and shall include, as applicable, a
narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the
case of a change of accounting principles, on the presentation) of financial information or operating
data being presented by the City. In addition, if the amendment relates to the accounting principles to
be followed in preparing financial statements, (i) notice of such change shall be given in the same
manner as for a Listed Event under Section 5(c), and (ii) the Annual Report for the year in which the
change is made should present a comparison (in narrative form and also, if feasible, in quantitative
form) between the financial statements as prepared on the basis of the new accounting principles and
those prepared on the basis of the former accounting principles.
Filin�s with the MSRB. All information, operating data, financial statements, notices and
other documents provided to the MSRB in accordance with this Disclosure Agreement shall be
provided in an electronic format prescribed by the MSRB and shall be accompanied by identifying
information as prescribed by the MSRB.
Additional Information. Nothing in this Disclosure Agreement sha11 be deemed to prevent the
City from disseminating any other information, using the means of dissemination set forth in this
Disclosure Agreement or any other means of communication, or incl�uding any other information in
any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by
this Disclosure Agreement. If the City chooses to include any information in any Annual Report or
notice of occurrence of a Listed Event in addition to that which is specifically required by this
Disclosure Agreement, the City sha11 have no obligation under this Disclosure Agreement to update
such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Default. In the event of a failure of the City or the Dissemination Agent to comply with any
provision of this Disclosure Agreement, the Trustee may (and, at the request of any Participating
Underwriter or the Holders of at least 25% of the aggregate principal amount of Outstanding Bonds
and upon provision of indemnification satisfactory to the Trustee, shall), or any Holder or Beneficial
Owner of the Bonds may take such actions as may be necessary and appropriate, incl�uding seeking
mandate or specific performance by court order, to cause the City or the Dissemination Agent, as the
case may be, to comply with its obligations under this Disclosure Agreement. A default under this
Disclosure Agreement shall not be deemed an Event of Default under the Indent�ure, and the sole
remedy under this Disclosure Agreement in the event of any failure of the City or the Dissemination
Agent to cotnply with this Disclosure Agreement shall be an action to compel performance
hereunder.
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Duties, Immunities and Liabilities of Trustee and Dissemination A..�. The Dissemination
Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the
City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and
agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the
exercise or performance of its powers and duties hereunder, including the costs and expenses
(including attorneys' fees) of defendin� against any claim of liability, but excluding any loss,
expense and liabilities due to the Dissemination Agent's negligence or willful misconduct. The
obligations of the City under this Section 12 shall survive resignation or removal of the
Dissemination Agent and payment of the Bonds.
N�otices. Any notices or communications to ar among any of the parties to this Disclosure
Agreement may be given as follows:
To the Citv: To the Dissemination A,_e�nt:
City of Redding U.S. Bank Trust Company,National Association
777 Cypress Avenue One California Street, Suite 1000
Redding, California 96001 San Francisco, California 94111
Attention: Finance Officer Attention: Global Corporate Trust Services
Phone: (530) 225-4087 Phone: (415) 677-3597
Fax: (530) 225-4324 Fax: (415) 677-3769
Bene�ciaries. This Disclosure Agreement shall inure solely to the bene�t of the City, the
Trustee, the Dissemination Agent, the Participating Underwriter and the Holders and Beneficial
Owners from time to time of the Bonds, and shall create no rights in any other person or entity.
[Remainder of page intentionally left blank.�
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Counterparts. This Disclosure Agreement may be executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same instrument.
CITY OF REDDING, CALIFORNIA
By
City Manager
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION,
as Dissemination Agent
By
Authorized Officer
ACKNOWLEDGED:
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By
Authorized Officer
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EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: CITY OF REDDTNG
Name of Bond Issue: ELECTRIC SYSTEM REFUNDING REVENUE BONDS, SERIES 2026
Date of Issuance: [CLOSING DATE], 2026
NOTICE IS HEREBY GIVEN that the City of Redding, California (the "City") has not
provided an Annual Report with respect to the above-named Bonds as required by Section 5.07 of the
Indenture, dated as of April 1, 2026, by and between the City and U.S. Bank Trust Company,
National Association, as trustee, and the Continuing Disclosure Agreement, dated [Closing Date],
2026, by and between the City and U�.S. Bank Trust Company, National Association, as
Dissemination Agent. The City anticipates that the Annual Report will be filed by ,
20
Dated: , 20
U.S. BANK TRUST COMPANY,NATIONAL
ASSOCIATION, as Dissemination Agent on behalf of
the City of Redding
By:
Authorized Officer
cc: City of Redding, California
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APPENDIX F
PROPOSED FORM OF OPINION OF BOND COUNSEL
April [_], 2026
City of Redding
Redding, California
City of Redding
Electric Svstem Refundin�Revenue Bonds Series 2026
(Fina1 Opinion)
Ladies and Gentlemen:
We have acted as bond counsel to the City of Redding(the "City") in connection with
the issuance of $[Series 2026 Par] aggregate principal amount of City of Redding Electric System
Refunding Revenue Bonds, Series 2026 (the `Bonds"), issued pursuant to an indenture, dated as of
Apri1 1, 2026 (the "Indenture"), between the City and U.S. Bank Trust Company, National
Association, as trustee (the "Trustee"). Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Indenture.
In such connection, we have reviewed the Indenture, the Tax Certificate, dated the
date hereof(the"Tax Certificate"), opinions of counsel to the City and the Trustee, certificates of the
City, the Trustee and others, and such other documents, opinions and matters to the extent we
deemed necessary to render the opinions set forth herein.
The opinions expressed herein are based on an analysis of existing laws, regulations,
rulings and court decisions and cover certain matters not directly addressed by such authorities. Such
opinions may be affected by actions taken or omitted or events occurring after original delivery of
the Bonds on the date hereof. We have not undertaken to determine, or to inform any person,
whether any such actions are taken or omitted or events do occur or any other matters come to our
attention after original delivery of the Bonds on the date hereof. Accordingly, this letter speaks only
as of its date and is not intended to, and may not, be relied upon or otherwise used in con.nection with
any such actions, events or matters. Our engagement with respect to the Bonds has concluded with
their issuance, and we disclaiin any obligation to update this letter. We have assumed that each
document and each signature thereon provided to us is genuine and that each such document has
been duly and 1ega11y executed by, and constitutes a valid and binding agreement of, each party
thereto other than the City. We have assumed, without undertaking to verify, the accuracy of the
factual matters represented, warranted or certified in the documents and of the legal conclusions
contained in the opinions,referred to in the second paragraph hereof. Furthermore, we have assumed
compliance with all covenants and agreements contained in the Indenture and the Tax Certificate,
including (without limitation) covenants and agreements compliance with which is necessary to
assure that future actions, omissions or events will not cause interest on the Bonds to be included in
gross income for federal income tax purposes. We call attention to the fact that the rights and
obligations under the Bonds, the Indenture and the Tax Certificate and their enforceability may be
subject to bankruptcy, insolvency, receivership, reor�anization, arrangement, fraudulent conveyance,
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moratorium and other laws relating to or affecting creditors' rights, to the application of equitable
principles, to the exercise of judicial discretion in appropriate cases and to �lie limitations on legal
remedies against governmental entities such as the City in the State of California. We express no
opinion with respect to any indemnification, contribution, liquidated damages,penalty(including any
remedy deemed to constitute a penalty),right of set-off, arbitration,judicial reference, choice of law,
choice of forum, choice of venue, non-exclusivity of remedies, waiver or severability provisions
contained in the foregoing documents, nor do we express any opinion with respect to the state or
quality of title to or interest in any of the assets described in ar as subject to the lien of the Indenture
or the accuracy or sufficiency of the description contained therein of, or the remedies available to
enforce liens on, any such assets. Our services did not include financial or other non-legal advice.
Finally, we undertake no responsibility for the accuracy, completeness or fairness of the Official
Statement or other offering material relating to the Bonds and express no view with respect thereto.
Based on and subject to the foregoing, and in reliance thereon, as of the date hereof,
we are of the following opinions:
1. The Bonds constitute the valid and binding special obligations of the City.
2. The Indenture has been duly executed and delivered by, and constitutes the
valid and binding agreement of, the City. The Indenture creates a valid pledge, to secure the
payment of the principal of and interest on the Bonds, of the Net Revenues of the Electric System
and moneys in the City's Electric Revenue Fund, subject to the provisions of the Indenture
permitting the application thereof for the purposes and on the terms and conditions set forth in the
Indenture.
3. 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. Interest on the Bonds is not a specific preference item for purposes
of the federal individual alternative minimum tax. We observe that interest on the Bonds included in
adjusted financial statement income of certain corporations is not excluded from the federal corporate
alternative minimum tax. We express no opinion regarding other tax consequences related to the
ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds.
Faithfully yours,
ORRICK,HERRINGTON & SUTCLIFFE LLP
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APPENDIX G
DEBT SERVICE SCHEDULE
Fiscal Year Outstanding Parity Obligations��> 2026 Bonds Total Debt
Ending June 30 Principal Interest Total��� Principal Interest Total Service���
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036 -- -- --
2037 -- -- --
2038 -- -- --
2039 -- -- --
2040 -- -- --
2041 -- -- --
2042 -- -- --
2043 - -- --
2044 -- -- --
2045 -- -- --
2046 -- -- --
2047 -- -- --
2048 -- -- --
2049 -- -- --
2050 -- -- --
2051 -- -- --
2052 -- -- --
2053 -- -- --
2054 -- -- --
2055 -- -- --
Tota1«>
�'� Excludes the installment sale payments relating to the Refunded 2015A Bonds.Includes the 2017 City Electric System Refunding Bonds,the 2018 City Electric System Refunding Bonds and the
instaIlment saie payinents relating to outstanding 2025 Authoriry Eleetrie System Bonds.Excludes obligations payable with respect to joint powers ageney obligarions deseribed under"SECURITY
AND SOURCES OF PAYMENT FOR THE 2026 BONDS—Outstanding Electric System Revenue Obligations—Take-or-Pay;Toint PoweYs Agency Obligations,"which constitute Maintenance and
OperaYion CosYs.
«� Totals may not add due fo rounding.
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