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<br />in its mid-level scenario (a 1% annual chance flood plus 3.3 feet of sea level rise), 8,308 acres of
<br />land in the City could be inundated, affecting 21,000 people. In the mid-level scenario, Redwood
<br />Shores would be inundated, Highway 101 overtopped, and portions of Woodside Road and
<br />downtown would be inundated. In March 2024, the City prepared its own Sea-Level Rise
<br />Vulnerability and Adaptation Planning Study (the “City Sea Level Planning Study”). The ultimate
<br />goal of the City Sea Level Planning Study is to develop sea level rise adaptation strategies, to
<br />advance flood protection, and to protect ecosystems and the built environment along the San
<br />Francisco Bay. The City Sea Level Planning Study delineates the shoreline into a limited number
<br />of areas based on variations in shoreline type, flood hazard exposure, inland flood connectivity,
<br />flooding vulnerabilities, and management constraints. Recommendations for adaptation
<br />strategies are presented according to the specific conditions of these areas.
<br />Although the City may undertake adaptation strategies, there can be no guarantee that
<br />these strategies will be effective in mitigating the risks of sea level rise on the City or Enterprise.
<br />Coastal areas like portions of the City are at risk of substantial flood damage over time, affecting
<br />private development and public infrastructure, including roads, utilities, emergency services,
<br />schools, and parks. As a result, the City could lose considerable tax revenues and many residents,
<br />businesses, and governmental operations along the waterfront could be displaced, and the City
<br />could be required to mitigate these effects at a potentially material cost.
<br />Cybersecurity
<br />The City, including the Enterprise, like many other public and private entities, relies on
<br />computer and other digital networks and systems to conduct its operations. As a recipient and
<br />provider of personal, private or other sensitive electronic information, the City is potentially subject
<br />to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and
<br />other attacks. The City believes it has taken reasonable steps to mitigate the adverse effects of
<br />cyberattacks, including steps to harden its cybersecurity and provide training for employees in the
<br />use of its digital networks and systems. No assurance can be given that the City’s efforts to
<br />manage cyber threats and attacks will be successful in all cases, or that any such attack will not
<br />materially impact the operations or finances of the City. No assurance can be given that the City,
<br />the Authority, and the Enterprise will not be affected by cyber threats and attacks in a manner that
<br />may affect the owners of the Bonds.
<br />Limited Recourse on Default
<br />Failure by the City to make the 2024 Installment Payments, when due, constitutes an
<br />event of default under the 2024 Installment Purchase Contract and the Authority is permitted to
<br />pursue remedies at law or in equity to enforce the City’s obligation to make the 2024 Installment
<br />Payments. Although the Trustee, as assignee of the Authority, has the right to accelerate the total
<br />unpaid principal component of the 2024 Installment Payments, there is no assurance that the City
<br />will have sufficient Net Revenues to pay the principal component of the 2024 Installment
<br />Payments upon acceleration.
<br />Effect of Bankruptcy
<br />In addition to the limitations on remedies contained in the 2024 Installment Purchase
<br />Contract and the Indenture, the rights and obligations under the Bonds, the 2024 Installment
<br />Purchase Contract and the Indenture may be subject to the following: the United States
<br />Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar
<br />laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in
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