JOINT POWERS FINANCING AUTHORITY AGENDA PACKET 9-15-26

42 control of the City, and may be adversely affected by actions taken (or not taken) by voters, property owners, taxpayers or payers of assessments, fees and charges. Furthermore, any remedies available to the owners of the 2026 Bonds upon the occurrence of an event of default under the Indenture are in many respects dependent upon judicial actions, which are often subject to discretion and delay and could prove both expensive and time-consuming to obtain. In addition to the limitations on Bondholder remedies contained in the Indenture, the rights and obligations of the Authority under the Indenture may be subject to the following: the United States Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the Owners of the 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. Seismic and other Natural Disasters; Climate Change General. The City is located in a seismically active area of California. If there were to be an occurrence of severe seismic activity in the area of the City, there could be an interruption in the service provided by the Water System, resulting in a temporary reduction in the amount of Net Revenues available to timely pay the Installment Payments. There are known earthquake faults near the City and the Water system could be damaged by an earthquake event, resulting in required unanticipated expense and repairs. Other natural disasters, such as flooding, landslides or wildfires, could also affect or interrupt the service provided by the Water System, resulting in a temporary reduction in the amount of Net Revenues available to timely pay the Installment Payments. Droughts. California is subject to droughts from time to time. The California Water Code asks agencies to evaluate their water service reliability by examining the impact of drought on their water supplies and comparing those reduced supplies to water demands. Specifically, agencies calculate their water supplies during a single dry year and five consecutive dry years using historical records. This water supply reliability assessment is documented within the City’s Urban Water Management Plan (UWMP), which is closely tied to Zone 7’s water supply reliability assessment. Under the City’s current 2025 UWMP, the water supply reliability assessment projects the City will have adequate supply to meet a single dry year and indicates Zone 7 is expected to have adequate supply reliability to meet the City’s current and projected demands through 2045. Furthermore, the analysis projects a potential small shortfall for Pleasanton (10 percent) in a five-year drought scenario beginning in 2045, specifically in the fifth consecutive year of drought. This shortfall is considered manageable through conservation measures consistent with the City’s Water Shortage Contingency Plan. Currently, the City does not project a water supply shortfall in the upcoming year. Page 170 of 205