Agenda packet — Beaumont City Council, June 20, 2023 (part 4 of 7)

6 findings of a court of competent jurisdiction.

8A. Indemnification Design Professionals.

8A.01 In the event that CONTRACTOR is a design professional under California Civil Code Section 2782.8 this Section 8A shall apply instead of Section 8. To the fullest extent permitted by California law and in accordance with California Civil Code section 2782.8, CONTRACTOR shall indemnify, and hold harmless the City, its officers, employees, trustees and members (“Indemnified Parties”) from any and all actions, assessments, counts, citations, claims, costs, damages, demands, judgments, liabilities (legal, administrative or otherwise), losses, notices, expenses, fines, penalties, proceedings, responsibilities, violations, attorney’s and consultants’ fees and causes of action including, but not limited to those for, injury to property or persons, including personal injury and/or death (“Claim(s)”), to the extent that the Claim(s) arises out of, pertains to, or relates to the negligence, recklessness, or willful misconduct of CONTRACTOR, its directors, officials, officers, employees and consultants arising out of, connected with, or resulting from the performance of the Services, the Project, or this Agreement. This indemnity excludes liability caused by the negligence or willful misconduct of any of the Indemnified Parties.

The cost to indemnify, hold harmless, and defend charged to CONTRACTOR shall not exceed CONTRACTOR’S proportionate percentage of fault.

9. Additional Services, Changes and Deletions.

9.01 In the event CONTRACTOR performs additional or different services than those described herein without the prior written approval of the City Manager and/or City Council of CITY, CONTRACTOR shall not be compensated for such services.

CONTRACTOR expressly waives any right to be compensated for services and materials not covered by the scope of this Agreement or authorized by the CITY in writing.

9.02 CONTRACTOR shall promptly advise the City Manager and Finance Director of CITY as soon as reasonably practicable upon gaining knowledge of a condition, event or accumulation of events which may affect the scope and/or cost of Services. All proposed changes, modifications, deletions and/or requests for additional services shall be reduced to writing for review and approval by the CITY and/or City Council.

10. Termination of Agreement.

10.01 Notwithstanding any other provision of this Agreement, CITY, at its sole option, may terminate this Agreement with or without cause, or for no cause, at any time by giving twenty (20) days’ written notice to CONTRACTOR.

10.02 In the event of termination, the payment of monies due CONTRACTOR for undisputed Services performed prior to the effective date of such termination shall be paid within thirty (30) business days after receipt of an invoice as provided in this Agreement.

Immediately upon termination, CONTRACTOR agrees to promptly provide and deliver to CITY all original documents, reports, studies, plans, specifications and the like which are in the possession or control of CONTRACTOR and pertain to CITY.

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7 11. Status of CONTRACTOR.

11.01 CONTRACTOR shall perform the Services in CONTRACTOR’s own way as an independent contractor, and in pursuit of CONTRACTOR’s independent calling, and not as an employee of CITY. However, CONTRACTOR shall regularly confer with CITY’s City Manager as provided for in this Agreement.

11.02 CONTRACTOR agrees that it is not entitled to the rights and benefits afforded to CITY’s employees, including disability or unemployment insurance, workers’ compensation, retirement, CalPERS, medical insurance, sick leave, or any other employment benefit. CONTRACTOR is responsible for providing, at its own expense, disability, unemployment, workers’ compensation and other insurance, training, permits, and licenses for itself and its employees and subcontractors.

11.03 CONTRACTOR hereby specifically represents and warrants to CITY that it possesses the qualifications and skills necessary to perform the Services under this Agreement in a competent, professional manner, without the advice or direction of CITY and that the Services to be rendered pursuant to this Agreement shall be performed in accordance with the standards customarily applicable to an experienced and competent professional rendering the same or similar services in the same geographic area where the CITY is located. Further, CONTRACTOR represents and warrants that the individual signing this Agreement on behalf of CONTRACTOR has the full authority to bind CONTRACTOR to this Agreement.

12.Ownership of Documents; Audit.

12.01 All draft and final reports, plans, drawings, studies, maps, photographs, specifications, data, notes, manuals, warranties and all other documents of any kind or nature prepared, developed or obtained by CONTRACTOR in connection with the performance of Services performed for the CITY shall become the sole property of CITY, and CONTRACTOR shall promptly deliver all such materials to CITY upon request. At the CITY’s sole discretion, CONTRACTOR may be permitted to retain original documents, and furnish reproductions to CITY upon request, at no cost to CITY.

12.02 Subject to applicable federal and state laws, rules and regulations, CITY shall hold all intellectual property rights to any materials developed pursuant to this Agreement. CONTRACTOR shall not such use data or documents for purposes other than the performance of this Agreement, nor shall CONTRACTOR release, reproduce, distribute, publish, adapt for future use or any other purposes, or otherwise use, any data or other materials first produced in the performance of this Agreement, nor authorize others to do so, without the prior written consent of CITY.

12.03 CONTRACTOR shall retain and maintain, for a period not less than four years following termination of this Agreement, all-time records, accounting records and vouchers and all other records with respect to all matters concerning Services performed, compensation paid and expenses reimbursed. At any time during normal business hours and as often as CITY may deem necessary, CONTRACTOR shall make available to CITY’s agents for examination all of such records and shall permit CITY’s agents to audit, examine and reproduce such records.

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8 13. Miscellaneous Provisions.

13.01 This Agreement, which includes all attached exhibits, supersedes any and all previous agreements, either oral or written, between the parties hereto with respect to the rendering of Services by CONTRACTOR for CITY and contains all of the covenants and agreements between the parties with respect to the rendering of such Services in any manner whatsoever. Any modification of this Agreement will be effective only if it is in writing signed by both parties.

13.02 CONTRACTOR shall not assign or otherwise transfer any rights or interest in this Agreement without the prior written consent of CITY. Unless specifically stated to the contrary in any written consent to an assignment, no assignment will release or discharge the assignor from any duty or responsibility under this Agreement.

13.03 CONTRACTOR shall timely file FPPC Form 700 Conflict of Interest Statements with CITY if required by California law and/or the CITY’s conflict of interest policy.

13.04 If any legal action or proceeding, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party will be entitled to reasonable attorneys’ fees and costs, in addition to any other relief to which that party may be entitled.

13.05 This Agreement is made, entered into and shall be performed in the County of Riverside in the State of California and shall in all respects be interpreted, enforced and governed under the laws of the State of California. The parties agree that venue in any litigation between them shall be in Riverside County, California.

13.06 CONTRACTOR covenants that neither it nor any officer or principal of its firm has any interest, nor shall they acquire any interest, either directly or indirectly, which will conflict in any manner or degree with the performance of their Services hereunder.

CONTRACTOR further covenants that in the performance of this Agreement, no person having such interest shall be employed by it as an officer, employee, agent, or subcontractor.

13.07 CONTRACTOR has read and is aware of the provisions of Section 1090 et seq. and Section 87100 et seq. of the Government Code relating to conflicts of interest of public officers and employees. CONTRACTOR agrees that they are unaware of any financial or economic interest of any public officer or employee of the CITY relating to this Agreement. It is further understood and agreed that if such a financial interest does exist at the inception of this Agreement, the CITY may immediately terminate this Agreement by giving notice thereof. CONTRACTOR shall comply with the requirements of Government Code section 87100 et seq. and section 1090 in the performance of and during the term of this Agreement.

13.08 Improper Consideration. CONTRACTOR shall not offer (either directly or through an intermediary) any improper consideration such as, but not limited to, cash,

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9 discounts, services, the provision of travel or entertainment, or any items of value to any officer, employee or agent of the CITY in an attempt to secure favorable treatment regarding this Agreement or any contract awarded by CITY. The CITY, by notice, may immediately terminate this Agreement if it determines that any improper consideration as described in the preceding sentence was offered to any officer, employee or agent of the CITY with respect to the proposal and award process of this Agreement or any CITY contract. This prohibition shall apply to any amendment, extension or evaluation process once this Agreement or any CITY contract has been awarded. CONTRACTOR shall immediately report any attempt by any CITY officer, employee or agent to solicit (either directly or through an intermediary) improper consideration from CONTRACTOR.

13.09 Severability. If any portion of this Agreement is declared invalid, illegal or otherwise unenforceable by a court of competent jurisdiction, the entire balance of this Agreement not so affected shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereby have made and executed this Agreement to be effective as of the day and year first above written.

CITY: CONTRACTOR:

CITY OF BEAUMONT NALCO COMPANY, LLC
By: By:

Julio Martinez, III, Mayor
Print Name:

Title:

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EXHIBIT “A”

PROPOSAL

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1601 W. DIEHL ROAD
NAPERVILLE, IL 60563-1198
April 27, 2023
City of Beaumont
c/o Grace Wichert
550 E 6th Street
Beaumont, CA 92223
To Whom It May Concern,
In response to your invitation to bid, RFP Wastewater Treatment Plant Chemical Supply & Deliver – Bid Item #1, R.O. Antiscalant, Nalco Company is looking to offer our PermaTreat PC-191T product. ▪PermaTreat PC-191T combines the product reliability of PermaTreat PC -191 with patented TRASAR™ Technology for advanced monitoring and control. PermaTreat PC-191T is a highly effective scale inhibitor whose active components were developed to treat reverse osmosis (RO) systems. PermaTreat PC-191 has shown for over 20 years excellent performance against the following scalants: calcium carbonate, calcium sulfate, barium sulfate, strontium sulfate, calcium fluoride, silica and iron.

Enclosed are all the required documents including one Cover Letter, an Introduction to Nalco Water, a List of References, Cost Proposal, PC-191T Product Bulletin and PC-191T Safety Data Sheet. Also attached is a copy of Addendum 1.

Please be sure to send bid results and future bid information to my attention:

Julian Smith
Account Manager WL186
10521 Humbolt Street, Los Alamitos, CA 90720
310-924-5669 - Mobile
[email protected]
Should you have any questions or comments, please feel free to contact me with the information above.

Thanks!
Sincerely,
Julian L Smith ACCOUNT MANAGER – WL186
NALCO Water | An Ecolab Company 10521 HUMBOLT ST, LOS ALAMITOS, CA 90720 M 310.924.5669 E [email protected]

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1601 W. DIEHL ROAD
NAPERVILLE, IL 60563-1198

April 27, 2023

City of Beaumont
c/o Grace Wichert
550 E 6th Street
Beaumont, CA 92223

To Whom It May Concern,

In response to your invitation to bid, RFP Wastewater Treatment Plant Chemical Supply & Deliver – Bid Item #1, R.O. Antiscalant, Nalco Water is looking to offer our PermaTreat PC-191T product.

▪ PermaTreat PC-191T combines the product reliability of PermaTreat PC -191 with patented TRASAR™ Technology for advanced monitoring and control. PermaTreat PC-191T is a highly effective scale inhibitor whose active components were developed to treat reverse osmosis (RO) systems. PermaTreat PC-191 has shown for over 20 years excellent performance against the following scalants: calcium carbonate, calcium sulfate, barium sulfate, strontium sulfate, calcium fluoride, silica and iron.

About Nalco Water

Nalco Water is a global leader in water and process management solutions, Nalco Water, an Ecolab company, works with customers across a wide range of industries to help meet their specific sustainability and business goals. With a presence at more than 100,000 customer sites, our solutions combine connected chemistry, digital innovation and extensive expertise to minimize water and climate impacts while maximizing outcomes at an optimized total cost. Our network of more than 50,000 connected water performance systems fuels over 90 billion data points each year, allowing us to provide our customers with insights, actions and value across their entire operation. As an Ecolab company, we’re aligned with our corporate ambition to make the world cleaner, healthier and safer by providing and protecting what’s vital.

More information about Nalco Water, our Leadership, Locations, Industries Serviced and Businesses can be found at https://www.ecolab.com/nalco-water/about

Scope of Services

Nalco Water is your premier supplier for water pretreatment chemistry, equipment, services and products.

We offer everything you need to achieve a specific water quality and quanti ty.

Nalco Water utilizes an expert team for field service engineers to assist customers w ith every day needs including water treatment solutions, chemical applications, asset protection, water testing and treatment

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1601 W. DIEHL ROAD
NAPERVILLE, IL 60563-1198

program support. This includes customer site and services visits to verify program effectiveness and value delivery.

Our team also designs, builds and services ion exchange, water filtration, DI and RO systems. Nalco Water is a provider of RO pre-treatment chemistry including dechlorination, anti-scalant, bio-control, cleaning (CIP/COP) and sanitization products. We also provide maintenance and exchange services, membrane autopsies, field cleanings and membrane optimization.

World-class engineers and scientists are passionate about solving problems: The vision and dedication come naturally. Our team’s qualifications are among the best in the industry, so great service is just part of the difference you get when you partner with Nalco Water.

Service Schedule

In addition to routine evaluation of chemical applications and feed equipment, our program will include, at no additional charge, specific services targeting process improvement and system innovation. Routine service will occur on a monthly basis during the first 60 – 90 days, then we will review your on-going needs.

Nalco Antiscalant Chemistry

Antiscalants prevent mineral deposits on membranes that cause fouling and reduce output. Our PermaCare antiscalants have a long track record of delivering superior performance for a wide variety of membrane installations, ranging from very large potable water plants to small and mid-sized industrial installations. Our proprietary TRASAR technology provides continuous in -line monitoring of antiscalant concentration and insures precise dosing regardless of variations in feed flow. Our PermaCare antiscalants:

▪ Meet the demands of most water types
▪ Protect against high levels of foulants
▪ Are NSF standard 60 approved

Local Nalco Team

The local Nalco Water support team in Southern California provides service, support and chemistry to many customers in this territory. Please find included your local primary contacts for support care:

Julian Smith - Account Manager WL186
310-924-5669 - Mobile
[email protected]

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1601 W. DIEHL ROAD
NAPERVILLE, IL 60563-1198

Haris Razvi – District Manager WL186
909-214-8435 – Mobile
[email protected]

One of the many Nalco Water production facilities supporting North America in located in Carson, CA. The local business office is located at 10521 Humbolt St, Los Alamitos, CA 90720.

Nalco Water Six Service Standards

People Survey - Communication is a key element in the success of your water managemen t plan. The People Survey identifies the key decision making individuals and individuals in authority. An effective and efficient communication plan can then be developed that will insure the proper implementation and control of the water management plan that will result in appropriate responses to any abnormal or out of control condition.

Plant / System Surveys - Another critical part of effective communication is speaking a common language.

We will develop this common language by continuing to learn your system as well as your people. By doing this we will be able to continuously understand the key success factors of your business and identify areas in which we can provide training. This will continue to enhance your personnel’s knowledge of what we are trying to accomplish in your plant.

Service Plans - Our ultimate goal is to provide you with a significant return on your investment. Mutually agreed upon projects and expectations will provide us with a tool to align our goals. Beginning our partnership with a common understanding of the desired results will allow u s to work together towards the reduction of your total operating expense.

Training/Program Administration Manual - A comprehensive Program Administration Manual will be prepared for your facility. The manual contains program applications, trouble shooting guides, statistical process control diagnosis, proposed training topics, safety information, and program guidelines.

Personal Service Reports - Service reports will be left with you each time a Nalco Team Member visits your site. These reports will document progress on any projects we are working on as well as ensure that all key personnel are informed about what is going on within their area of responsibility.

Business Reviews - Periodic, formal discussion about direction and project completion is impo rtant to the success of any program. Equally important are regular meetings to address recurring variations or new projects that should be put on the “priority list”.

Business Reviews are an opportunity for us to evaluate the Return on Investment tha t you are receiving from Nalco. Weekly or monthly staff meetings provide an opportunity to update your personnel about on - going projects, and for you to give us feedback and direction on a timely basis.

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1601 W. DIEHL ROAD
NAPERVILLE, IL 60563-1198

Should you have any questions or comments, please feel free to contact me with the information above.

Thanks!

Sincerely,

Julian L Smith ACCOUNT MANAGER – WL186

NALCO Water | An Ecolab Company 10521 HUMBOLT ST, LOS ALAMITOS, CA 90720 M 310.924.5669 E [email protected]

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1601 W. DIEHL ROAD
NAPERVILLE, IL 60563-1198
April 27, 2023

City of Beaumont
c/o Grace Wichert
550 E 6th Street
Beaumont, CA 92223

To Whom It May Concern,

In response to your invitation to bid, RFP Wastewater Treatment Plant Chemical Supply & Deliver – Bid Item #1, R.O. Antiscalant, Nalco Water is looking to offer our PermaTreat PC- 191T product. As requested in the bid, please see the references listed below:

Reverence #1

Customer Anheuser Busch – Van Nuys
15800 Roscoe Blvd, Van Nuys, VA 91406
Contact Alex Burke – Assistant Brewmaster
(636) 328-5081
Project Relationship Oversees daily production of 1.1MMGPD permeate water for brewing process. Supervisor for the on-site RO membrane treatment program.

Service Provided Supply of antiscalant, chlorine scavenger, 3DTrasar automation, service visits, analytical services (water/membrane), water hygiene testing, safety training, project improvement and RO performance support.

Personnel Julian Smith, Haris Razvi, Nalco Water ITCs
Project Status Ongoing
Fees Paid $155K/YR

Reference #2

Customer CDM Smith
810 Flower Ave, Glendale, CA 91201
Contact Charles Cron – Plant Manager
562-755-0905
Project Relationship Oversees daily process for 7 MMGPD well water for treatment and remediation.

Service Provided Supply of scale & corrosion inhibitor, analytical services, water quality monitoring, service visits, safety training, project improvement and water hygiene support.

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1601 W. DIEHL ROAD
NAPERVILLE, IL 60563-1198
Personnel Julian Smith, Haris Razvi, Nalco ITCs
Project Status Ongoing
Fees Paid $225K/YR

Reference #3

Customer City of Fresno
6395 Floradora Ave, Fresno, CA 93727
Contact Russell Guilliams – Plant Manager
559-960-4372
Project Relationship Oversees daily operation of potable/wastewater treatment facilities Service Provided Supply of wastewater and potable water treatment polymers, safety training, process improvement discovery, service visits, analytical services
Personnel Julian Smith, Haris Razvi, Nalco ITCs
Project Status Ongoing
Fees Paid $125K/YR

Should you have any questions or comments, please feel free to contact me with the information below. Thanks!

Sincerely,

Julian L Smith ACCOUNT MANAGER – WL186

NALCO Water | An Ecolab Company 10521 HUMBOLT ST, LOS ALAMITOS, CA 90720 M 310.924.5669 E [email protected]

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MEMORANDUM OF INSURANCE DATE
29-Mar-2023
This Memorandum is issued as a matter of information only to authorized viewers for their internal use only and confers no rights upon any viewer of this Memorandum. This Memorandum does not amend, extend or alter the coverage described below. This Memorandum may only be copied, printed and distributed within an authorized viewer and may only be used and viewed by an authorized viewer for its internal use. Any other use, duplication or distribution of this Memorandum without the consent of Marsh is prohibited. "Authorized viewer" shall mean an entity or person which is authorized by the insured named herein to access this Memorandum via https://marshdigital.marsh.com/marshconnect/viewMOI.action?clientId=894 . The information contained herein is as of the date referred to above. Marsh shall be under no obligation to update such information.

PRODUCER
Marsh USA Inc.
("Marsh")

COMPANIES AFFORDING COVERAGE
Co. A National Union Fire Ins Co of Pittsburgh PA

INSURED
Ecolab Inc., Nalco Company LLC
1 Ecolab Place
St. Paul
Minnesota 55102
United States
Co. B AIU Insurance Company
Co. C New Hampshire Ins. Co.

Co. D American International Group UK Ltd
Co. E American Home Assurance Company
Co. F

COVERAGES

THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION

OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS MEMORANDUM MAY BE

ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY

HAVE BEEN REDUCED BY PAID CLAIMS
CO
LTR

TYPE OF

INSURANCE POLICY NUMBER
POLICY

EFFECTIVE
DATE
POLICY

EXPIRATION
DATE
LIMITS

LIMITS IN USD UNLESS OTHERWISE INDICATED
A
A

GENERAL

LIABILITY
Commercial
General
Liability
Occurrence
3980263
3980264
(Products)
31-Dec-2022
31-Dec-2022
01-Dec-2023
01-Dec-2023
GENERAL AGGREGATE USD 5,000,000

PRODUCTS - COMP/OP
AGG USD 15,000,000

PERSONAL AND ADV
INJURY USD 2,000,000
EACH OCCURRENCE USD 2,000,000
Prem / USD
5,000,000
Products

FIRE DAMAGE (ANY
ONE FIRE) USD 500,000

MED EXP (ANY ONE

PERSON)
A
A
A

AUTOMOBILE

LIABILITY
Any Auto
4888773
(AOS)
4888775 (MA)
4888774 (VA)
31-Dec-2022
31-Dec-2022
31-Dec-2022
01-Dec-2023
01-Dec-2023
01-Dec-2023

COMBINED SINGLE
LIMIT USD 5,000,000

BODILY INJURY (PER

PERSON)

BODILY INJURY (PER

ACCIDENT)

PROPERTY DAMAGE

D EXCESS

LIABILITY
Umbrella Form
62785848 31-Dec-2022 01-Dec-2023 EACH OCCURENCE USD 10,000,000 AGGREGATE UDS 10,000,000
B
B
B

WORKERS

COMPENSATION /

EMPLOYERS

LIABILITY
THE

PROPRIETOR
/ PARTNERS /

EXECUTIVE

OFFICERS
ARE Included
WC080880467
(AOS) (incl
Stop Gap

ND,WA,WY)
WC080880468
(CA)
WC080880466
(WI)
31-Dec-2022
31-Dec-2022
31-Dec-2022
01-Dec-2023
01-Dec-2023
01-Dec-2023

WORKERS COMP
LIMITS Statutory
EL EACH ACCIDENT USD 2,000,000

EL DISEASE - POLICY
LIMIT USD 2,000,000

EL DISEASE - EACH
EMPLOYEE USD 2,000,000

Page 1000 of 1667 ends

A Excess Workers
Compensation
XWC1647370
(OH)
31-Dec-2022 01-Dec-2023 WC Statutory
Limits;
EL 1M/1M Excess
of 1M SIR

The Memorandum of Insurance serves solely to list insurance policies, limits and dates of coverage. Any modifications here to are not authorized.

PRODUCER
Marsh USA Inc.
("Marsh")

INSURED
Ecolab Inc., Nalco Company LLC
1 Ecolab Place
St. Paul
Minnesota 55102
United States

ADDITIONAL INFORMATION
Any person or organization are included as additional insured on the auto liability and general/product liability policies, where required by written contract executed prior to loss. Refer to the attached page "Additional Remarks Schedule" for the applicable additional insured, insurance as primary, waiver of subrogation, notice of cancellation and other endorsements that may apply, where required by written contract. All endorsements are issued on a blanket basis without having to specifically name individual customers or others on an endorsement.

Ecolab Inc.

December 31, 2022 - December 01, 2023
Certificate Description of Operations Language
Named Insured: coverage under the policies shown above apply to Ecolab Inc., its subsidiaries, and business units including but not limited to the following:

Ecolab Inc.
1 Ecolab Place
St. Paul, MN 55102
Bioquell Inc.

Chemstar Corporation
Ecolab Production LLC
Ecolab USA
EcoSure
Ecovation, Inc.

Food Protection Services LLC
Food Safety Specialists, Inc.

FPS Region 3 LLC
Kay Chemical
Lobster Ink US, Inc
Microtek Medical, Inc.

Pest Elimination
Research Fumigation Co., LLC
Royal Pest Solutions, Inc.

Swisher

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Purolite LLC
Nalco Company LLC
1601 West Diehl Road
Naperville, IL 60563
Abednego Environmental Services, LLC
Cascade Water
ChemStaff
Nalco Industrial Outsourcing
Nalco Production LLC
Nalco U.S. 2 LLC
Nalco Water
Nalco Water Pretreatment Solutions, LLC
Quantum Technical Services, LLC
Additional Insured: Where required by written contract executed prior to loss, the certificate holder and any person or organization are included as additional insured on the auto liability and general liability policies. The following endorsements are attached to the policies shown above:

General Liability (Premises/Ongoing Operations) and General Liability (Products/Completed Operations) Additional Insured-Vendors CG2015
Additional Insured-Primary Insurance 74434 (Premises/Ongoing Operations); 94955 (Products/Completed Operations)
General Liability (Premises/Ongoing Operations)
Additional Insured-Owners, Lessees or Contractors-Scheduled Person or Organization CG2010 Additional Insured-Managers or Lessors of Premises CG2011 Additional Insured-State of Governmental Agency or Subdivision or Political Subdivision-Permits or Authorizations CG2012
Additional Insured-Designated Person or Organization CG 20 26 Additional Insured-Lessor of Leased Equipment Automatic Coverage CG2034 Additional Insured-Owners, Lessees or Contractors-Automatic Status When Requirement in Construction Agreement with You CG2033
Additional Insured-Owners, Lessees or Contractors-Automatic Status for Other Parties When Required in Writing Construction Agreement CG2038
General Liability (Products/Completed Operations)
Additional Insured-Where Required Under Contract or Agreement 94954 Additional Insured-Owners, Lessees or Contractors-Completed Operations CG2037 Automobile Liability
Additional Insured-Where Required Under Contract or Agreement 87950 Lessor-Additional Insured and Loss Payee CA2001
Insurance Primary as to Certain Additional Insureds 74445 Waiver of Subrogation: Where required by written contract executed prior to loss, waiver of subrogation is granted on the auto liability, general liability and workers compensation and umbrella liability policies. The following endorsements are attached to the policies shown above:

General Liability (Premises/Ongoing Operations) and General Liability (Products/Completed Operations): Waiver of Transfer of Rights of Recovery Against Others to Us CG2404 Automobile Liability: Waiver of Transfer of Rights of Recovery Against Others to Us 62897 Workers Compensation & Employers Liability: Waiver of Our Right to Recover from Others WC000313 Notice of Cancellation: The following endorsements are attached to the policies shown above:

General Liability (Premises/Ongoing Operations), General Liability (Products/Completed Operations) and Automobile Liability: Limited Advice of Cancellation to Scheduled Entities 108538 Workers Compensation & Employers Liability: Limited Advice of Cancellation Provided Via Email to Entities Other Than the Named Insured 108538

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Pesticide or Herbicide Applicator Coverage CG2264 is attached to the general liability (premises) liability policy shown above
Blended Pollution Endorsement is attached to the general liability (premises) policy shown above Waiver of Governmental Immunity Endorsement CG2414 is attached to the general liability (premises) policy shown above
Alternate Employer Endorsement WC000301, WC000301A are attached to the workers compensation policies shown above
Longshore and Harbor Workers Compensation Act Coverage Endorsement WC000106A is attached to the workers compensation policies shown above
Maritime Coverage Endorsement WC000201B (Jones Act) is attached to the workers compensation policies shown above.

Outer Continental Shelf Lands Act Coverage Endorsement WC000109C is attached to the workers compensation policies shown above.

Umbrella policy territory is WORLDWIDE. Coverage applies excess of retained amounts. This retained limit can be satisfied either through insurance of paid by Ecolab.

Limits shown are in US Dollars (USD)
The insurance evidenced herein and in the referenced policies is not intended to provide coverage beyond that required by written contract, beyond the Named Insured's indemnification obligations or at law.

The Memorandum of Insurance serves solely to list insurance policies, limits and dates of coverage. Any modifications hereto are not authorized.

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PRODUCT DESCRIPTION AND APPLICATION
PermaTreat PC-191T combines the product reliability of PermaTreat PC-191 with patented TRASAR™ Technology for advanced monitoring and control. PermaTreat PC-191T is a highly effective scale inhibitor whose active components were developed to treat reverse osmosis (RO) systems. PermaTreat PC-191 has shown for over 20 years excellent performance against the following scalants: calcium carbonate, calcium sulfate, barium sulfate, strontium sulfate, calcium fluoride, silica and iron.

Scaling and iron fouling of the RO membranes will reduce system performance and lead to premature membrane replacement. Precipitation of scale and deposits build up on the RO membrane, which leads to poor permeate quality, low permeate production, unscheduled downtime, increased water consumption and increased energy costs.

For RO units with a feedwater flowrate of 545m3/day (100 GPM) or less, the recommended product would be PermaTreat PC-391T.

PermaTreat PC-191T is used when the silica level in the brine is less than 185 mg/l at a brine pH of 7.5 and temperature 25oC (77oF). For higher silica levels, the recommended product is PermaTreat PC- 510T.

PHYSICAL & CHEMICAL PROPERTIES
These properties are typical. Refer to the Safety Data Sheet (SDS) for the most current data.

Color Yellow to Amber Green
Form Liquid
Odor Slight ammonia odor
Density 11.33 lb/gal
Specific Gravity @25C (77F) 1.36
pH (Neat) 10.5
Freeze Point 32F (0C)
Freeze-Thaw Recovery Complete
Viscosity @ 25C (77F) 20 cp
Flash Point None
VOC 0%
Shelf Life 1 year in an unopened container

ACTIVE CONSTITUENTS

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Proprietary Sequestering Agent

REGULATORY APPROVALS
Refer to the Regulatory Certifications & Registrations (RCR) document for the most recent information on approvals.

MATERIALS OF COMPATIBILITY
Material compatibility data are only valid for product storage and feed systems.

Compatible Not Compatible
Stainless Steel 304 Mild Steel
Stainless Steel 316 Liner Epoxy Phenolic
CPVC Piping
Polytetraflouroethylene
Polyethylene (HDPE, LLDPE)
Polypropylene
Plasite 4300
Plasite 7122
Brass - Admirality
Neoprene

All membrane elements based on
Polyamide chemistries including
Thin Film Composite (TFC) membranes when used as directed

* O-rings are acceptable for static applications. If fitting is opened, O-ring must be replaced.

DOSAGE AND FEEDING
PermaTreat PC-191T MUST be fed continuously to minimize precipitation of scale and fouling of RO and nanofiltration membranes. The feed point location should be as close to the RO membrane as practical but one that ensures good mixing with the feedwater prior to entering the RO system. Typically, this is before the cartridge filters.

All new installations of PermaTreat PC-191T should begin with a 2 week monitoring phase during which current operating conditions should be maintained (i.e. setting pumps manually based on stroke length and frequency). After this evaluation period, TRASAR-based control of the system should be instituted using the recommended pump.

It is preferred to feed PermaTreat PC-191T neat via a closed feed system to prevent contamination from foreign material (a closed feed system being defined as a system in which fluid is moved from a closed storage vessel into a treated media without exposure to the atmosphere, except through normal venting or pressure relief devices).

Page 1005 of 1667 ends

PermaTreat PC-191T can be diluted using RO permeate (only) following these guidelines:

1. Use RO permeate for dilution.

2. Prepare a fresh antiscalant solution every 3-5 days.

3. Inspect the antiscalant day tank before adding the new solution. If needed, the antiscalant tank should be cleaned prior to filling.

4. Dilution rates up to a factor 10 are typically applied. Dilution factors higher than 10 will require more attention with respect to the condition of the antiscalant tank (cleaning) and preparation of a new solution (every 1-3 days).

5. NaOH can be added to the dilution to increase the pH to 10-11. This is especially recommended for warm environments to prevent bio-growth.

PermaTreat PC-191T dosage is dependent on feedwater chemistry, membrane type, and system operating parameters (e.g., recovery, temperature and pressure). These parameters determine the potential foulant that is likely to foul the membrane elements.

To determine the optimum product dosage for your system, it is recommended that you use the RO Optimizer chemical projection computer program. This program will select the appropriate scale inhibitor treatment program and calculate the recommended dosage based on the RO design and operation as well as feedwater or brine chemistry. This program will do all calculations for you easily and automatically.

CONSEQUENCES OF OVERFEED
Overfeed of PermaTreat PC-191T will result in higher chemical cost.

CONSEQUENCES OF UNDERFEED
Underfeed of PermaTreat PC-191T will result in poor scale inhibition. This will lead to fouled RO membranes, and reduced system performance and/or premature membrane replacement. In RO units, scaling is typically seen in the tail-end elements that have the highest reject concentration (4:1 for a 75% recovery system).

Consult your Nalco Water sales engineer for detailed dosage and feeding information.

ENVIRONMENTAL AND TOXICITY DATA
Refer to of the Safety Data Sheet (SDS) for all available mammalian and aquatic toxicity information.

SAFETY AND HANDLING
Before using PermaTreat PC-191T please refer the Safety Data Sheet (SDS) for proper personal protective equipment (PPE) and for health effects.

STORAGE

Page 1006 of 1667 ends

PermaTreat PC-191T has a suggested in-plant storage limit of one year. The suggested maximum storage temperature is 100oF (38oC). Refer to the Safety Data Sheet (SDS), for the most current data.

Concentration vs. Viscosity
2% 0 cP
1% 0 cP

0.5% 0 cP

REMARKS
If you need assistance or more information on this product, please call your nearest Nalco Water representative.

For Medical and Transportation Emergencies involving Nalco Water products, please see the Safety Data Sheet for the phone number.

ADDITIONAL INFORMATION
Ecolab, Nalco Water, 3D-TRASAR, TRASAR, PermaTreat, PermaCare, NALCO and the Logo are trademarks of Ecolab USA Inc.

NALCO Water, An Ecolab Company
ecolab.com/nalco-water
Ecolab, Nalco Water and the logos are Trademarks of Ecolab USA Inc. ©2018 Ecolab USA Inc. All Rights Reserved

Page 1007 of 1667 ends

As part of our commitment to
Responsible Care the logistics
processes are designed to ensure
that our chemicals are transported
in a manner that minimizes the
risk of injury to people moving
the goods, to people along the
transportation route, and to the
environment.

Many Nalco deliveries are made
using our company-owned fleet of
trucks operated by our Customer
Delivery Specialists. Our Delivery
Specialists undergo a rigorous
initial training program with
quarterly follow-up training and
annual re-certification.

The third party companies we hire
to carry Nalco’s goods are expected
to operate according to the prin-
ciples of Responsible Care. Nalco
evaluates carriers based on their
safety performance and programs,
inspection and maintenance
procedures for equipment, and
selection and training of drivers
and support staff. If the carriers
cannot meet our standards, they
will not be hired. Employees of
third party carriers, and people
living in communities along the
transportation route, should have
access to the same health and
safety information as company
employees.

We exercise care in planning the
movement of Nalco products.

Transportation routes are chosen
to minimize the exposure of people
and environmentally sensitive areas
to the potential hazards caused by
chemicals and products.

Responsible Care® In
(Continued on Reverse Side)
Nalco Delivery Specialists receive 5
weeks of training with an emphasis on
achieving zero defects when making a
delivery.

NALCO EMERGENCY RESPONSE
SYSTEM
The goal of the Nalco Emergency
Response System is to minimize
the human and environmental
impact of distribution incidents
involving our products and to strive
to prevent future incidents. Nalco’s
philosophy has always been to
work closely and maintain open
communication with local
authorities to ensure that if an
emergency response to a Nalco
product or raw material spill should
become necessary, a smooth
response will be commonplace.

In Case of Emergency involving
Nalco Products call:

United States
CHEMTREC 800-424-9300 or
(703) 527-3887
24 hour numbers
Canada
1-800-463 3216 or 613-594-2717

Page 1008 of 1667 ends

En Cas D’urgence concernant des
produits chimiques Nalco, appeler
24 hour number 24 Heures Sur 24
To receive additional information
on safe transportation of our
products contact your local Nalco
representative.

ZERO DEFECT DELIVERY

PROGRAM
Nalco has adopted a Zero Defect
Delivery Program for all deliveries.

Only the highest quality people,
safety, transport and chemical
transfer equipment are used to
handle delivery to a customer site.

Our fleet of Nalco trucks is oper-
ated by our Delivery Specialists,
each of them highly motivated to
carry out their responsibilities with
military precision. Employees for
the dedicated carriers we use in
addition to our fleet have also
undergone training in our Zero
Defect Delivery Program.

Zero Defect Program means:

1. Delivering the Right product

2. In the Right quantity

3. Into the Right tank

4. At the Right time

5. Using the Right safety procedure

6. Following the Right security
procedure

7. With No contamination

8. With No spills
Nalco is up for the challenge in
obtaining Zero Defect Deliveries
with a system of tank labels
consistently displayed on the tanks
themselves, bills of lading, and all
associated documentation. During
delivery, our Delivery Specialists
triple-check these labels – if the
numbers don’t match, we don’t
unload chemical. We keep it simple;
doing it by the numbers, and
ensuring zero defects with every
delivery.

Ecolab, NALCO and the logos are Trademarks of Ecolab USA Inc.

Responsible Care and CHEMTREC are Registered Service Marks of the American Chemistry Council ©2005, 2015 Ecolab USA Inc. All Rights Reserved 3-15 Nalco, an Ecolab Company
North America: Headquarters – 1601 West Diehl Road • Naperville, Illinois 60563 • USA Nalco Champion – 7705 Highway 90-A • Sugar Land, Texas 77478 • USA Europe: Richtistrasse 7 • 8304 Wallisellen • Switzerland Asia Pacific: 2 International Business Park • #02-20 The Strategy Tower 2 • Singapore 609930 Latin America: Av. das Nações Unidas 17.891 • 6° andar • São Paulo • SP • Brazil • CEP 04795-100 www.nalco.com
Bulletin B-676

Page 1009 of 1667 ends

MATERIAL SAFETY DATA SHEET

PRODUCT

PERMATREAT(R) PC-191T

EMERGENCY TELEPHONE NUMBER(S)
(800) 424-9300 (24 Hours) CHEMTREC

Nalco Company 1601 W. Diehl Road • Naperville, Illinois 60563-1198 • (630)305-1000 For additional copies of an MSDS visit www.nalco.com and request access 1 / 10

1. CHEMICAL PRODUCT AND COMPANY IDENTIFICATION

PRODUCT NAME : PERMATREAT(R) PC-191T

APPLICATION : REVERSE OSMOSIS ANTISCALANT

COMPANY IDENTIFICATION : Nalco Company
1601 W. Diehl Road
Naperville, Illinois
60563-1198

EMERGENCY TELEPHONE NUMBER(S) : (800) 424-9300 (24 Hours) CHEMTREC

NFPA 704M/HMIS RATING
HEALTH : 0 / 1 FLAMMABILITY : 1 / 1 INSTABILITY : 0 / 0 OTHER :
0 = Insignificant 1 = Slight 2 = Moderate 3 = High 4 = Extreme

2. COMPOSITION/INFORMATION ON INGREDIENTS

Based on our hazard evaluation, none of the substances in this product are hazardous.

3. HAZARDS IDENTIFICATION

**EMERGENCY OVERVIEW**

CAUTION
May cause irritation with prolonged contact.

Do not get in eyes, on skin, on clothing. Do not take internally. Use with adequate ventilation. In case of contact with eyes, rinse immediately with plenty of water and seek medical advice. After contact with skin, wash immediately with plenty of water.

Wear suitable protective clothing.

May evolve oxides of carbon (COx) under fire conditions. May evolve oxides of nitrogen (NOx) under fire conditions.

PRIMARY ROUTES OF EXPOSURE :

Eye, Skin

HUMAN HEALTH HAZARDS - ACUTE :

EYE CONTACT :

May cause irritation with prolonged contact.

SKIN CONTACT :

May cause irritation with prolonged contact.

INGESTION :

May cause gastrointestinal irritation.

Page 1010 of 1667 ends

MATERIAL SAFETY DATA SHEET

PRODUCT

PERMATREAT(R) PC-191T

EMERGENCY TELEPHONE NUMBER(S)
(800) 424-9300 (24 Hours) CHEMTREC

Nalco Company 1601 W. Diehl Road • Naperville, Illinois 60563-1198 • (630)305-1000 For additional copies of an MSDS visit www.nalco.com and request access 2 / 10

INHALATION :

May cause irritation of mucous membranes.

SYMPTOMS OF EXPOSURE :

Acute :

A review of available data does not identify any symptoms from exposure not previously mentioned.

Chronic :

A review of available data does not identify any symptoms from exposure not previously mentioned.

AGGRAVATION OF EXISTING CONDITIONS :

A review of available data does not identify any worsening of existing conditions.

HUMAN HEALTH HAZARDS - CHRONIC :

No adverse effects expected other than those mentioned above.

4. FIRST AID MEASURES

EYE CONTACT :

Immediately flush eye with water for at least 15 minutes while holding eyelids open. If symptoms persist, call a physician.

SKIN CONTACT :

Immediately flush with plenty of water for at least 15 minutes. If symptoms persist, call a physician.

INGESTION :

Do not induce vomiting without medical advice. If conscious, washout mouth and give water to drink. If symptoms develop, seek medical advice.

INHALATION :

Remove to fresh air, treat symptomatically. If symptoms develop, seek medical advice.

NOTE TO PHYSICIAN :

Based on the individual reactions of the patient, the physician's judgement should be used to control symptoms and clinical condition.

5. FIRE FIGHTING MEASURES

FLASH POINT : None

EXTINGUISHING MEDIA :

Use extinguishing media appropriate for surrounding fire. This product would not be expected to burn unless all the water is boiled away. The remaining organics may be ignitable.

FIRE AND EXPLOSION HAZARD :

May evolve oxides of carbon (COx) under fire conditions. May evolve oxides of nitrogen (NOx) under fire conditions.

SPECIAL PROTECTIVE EQUIPMENT FOR FIRE FIGHTING :

In case of fire, wear a full face positive-pressure self contained breathing apparatus and protective suit.

Page 1011 of 1667 ends

MATERIAL SAFETY DATA SHEET

PRODUCT

PERMATREAT(R) PC-191T

EMERGENCY TELEPHONE NUMBER(S)
(800) 424-9300 (24 Hours) CHEMTREC

Nalco Company 1601 W. Diehl Road • Naperville, Illinois 60563-1198 • (630)305-1000 For additional copies of an MSDS visit www.nalco.com and request access 3 / 10

6. ACCIDENTAL RELEASE MEASURES

PERSONAL PRECAUTIONS :

Restrict access to area as appropriate until clean-up operations are complete. Use personal protective equipment recommended in Section 8 (Exposure Controls/Personal Protection). Stop or reduce any leaks if it is safe to do so.

Do not touch spilled material. Ventilate spill area if possible.

METHODS FOR CLEANING UP :

SMALL SPILLS: Soak up spill with absorbent material. Place residues in a suitable, covered, properly labeled container. Wash affected area. LARGE SPILLS: Contain liquid using absorbent material, by digging trenches or by diking. Reclaim into recovery or salvage drums or tank truck for proper disposal. Contact an approved waste hauler for disposal of contaminated recovered material. Dispose of material in compliance with regulations indicated in Section 13 (Disposal Considerations).

ENVIRONMENTAL PRECAUTIONS :

Do not contaminate surface water., Do not allow material to contaminate ground water system., Prevent material from entering sewers or waterways.

7. HANDLING AND STORAGE

HANDLING :

Do not take internally. Ensure all containers are labeled. Keep the containers closed when not in use. Avoid eye and skin contact. Keep away from acids and oxidizing agents.

STORAGE CONDITIONS :

Protect product from freezing. Store the containers tightly closed.

SUITABLE CONSTRUCTION MATERIAL :

HDPE (high density polyethylene), Stainless Steel 304, Compatibility with Plastic Materials can vary; we therefore recommend that compatibility is tested prior to use., Polyethylene, Polypropylene, PVC, 100% phenolic resin liner, Epoxy phenolic resin

UNSUITABLE CONSTRUCTION MATERIAL :

Brass, Buna-N, EPDM, Neoprene, Polyurethane, Viton, Hypalon

8. EXPOSURE CONTROLS/PERSONAL PROTECTION

OCCUPATIONAL EXPOSURE LIMITS :

This product does not contain any substance that has an established exposure limit.

ENGINEERING MEASURES :

General ventilation is recommended. Local exhaust ventilation may be necessary when dusts or mists are generated.

RESPIRATORY PROTECTION :

If significant mists, vapors or aerosols are generated an approved respirator is recommended.

Page 1012 of 1667 ends

MATERIAL SAFETY DATA SHEET

PRODUCT

PERMATREAT(R) PC-191T

EMERGENCY TELEPHONE NUMBER(S)
(800) 424-9300 (24 Hours) CHEMTREC

Nalco Company 1601 W. Diehl Road • Naperville, Illinois 60563-1198 • (630)305-1000 For additional copies of an MSDS visit www.nalco.com and request access 4 / 10

HAND PROTECTION :

Nitrile gloves, Butyl gloves, PVC gloves, Neoprene gloves

SKIN PROTECTION :

Wear standard protective clothing.

EYE PROTECTION :

Wear chemical splash goggles.

HYGIENE RECOMMENDATIONS :

Keep a safety shower available. If clothing is contaminated, remove clothing and thoroughly wash the affected area.

Launder contaminated clothing before reuse. Keep an eye wash fountain available.

HUMAN EXPOSURE CHARACTERIZATION :

Based on our recommended product application and personal protective equipment, the potential human exposure is: Low

9. PHYSICAL AND CHEMICAL PROPERTIES

PHYSICAL STATE Liquid

APPEARANCE Clear Amber - Green

ODOR Ammoniacal

SPECIFIC GRAVITY 1.36
DENSITY 11.33 lb/gal
SOLUBILITY IN WATER Complete
pH (100 %) 10.5
VOC CONTENT 0 % Calculated

Note: These physical properties are typical values for this product and are subject to change.

10. STABILITY AND REACTIVITY

STABILITY :

Stable under normal conditions.

HAZARDOUS POLYMERIZATION :

Hazardous polymerization will not occur.

CONDITIONS TO AVOID :

Freezing temperatures.

MATERIALS TO AVOID :

Strong oxidizing agents Strong acids

Page 1013 of 1667 ends

MATERIAL SAFETY DATA SHEET

PRODUCT

PERMATREAT(R) PC-191T

EMERGENCY TELEPHONE NUMBER(S)
(800) 424-9300 (24 Hours) CHEMTREC

Nalco Company 1601 W. Diehl Road • Naperville, Illinois 60563-1198 • (630)305-1000 For additional copies of an MSDS visit www.nalco.com and request access 5 / 10

HAZARDOUS DECOMPOSITION PRODUCTS :

Under fire conditions: Oxides of carbon, Oxides of nitrogen

11. TOXICOLOGICAL INFORMATION

The following results are for a similar product.

ACUTE ORAL TOXICITY :

Species LD50 Test Descriptor
Rat > 17,800 mg/kg Similar Product
Rating : Non-Hazardous

ACUTE DERMAL TOXICITY :

Species LD50 Test Descriptor
Rabbit > 15,800 mg/kg Similar Product
Rating : Non-Hazardous

PRIMARY SKIN IRRITATION :

Draize Score Test Descriptor

0.3 / 8.0 Similar Product
Rating : Slightly irritating

PRIMARY EYE IRRITATION :

Draize Score Test Descriptor

3.7 / 110.0 Product
Rating : Practically non-irritating

SENSITIZATION :

This product is not expected to be a sensitizer.

CARCINOGENICITY :

None of the substances in this product are listed as carcinogens by the International Agency for Research on Cancer (IARC), the National Toxicology Program (NTP) or the American Conference of Governmental Industrial Hygienists (ACGIH).

HUMAN HAZARD CHARACTERIZATION :

Based on our hazard characterization, the potential human hazard is: Low

12. ECOLOGICAL INFORMATION

ECOTOXICOLOGICAL EFFECTS :

The following results are for a similar product.

ACUTE FISH RESULTS :

Species Exposure LC50 Test Descriptor
Rainbow Trout 96 hrs > 330 mg/l Similar Product
Bluegill Sunfish 96 hrs > 330 mg/l Similar Product

Page 1014 of 1667 ends

MATERIAL SAFETY DATA SHEET

PRODUCT

PERMATREAT(R) PC-191T

EMERGENCY TELEPHONE NUMBER(S)
(800) 424-9300 (24 Hours) CHEMTREC

Nalco Company 1601 W. Diehl Road • Naperville, Illinois 60563-1198 • (630)305-1000 For additional copies of an MSDS visit www.nalco.com and request access 6 / 10

Channel Catfish 96 hrs 1,212 mg/l Similar Product
Sheepshead Minnow 96 hrs 8,132 mg/l Similar Product

ACUTE INVERTEBRATE RESULTS :

Species Exposure LC50 EC50 Test Descriptor
Daphnia magna 48 hrs 297 mg/l Similar Product
Grass Shrimp 96 hrs 4,575 mg/l Similar Product

AQUATIC PLANT RESULTS :

Species Exposure EC50/LC50 Test Descriptor
Green Algae (Selenastrum
capricornutum)
96 hrs 20 mg/l Similar Product

CHRONIC FISH RESULTS :

Species Exposure NOEC / LOEC End Point Test Descriptor Rainbow Trout 60 Days 23 mg/l / 47.6 mg/l Growth Similar Product

CHRONIC INVERTEBRATE RESULTS :

Species Test Type NOEC / LOEC End Point Test Descriptor Daphnia magna 3 Brood 25 mg/l / 50 mg/l Reproduction Similar Product

AVIAN RESULTS :

Species Exposure LC50 Test Descriptor
Bobwhite Quail 14 Days > 2,510 mg/kg Similar Product Mallard Duck 14 Days > 2,510 mg/kg Similar Product

MOBILITY :

The environmental fate was estimated using a level III fugacity model embedded in the EPI (estimation program interface) Suite TM, provided by the US EPA. The model assumes a steady state condition between the total input and output. The level III model does not require equilibrium between the defined media. The information provided is intended to give the user a general estimate of the environmental fate of this product under the defined conditions of the models.

If released into the environment this material is expected to distribute to the air, water and soil/sediment in the approximate respective percentages;

Air Water Soil/Sediment
<5% 30 - 50% 50 - 70%

The portion in water is expected to be soluble or dispersible.

BIOACCUMULATION POTENTIAL
This preparation or material is not expected to bioaccumulate.

ENVIRONMENTAL HAZARD AND EXPOSURE CHARACTERIZATION
Based on our hazard characterization, the potential environmental hazard is: Low Based on our recommended product application and the product's characteristics, the potential environmental exposure is: Low

Page 1015 of 1667 ends

MATERIAL SAFETY DATA SHEET

PRODUCT

PERMATREAT(R) PC-191T

EMERGENCY TELEPHONE NUMBER(S)
(800) 424-9300 (24 Hours) CHEMTREC

Nalco Company 1601 W. Diehl Road • Naperville, Illinois 60563-1198 • (630)305-1000 For additional copies of an MSDS visit www.nalco.com and request access 7 / 10

If released into the environment, see CERCLA/SUPERFUND in Section 15.

13. DISPOSAL CONSIDERATIONS

If this product becomes a waste, it is not a hazardous waste as defined by the Resource Conservation and Recovery Act (RCRA) 40 CFR 261, since it does not have the characteristics of Subpart C, nor is it listed under Subpart D.

As a non-hazardous waste, it is not subject to federal regulation. Consult state or local regulation for any additional handling, treatment or disposal requirements. For disposal, contact a properly licensed waste treatment, storage, disposal or recycling facility.

14. TRANSPORT INFORMATION

The information in this section is for reference only and should not take the place of a shipping paper (bill of lading) specific to an order. Please note that the proper Shipping Name / Hazard Class may vary by packaging, properties, and mode of transportation. Typical Proper Shipping Names for this product are as follows.

LAND TRANSPORT :

Proper Shipping Name : PRODUCT IS NOT REGULATED DURING

TRANSPORTATION

AIR TRANSPORT (ICAO/IATA) :

Proper Shipping Name : PRODUCT IS NOT REGULATED DURING

TRANSPORTATION

MARINE TRANSPORT (IMDG/IMO) :

Proper Shipping Name : PRODUCT IS NOT REGULATED DURING

TRANSPORTATION

15. REGULATORY INFORMATION

This section contains additional information that may have relevance to regulatory compliance. The information in this section is for reference only. It is not exhaustive, and should not be relied upon to take the place of an individualized compliance or hazard assessment. Nalco accepts no liability for the use of this information.

NATIONAL REGULATIONS, USA :

OSHA HAZARD COMMUNICATION RULE, 29 CFR 1910.1200 :

Based on our hazard evaluation, none of the substances in this product are hazardous.

CERCLA/SUPERFUND, 40 CFR 117, 302 :

Notification of spills of this product is not required.

Page 1016 of 1667 ends

MATERIAL SAFETY DATA SHEET

PRODUCT

PERMATREAT(R) PC-191T

EMERGENCY TELEPHONE NUMBER(S)
(800) 424-9300 (24 Hours) CHEMTREC

Nalco Company 1601 W. Diehl Road • Naperville, Illinois 60563-1198 • (630)305-1000 For additional copies of an MSDS visit www.nalco.com and request access 8 / 10

SARA/SUPERFUND AMENDMENTS AND REAUTHORIZATION ACT OF 1986 (TITLE III) - SECTIONS 302, 311, 312, AND 313 :

SECTION 302 - EXTREMELY HAZARDOUS SUBSTANCES (40 CFR 355) :

This product does not contain substances listed in Appendix A and B as an Extremely Hazardous Substance.

SECTIONS 311 AND 312 - MATERIAL SAFETY DATA SHEET REQUIREMENTS (40 CFR 370) :

Our hazard evaluation has found that this product is not hazardous under 29 CFR 1910.1200.

Under SARA 311 and 312, the EPA has established threshold quantities for the reporting of hazardous chemicals.

The current thresholds are: 500 pounds or the threshold planning quantity (TPQ), whichever is lower, for extremely hazardous substances and 10,000 pounds for all other hazardous chemicals.

SECTION 313 - LIST OF TOXIC CHEMICALS (40 CFR 372) :

This product does not contain substances on the List of Toxic Chemicals.

TOXIC SUBSTANCES CONTROL ACT (TSCA) :

The substances in this preparation are included on or exempted from the TSCA 8(b) Inventory (40 CFR 710)

This product has been certified as KOSHER/PAREVE for year-round use INCLUDING THE PASSOVER SEASON by the CHICAGO RABBINICAL COUNCIL.

NSF INTERNATIONAL :

This product has received NSF/International certification under NSF/ANSI Standard 60 in the reverse osmosis antiscalant category. The official name is "Miscellaneous Water Supply Products." Maximum product application dosage is : 15 mg/l.

FEDERAL WATER POLLUTION CONTROL ACT, CLEAN WATER ACT, 40 CFR 401.15 / formerly Sec. 307, 40 CFR 116.4 / formerly Sec. 311 :

None of the substances are specifically listed in the regulation.

CLEAN AIR ACT, Sec. 112 (40 CFR 61, Hazardous Air Pollutants), Sec. 602 (40 CFR 82, Class I and II Ozone Depleting Substances) :

None of the substances are specifically listed in the regulation.

CALIFORNIA PROPOSITION 65 :

This product does not contain substances which require warning under California Proposition 65.

MICHIGAN CRITICAL MATERIALS :

None of the substances are specifically listed in the regulation.

STATE RIGHT TO KNOW LAWS :

None of the substances are specifically listed in the regulation.

NATIONAL REGULATIONS, CANADA :

Page 1017 of 1667 ends

MATERIAL SAFETY DATA SHEET

PRODUCT

PERMATREAT(R) PC-191T

EMERGENCY TELEPHONE NUMBER(S)
(800) 424-9300 (24 Hours) CHEMTREC

Nalco Company 1601 W. Diehl Road • Naperville, Illinois 60563-1198 • (630)305-1000 For additional copies of an MSDS visit www.nalco.com and request access 9 / 10

WORKPLACE HAZARDOUS MATERIALS INFORMATION SYSTEM (WHMIS) :

This product has been classified in accordance with the hazard criteria of the Controlled Products Regulations (CPR) and the MSDS contains all the information required by the CPR.

WHMIS CLASSIFICATION :

Not considered a WHMIS controlled product.

CANADIAN ENVIRONMENTAL PROTECTION ACT (CEPA) :

The substance(s) in this preparation are included in or exempted from the Domestic Substance List (DSL).

AUSTRALIA
All substances in this product comply with the National Industrial Chemicals Notification & Assessment Scheme (NICNAS).

CHINA
All substances in this product comply with the Chemical Control Law and are listed on the Inventory of Existing Chemical Substances China (IECSC).

EUROPE
The substance(s) in this preparation are included in or exempted from the EINECS or ELINCS inventories

JAPAN
All substances in this product comply with the Law Regulating the Manufacture and Importation Of Chemical Substances and are listed on the Ministry of International Trade & industry List (MITI).

KOREA
All substances in this product comply with the Toxic Chemical Control Law (TCCL) and are listed on the Existing Chemicals List (ECL)

NEW ZEALAND
All substances in this product comply with the Hazardous Substances and New Organisms (HSNO) Act 1996,and are listed on or are exempt from the New Zealand Inventory of Chemicals.

PHILIPPINES
All substances in this product comply with the Republic Act 6969 (RA 6969) and are listed on the Philippines Inventory of Chemicals & Chemical Substances (PICCS).

16. OTHER INFORMATION

Due to our commitment to Product Stewardship, we have evaluated the human and environmental hazards and exposures of this product. Based on our recommended use of this product, we have characterized the product's general risk. This information should provide assistance for your own risk management practices. We have evaluated our product's risk as follows:

* The human risk is: Low

* The environmental risk is: Low

Page 1018 of 1667 ends

MATERIAL SAFETY DATA SHEET

PRODUCT

PERMATREAT(R) PC-191T

EMERGENCY TELEPHONE NUMBER(S)
(800) 424-9300 (24 Hours) CHEMTREC

Nalco Company 1601 W. Diehl Road • Naperville, Illinois 60563-1198 • (630)305-1000 For additional copies of an MSDS visit www.nalco.com and request access 10 / 10

Any use inconsistent with our recommendations may affect the risk characterization. Our sales representative will assist you to determine if your product application is consistent with our recommendations. Together we can implement an appropriate risk management process.

This product material safety data sheet provides health and safety information. The product is to be used in applications consistent with our product literature. Individuals handling this product should be informed of the recommended safety precautions and should have access to this information. For any other uses, exposures should be evaluated so that appropriate handling practices and training programs can be established to insure safe workplace operations. Please consult your local sales representative for any further information.

REFERENCES

Threshold Limit Values for Chemical Substances and Physical Agents and Biological Exposure Indices, American Conference of Governmental Industrial Hygienists, OH., (Ariel Insight# CD-ROM Version), Ariel Research Corp., Bethesda, MD.

Hazardous Substances Data Bank, National Library of Medicine, Bethesda, Maryland (TOMES CPS# CD-ROM Version), Micromedex, Inc., Englewood, CO.

IARC Monographs on the Evaluation of the Carcinogenic Risk of Chemicals to Man, Geneva: World Health Organization, International Agency for Research on Cancer.

Integrated Risk Information System, U.S. Environmental Protection Agency, Washington, D.C. (TOMES CPS# CD- ROM Version), Micromedex, Inc., Englewood, CO.

Annual Report on Carcinogens, National Toxicology Program, U.S. Department of Health and Human Services, Public Health Service.

Title 29 Code of Federal Regulations, Part 1910, Subpart Z, Toxic and Hazardous Substances, Occupational Safety and Health Administration (OSHA), (Ariel Insight# CD-ROM Version), Ariel Research Corp., Bethesda, MD.

Registry of Toxic Effects of Chemical Substances, National Institute for Occupational Safety and Health, Cincinnati, OH, (TOMES CPS# CD-ROM Version), Micromedex, Inc., Englewood, CO.

Ariel Insight# (An integrated guide to industrial chemicals covered under major regulatory and advisory programs), North American Module, Western European Module, Chemical Inventories Module and the Generics Module (Ariel Insight# CD-ROM Version), Ariel Research Corp., Bethesda, MD.

The Teratogen Information System, University of Washington, Seattle, WA (TOMES CPS# CD-ROM Version), Micromedex, Inc., Englewood, CO.

Prepared By : Product Safety Department
Date issued : 06/10/2008
Version Number : 1.8

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1601 W. DIEHL ROAD
NAPERVILLE, IL 60563-1198

April 27, 2023

City of Beaumont
c/o Grace Wichert
550 E 6th Street
Beaumont, CA 92223

To Whom It May Concern,

In response to your invitation to bid, RFP Wastewater Treatment Plant Chemical Supply & Deliver – Bid Item #1, R.O. Antiscalant, Nalco Water is looking to offer our PermaTreat PC-191T product.

PermaTreat PC-191T combines the product reliability of PermaTreat PC-191 with patented TRASAR™ Technology for advanced monitoring and control. PermaTreat PC-191T is a highly effective scale inhibitor whose active components were developed to treat reverse osmosis (RO) systems. PermaTreat PC-191 has shown for over 20 years excellent performance against the following scalants: calcium carbonate, calcium sulfate, barium sulfate, strontium sulfate, calcium fluoride, silica and iron.

Nalco Water’s goal is to help customers improve permeate quality and meet production demands. An effective reverse osmosis (RO) chemical program consisting of antiscalants, cleaners and biocides, combined with the right pretreatment processes and chemistry, will enhance system performance while reducing energy and water costs. Adding our cleaning program and appropriate maintenance can also provide substantial returns by extending membrane life, resulting in less downtime and lower total cost of operations.

Nalco Water is proposing an RO feedwater anti-scalant treatment program based on provided operational information, collected water sample analysis and RO optimization modeling. The recommended product, under normal operations, will provide the necessary protection for RO membrane against scaling and fouling.

Please see the attached Nalco Water Reverse Osmosis Optimizer – System performance Report for detailed technical water chemistry information.

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1601 W. DIEHL ROAD
NAPERVILLE, IL 60563-1198

Cost Details

The proposed cost for antiscalant supply to the City of Beaumont is $35,210/YR ($3.50/LB @ 9,200 LB +

8.0% energy/fuel surcharge) + TAX, delivered FOB Beaumont, CA This proposed cost is based on an average flow of 1.9 MMGPD. This price does not include alkalinity control or 3DTrasar automation.

While the RFQ outlines an estimated usage of ten (10) totes per year, at ~250 GAL/Tote, our optimized chemical model predicts a much lower volume (820 GAL).

Should you have any questions or comments, please feel free to contact me with the information above.

Thanks!

Sincerely,

Julian L Smith ACCOUNT MANAGER – WL186

NALCO Water | An Ecolab Company 10521 HUMBOLT ST, LOS ALAMITOS, CA 90720 M 310.924.5669 E [email protected]

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80.0 %
Concentrate
263.9 gpm
Permeate
1,056 gpm
Recovery

80.0 %
Sa
t
u
r
a
t
i
o
n

%
Untreated Reference
Treated Reference
Ca
C
O
3 Ca
S
O
4 Ca
F
2 Ba
S
O
4 Sr
S
O
4 SiO
2 Ca
3 P
O
4 2
M
n Al Fe
0%
100%
200%
Scale Control Scale Control
Feed
1,319 gpm
PC-191T

1.61 ppm
Feed
1,319 gpm
Powered by OptimizerPro 2.0.17 Page 1 of 3 Page 1022 of 1667

Reverse Osmosis Optimizer -
System Performance Report
Customer Name:CITY OF BEAUMONT Project:Waste Water Reclaim RO Customer Contact:Asset:Waste Water Reclaim RO
Sold To/Ship To:500111663/150459342 System Type:Brackish Location:BEAUMONT, USA Scenario:Scenario 1
Water Chemistry Units Raw Water
Untreated Reference Treated Reference
Feed Concentrate Feed Concentrate
pH 8.50 8.50 8.28 8.50 8.28
MAlkalinity ppm as CaCO₃240 240 1,170 240 1,170
PAlkalinity ppm as CaCO₃4.14 4.14 4.14
Ba ppm 0.0210 0.0210 0.105 0.0210 0.105
Ca ppm 48.1 48.1 240 48.1 240
Fe2 ppm 0.0200 0.0200 0.0998 0.0200 0.0998
Mg ppm 16.0 16.0 79.8 16.0 79.8
Mn ppm 0.0110 0.0110 0.0549 0.0110 0.0549
Na ppm 100 100 498 100 498
K ppm 18.0 18.0 89.6 18.0 89.6
SiO2 ppm 28.0 28.0 140 28.0 140
Sr ppm 0.220 0.220 1.10 0.220 1.10
Cl ppm 248 248 1,230 248 1,230
F ppm 0.430 0.430 2.14 0.430 2.14
SO4 ppm 28.0 28.0 140 28.0 140
Program Details
Product
Untreated Reference Treated Reference
Product
Name
Dosage Usage Unit Annual
Price Product
Name
Dosage Usage Unit Annual
Price Difference
ppm lb/year USD/lb USD ppm lb/year USD/lb USD USD
Antiscalant PC-191T 1.61 9,300 3.5 32,600 -32,600
pH Control
Water Cost
Untreated Reference Treated Reference
Flow Usage Cost Annual Cost Flow Usage Cost Annual Cost Difference gpm gal/y USD/1000
gal USD gpm gal/y USD/1000
gal USD USD
Raw Water 1,319 694,000,000 1,319 694,000,000
Concentrate 263.9 139,000,000 263.9 139,000,000
Other Comments - Best Practices and Recommendations
Powered by OptimizerPro 2.0.17 Page 2 of 3 Page 1023 of 1667

EXHIBIT “B”

CERTIFICATES OF INSURANCE AND ENDORSEMENTS

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1 AGREEMENT FOR PROFESSIONAL SERVICES BY INDEPENDENT CONTRACTOR

THIS AGREEMENT FOR PROFESSIONAL SERVICES BY INDEPENDENT CONTRACTOR is made and effective as of the 6th day of June 2023, by and between the CITY OF BEAUMONT (“CITY”) whose address is 550 E. 6th Street, Beaumont, California 92223 and Univar Solutions USA, Inc., a Washington Corporation, whose address is 8201 S. 212th, Kent, WA 98032-1994 (“CONTRACTOR”).

RECITALS

This Agreement is entered into on the basis of the following facts, understandings and intentions of the parties to this Agreement:

A. CITY desires to engage CONTRACTOR to transport and deliver the desired chemicals and services; and

B. CONTRACTOR has made a proposal (“Proposal”) to the CITY to provide such goods and services, which Proposal is attached hereto as Exhibit “A” and incorporated herein by this reference; and

C. CONTRACTOR agrees to provide such services pursuant to, and in accordance with, the terms and conditions of this Agreement, and represents and warrants to CITY that CONTRACTOR possesses the necessary skills, licenses, certifications, qualifications, personnel and equipment to provide such services.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing Recitals and mutual covenants contained herein, CITY and CONTRACTOR agree as follows:

1. Term of Agreement. This Agreement is effective as of the date first above written and shall continue until terminated as provided for herein. Notwithstanding anything in this Agreement to the contrary, this Agreement shall automatically terminate after three (3) year(s) unless extended by the parties with the approval of the City Council of the CITY.

2. Services to be Performed. CONTRACTOR agrees to provide the services (“Services”) as follows: Supply and Delivery of desired chemicals per Exhibit “A”. All Services shall be performed in the manner and according to the timeframe set forth in the Proposal.

CONTRACTOR designates Elio Limonchi as CONTRACTOR’S professional(s) responsible for overseeing the Services provided by CONTRACTOR.

3. Associates and Subcontractors. CONTRACTOR may, at CONTRACTOR’s sole cost and expense, employ such competent and qualified independent associates, subcontractors and consultants as CONTRACTOR deems necessary to perform the Services; provided, however, that CONTRACTOR shall not subcontract any of the Services without the written consent of CITY.

4. Compensation.

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2 4.01 CONTRACTOR shall be paid at the rates set forth in the Proposal and shall not increase any rate without the prior written consent of the CITY.

4.02 CONTRACTOR shall not be compensated for any Services rendered nor reimbursed for any expenses incurred in excess of those authorized unless approved in advance by the CITY, in writing.

4.03 CONTRACTOR shall submit to CITY, on or before the fifteenth (15th) of each month, itemized invoices for the Services rendered in the previous month. The CITY shall not be obligated to pay any invoice that is submitted more than sixty (60) days after the due date of such invoice. CITY shall have the right to review and audit all invoices prior to or after payment to CONTRACTOR. This review and audit may include, but not be limited to CITY’s:

a. Determination that any hourly fee charged is consistent with this Agreement's approved hourly rate schedule;
b. Determination that the multiplication of the hours billed times the approved rate schedule dollars is correct;
c. Determination that each item charged is the usual, customary, and reasonable charge for the particular item. If CITY determines an item charged is greater than usual, customary, or reasonable, or is duplicative, ambiguous, excessive, or inappropriate, CITY shall either return the bill to CONTRACTOR with a request for explanation or adjust the payment accordingly, and give notice to CONTRACTOR of the adjustment.

4.04 If the work is satisfactorily completed, CITY shall pay such invoice within thirty (30) days of its receipt. Should CITY dispute any portion of any invoice, CITY shall pay the undisputed portion within the time stated above, and at the same time advise CONTRACTOR in writing of the disputed portion.

5. Obligations of CONTRACTOR.

5.01 CONTRACTOR agrees to perform all Services in accordance with the terms and conditions of this Agreement and the Proposal. In the event that the terms of the Proposal shall conflict with the terms of this Agreement, or contain additional terms that purport to bind the CITY other than the Services to be rendered and the price for the Services, the terms of this Agreement shall govern and said additional or conflicting terms shall be of no force or effect.

5.02 Except as otherwise agreed by the parties, CONTRACTOR will supply all personnel, materials and equipment required to perform the Services. CONTRACTOR shall provide its own offices, telephones, vehicles and computers and set its own work hours. CONTRACTOR will determine the method, details, and means of performing the Services under this Agreement.

5.03 CONTRACTOR shall keep CITY informed as to the progress of the

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3 Services by means of regular and frequent consultations. Additionally, when requested by CITY, CONTRACTOR shall prepare written status reports.

5.04 CONTRACTOR is responsible for paying, when due, all income and other taxes, fees and withholding, including withholding state and federal taxes, social security, unemployment and worker’s compensation, incurred as a result of the compensation paid under this Agreement. CONTRACTOR agrees to indemnify, defend and hold harmless CITY for any claims, costs, losses, fees, penalties, interest, or damages suffered by CITY resulting from CONTRACTOR’s failure to comply with this provision.

5.05 In the event CONTRACTOR is required to prepare plans, drawings, specifications and/or estimates, the same shall be furnished in conformance with local, state and federal laws, rules and regulations.

5.06 CONTRACTOR represents that it possesses all required licenses necessary or applicable to the performance of Services under this Agreement and the Proposal and shall obtain and keep in full force and effect all permits and approvals required to perform the Services herein. In the event CITY is required to obtain an approval or permit from another governmental entity, CONTRACTOR shall provide all necessary supporting documents to be filed with such entity.

5.07 CONTRACTOR shall be solely responsible for obtaining Employment Eligibility Verification information from CONTRACTOR’s employees, in compliance with the Immigration Reform and Control Act of 1986, Pub. L. 99-603 (8 U.S.C. 1324a), and shall ensure that CONTRACTOR’s employees are eligible to work in the United States.

5.08 In the event that CONTRACTOR employs, contracts with, or otherwise utilizes any CalPERS retirees in completing any of the Services performed hereunder, such instances shall be disclosed in advance to the CITY and shall be subject to the CITY’s advance written approval.

5.09 Drug-free Workplace Certification. By signing this Agreement, the CONTRACTOR hereby certifies under penalty of perjury under the laws of the State of California that the CONTRACTOR will comply with the requirements of the Drug-Free Workplace Act of 1990 (Government Code, Section 8350 et seq.) and will provide a drug- free workplace.

5.10 CONTRACTOR shall comply with all applicable local, state and federal laws, rules, regulations, entitlements and/or permits applicable to, or governing the Services authorized hereunder.

6. Insurance. CONTRACTOR hereby agrees to be solely responsible for the health and safety of its employees and agents in performing the Services under this Agreement and shall comply with all laws applicable to worker safety including but not limited to Cal-OSHA.

Therefore, throughout the duration of this Agreement, CONTRACTOR hereby covenants and agrees to maintain insurance in conformance with the requirements set forth below. Attached hereto as Exhibit “B” are copies of Certificates of Insurance and endorsements as required by

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4 Section 7.02. If existing coverage does not meet the requirements set forth herein, CONTRACTOR agrees to amend, supplement or endorse the existing coverage to do so.

CONTRACTOR shall provide the following types and amounts of insurance:

6.01 Commercial general liability insurance in an amount of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate; CONTRACTOR agrees to have its insurer endorse the general liability coverage required herein to include as additional insured’s CITY, its officials, employees and agents. CONTRACTOR also agrees to require all contractors and subcontractors to provide the same coverage required under this Section 6.

6.02 Business Auto Coverage in an amount no less than $1 million per accident.

If CONTRACTOR or CONTRACTOR’s employees will use personal autos in performance of the Services hereunder, CONTRACTOR shall provide evidence of personal auto liability coverage for each such person.

6.03 Workers’ Compensation coverage for any of CONTRACTOR’s employees that will be providing any Services hereunder. CONTRACTOR will have a state-approved policy form providing statutory benefits as required by California law. The provisions of any workers’ compensation will not limit the obligations of CONTRACTOR under this Agreement. CONTRACTOR expressly agrees not to use any statutory immunity defenses under such laws with respect to CITY, its employees, officials and agents.

6.04 Optional Insurance Coverage. Choose and check one: Required 08/_ /Not Required ___; Errors and omissions insurance in a minimum amount of $2 million per occurrence to cover any negligent acts or omissions committed by CONTRACTOR, its employees and/or agents in the performance of any Services for CITY.

7. General Conditions pertaining to Insurance Coverage

7.01 No liability insurance coverage provided shall prohibit CONTRACTOR from waiving the right of subrogation prior to a loss. CONTRACTOR waives all rights of subrogation against CITY regardless of the applicability of insurance proceeds and shall require all contractors and subcontractors to do likewise.

7.02. Prior to beginning the Services under this Agreement, CONTRACTOR shall furnish CITY with certificates of insurance, endorsements, and upon request, complete copies of all policies, including complete copies of all endorsements. All copies of policies and endorsements shall show the signature of a person authorized by that insurer to bind coverage on its behalf.

7.03. All required policies shall be issued by a highly rated insurer with a minimum A.M. Best rating of “A:VII”). The insurer(s) shall be admitted and licensed to do business in California. The certificates of insurance hereunder shall state that coverage shall not be suspended, voided, canceled by either party, or reduced in coverage or in limits, except after thirty (30) days' prior written notice has been given to CITY.

7.04 Self-insurance does not comply with these insurance specifications.

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5 CONTRACTOR acknowledges and agrees that that all insurance coverage required to be provided by CONTRACTOR or any subcontractor, shall apply first and on a primary, non- contributing basis in relation to any other insurance, indemnity or self-insurance available to CITY.

7.05 All coverage types and limits required are subject to approval, modification and additional requirements by CITY, as the need arises. CONTRACTOR shall not make any reductions in scope of coverage (e.g. elimination of contractual liability or reduction of discovery period) that may affect CITY’s protection without CITY’s prior written consent.

7.06 CONTRACTOR agrees to provide immediate notice to CITY of any claim or loss against CONTRACTOR or arising out of the Services performed under this Agreement. CITY assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve CITY.

8. Indemnification.

8.01 CONTRACTOR and CITY agree that CITY, its employees, agents and officials should, to the extent permitted by law, be fully protected from any loss, injury, damage, claim, lawsuit, cost, expense, attorneys’ fees, litigation costs, defense costs, court costs or any other costs arising out of or in any way related to the performance of this Agreement by CONTRACTOR or any subcontractor or agent of either as set forth herein.

Accordingly, the provisions of this indemnity are intended by the parties to be interpreted and construed to provide the fullest protection possible under the law to CITY.

CONTRACTOR acknowledges that CITY would not enter into this Agreement in the absence of the commitment of CONTRACTOR to indemnify and protect CITY as set forth herein.

a. To the fullest extent permitted by law, CONTRACTOR shall defend, indemnify and hold harmless CITY, its employees, agents and officials, from any liability, claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses, damages or costs of any kind, whether actual, alleged or threatened, actual attorneys’ fees incurred by CITY, court costs, interest, defense costs, including expert witness fees and any other costs or expenses of any kind whatsoever without restriction or limitation incurred in relation to, as a consequence of or arising out of, or in any way attributable actually, allegedly or impliedly, in whole or in part to the performance of this Agreement.

CONTRACTOR’s obligation to defend, indemnify and hold harmless shall include any and all claims, suits and proceedings in which CONTRACTOR (and/or CONTRACTOR’s agents and/or employees) is alleged to be an employee of CITY.

All obligations under this provision are to be paid by CONTRACTOR as they are incurred by CITY.
b. Without affecting the rights of CITY under any provision of this Agreement or this Section, CONTRACTOR shall not be required to indemnify and hold harmless CITY as set forth above for liability attributable solely to the fault of CITY, provided such fault is determined by agreement between the parties or the

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6 findings of a court of competent jurisdiction.

8A. Indemnification Design Professionals.

The cost to indemnify, hold harmless, and defend charged to CONTRACTOR shall not exceed CONTRACTOR’S proportionate percentage of fault.

9. Additional Services, Changes and Deletions.

CONTRACTOR expressly waives any right to be compensated for services and materials not covered by the scope of this Agreement or authorized by the CITY in writing.

10. Termination of Agreement.

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7 11. Status of CONTRACTOR.

12. Ownership of Documents; Audit.

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8 13. Miscellaneous Provisions.

13.03 CONTRACTOR shall timely file FPPC Form 700 Conflict of Interest Statements with CITY if required by California law and/or the CITY’s conflict of interest policy.

CONTRACTOR further covenants that in the performance of this Agreement, no person having such interest shall be employed by it as an officer, employee, agent, or subcontractor.

13.08 Improper Consideration. CONTRACTOR shall not offer (either directly or through an intermediary) any improper consideration such as, but not limited to, cash,

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IN WITNESS WHEREOF, the parties hereby have made and executed this Agreement to be effective as of the day and year first above written.

CITY: CONTRACTOR:

CITY OF BEAUMONT UNIVAR SOLUTIONS USA, INC.

By: By:

Julio Martinez, III, Mayor
Print Name:

Title:

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EXHIBIT “A”

PROPOSAL

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EXHIBIT “B”

CERTIFICATES OF INSURANCE AND ENDORSEMENTS

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Staff Report

TO: City Council
FROM: Elizabeth Gibbs, City Manager
DATE June 20, 2023
SUBJECT: Continued Public Hearing from May 16, 2023 for the Formation of Community Facilities District No. 2023-1 (Fairway Canyon)

Description A public hearing continued from May 16, 2023, for the formation of CFD No. 2023-1 (Fairway Canyon).

Background and Analysis:

The developer, Meritage Homes of California, Inc., a California corporation (the “Developer”) and D.R. Horton Los Angeles Holding Company, Inc., a California corporation, own property containing 419 proposed residential lots within the City. Such property is located in the northwestern part of the City, west of Tukwet Canyon Parkway, and north of Oak Valley Parkway. The Developer has requested that the City form a community facilities district (“CFD No. 2023-1”) with two improvement areas therein (“Improvement Area No. 1” and “Improvement Area No. 2” and together, the “Improvement Areas”) to encompass such property in accordance with the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), to finance the costs of certain public improvements, public safety services, and maintenance services through the levy of a special tax. Improvement Area No. 1 is planned to include approximately 132 residential units and Improvement Area No. 2 is planned to include approximately 287 residential units.

In 2003, the City entered into a Development Agreement (the “Development Agreement”) with LB/L-SunCal Oak Valley, LLC (“SunCal Oak Valley”). The Development Agreement requires the City to, among other things, cooperate with the developer in taking all steps necessary to cause a community facilities district or other alternative financing mechanisms to provide public financing for the construction of public infrastructure improvements on the property subject to the SunCal Development Agreement. The project subject to the Development Agreement was originally called Oak Valley and is now known as Fairway Canyon.

SunCal Oak Valley was a subsidiary of a large land development company known as SunCal and was set up as a single-purpose entity to own and develop the Oak Valley

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project. Lehman Brothers provided financing to various SunCal subsidiaries for land development projects throughout California. In particular, SunCal Oak Valley received a loan from an affiliated entity of Lehman Brothers which was secured by a deed of trust against the Oak Valley project. Lehman Brothers also owned a 50% share of SunCal Oak Valley’s equity.

Following the Lehman Brother’s bankruptcy filing in 2008, SunCal Oak Valley entered bankruptcy as an involuntary debtor in California bankruptcy court as Lehman Brothers attempted to recover their investments in various SunCal projects by foreclosing on the various loans. In October 2011, following several years of litigation, Lehman Brothers and SunCal reached a settlement of their litigation pursuant to which, among other things, (1) SunCal would not object to the bankruptcy plan proposed by the bankruptcy trustee and (2) SunCal would have the option to purchase two projects from Lehman Brothers (one of which was the Oak Valley project) at an agreed price.

On January 6, 2012, the California bankruptcy court confirmed the final bankruptcy plan for SunCal Oak Valley and the other SunCal companies. The bankruptcy court’s order provides that each of the various SunCal projects (including the Oak Valley project) were to be conveyed to the applicable Lehman Brothers affiliate, including all “right, title and interest in, to and under any development agreements, plans engineering reports, permits and community facilities district bonds.” The final order from the bankruptcy court also specifically provided for the assumption of the Development Agreement by SunCal Oak Valley in the bankruptcy case and provided that any precondition to assignment or conveyance of any such contracts was deemed satisfied by the bankruptcy court’s order. In particular, on March 27, 2012, the bankruptcy court entered a sale order conveying the Oak Valley project to LV Oak Valley Champions LLC pursuant to the final bankruptcy plan.

Pursuant to the settlement agreement between SunCal and Lehman Brothers, it appears SDC Fairway Canyon LLC purchased the Oak Valley (now Fairway Canyon) project from LV Oak Valley Champions LLC. In July 2012, pursuant to Section 20.1 of the SunCal Development Agreement, the City consented to the assignment of the Development Agreement to SDC Fairway Canyon LLC.

Analysis:

In order to finance the CFD facilities and incidental expenses, the City intends to issue bonds secured by special taxes levied in each Improvement Area. The maximum amount of bonded indebtedness proposed for Improvement Area No. 1 is $3.5 million and the maximum amount of bonded indebtedness proposed for Improvement Area No. 2 is $11 million.

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The Developer has requested that the boundaries of CFD No. 2023 -1 include the area described in Attachment A of the Resolution of Intention to Establish CFD No. 2023 -1 adopted by the City Council on April 4, 2023 (the “Resolution of Intention”), and that special taxes be levied within the boundaries of Improvement Area No. 1 and Improvement Area No. 2 in accordance with the applicable Rate and Method of Apportionment (each an “RMA”) described in Attachments C an d D to the Resolution of Intention.

The Resolution of Intention called for a public hearing to be held on May 16, 2023. The purpose of the public hearing is for the City Council to formally consider the approval of the formation of CFD No. 2023-1 and the approval of the levy of the special taxes within CFD No. 2023-1. Notice of the public hearing was published in the Press Enterprise and mailed to the property owners in accordance with the Act.

In connection with the public hearing, Spicer Consulting Group has prepared a CFD Public Hearing Report which describes and analyzes the facilities and services to be financed by CFD No. 2023-1 and the estimated costs of such facilities and services.

Following the close of the public hearing, the City Council will be asked to adopt the Resolution of Formation and the Resolution Determining the Necessity to Incur Debt which, together, approve the formation of CFD No. 2023 -1 and the Improvement Areas, the levy of the special taxes in each Improvement Area in accord ance with the applicable RMA and determines the necessity for CFD No. 2023-1 to issue bonds in an amount not to exceed $3.5 million for Improvement Area No. 1 and $11 million for Improvement Area No. 2. Such resolutions call for an election to submit to the qualified voters within CFD No. 2023-1 ballot measures on the approval of the special taxes, the issuance of the bonds and an appropriations limit for CFD No. 2023 -1.

In addition, the Resolution of Formation approves the execution and delivery of the Acquisition, Construct and Funding Agreement with the Developer (the “Funding Agreement”) in the form presented to this City Council. The Funding Agreement sets forth the terms, among others, pursuant to which CFD No. 2023-1 will finance improvements to be owned by the City.

On file with the City Clerk is a Certificate of the Registrar of Voters of Riverside County certifying that there are no registered voters residing within the boundaries of CFD No. 2023-1. Accordingly, under the Act, only property owners owning land in CFD No. 2023- 1 are eligible to vote at the election for CFD No. 2023 -1 with each owner having one vote for each acre (or portion thereof) that they own within an Improvement Area. The Property Owners have executed consents and waivers of certain election procedures with respect to the election, including certain timing requirements with respect to the election, in accordance with the Act. Accordingly, if the City Council approves the Resolution of Formation and the Resolution Determining the Necessity to Incur Debt,

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the City Clerk will conduct the election. The City Clerk will announce the election results and the City Council will be asked to adopt the Resolution Certifying the Election Results. Based upon certification that 2/3rds of the votes cast are in favor of the propositions voted upon in each Improvement Area, the Resolution Certifying the Election Results directs the City Clerk to record a notice of special tax lien on the property within each Improvement Area. The City Council will then be asked to introduce the Ordinance authorizing the levy of the special tax within each Improvement Area in accordance with the applicable RMA.

Fiscal Impact:

The Developer has made a deposit of $50,000 to pay for the costs of the formation proceedings which may be reimbursed to the Developer in accordance with Funding Agreement. If established and subject to necessary City Council and voter approvals, CFD No. 2023-1 will annually levy special taxes on all of the taxable property within each of Improvement Area No. 1 and Improvement Area No. 2 in accordance with the RMA applicable to such Improvement Areas (as attached to the Resolution of Intention).

Any bonds issued by CFD No. 2023-1 are not obligations of the City and will be secured solely by the Special Taxes levied in the applicable Improvement Area within CFD No. 2023-1. The inclusion of the Special Tax B is estimated to produce $178,075 in annual revenues for public safety at buildout (based on the initial rate of $425/unit). The inclusion of the Special Tax D will produce an estimated $213,271 in annual revenues for Public Services at buildout (based on the initial rate of $509/unit).

Recommended Action:

Waive the full reading and adopt by title only, “Resolution of the City Council of the City of Beaumont, California, Establishing City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) and Improvement Areas Therein, Authorizing the Levy of a Special Tax Therein, Calling an Election Within Each Improvement Area and Approving and Authorizing Certain Actions Related Thereto" and; Waive the full reading and adopt by title only, "Resolution of the City Council of the City of Beaumont, California, Acting as the Legislative Body of City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) Determining the Necessity to Incur Bonded Indebtedness within Improvement Areas Nos. 1 and 2 of City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) in an Amount Not to Exceed $3,500,000 Within Improvement Area No. 1 and $11,000,000 Within Improvement Area No. 2 and Calling Elections Therein” and; Waive the full reading and adopt by title only, "Resolution of the City Council of the City of Beaumont, California, Acting in its Capacity as the Legislative Body of City of

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Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) Certifying Election Results” and;
Waive the full reading and introduce the first reading by title only, "Ordinance of the City Council of the City of Beaumont, California, Acting in its Capacity as the Legislative Body of City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) Authorizing the Levy of Special Taxes Within Improvement Area No. 1 and Improvement Area No. 2.”
Attachments:

A. Resolution Establishing City of Beaumont CFD No. 2023-1 B. Resolution Determining Necessity to Incur Bond Indebtedness within CFD No. 2023-1
C. Resolution Certifying Election Results
D. Ordinance Authorizing the Levy of Special Tax
E. Acquisition, Construction and Funding Agreement
F. Certificate of the Registrar of Voters
G. Public Hearing Report
H. Project Map

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RESOLUTION NO. 23-__

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BEAUMONT,

CALIFORNIA, ESTABLISHING CITY OF BEAUMONT COMMUNITY
FACILITIES NO. 2023-1 (FAIRWAY CANYON) AND IMPROVEMENT

AREAS THEREIN, AUTHORIZING THE LEVY OF A SPECIAL TAX

THEREIN, CALLING AN ELECTION WITHIN EACH IMPROVEMENT

AREA AND APPROVING AND AUTHORIZING CERTAIN ACTIONS

RELATED THERETO

WHEREAS, the City Council (the “City Council”) of the City of Beaumont (the “City”) has heretofore adopted Resolution No. 2023-06 stating its intention to form City of Beaumont Community Facilities No. 2023-1 (Fairway Canyon) (“Community Facilities District No. 2023-1” or the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”) and to form two improvement areas within proposed Community Facilities District No. 2023 -1 to be known as “Improvement Area No. 1 of City of Beaumont Community Facilities No. 2023 -1 (Fairway Canyon) (“Improvement Area No. 1”) and “Improvement Area No. 2 of City of Beaumont Community Facilities No. 2023-1 (Fairway Canyon)” (“Improvement Area No. 2” and together with Improvement Area No. 1, the “Improvement Areas” and each individually an “Improvement Area”); and

WHEREAS, a copy of Resolution No 2023-06 setting forth a description of the proposed boundaries of Community Facilities District No. 2023-1 and each of the Improvement Areas, the facilities, services and incidental expenses to be financed by the District and the rate and method of apportionment of the special tax proposed to be levied within each Improvement Area is on file with the City Clerk; and

WHEREAS, notice was published and mailed to all landowners of the land proposed to be included within the District as required by law relative to the intention of this City Council to form proposed Community Facilities District No. 2023-1 and the Improvement Areas and to levy special taxes within each Improvement Area and to incur bonded indebtedness in the maxi mum aggregate amount of up to $3,500,000 within proposed Improvement Area No. 1 and $11,000,000 within proposed Improvement Area No. 2 therein to finance the facilities, services and incidental expenses described in Resolution No. 2023-06; and

WHEREAS, on May 16, 2023, the City Council continued the public hearing called for pursuant to Resolution No. 2023-06 and Resolution No. 2023-07 to June 20, 2023; and

WHEREAS, on June 20, 2023, this City Council conducted a noticed public hearing as required by law relative to the proposed formation of Community Facilities District No. 2023 -1 and the Improvement Areas, the levy of the special taxes within each Improvement Area and the issuance of bonded indebtedness by the District for each Improvement Area; and

WHEREAS, at the June 20, 2023 public hearing there was filed with this City Council a report containing a description of the facilities and services necessary to meet the needs of the District and an estimate of the cost of such facilities and services as req uired by Section 53321.5 of the Act (the “Engineer’s Report”); and

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WHEREAS, at the June 20, 2023 public hearing all persons desiring to be heard on all matters pertaining to the formation of Community Facilities District No. 2023-1 and the Improvement Areas, the levy of the special taxes within each Improvement Area and the issuance of bonded indebtedness by the District for each of the Improvement Areas were heard and full and fair hearings were held; and

WHEREAS, following the public hearing, this City Council has determined to authorize the formation of the District to finance the types of facilities (the “Facilities”) and the types of services (the “Services”) and the incidental expenses (the “Incidental Expenses”) set forth in Attachment A hereto, which are described in more detail in the Engineer’s Report; and

WHEREAS, at the public hearing evidence was presented to this City Council on the matters before it, and the proposed special taxes to be levied within each of the Improvement Areas was not precluded by a majority protest of the type described in Section 53324 of the Act, and this City Council at the conclusion of the hearing was fully advised as to all matters relating to the formation of the District and the Improvement Areas, the levy of the special taxes and the issuance of bonded indebtedness within each of the Improvement Areas; and

WHEREAS, this City Council has determined, based on a Certificate of Registrar of Voters of the County of Riverside on file in the office of the City Clerk, that no registered voters have been residing in the proposed boundaries of Community Facilities District No. 2023-1 for each of the 90 days prior to June 20, 2023 and that the qualified electors in Community Faciliti es District No. 2023- 1 are the landowners within the District; and

WHEREAS, on the basis of all of the foregoing, this City Council has determined to proceed with the establishment of Community Facilities District No. 2023 -1 and the Improvement Areas and to call an election within each Improvement Area to authorize (i) the levy of special taxes within Improvement Area No. 1 pursuant to the rate and method of apportionment of the special tax, as set forth in Attachment C to Resolution No. 2023-06 (the “Improvement Area No. 1 Rate and Method”), (ii) the levy of special taxes within Improvement Area No. 2 pursuant to the rate and method of apportionment of the special tax, as set forth in Attachment D to Resolution No. 2023 -06 (the “Improvement Area No. 2 Rate and Method”) (iii) the issuance of bonds within each of the Improvement Areas to finance the Facilities and Incidental Expenses, and (iv) the establishment of an appropriations limit for Community Facilities District No. 2023-1; and

WHEREAS, in order to facilitate the funding of the Facilities, the legislative body of the District desires to enter into an Acquisition, Construction and Funding Agreement (the “Agreement”) with Meritage Homes of California, Inc., a California corporation (the “Developer”) an d the form of the Agreement is on file with the City Clerk; and

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Beaumont, California:

SECTION 1. Each of the above recitals is true and correct.

SECTION 2. A community facilities district to be designated “City of Beaumont Community Facilities No. 2023-1 (Fairway Canyon)” is hereby established pursuant to the Act and Improvement Area No. 1 and Improvement Area No. 2 are hereby designated within the District in accordance with 53350 of the Act. The City Council hereby finds and determines that all prior proceedings taken with

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respect to the establishment of the District were valid and in conformity with the requirements of law, including the Act. This finding is made in accordance with t he provisions of Section 53325.1(b) of the Act.

SECTION 3. The boundaries of Community Facilities District No. 2023-1 and each of the Improvement Areas are established as shown on the map designated “Proposed Boundary Map of City of Beaumont Community Facilities No. 2023-1 (Fairway Canyon), County of Riverside, State of California”, which map is on file in the office of the City Clerk and was recorded pursuant to Sections 3111 and 3113 of the Streets and Highways Code in the County Book of Maps of Assessme nt and Community Facilities Districts in the Assessor-County Clerk-Recorder’s office of the County of Riverside in Book No. 90 Page No. 98 on April 16, 2023 as Instrument No. 2023-0099016.

SECTION 4. The types of Facilities, Services and Incidental Expenses authorized to be provided for Community Facilities District No. 2023-1 are those set forth in Attachment A attached hereto. The estimated cost of the Facilities, Services and Incidental Expenses to be financed is set forth in the Engineer’s Report, which estimates may change as the Facilities are designed and bid for construction and acquisition, as applicable.

The City is authorized by the Act to contribute revenue to, or to construct or acquire the Facilities, all in accordance with the Act. The City Council finds and determines that the proposed Facilities and Services are necessary to meet the increased demand that will be placed upon local agencies and public infrastructure as a result of new development within the District and that the Facilities and Services to be financed, benefit residents of the City and the future residents of the District.

SECTION 5. Except where funds are otherwise available, it is the intention of this City Council, subject to the approval of the eligible voters within each Improvement Area, to levy annually special taxes at the rates set forth in the Improvement Area No. 1 Rate and Method and the Improvement Area No. 2 Rate and Method, on all non-exempt property within Improvement Area No. 1 and Improvement Area No. 2, respectively, sufficient to pay for (i) the Facilities and the Services, (ii) principal and interest and other periodic costs on the bonds proposed to be issued to finance the Facilities and Incidental Expenses to be financed by such Improvement Area, incl uding the establishment and replenishment of reserve funds, any remarketing, credit enhancement and liquidity facility fees and other expenses of the type permitted by Section 53345.3 of the Act, and (iii) the Incidental Expenses. The District expects to incur, and in certain cases has already incurred, Incidental Expenses in connection with the creation of the District, the issuance of bonds, the levying and collecting of the special taxes, the completion and inspection of the Facilities and the annual administration of the bonds and the District. The Improvement Area No. 1 Rate and Method is described in detail in Attachment C to Resolution No. 2023-06 and is incorporated herein by this reference, and the City Council hereby finds that the Improvement Ar ea No. 1 Rate and Method contains sufficient detail to allow each landowner within Improvement Area No. 1 to estimate the maximum amount that may be levied against each parcel. The Improvement Area No. 2 Rate and Method is described in detail in Attachment D to Resolution No. 2023-06 and is incorporated herein by this reference, and the City Council hereby finds that the Improvement Area No. 2 Rate and Method contains sufficient detail to allow each landowner within Improvement Area No. 2 to estimate the maximum amount that may be levied against each parcel. As described in greater detail in the Engineer’s Report, which is incorporated by reference herein, the special taxes to be levied within an Improvement Area is based on the expected demand that each p arcel of real property within the

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Improvement Area will place on the Facilities and the Services and on the benefit that each parcel will derive from the right to access the Facilities and the Services and, accordingly, is hereby determined to be reasonable. The special taxes within the Improvement Areas shall be levied on each assessor’s parcel in accordance with the Improvement Area No. 1 Rate and Method and the Improvement Area No. 2 Rate and Method, as applicable. The special taxes are apportioned to each parcel within an Improvement Area on the foregoing bases pursuant to Section 53325.3 of the Act and such special taxes are not on or based upon the ownership of real property or the assessed value of real property.

If special taxes of an Improvement Area are levied against any parcel used for private residential purposes, (i) the maximum special tax rate shall be specified as a dollar amount which shall be calculated and established not later than the date on which the parcel is first subject to the sp ecial tax because of its use for private residential purposes and shall not be increased over time, except to the extent permitted in the rate and method of apportionment of the special tax for such Improvement Area as set forth in the Improvement Area No. 1 Rate and Method or the Improvement Area No. 2 Rate and Method, as applicable, (ii) the Special Tax A (as defined in the Improvement Area No. 1 Rate and Method or the Improvement Area No. 2 Rate and Method) shall not be levied after fiscal year 2063 - 64, as described in the Improvement Area No. 1 Rate and Method or the Improvement Area No. 2 Rate and Method, as applicable, (iii) the Special Tax B, the Special Tax C (Contingent), and the Special Tax D (each as defined in the Improvement Area No. 1 Rate and Method or the Improvement Area No. 2 Rate and Method) shall be levied as long as each is needed to meet the Special Tax B Requirement, the Special Tax C (Contingent) Requirement and the Special Tax D Requirement (each as defined in the Improvement Area No. 1 Rate and Method or the Improvement Area No. 2 Rate and Method), respectively, as determined at the sole discretion of the City Council and (iv) under no circumstances will the special tax levied in an Improvement Area in any fiscal year against any such parcel used for private residential uses be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within an Improvement Area by more than ten percent (10%) above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults.

The City Manager of the City of Beaumont, or his or her designee, will be responsible for preparing annually, or authorizing a designee to prepare, a current roll of special tax l evy obligations by assessor’s parcel number and will be responsible for estimating future special tax levies pursuant to Section 53340.2 of the Act.

SECTION 6. In the event that a portion of the property within Improvement Area No. 1 shall become for any reason exempt, wholly or partially, from the levy of the special taxes specified in the Improvement Area No. 1 Rate and Method, or in the event of delinquencies in the payment of the applicable special tax levied, the City Council shall, on behalf of Commu nity Facilities District No. 2023-1, increase the levy to the extent necessary and permitted by law and these proceedings upon the remaining property within Improvement Area No. 1 which is not exempt or delinquent in order to yield the required debt service payments on any outstanding bonds of the District for Improvement Area No. 1, or to prevent the District from defaulting on any other of its obligations or liabilities payable from Improvement Area No. 1 special taxes; provided, however, under no circumstances will any special tax levied against any parcel in Improvement Area No. 1 used for private residential uses be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within Improvement Area No. 1 by more than ten percent above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. The amount of the special tax for parcels within Improvement Area No. 1 will be set in accordance with the Imp rovement Area No. 1 Rate and Method. The obligation to pay the Special Tax A may be prepaid only as set forth in

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Sections G and H of the Improvement Area No. 1 Rate and Method. The obligation to pay the Special Tax B, the Special Tax C (Contingent), and the Special Tax D may not be prepaid.

In the event that a portion of the property within Improvement Area No. 2 shall become for any reason exempt, wholly or partially, from the levy of the special taxes specified in the Improvement Area No. 2 Rate and Method, or in the event of delinquencies in the payment of the applicable special tax levied, the City Council shall, on behalf of Community Facilities District No. 2023 -1, increase the levy to the extent necessary and permitted by law and these proceedings upon the remaining property within Improvement Area No. 2 which is not exempt or delinquent in order to yield the required debt service payments on any outstanding bonds of the District for Improvement Area No. 2, or to prevent the District from defaulting on any other of its obligations or liabilities payable from Improvement Area No. 2 special taxes; provided, however, under no circumstances will any special tax levied against any parcel in Improvement Area No. 2 used for private residential uses be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within Improvement Area No. 2 by more than ten percent above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. The amount of the special tax for parcels within Improvement Area No. 2 will be set in accordance with the Improvement Area No. 2 Rate and Method. The obligation to pay the Special Tax A may be prepaid only as set forth in Sections G and H of the Improvement Area No. 2 Rate and Method. The obligation to pay the Special Tax B, the Special Tax C (Contingent), and the Special Tax D may not be prepaid.

SECTION 7. Upon recordation of a notice of special tax lien for an Improvement Area pursuant to Section 3114.5 of the Streets and Highways Code, a continuing lien to secure each levy of the special taxes shall attach to all non-exempt real property in such Improvement Area and this lien shall continue in force and effect until the specia l tax obligation is prepaid and permanently satisfied and the lien canceled with respect to such Improvement Area in accordance with law or until collection of the special taxes for such Improvement Area by the District ceases.

SECTION 8. Consistent with Section 53325.6 of the Act, the City Council finds and determines that the land within Community Facilities District No. 2023-1, if any, devoted primarily to agricultural, timber or livestock uses and being used for the commercial production of agricultura l, timber or livestock products is contiguous to other land within Community Facilities District No. 2023 - 1 and will be benefited by the Facilities proposed to be provided within Community Facilities District No. 2023-1.

SECTION 9. It is hereby further determined that there is no ad valorem property tax currently being levied on property within proposed Community Facilities District No. 2023 -1 for the exclusive purpose of paying the principal of or interest on bonds or other indebtedness incurred to financ e the construction of capital facilities which provide the same services to the territory of Community Facilities District No. 2023-1 as are proposed to be provided by the Facilities to be financed by Community Facilities District No. 2023-1.

SECTION 10. Written protests against the establishment of the District and the designation of the Improvement Areas have not been filed by one-half or more of the registered voters within the boundaries of the District or either Improvement Area or by the property own ers of one-half (1/2) or more of the area of land within the District or either Improvement Area. The City Council hereby finds that the proposed special taxes have not been precluded by a majority protest pursuant to Section 53324 of the Act.

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SECTION 11. An election is hereby called for Improvement Area No. 1 on the propositions of levying the special taxes on the property within Improvement Area No. 1 and establishing an appropriations limit for the District pursuant to Section 53325.7 of the Act and shall be consolidated with the election on the proposition of incurring bonded indebtedness for Improvement Area No. 1, pursuant to Sections 53351 and 53353.5 of the Act. The language of the propositions to be placed on the ballot is attached hereto as Attachment B.

An election is hereby called for Improvement Area No. 2 on the propositions of levying the special taxes on the property within Improvement Area No. 2 and establishing an appropriations limit for the District pursuant to Section 53325.7 of the Ac t and shall be consolidated with the election on the proposition of incurring bonded indebtedness for Improvement Area No. 2. Pursuant to Section 53351 and 53353.5 of the Act. The language of the propositions to be placed on the ballot is attached hereto as Attachment C.

SECTION 12. The date of the elections for each of the Improvement Areas on the propositions of incurring the bonded indebtedness, authorizing the levy of the special taxes and establishing an appropriations limit for the District shall be June 20, 2023, or such later date as is consented to by the City Clerk or any Acting City Clerk (referred to herein as the “City Clerk”) of the City of Beaumont; provided that, if the election is to take place sooner than 90 days after June 20, 2023, the n the unanimous written consent of each qualified elector within such Improvement Area to such election date must be obtained. The polls shall be open for said election immediately following the close of the public hearing on June 20, 2023. The election shall be conducted by the City Clerk. Except as otherwise provided by the Act, the election shall be conducted in accordance with the provisions of law regulating elections of the City of Beaumont insofar as such provisions are determined by the City Clerk to be applicable. The City Clerk is authorized to conduct the election following the adoption of this resolution, and all ballots shall be received by, and the City Clerk shall close the election by, 11:00 p.m. on the election day; provided the election shall be closed at such earlier time as all qualified electors have voted as provided in Section 53326(d) of the Act. Pursuant to Section 53326 of the Act, the ballots for the special election shall be distributed in person or by mail with return postage prepaid, to the qualified electors within each of the Improvement Areas. The City Clerk has secured a certificate from the Registrar of Voters of the County of Riverside certifying that there were no registered voters within the District as of the date of such certificate. Accordingly, since there were fewer than 12 registered voters within the District for each of the 90 days preceding June 20, 2023, the qualified electors shall be the landowners within each of the Improvement Areas and each landowner, or the authorized representative thereof, shall have one vote for each acre or portion thereof that such landowner owns within the respective Improvement Area, as provided in Section 53326 of the Act.

The landowners within Improvement Area No. 1 have each executed and delivered a waiver of certain election law requirements and consenting to the holding of the election on June 20, 2023, which waivers are on file with the City Clerk. The sole landowner within Improvement Area No. 2 has executed and delivered a waiver of certain election law requirements and consenting to the holding of the election on June 20, 2023, which waiver is on file with the City Clerk.

SECTION 13. The preparation of the Engineer’s Report is hereby ratified. The Engineer’s Report, as submitted, is hereby approved and was made a part of the record of the public hearing regarding the formation of Community Facilities District No. 2023 -1. The Engineer’s Report is ordered to be kept on file with the transcript of these proceedings and o pen for public inspection.

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SECTION 14. The District may accept advances of funds or work-in-kind from any source, including, but not limited to, private persons or private entities, for any authorized purpose, including, but not limited to, paying any cost incurred in creating Community Facilities District No. 2023-1. The District may enter into an agreement with the person or entity advancing the funds or work -in-kind, to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the City Council, with or without interest.

SECTION 15. The form of the Agreement on file with the City Clerk is approved as to form, and each of the City Manager and their written designees, is authorized to execute the Agreement in substantially the form on file with the City Clerk, together with such changes as are approved by the officer executing the same, with the approval of such changes to be conclusively evidenced by t he execution and delivery thereof.

SECTION 16. This Resolution shall be effective upon its adoption.

ADOPTED, SIGNED AND APPROVED this 20th day of June, 2023.

Julio Martinez III, Mayor of the City of Beaumont
(SEAL)
ATTEST:

Elaine Morgan, City Clerk
of the City of Beaumont

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STATE OF CALIFORNIA )
) ss.

COUNTY OF RIVERSIDE )
I, Elaine Morgan, City Clerk of the City of Beaumont, do hereby certify that the foregoing resolution was duly adopted by the City Council of said City, at a regular meeting of said City Council held on the 20th day of June, 2023, and that it was so adopted by the following vote:

AYES:

NOES:

ABSENT:

Elaine Morgan, City Clerk
City of Beaumont

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ATTACHMENT A

DESCRIPTION OF THE FACILITIES, SERVICES AND INCIDENTAL EXPENSES

TYPES OF FACILITIES
The proposed types of public facilities and expenses to be financed by the Community Facilities District include:

The construction, purchase, modification, rehabilitation, expansion and/or improvement of roadway, bridge, sewer, domestic and reclaimed water, dry utilities, storm drain, curb and gutter, medians, traffic signals and any other facilities permitted pursuant to the Act, parks, trails, police facilities, fire facilities, library facilities, public community facilities, and appurtenances and appurtenant work, and development impact fees that are used by the City to construct infrastructure including design, engineering and planning costs associated therewith. The Facilities include, but are not limited to:

PA 21B Park Improvements
Sorenstam Road Improvement
Water Facilities of Beaumont Cherry Valley Water District

TYPES OF MAINTENANCE SERVICES
The types of Maintenance Services that are proposed to be provided by the Community Facilities District and funded with the proceeds of special taxes levied by the Community Facilities District consist of services permitted to be financed under the Act including, witho ut limitation, street sweeping, traffic signal maintenance, the maintenance of landscaping and lighting of publicly owned parks, parkways, streets, roads and open spaces, flood and storm protection services, and the operation of storm drainage systems. All of the Maintenance Services to be financed must be in addition to those provided within the boundaries of the Community Facilities District before the Community Facilities District is created, and shall not supplant services already available within that territory when the Community Facilities District is created.

TYPES OF PUBLIC SERVICES
The types of Public Services that are proposed to be provided by the Community Facilities District and funded with the proceeds of special taxes levied by the Community Facilities District consist of services permitted to be financed under the Act, including, without limitation, police and fire protection and ambulance and paramedic services. All of the Public Services to be financed must be in addition to those provided within the boundaries of the Community Facilities District before The Community Facilities District is created, and shall not supplant services already available within that territory when the Community Facilities District is created.

TYPES OF INCIDENTAL EXPENSES
The Incidental Expenses to be paid from bond proceeds and/or special taxes include:
a. The cost of engineering, planning and designing the Facilities;

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b. All costs, including costs of the property owner petitioning to form the Community Facilities District, associated with the creation of the Community Facilities District, the issuance of the bonds, the determination of the amount of special taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the Community Facilities District; and c. Any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities.

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ATTACHMENT B

BALLOT PROPOSITIONS

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON)

IMPROVEMENT AREA NO. 1

SPECIAL TAX AND SPECIAL BOND ELECTION
June 20, 2023

PROPOSITION A: Shall City of Beaumont Community
Facilities No. 2023-1 (Fairway Canyon) (the “District”) incur an indebtedness and issue bonds in the maximum principal amount of $3,500,000 for Improvement Area No. 1 therein (the “Improvement Area”) with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 2023-06 of the City Council of the City of Beaumont?
PROPOSITION B: Shall special taxes with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2023-06 of the City Council of the City of Beaumont be levied to pay for the Facilities, Services and Incidental Expenses and other purposes
described in Resolution No. 2023-06, including the payment of the principal of and interest on bonds issued by the District for the Improvement Area to finance the Facilities and
Incidental Expenses?

YES______
NO_______

PROPOSITION C: For each year commencing with Fiscal
Year 2023-2024, shall the appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the
California Constitution, for the District be an amount equal to $5,000,000?

YES______
NO_______

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ATTACHMENT C

BALLOT PROPOSITIONS

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON)

IMPROVEMENT AREA NO. 2

SPECIAL TAX AND SPECIAL BOND ELECTION
June 20, 2023

PROPOSITION D: Shall City of Beaumont Community
Facilities No. 2023-1 (Fairway Canyon) (the “District”) incur an indebtedness and issue bonds in the maximum principal amount of $11,000,000 for Improvement Area No. 2 therein (the “Improvement Area”) with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 2023-06 of the City Council of the City of Beaumont?
PROPOSITION E: Shall special taxes with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2023-06 of the City Council of the City of Beaumont be levied to pay for the Facilities, Services and Incidental Expenses and other purposes
described in Resolution No. 2023-06, including the payment of the principal of and interest on bonds issued by the District for the Improvement Area to finance the Facilities and
Incidental Expenses?

YES______
NO_______

PROPOSITION F: For each year commencing with Fiscal
Year 2023-2024, shall the appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the
California Constitution, for the District be an amount equal to $5,000,000?

YES______
NO_______

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RESOLUTION NO. 23- ___

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BEAUMONT,

CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF
BEAUMONT COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY

CANYON) DETERMINING THE NECESSITY TO INCUR BONDED
INDEBTEDNESS WITHIN IMPROVEMENT AREA NOS. 1 AND 2 OF CITY OF BEAUMONT COMMUNITY FACILITIES DISTRICT NO. 2023-1
(FAIRWAY CANYON) IN AN AMOUNT NOT TO EXCEED $3,500,000
WITHIN IMPROVEMENT AREA NO. 1 AND $11,000,000 WITHIN
IMPROVEMENT AREA NO. 2, AND CALLING ELECTIONS THEREIN
WHEREAS, on April 4, 2023, the City Council of the City of Beaumont (the “City Council”) adopted Resolution No. 2023-06 stating its intention to form City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) (“Community Facilities District No. 2023-1” or the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”) and to form two improvement areas within proposed Community Facilities District No. 2023-1 to be known as “Improvement Area No. 1 of City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon)” (“Improvement Area No. 1”) and “Improvement Area No. 2 of City of Beaumont Community Facilities District No. 2023 -1 (Fairway Canyon)” (“Improvement Area No. 2” and together with Improvement Area No. 1, the “Improvement Areas” and each individually an “Improvement Area”); and
WHEREAS, on April 4, 2023, the City Council also adopted Resolution No. 2023-07 stating its intention to incur bonded indebtedness in the amount of up to $3,500,000 within proposed Improvement Area No. 1 and $11,000,000 within proposed Improvement Area No. 2 to finance (1) the purchase, construction, modification, expansion, impr ovement and/or rehabilitation of public facilities identified in Attachment B to Resolution No. 2023-06, and (2) the incidental expenses to be incurred in financing such public facilities and services and forming and administering the District, as identified in Attachment B to Resolution No. 2023-06; and WHEREAS, notice was published as required by law relative to the intention of the City Council to form proposed Community Facilities District No. 2023-1, to designate the Improvement Areas and to incur bonded indebtedness in the amount of up to $3,500,000 within the boundaries of proposed Improvement Area No. 1 and $11,000,000 within the boundaries of proposed Improvement Area No. 2; and
WHEREAS, on May 16, 2023, the City Council continued the public hearing called for pursuant to Resolution No. 2023-06 and Resolution No. 2023-07 to June 20, 2023; and

WHEREAS, on June 20, 2023, this City Council conducted a noticed public hearing to determine whether it should proceed with the formation of Community Facilities District No. 2023-1 and the designation of the Improvement Areas, issue bonds within the Improvement Areas to pay for the facilities and incidental expenses described in Resolution No. 2023-06 and authorize a rate and method of apportionment of a special tax for each of the Improvement Areas to be levied within such Improvement Areas for the purposes described in Resolution No. 2023-06; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of Community Facilities District No. 2023-1, the designation of the Improvement Areas,

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the levy of a special tax and the issuance of bonds with respect to each Improvement Area to pay for the cost of the proposed facilities and incidental expenses were heard and a full and fair hearing was held; and
WHEREAS, the City Council subsequent to such hearing adopted Resolution No. 23-___ establishing Community Facilities District No. 2023-1 (the “Resolution of Formation”), designating the Improvement Areas and authorizing the financing of the public facilities (the “Facilities”) and the incidental expenses (the “Incidental Expenses”) described in Attachment A thereto; and WHEREAS, the City Council desires to make the necessary findings to incur bonded indebtedness within each of the Improvement Areas, to declare the purpose for said debt, and to authorize the submittal of a proposition to issue bonded indebtedness to the voters of each of the Improvement Areas, being the landowners therein, all as authorized and required by law; NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Beaumont, California:

SECTION 1. It is necessary to incur bonded indebtedness in one or more series in a maximum aggregate principal amount not to exceed $3,500,000 within Improvement Area No. 1 and $11,000,000 within Improvement Area No. 2.

SECTION 2. The indebtedness is to be incurred for the purpose of financing the costs of purchasing, constructing, modifying, expanding, improving, and/or rehabilitating the Facilities and financing the Incidental Expenses, as described in the Resolution of Formation, and carrying out the powers and purposes of Community Facilities District No. 2023-1, including, but not limited to, financing the costs of selling the bonds, establishing and replenishing bond reserve funds and paying remarketing, credit enhancement and liquidity facility fees and other expenses of the type authorized by Section 53345.3 of the Act.

SECTION 3. The whole of the property within Improvement Area No. 1, other than property exempted from the special tax pursuant to the provisions of the rate and method of apportionment attached to Resolution No. 2023-06 as Attachment C, shall pay for the bonded indebtedness issued by the District for Improvement Area No. 1 pursuant to the levy of the special tax for Improvement Area No. 1 authorized by the Resolution of Formation.

The whole of the property within Improvement Area No. 2, other than property exempted from the special tax pursuant to the provisions of the rate and method of apportionment attac hed to Resolution No. 2023-06 as Attachment D, shall pay for the bonded indebtedness issued by the District for Improvement Area No. 2 pursuant to the levy of the special tax for Improvement Area No. 2 authorized by the Resolution of Formation.

SECTION 4. The maximum term of any series of bonds to be issued to finance Facilities shall in no event exceed thirty-five (35) years from the date of issuance of the bonds, or such longer term as is then permitted by law.

SECTION 5. The bonds shall bear interest at the rate or rates not to exceed the maximum interest rate permitted by law, payable annually or semiannually, or in part annually and in part semiannually, except the first interest payment may be for a period of les s than six months, with the actual rate or rates and times of payment to be determined at the time or times of sale thereof.

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SECTION 6. The bonds may bear a variable or fixed interest r ate, provided that such variable rate or fixed rate shall not exceed the maximum r ate permitted by Section 53531 of the Act, or any other applicable provision of law limiting the maximum interest rate on the bonds.

SECTION 7. Pursuant to Section 53351 of the Act, a special election is hereby called for Improvement Area No. 1 on the proposition of incurring the bonded indebtedness. The proposition relative to incurring bonded indebtedness in the maximum aggregate principal amount of $3,500,000 shall be in the form of Proposition A set forth in Attachment A hereto. In accordance with Sections 53351(h) and 53353.5 of the Act, the election shall be consolidated with the special election called on the proposition of levying special taxes within Improvement Area No. 1 as described in the Resolution of Formation, which proposition shall be in the form of Proposition B set forth in Attachment A, and on the proposition of establishing an appropriations limit for the District, which proposition shall be in the form of Proposition C set forth in Attachment A.

Pursuant to Section 53351 of the Act, a special election is hereby called for Improvement Area No. 2 on the proposition of incurring the bonded indebtedness therein. The proposition relative to incurring bonded indebtedness in the maximum aggregate principal amount of $11,000,000 shall be in the form of Proposition D set forth in Attachment B hereto. In accordance with Section 53351(h) and 53353.5 of the Act, the election shall be consolidated with the special election call ed on the proposition of levying special taxes within Improvement Area No. 2 as described in the Resolution of Formation, which proposition shall be in the form of Proposition E set forth in Attachment B, and on the proposition of establishing an appropria tions limit for the District, which proposition shall be in the form of Proposition F set forth in Attachment B.

SECTION 8. The date of the special elections for the Improvement Areas on the propositions of incurring the bonded indebtedness, authorizing the levy of the special tax and setting an appropriations limit shall be June 20, 2023, or such later date as is consented to by the City Clerk, or any Acting City Clerk of the City (referred to herein as the “City Clerk”); provided that, if the election for an Improvement Area is to take place sooner than 90 days after June 20, 2023, then the unanimous written consent of each qualified elector within such Improvement Area to such election date must be obtained. The polls shall be open for said election immediately following the public hearing on June 20, 2023. The election shall be conducted by the City Clerk. Except as otherwise provided by the Act, the election shall be conducted in accordance with the provisions of law regulating elections of the City of Beaumont insofar as such provisions are determined by the City Clerk to be applicable. The City Clerk is authorized to conduct the election following the adoption of the Resolution of Formation, and this resolution and all ballots shall be received by and the City Clerk shall close the election by 11:00 p.m. on the election day; provided the election shall be closed at such earlier time as all qualified electors have voted as provided in Section 53326(d) of the Act.

Pursuant to Section 53326 of the Act, the ballots for the special elections shall be distributed in person, or by mail with return postage prepaid, to the qualified electors within each of the Improvement Areas. The City Clerk has secured a certificate of the Registrar of Voters of the County of Riverside certifying that there were no registered voters within the District as of the date of such certificate. Accordingly, since there were fewer than 12 registered voters within the District for each of the 90 days preceding June 20, 2023, the qualified electors shall be the landowners within each of the Improvement Areas and each landowner, or the authorized representative thereof, shall have one vote for each acre or portion thereof that such landowner owns within the respective Improvement Areas, as provided in Section 53326 of the Act. The landowners within Improvement Area No. 1 have each executed and delivered a waiver of certain election law requirements and consenting to the holding of the election on June 20, 2023, which waivers are on file with the City

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Clerk. The sole landowner within Improvement Area No. 2 has executed and delivered a waiver of certain election law requirements and consenting to the holding of the election on June 20, 2023, which waiver is on file with the City Clerk.

SECTION 9. This Resolution shall be effective upon its adoption.

ADOPTED, SIGNED AND APPROVED this 20th day of June, 2023.

Julio Martinez III, Mayor of the City of Beaumont
(SEAL)
ATTEST:

Elaine Morgan, City Clerk
of the City of Beaumont

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STATE OF CALIFORNIA )
) ss.

AYES:

NOES:

ABSENT:

Elaine Morgan, City Clerk
City of Beaumont

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ATTACHMENT A

BALLOT PROPOSITIONS

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) IMPROVEMENT AREA NO. 1

SPECIAL TAX AND SPECIAL BOND ELECTION
June 20, 2023

PROPOSITION A: Shall City of Beaumont Community
Facilities No. 2023-1 (Fairway Canyon) (the “District”) incur an indebtedness and issue bonds in the maximum
principal amount of $3,500,000 for Improvement Area No. 1 therein (the “Improvement Area”) with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expe nses described in Resolution No. 2023-06 of the City Council of the City of Beaumont?
PROPOSITION B: Shall special taxes with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2023-06 of the City Council of the City of Beaumont be levied to pay for the Facilities, Services and Incidental Expenses and other purposes
described in Resolution No. 2023-06, including the
payment of the principal of and interest on bonds issued by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?

YES______
NO_______

PROPOSITION C: For each year commencing with Fiscal
Year 2023-2024, shall the appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, for the District be an amount equal to $5,000,000?

YES______
NO_______

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ATTACHMENT B

BALLOT PROPOSITIONS

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) IMPROVEMENT AREA NO. 2

SPECIAL TAX AND SPECIAL BOND ELECTION
June 20, 2023

PROPOSITION D: Shall City of Beaumont Community
Facilities No. 2023-1 (Fairway Canyon) (the “District”) incur an indebtedness and issue bonds in the maximum
principal amount of $11,000,000 for Improvement Area No. 2 therein (the “Improvement Area”) with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 2023-06 of the City Council of the City of Beaumont?
PROPOSITION E: Shall special taxes with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2023-06 of the City Council of the City of Beaumont be levied to pay for the Facilities, Services and Incidental Expenses and other purposes
described in Resolution No. 2023-06, including the
payment of the principal of and interest on bonds issued by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?

YES______
NO_______

PROPOSITION F: For each year commencing with Fiscal
Year 2023-2024, shall the appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, for the District be an amount equal to $5,000,000?

YES______
NO_______

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RESOLUTION NO. 23-___

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BEAUMONT,

CALIFORNIA ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF CITY OF BEAUMONT COMMUNITY FACILITIES DISTRICT NO.
2023-1 (FAIRWAY CANYON) CERTIFYING ELECTION RESULTS

WHEREAS, the City Council of the City of Beaumont called and duly held elections on June 20, 2023 within the boundaries of Improvement Area No. 1 (“Improvement Area No. 1”) and within the boundaries of Improvement Area No. 2 (“Improvement Area No. 2”) of City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) (“Community Facilities District No. 2023-1” or the “District”) pursuant to Resolution Nos. 2023-__ and 2023-__ for the purpose of presenting to the qualified electors within Improvement Area No. 1, Propositions A, B and C, attached hereto as Attachment A, and to the qualified electors within Improvement Area No. 2, Propositions D, E and F, attached hereto as Attachment B; and WHEREAS, there has been presented to this City Council a certificate of the City Clerk or Acting City Clerk (referred to herein as the “City Clerk”) canvassing the results of the election within Improvement Area No. 1 and the results of the election within Improvement Area No. 2 , a copy of which are attached hereto as Attachment C;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Beaumont, California:

SECTION 1. Each of the above recitals is true and correct and is adopted by the legislative body of the District.

SECTION 2. Propositions A, B and C set forth in Attachment A hereto presented to the qualified electors of Improvement Area No. 1 on June 20, 2023, were approved by more than two- thirds of the votes cast at said election and Propositions A, B a nd C each has carried. The City Council, acting as the legislative body of the District, is hereby authorized to levy on the land within Improvement Area No. 1 the special taxes described in Proposition B set forth in Attachment A hereto for the purposes described therein and to take the necessary st eps to levy the special taxes authorized by Proposition B and to issue bonds in an amount not to exceed $3,500,000 specified in Proposition A set forth in Attachment A hereto.

SECTION 3. Propositions D, E and F set forth in Attachment B hereto presented to the qualified electors of Improvement Area No. 2 on June 20, 2023, were approved by more than two- thirds of the votes cast at said election and Propositions D, E and F each has carried. The City Council, acting as the legislative body of the District, is hereby authorized to levy on the land within Improvement Area No. 2 the special taxes described in Proposition E set forth in Attachment B hereto for the purposes described therein and to take the necessary steps to levy the special taxes authorized by Proposition E and to issue bonds in an amount not to exceed $11,000,000 specified in Proposition D set forth in Attachment B hereto.

SECTION 4. The City Clerk is hereby directed to record in the Assessor-County Clerk- Recorder’s office of the County of Riverside within fifteen days of the date hereof a notice of special tax lien with respect to Improvement Area No. 1 and a notice of special tax lien with respect to

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Improvement Area No. 2, which Bond Counsel to the District shall prepare in the form required by Streets and Highways Code Section 3114.5.

SECTION 5. This Resolution shall be effective upon its adoption.

ADOPTED, SIGNED AND APPROVED this 20th day of June, 2023.

Julio Martinez III, Mayor of the City of Beaumont
(SEAL)
ATTEST:

Elaine Morgan, City Clerk
of the City of Beaumont

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3 4885-2410-1470v4/022599-0032

STATE OF CALIFORNIA )
) ss.

COUNTY OF RIVERSIDE )
I, Elaine Morgan, City Clerk of the City of Beaumont, do hereby certify that the foregoing resolution was duly adopted by the City Council of said City, at a regul ar meeting of said City Council held on the 20th day of June, 2023, and that it was so adopted by the following vote:

AYES:

NOES:

ABSENT:

Elaine Morgan, City Clerk
City of Beaumont

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ATTACHMENT A

BALLOT PROPOSITIONS

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) IMPROVEMENT AREA NO. 1

SPECIAL TAX AND SPECIAL BOND ELECTION
June 20, 2023

PROPOSITION A: Shall City of Beaumont Community
Facilities No. 2023-1 (Fairway Canyon) (the “District”) incur an indebtedness and issue bonds in the maximum
principal amount of $3,500,000 for Improvement Area No. 1 therein (the “Improvement Area”) with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 2023-06 of the City Council of the City of Beaumont?
PROPOSITION B: Shall special taxes with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2023-06 of the City Council of the City of Beaumont be levied to pay for the Facilities, Services and Incidental Expenses and other purposes
described in Resolution No. 2023-06, including the
payment of the principal of and interest on bonds issued by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?

YES______
NO_______

PROPOSITION C: For each year commencing with Fiscal
Year 2023-2024, shall the appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, for the District be an amount equal to $5,000,000?

YES______
NO_______

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ATTACHMENT B

BALLOT PROPOSITIONS

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) IMPROVEMENT AREA NO. 2

SPECIAL TAX AND SPECIAL BOND ELECTION
June 20, 2023

PROPOSITION D: Shall City of Beaumont Community
Facilities No. 2023-1 (Fairway Canyon) (the “District”) incur an indebtedness and issue bonds in the maximum
principal amount of $11,000,000 for Improvement Area No. 2 therein (the “Improvement Area”) with interest at a rate or rates not to exceed the maximum interest rate permitted by law, to finance the Facilities and the Incidental Expenses described in Resolution No. 2023-06 of the City Council of the City of Beaumont?
PROPOSITION E: Shall special taxes with a rate and
method of apportionment for the Improvement Area as
provided in Resolution No. 2023-06 of the City Council of the City of Beaumont be levied to pay for the Facilities, Services and Incidental Expenses and other purposes
described in Resolution No. 2023-06, including the
payment of the principal of and interest on bonds issued by the District for the Improvement Area to finance the
Facilities and Incidental Expenses?

YES______
NO_______

PROPOSITION F: For each year commencing with Fiscal
Year 2023-2024, shall the appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, for the District be an amount equal to $5,000,000?

YES______
NO_______

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ATTACHMENT C

CERTIFICATE OF CITY CLERK

AS TO THE RESULTS OF THE CANVASS OF THE ELECTION RETURNS I, Elaine Morgan, City Clerk of the City of Beaumont, do hereby certify that I have examined the returns of the Special Tax and Bond Election for Improvement Area No. 1 of City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) (the “City”). The election was held in the City Council Chambers, 550 East 6th Street, Beaumont, California, on June 20, 2023. I caused to be delivered ballots to each qualified elector. ___ (_) ballots were returned.

I further certify that the results of said election and the number of votes cast for and against Propositions A, B and C for Improvement Area No. 1 are as follows:

PROPOSITION A PROPOSITION B PROPOSITION C
YES: YES: YES:

NO: NO: NO:

TOTAL: TOTAL: TOTAL:

I further certify that I have examined the returns of the Special Tax and Bond Election for Improvement Area No. 2 of Community Facilities District No. 2023-1 (Fairway Canyon) of the City.

The election was held in the City Council Chambers, 550 East 6th Street, Beaumont, California, on June 20, 2023. I caused to be delivered ballots to each qualified elector. ___ (_) ballots were returned.

I further certify that the results of said electio n and the number of votes cast for and against Propositions D, E and F for Improvement Area No. 2 are as follows:

PROPOSITION D PROPOSITION E PROPOSITION F
YES: YES: YES:

NO: NO: NO:

TOTAL: TOTAL: TOTAL:

Dated this 20th day of June, 2023.

Elaine Morgan
City Clerk
City of Beaumont

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ORDINANCE NO. 23-___

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BEAUMONT,

CALIFORNIA ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF CITY OF BEAUMONT COMMUNITY FACILITIES DISTRICT NO.
2023-1 (FAIRWAY CANYON) AUTHORIZING THE LEVY OF SPECIAL TAXES WITHIN IMPROVEMENT AREA NO. 1 AND IMPROVEMENT
AREA NO. 2
WHEREAS, on April 4, 2023, the City Council (the “City Council”) of the City of Beaumont (the “City”) adopted Resolution No. 2023-06 declaring its intention to form City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) (the “District”) and Improvement Area No. 1 (“Improvement Area No. 1”) and Improvement Area No. 2 (“Improvement Area No. 2” and together with Improvement Area No. 1, the “Improvement Areas” and each an “Improvement Area”) therein pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, comprising Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”), and its Resolution No. 2023-07 declaring its intention to incur bonded indebtedness for each of Improvement Area No. 1 and Improvement Area No. 2; and WHEREAS, on May 16, 2023, the City Council continued the public hearing called for pursuant to Resolution No. 2023-06 and Resolution No. 2023-07 to June 20, 2023; and

WHEREAS, on June 20, 2023, after providing all notice required by the Act, the City Council conducted a noticed public hearing required by the Act relative to the proposed formation of the District, the designation of the Improvement Areas, the proposed levy of special taxes therein to finance certain public facilities and services described in Resolution No. 2023-06 and to secure the payment of any bonded indebtedness of the District for the Improvement Areas, and the proposed issuance of up to $3,500,000 of bonded indebtedness for Improvement Area No. 1 and up to $11,000,000 of bonded indebtedness for Improvement Area No. 2, as described in Resolution No. 2023-07; and
WHEREAS, at the June 20, 2023 public hearing, all persons desiring to be heard on all matters pertaining to the formation of the District, the designation of the Improvement Areas and the proposed levy of the special taxes to finance the facilities and services described in Resolution No. 2023-06 and to secure the payment of up to $3,500,000 of bonded indebtedness for Improvement Area No. 1 and of up to $11,000,000 of bonded indebtedness for Improvement Area No. 2 as described in Resolution No. 2023-07 (together, the “Bonds”) were heard and a full and fair hearing was held; and
WHEREAS, on June 20, 2023, the City Council adopted Resolution Nos. 2023-___ and 2023-___ which formed the District, designated the Improvement Areas and called a special election within each of Improvement Area No. 1 and Improvement Area No. 2 on June 20, 2023 in each case on three propositions relating to the levy of special taxes within each Improvement Area, the issuance of the Bonds by the District for each Improvement Area and the establishment of an appropriations limit within the District; and
WHEREAS, on June 20, 2023, a special election was held within Improvement Area No. 1 at which the qualified electors therein approved by more than a two-thirds vote Propositions A, B and C set forth in Attachment B to Resolution No. 2023-___ authorizing the levy of special taxes within

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Improvement Area No. 1 for the purposes described in Resolution No. 23-__, the issuance of the Bonds for Improvement Area No. 1 as described in Resolution No. 23-__ and establishing an appropriations limit for the District; and
WHEREAS, on June 20, 2023, a special election was held within Improvement Area No. 2 at which the qualified electors therein approved by more than a two-thirds vote Propositions D, E and F set forth in Attachment C to Resolution No. 2023-___ authorizing the levy of special taxes within Improvement Area No. 2 for the purposes described in Resolution No. 23-__, the issuance of the Bonds for Improvement Area No. 2 as described in Resolution No. 23-__ and establishing an appropriations limit for the District; and
NOW, THEREFORE, the City Council of the City of Beaumont, California does ordain as follows:

SECTION 1. The above recitals are all true and correct.

SECTION 2. By the passage of this Ordinance, the City Council authorizes and levies special taxes within Improvement Area No. 1 and Improvement Area No. 2 pursuant to Sections 53328 and 53340 of the Act at the rates and in accordance with the rate and method of apportionment set forth in Attachment C to Resolution No. 2023-06 as to Improvement Area No. 1 and the rate and method of apportionment set forth in Attachment D to Resolution No. 2023-06 as to Improvement Area No. 2, which are incorporated by reference herein (each a “Rate and Method”).

The special taxes are hereby levied commencing in the fiscal year specified in the Rate and Method for such Improvement Area and in each fiscal year thereafter until payment in full of the Bonds issued by the District for such Improvement Area (including any bonds issued to refund the Bonds), payment of all costs of the public facilities and services authorized to be financed by the District for such Improvement Area, and payment of all costs of administering the District allocable to such Improvement Area.

SECTION 3. Each of the Mayor, the City Manager, or their written designees (each, an “Authorized Officer”), acting alone, is hereby authorized and directed each fiscal year to determine the specific special tax rates and amounts to be levied in s uch fiscal year on each parcel of real property within Improvement Area No. 1 and Improvement Area No. 2, in the manner and as provided in the Rate and Method applicable to such Improvement Area. The special tax rates levied on a parcel pursuant to each Rate and Method shall not exceed the maximum rates set forth in the Rate and Method for such parcel, but the special taxes may be levied at lower rates. Each Authorized Officer is hereby authorized and directed to provide all necessary information to the Trea surer-Tax Collector of the County of Riverside and to otherwise take all actions necessary in order to effect proper billing and collection of the special taxes within each Improvement Area, so that the special taxes shall be levied and collected in sufficient amounts and at times necessary to satisfy the financial obligations of the District for such Improvement Area in each fiscal year, and with respect to Special Tax A, until the Bonds issued by the District for such Improvement Area are paid in full, the facilities financed for such Improvement Area have been paid for, and provision has been made for payment of all of the related administrative costs of the District.

SECTION 4. Properties or entities of the state, federal or other local governments shall be exempt from the special taxes for each Improvement Area, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act and Section F of each Rate and Method. No other properties or entities within each of the Improvement Areas are exempt from the special taxes unless

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the properties or entities are expressly exempted in Resolution No. 2023-___ or in a resolution of consideration to levy a new special tax or special taxes or to alter the applicable Rate and Method or an existing special tax as provided in Section 53334 of the Act.

SECTION 5. All of the collections of the special taxes within each Improvement Area shall be used as provided for in the Act, the Rate and Method for such Improvement Area and Resolution No. 2023-___.

SECTION 6. The special taxes within each Improvement Area shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem taxes (which such procedures include the exercise of all rights and remedies permitted by law to make corrections, including, but not limited to, the issuance of amended or supplemental tax bills), as such procedure may be modified by law or by this City Council from time to time.

SECTION 7. As a cumulative remedy, if any amount levied as a special tax for payment of the interest or principal of the Bonds issued by the District for an Improvement Area (including any bonds issued to refund such Bonds), together with any penalties and other charges accruin g under this Ordinance, are not paid when due, the City Council may, not later than four years after the due date of the last installment of principal on such Bonds (including any bonds issued to refund such Bonds), order that the same be collected by an a ction brought in the superior court to foreclose the lien of such special tax within the applicable Improvement Area, as authorized by the Act.

SECTION 8. The Mayor of the City shall sign this Ordinance and the City Clerk or any Acting City Clerk (referred to herein as the “City Clerk”) shall attest to the Mayor’s signature and then cause the same to be published within fifteen (15) days after its passage at least once in The Press Enterprise, a newspaper of general circulation published and circulated in the City of Beaumont.

SECTION 9. The specific authorization for adoption of this Ordinance is pursuant to the provisions of Section 53340 of the Act.

SECTION 10. The City Clerk is hereby authorized to transmit a certified copy of this ordinance to the Treasurer-Tax Collector of the County of Riverside, and to perform all other acts which are required by the Act, this Ordinance or by law in order to accomplish the purpose of this Ordinance.

SECTION 11. A full reading of this Ordinance is dispensed with prior to its final passage, a written or printed copy having been available to the City Council and the public a day prior to its final passage.

SECTION 12. This Ordinance shall take effect thirty days after its final passage.

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PASSED, APPROVED and ADOPTED this __ day of _________, 2023.

Julio Martinez III, Mayor
I, Elaine Morgan, City Clerk of the City of Beaumont, California, do hereby certify that the foregoing Ordinance was introduced at a regular meeting of the City Council of the City of Beaumont held on the 20th day of June, 2023, and was adopted at a regular meeting of the City Council of the City of Beaumont on the ___ day of _______, 2023, by the following roll call vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

ATTEST:

Elaine Morgan, City Clerk

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ACQUISITION AGREEMENT
by and among

CITY OF BEAUMONT,

CITY OF BEAUMONT COMMUNITY FACILITIES DISTRICT
NO. 2023-1 (FAIRWAY CANYON)
and
MERITAGE HOMES OF CALIFORNIA, INC.

Dated as of May 1, 2023

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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ........................................................................................................... 2 Section 1.1 Definitions ................................................................................................................. 2 ARTICLE II FUNDING ................................................................................................................. 4 Section 2.1 Issuance of Bonds ...................................................................................................... 4 Section 2.2 Special Taxes and Bonds ........................................................................................... 5 Section 2.3 Net Proceeds .............................................................................................................. 5 Section 2.4 Funding Facilities in Other Fairway Canyon Districts .............................................. 6 Section 2.5 Disclosure of Special Tax .......................................................................................... 6 ARTICLE III CONSTRUCTION AND ACQUISITION OF FACILITIES .................................... 6 Section 3.1 Duty of Owner to Construct ....................................................................................... 6 Section 3.2 Inspection ................................................................................................................... 6 Section 3.3 Agreement to Sell and Acquire Facilities .................................................................. 6 Section 3.4 Payment Requests ...................................................................................................... 7 Section 3.5 Payment ..................................................................................................................... 8 Section 3.6 Defective or Nonconforming Work ........................................................................... 9 ARTICLE IV OWNERSHIP AND TRANSFER OF FACILITIES ................................................. 9 Section 4.1 Facilities to be Owned by the City; Conveyance of Land and Easements to City .... 9 Section 4.2 Facilities to be Owned by the City; Title Evidence ................................................. 10 Section 4.3 Facilities Constructed on Private Lands .................................................................. 10 Section 4.4 Facilities Constructed on City Land ........................................................................ 10 Section 4.5 Maintenance and Warranties ................................................................................... 10 Section 4.6 Allocation of Costs .................................................................................................. 11 Section 4.7 Expectations of the Parties ....................................................................................... 11 ARTICLE V INSURANCE ........................................................................................................... 12 Section 5.1 Insurance Requirements ........................................................................................... 12 Section 5.2 Standards Applicable ............................................................................................... 13 Section 5.3 Evidence of Insurance .............................................................................................. 13 ARTICLE VI REPRESENTATIONS, WARRANTIES AND COVENANTS ............................. 13 Section 6.1 Representations, Covenants and Warranties of the Owner ...................................... 13 Section 6.2 Indemnification and Hold Harmless ........................................................................ 14 ARTICLE VII TERMINATION ...................................................................................................... 14 Section 7.1 Mutual Consent ........................................................................................................ 14 Section 7.2 City Election to Terminate for Cause ...................................................................... 15 Section 7.3 Force Majeure .......................................................................................................... 16 ARTICLE VIII MISCELLANEOUS ................................................................................................ 16 Section 8.1 Limited Liability of City .......................................................................................... 16 Section 8.2 Excess Costs ............................................................................................................ 16 Section 8.3 Review of Records ................................................................................................... 16

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(continued)
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Section 8.4 Attorney’s Fees ........................................................................................................ 16 Section 8.5 Notices ..................................................................................................................... 16 Section 8.6 Severability .............................................................................................................. 17 Section 8.7 Successors and Assigns ........................................................................................... 17 Section 8.8 Other Agreements .................................................................................................... 18 Section 8.9 Waiver ...................................................................................................................... 18 Section 8.10 Merger ...................................................................................................................... 18 Section 8.11 Parties in Interest ..................................................................................................... 18 Section 8.12 Amendment .............................................................................................................. 18 Section 8.13 Counterparts ............................................................................................................. 18 Section 8.14 Termination .............................................................................................................. 18

Signatures ............................................................................................................................... S-1 List of Exhibits
Exhibit A: Description of Facilities and Discrete Components Eligible for Acquisition from the Owner ...................................................................................................... A-1 Exhibit B: Form of Payment Request (Facilities) ................................................................... B-1 Exhibit C: City CFD Policies .................................................................................................. C-1

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THIS ACQUISITION AGREEMENT (the “Acquisition Agreement”), dated as of May 1, 2023, is by and among the CITY OF BEAUMONT, a general law city (the “City”), the CITY OF BEAUMONT COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON), a community facilities district created pursuant to the Act (defined herein) (the “District”), and MERITAGE HOMES OF CALIFORNIA, INC., a California corporation (the “Owner”).

RECITALS
A. The District. The City Council of the City has established the District under the Act for the financing of, among other things, the acquisition, construction and installation of public facilities identified in the proceedings to form the District therein, which include the facilities listed in Exhibit A hereto (the “Facilities”).

B. The Development. The land within the District is currently expected to be developed with 419 dwelling units as part of a master-planned community commonly known as “Fairway Canyon,” which is described as County of Riverside Assessor Parcel Nos. 413-790-067 through 413-790-073, inclusive.

C. The Facilities. As part of the District formation proceedings, the Facilities were authorized to be acquired by the District, and the District proceedings contemplated that acquisition agreements would be entered into from time to time to describe the terms of such acquisition. The Facilities are within or serve the City and the City and the Owner will benefit from a coordinated plan of design, engineering and construc tion of the Facilities and the development of the land within the District. The facilities that are eligible for acquisition by the City from the Owner under this Acquisition Agreement are only the Facilities listed in Exhibit A hereto, as such Exhibit may be amended and/or supplemented by any Supplement approved by the City and Owner.

D. The Financing. In order to, among other things, implement provisions of the Development Agreement, as defined below, the Owner, the District and the City wish to enter into this Acquisition Agreement to finance the acquisition of the Facilities, as defined below, and provide for the payment of the Facilities and Discrete Components thereof as shown in Exhibit A hereto (as it may be amended and supplemented by any Supplement).

E. The Bonds. The District may proceed with the authorization and issuance of the Bonds in one or more series under the Act and the Indenture, the proceeds of which Bonds shall be used, in part, to finance the Facilities.

F. No Advantage to City Construction. The City, by its approval of this Acquisition Agreement, has determined that it will obtain no advantage from undertaking the construction by the City directly of the Facilities and that the provisions of this Acquisition Agreement require t hat the Facilities constructed by the Owner and acquired with the funds in the Improvement Fund, as defined below, be constructed as if they had been constructed under the direction and supervision of the City.

The Owner hereby represents that it has expe rience in the supervision of the construction of improvements of the character of the Facilities.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, and for other valuable consideration, the receipt and sufficiency of w hich are hereby acknowledged, the City, the District and the Owner agree that the foregoing recitals, as applicable to each, are true and correct and further make the agreements set forth herein.

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ARTICLE I

DEFINITIONS
Section 1.1 Definitions. The following terms shall have the meanings ascribed to them in this Section 1.1 for purposes of this Acquisition Agreement. Unless otherwise indicated, any other terms, capitalized or not, when used herein shall have the meanings ascribed to them in the Indenture (as hereinafter defined).
“Acceptable Title” means title to land or interest therein, in form acceptable to the Director, free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether or not recorded, but subject to any exceptions determined by the Director as not interfering with the actual or intended use of the land or interest therein. Notwithstanding the foregoing, an irrevocable offer of dedication may constitute land with an “Acceptable Title” if: (i) such offer is necessary to satisfy a condition to a tentative or final parcel map, (ii) such offer is in a form acceptable to the Director, (iii) the Director has no reason to believe that such offer of dedication will not be accepted by the applicable public agency, and (iv) the Owner commits in writing not to allow any liens to be imposed on such property prior to its acceptance.
“Acceptance Date” means the date the City Council (or other public entity which is to own a Facility) takes final action to accept dedication of or transfer of title to a Facility. “Acquisition Agreement” means this Acquisition Agreement, together with any Supplement hereto.
“Act” means the Mello-Roos Community Facilities Act of 1982, Section 53311 et seq. of the California Government Code, as amended.
“Actual Cost” means the substantiated cost of a Facility or a Discrete Component, which costs may include: (i) the costs incurred for the construction of such Facility or Discrete Component, (ii) the costs incurred in preparing the Plans for such Facility or Discrete Co mponent and the related costs of environmental evaluations of the Facility or Discrete Component, (iii) the fees paid to governmental agencies or utilities for obtaining permits, licenses or other governmental approvals for such Facility or Discrete Component, (iv) professional costs incurred that are associated with such Facility or Discrete Component, such as construction management and supervision (not to exceed 15% of the costs in (i) above), engineering, legal, accounting, inspection, construction stak ing, materials testing and similar professional services; and (v) the costs directly related to the construction and/or acquisition of a Facility or Discrete Component, such as costs of payment, performance and/or maintenance bonds, and insurance costs (including costs of any title insurance required hereunder) (but excluding the cost of real property unless paid to unrelated third parties). “Affiliate” means any entity with respect to which fifty percent (50%) or more of the ownership or voting power is held individually or collectively by any of the Owner and any other entity owned, controlled or under common ownership or control by or with, as applicable, the Owner, and includes all general partners of any entity which is a partnership. Control shall mea n ownership of fifty percent (50%) or more of the voting power of or ownership interest in the respective entity. “Bonds” means the bonds to be issued by the District for an Improvement Area pursuant to the Act in one or more series.

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“City” means the City of Beaumont, a general law city.
“Conditions of Approval” means, with respect to any portion of the property within the District, the conditions of approval of all land use entitlements approved by the City and the conditions of any Development Agreement, subdivision improvement agreement or other agreement between the Owner and the City relating to such property which conditions must be satisfied in order to develop such property.
“County” means the County of Riverside, California.
“Development Agreement” means the Development Agreement between the City of Beaumont and LB/L-SunCal Oak Valley LLC, recorded as Instrument No. 2003-977700 in the Riverside County Recorder’s Office on December 5, 2003, as partially assigned to and assumed by the Owner, as evidenced by Document No 2021-0396265 recorded on June 30, 2021, and by Document No 2022-0201712 recorded on April 29, 2022 in the Official Records of the County. “Director” means the Director of Public Works of the City, or his or her written designee acting as such under this Acquisition Agreement.
“Discrete Component” means a component of a Facility that the Director has agreed can be separately identified, inspected and completed, and be the subject of a Payment Request hereunder.

The Discrete Components are described in Exhibit A hereto. “District” means the City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon), created by the City under the Act.
“Facilities” means the facilities described in Exhibit A hereto which are to be acquired with the proceeds of the Special Taxes and Bonds.
“Financing Policies” means the City of Beaumont’s Goals and Policies for Community Facilities Districts, as adopted May 8, 1995 by Resolution No. 1995-23, attached hereto as Exhibit C. “Improvement Area” means either of Improvement Area No. 1 or Improvement Area No. 2 of the District.
“Improvement Fund” means, (a) prior to the initial issuance of Bonds of an Improvement Area, the fund or account established by the City for such Improvement Area, howsoever denominated, into which Net Proceeds of the Special Taxes of such Improvement Area are to be deposited, and (b) from and after the initial issuance of Bonds for such Improvement Area, the fund or account established under the Indenture for such Bonds, howsoever denominated, into which Net Proceeds of Bonds and Special Taxes of such Improvement Area are to be deposited. “Indenture” means the bond indenture or similar document between the City and the Trustee for the District, providing for, among other matters, t he issuance of the Bonds and the establishment of the Improvement Fund, as it may be amended from time to time. “Net Proceeds” means (a) with respect to Special Taxes, the proceeds of such Special Taxes received prior to the initial issuance of Bonds and remaining after the payment or setting aside of, or provision for, administrative expenses of the District, and (b) with respect to Bonds, the proceeds of such Bonds remaining after the payment or setting aside of, or provisions for (i) the underwriter’s

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discount for such Bonds, (ii) the costs of issuance of such Bonds, including the costs of authorizing the Special Taxes and Bonds of the District incurred by the City and Owner, (iii) any required reserve fund deposit for such Bonds, (iv) capitalized interest on such Bonds, and (v) pre funded administrative expenses of the District.
“Owner” means Meritage Homes of California, Inc., a California corporation, and its successors or assigns to the extent permitted under Section 8.7 hereof. “Payment Request” means a document, substantially in the form of Exhibit B hereto, to be used by the Owner in requesting payment of a Purchase Price. “Plans” means the plans, specifications, schedules and related construction contracts for the Facilities and/or any Discrete Components thereof approved pursuant to the applicable standards of the City.
“Purchase Price” means the amount paid by the District for a Facility and/or any Discrete Components thereof determined in accordance with Article III hereof, being an amount equal to the Actual Cost of such Facility or Discrete Component, but subject to the limitations and reductions provided for in Article III.
“Rate and Method” means the rate and method of apportionment of the Special Taxes of an Improvement Area approved by the qualified electors of such Improvement Area. “Special Taxes” means the special taxes for facilities in the District levied in accordance with the Rate and Method.
“Supplement” means a written document amending, supplementing or otherwise modifying this Acquisition Agreement and any exhibit hereto, including any amendments to th e list of Discrete Components in Exhibit A, and/or the addition to Exhibit A of additional Facilities (and Discrete Components) to be financed with the proceeds of the Bonds deposited in the Improvement Fund eligible to be financed by the District.
“Trustee” means a financial institution in its capacity as trustee or fiscal agent under the Indenture, or any successor thereto acting as trustee or fiscal agent under the Indenture.

ARTICLE II

FUNDING
Section 2.1 Issuance of Bonds. Upon the written request of the Owner or City, the Owner and the City staff shall meet regarding the amount, timing and other material aspects of each series of the Bonds. The legal proceedings for the issuance of the Bonds and the series, principal amounts, rates, terms, conditions and timing of the sale of the Bonds shall be in all respects be solely determined by the City Council of the City, acting as the governing body of the District, in accordance with this Acquisition Agreement; provided that, subject to satisfaction of the applicable Financing Policies, sound municipal financing practices and the requirements of this Acquisition Agreement, as soon as possible following the execution of this Acquisition Agreement the City shall use commercially reasonable efforts to cause the District to issue and sell the Bonds in an amount

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sufficient to fund the Facilities. For purposes of sizing each series of Bonds, the priority annual administrative expense shall be $30,000 for the related Improvement Area.

Prior to the Bonds being issued for an Improvement Area, the Owner will be required to provide all information regarding the development of its property within the Improvement Area, including the financing plan for such development, which is necessary to ensure that the official statement for such Bonds complies with the requirements of all applicable federal and state securities laws, including without limitation Rule l5c2-12 and Rule 10(b)-5 of the Securities and Exchange Commission (the “Commission”). Moreover, each property owner which is responsible for twenty percent (20%) or more of the maximum special tax within an Improvement Area at the time each series of Bonds for such Improvement Area are issued (each a “Major Landowner”) will be required to enter into a continuing disclosure agreement to provide such continuing disclosure pertaining to the development of the land owned by such Major Landowner in the District as necessary to assist the underwriter of the series of Bonds in complying with the continuing disclosure requirements of Rule 15c2-12 of the Commission and/or in marketing the Bonds. Each Major Landowner shall be required to execute a certificate in connection with each public sale of Bonds pursuant to which the Major Landowner shall indemnify and hold harmless City from claims arising from, or based upon, any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact in the above-referenced information.

Section 2.2 Special Taxes and Bonds. Prior to the issuance of the first series of Bonds for an Improvement Area, the “Assigned Special Tax” has been and shall continue to be levied in each fiscal year on parcels classified as “Developed Property” pursuant to and as defined in the Rate and Method for such Improvement Area. The Net Proceeds of such Sp ecial Taxes have been and shall continue to be deposited in the Improvement Fund. In addition, the proceeds of each full or partial prepayment of Special Taxes attributable to eligible facilities prior to the issuance of Bonds shall be deposited in the Improvement Fund. The City, the District and the Owner are entering into this Acquisition Agreement and authorized the levy of the Special Taxes for the purpose of creating and allocating certain streams of revenues that are or will be available to pay direc tly or reimburse the costs of acquisition and construction of the Facilities and to pay debt service on Bonds and other indebtedness of the District. The District hereby irrevocably pledges the Net Proceeds of Special Taxes to the Owner for the reimbursement of costs of the Facilities, subordinate only to the payment of debt service on Bonds issued to fund such costs. Following the issuance of the Bonds, the District shall have no obligation to levy Special Taxes to pay directly for the costs of reimbursi ng or paying the Owner for the Facilities. The Owner, the City and the District hereby acknowledge and agree that any reduction or termination of the Special Taxes by exercise of the initiative power or the exercise of discretion of the City or the District would constitute a substantial impairment of revenue stream of Special Taxes that the Owner, the City and the District intend to create for the purpose of providing an assured source of funding for such costs.

Section 2.3 Net Proceeds. The proceeds of the Bonds shall be deposited, held, invested, reinvested and disbursed as provided in the Indenture. The Net Proceeds of the Bonds will be set aside under the Indenture in the Improvement Fund. Moneys in the Improvement Fund shall be withdrawn therefrom in accordance with the provisions of the Indenture and the applicable provisions hereof for payment of all or a portion of the costs of construction and/or acquisition of the Facilities (including payment of the Purchase Price of Discrete Components thereof) all as he rein provided. Funds in the Improvement Fund shall be reserved and disbursed in accordance with this Acquisition Agreement.

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The Owner acknowledges that any lack of availability of amounts in the Improvement Fund to pay the Purchase Price of Facilities or any Discrete Components thereof shall in no way diminish any obligation of the Owner with respect to the construction of or contributions for public facilities and mitigation measures required by the Conditions of Approval or any subdivision, development o r other agreement to which the Owner is a party, or any governmental approval to which the Owner or any land within the District are subject.

Section 2.4 Funding Facilities in Other Fairway Canyon Districts. Any Facilities that are not funded by the proceeds of Bonds and Special Taxes in the District may be funded by bonds and special taxes of another existing or to-be-formed community facilities district under the Act for the Fairway Canyon project (an “Other Fairway Canyon District”). To the extent that the Purchase Price of a Facility is not fully paid by this District, the unpaid Purchase Price of a Facility may be paid by sources available in an Other Fairway Canyon District.

Section 2.5 Disclosure of Special Tax. If requested in writing by the City, copies of the executed “Notice of Special Tax” required by California Government Code Section 53341.5 provided to the purchaser of real property within the District shall be provided to the City Director of Finance. The Director of Finance’s receipt of such “Notice of Special Ta x” shall not be construed as City or District approval of the form of Notice or in any way make the City or District liable for deficiencies in such “Notice of Special Tax.” Owner agrees to retain copies of the Notice of Special Tax it has provided to homebuyers within the District for a period of three (3) years and to provide them to the City upon City’s written request.

ARTICLE III

CONSTRUCTION AND ACQUISITION OF FACILITIES
Section 3.1 Duty of Owner to Construct. All Facilities and Discrete Components thereof to be acquired hereunder shall have been constructed at the direction of the Owner in accordance with the approved Plans following the solicitation of competitive bids. The Owner shall have employed at all times adequate staff or consultants with the requisite experience necessary to bid, administer and coordinate all work related to the design, engineering, acquisition, construction and installation of the Facilities to be acquired by the City from the Owne r hereunder.

Section 3.2 Inspection. No payment hereunder shall be made by the City to the Owner for a Facility or Discrete Component thereof until the Facility or Discrete Component thereof has been inspected and found to be completed in accordance with the Plans by the City or other applicable public entity or utility. However, due to the age of some of the Facilities it is understood that normal wear and tear and aging may have occurred which shall not be a basis for denial. The City shall make or cause to be made periodic site inspections of the Facilities or Discrete Components to be acquired hereunder on a timely basis; provided that in no event shall the City incur any liability for any delay in the inspection of any Facilities or Discrete Components. For Faci lities to be acquired by other public entities or utilities, the Owner shall be responsible for obtaining such inspections and providing written evidence thereof to the Director. The Owner agrees to pay all inspection, permit and other similar fees of the City applicable to construction of the Facilities.

Section 3.3 Agreement to Sell and Acquire Facilities. The Owner hereby agrees to sell the Facilities and Discrete Components listed in Exhibit A hereto to the City or an applicable utility and the City hereby agrees to use amounts in the Improvement Fund to pay the Purchase Price of

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each of such Facilities and Discrete Components to the Owner, subject to the terms and conditions hereof. The City shall not be obligated to acquire any Facility or Discrete Component u ntil the Facility or Discrete Component is completed and the Acceptance Date for such Facility (or the final Discrete Component) has occurred; provided that the City has agreed hereunder to make payments to the Owner for certain Discrete Components of Facilities as shown in Exhibit A hereto prior to the Acceptance Date. The Owner acknowledges that the Discrete Components have been identified for payment purposes only, and that the City shall not accept a Facility of which a Discrete Component is a part until the entire Facility has been completed. The City acknowledges that the Discrete Components do not have to be accepted by the City as a condition precedent to the payment of the Purchase Price therefor, but any such payment shall not be made until the D iscrete Component has been completed in accordance with the Plans therefor, as determined by the Director. In any event, the City shall not be obligated to pay the Purchase Price for any Facility or Discrete Component except from the moneys in the Improvement Fund (subject to Section 2.4).

Section 3.4 Payment Requests. In order to receive the Purchase Price for a completed Facility or Discrete Component, inspection thereof under Section 3.2 shall have been made and the Owner shall deliver to the Director: (i) a Payment Request in the form of Exhibit B hereto for such Facility or Discrete Component, together with all attachments and exhibits required by Exhibit B and this Section 3.4 to be included therewith (including, but not limited to Attachments 1 and 2 to Exhibit B), and (ii) if payment is requested for a completed Facility, (a) if the property on which the Facility is located is not owned by the City at the time of the request, a copy of the recorded documents conveying to the City Acceptable Title to the real property on, in or over which such Facility is located, as described in Section 4.1 hereof, (b) to the extent paid for with the proceeds of the Bonds, an assignment to the District of any reimbursements that may be payable with respect to the Facility, such as public or private utility reimbursements, and (c) an assignment of warranties and guaranties for such Facility, as described in Section 4.5 hereof, in a form acceptable to the City.

Upon receipt of a Payment Request (and all accompanying documentation), the Director shall conduct a review in order to confirm that such request is complete, that such Discrete Component or Facility identified therein was constructed in accordance with the Plans therefor, and to verify and approve the Actual Cost of such Discrete Component or Facility specified in such Payment Request.

The Director shall also conduct such review as is required in his discretion to confirm the matters certified in the Payment Request. The Owner agrees to cooperate with the Director in con ducting each such review and to provide the Director with such additional information and documentation as is reasonably necessary for the Director to conclude each such review. For any Facilities to be acquired by another public entity or utility, the Owner shall provide evidence acceptable to the Director that such Facilities are acceptable to such entity or utility. Within fifteen (15) business days of receipt of any Payment Request, the Director expects to review the request for completeness and notify the Owner whether such Payment Request is complete, and, if not, what additional documentation must be provided. If such Payment Request is complete, the Director expects to provide a written approval or denial (specifying the reason for any denial) of the request within thirty (30) calendar days of its submittal. However, the Facilities documentation will be delivered by Owner to City in large quantities which may be beyond the ability of City to process, in accordance with the forgoing timeframes. At the request of City or Owner, City may engage an outside contractor to review and process the Facilities documentation on behalf of the City the cost of which shall be borne by Owner subject to a written agreement executed by City and Owner. If a Payment Request seeking reimbursement for more than one Facility or Discrete Component is denied, the Director shall state whether the Payment Request is nevertheless approved and complete for any one or more Facilities or Discrete Components and any such Facilit ies or Discrete Components shall be

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processed for payment under Section 3.5 notwithstanding such partial denial. The City’s and District’s Costs associated with the acquisition of Facilities and processing of Payment Requests shall be reimbursed from the Improvement Fund or from amounts advanced by the Owner to the extent insufficient funds are on deposit in the Improvement Fund, which advances may be later reimbursed to the Owner out of the Improvement Fund.

Section 3.5 Payment. Upon approval of the Payment Request by the Director, the Director shall sign the Payment Request and forward the same to the City Director of Finance. Upon receipt of the reviewed and fully signed Payment Request, the City Director of Finance shall, within the then current City financial accounting payment cycle but in any event within fifteen (15) business days of receipt of the approved Payment Request, cause the same to be paid by the Trustee under the applicable provisions of the Indenture, to the extent of funds then on deposit in the I mprovement Fund. Any approved Payment Request not paid due to an insufficiency of funds in the Improvement Fund, shall be paid promptly following the deposit into the Improvement Fund of proceeds of any investment earnings or other amounts transferred to the Improvement Fund under the terms of the Indenture.

Subject to Section 2.4, the Purchase Price paid hereunder for any Facility or Discrete Component shall constitute payment in full for such Facility or Discrete Component, including, without limitation, payment for all labor, materials, equipment, tools and services used or incorporated in the work, supervision, administration, overhead, expenses and any and all other things required, furnished or incurred for completion of such Facility or Discrete Comp onent, as specified in the Plans.

The City shall withhold payment for any Discrete Component or Facility constructed on land not already owned by the City or other public entity, until Acceptable Title to such land is conveyed to the City or other public entity that will own the respective Facility, as described in Article IV hereof.

The City shall be entitled to withhold any payment hereunder for a Facility or Discrete Component that is the subject of a Payment Request until it is satisfied that any and al l claims for labor and materials have been paid by the Owner for the Facility or Discrete Component that is the subject of a Payment Request, or conditional lien releases (and/or unconditional lien releases) have been provided by the Owner for such Facility or Discrete Component. The City, in its discretion, may waive this limitation upon the provision by the Owner of sureties, undertakings, securities and/or bonds of the Owner or appropriate contractors or subcontractors and deemed satisfactory by the Director to assure payment of such claims.

The City shall be entitled to withhold payment for any Facility (or final Discrete Component) hereunder to be owned by the City until: (i) the Director determines that the Facility is ready for its intended use, and (ii) the Acceptance Date for the Facility has occurred and the requirements of Section 4.1, if applicable to such Facility, have been satisfied. The City hereby agrees that the Owner shall have the right to post or cause the appropriate contractor or sub contractor to post a bond with the City to indemnify it for any losses sustained by the City because of any liens that may exist at the time of acceptance of such a Facility, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the Director. The City shall be entitled to withhold payment for any Facility (or the final Discrete Component of any such Facility) to be owned by other governmental entities, until the Owner provides the Director with evidence that the governmental entity has accepted dedication of and/or title to the Facility. If the Director determines that a Facility

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is not ready for intended use under (i) above, the Director shall so notify the Owner as soon as reasonably practicable in writing specifying the re ason(s) therefor.

Nothing in this Acquisition Agreement shall be deemed to prohibit the Owner from contesting in good faith the validity or amount of any mechanics or materialman’s lien nor limit the remedies available to the Owner with respect thereto so long as such delay in performance shall not subject the Facilities or any Discrete Component thereof to foreclosure, forfeiture or sale. In the event that any such lien is contested, the Owner shall only be required to post or cause the delivery of a bond in an amount equal to the amount in dispute with respect to any such contested lien sufficient to cause the release or such lien, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the Director.

Subject to the last paragraph of this Section 3.5, the City shall withhold in the Improvement Fund an amount equal to ten percent (10%) of the Purchase Price of each Discrete Component to be paid hereunder other than the final Discrete Component of any Facility. Any such retention will be released to the Owner upon final completion and acceptance of the related Facility.

Notwithstanding the foregoing, the Owner shall be entitled to payment of any such retention upon the completion and acceptance of a Discrete Component, if securities meeting the requirements of the California Public Contracts Code are deposited in lieu thereof. Payment of any retention shall also be contingent upon the availability of monies in the Improvement Fund therefore. No retention shall apply if the Owner proves to the Director’s satisfaction that the Owner’s contracts for the Discrete Components provide for the same retention as herein provided, so that the Purchase Price paid for the Discrete Component is at all times net of the required retention.

Section 3.6 Defective or Nonconforming Work. If any of the work done or materials furnished for a Facility or Discrete Component are found by the Director to be defective or not in accordance with the applicable Plans: (i) and such finding is made prior to payment for the Purchase Price of such Facility or Discrete Component hereunder, the City may withhold payment therefor until such defect or nonconformance is corrected to the satisfaction of the Director, or (ii) and such finding is made after payment of the Pur chase Price of such Facility or Discrete Component, the City and the Owner shall act in accordance with the City’s standard specification for public works construction.

ARTICLE IV

OWNERSHIP AND TRANSFER OF FACILITIES
Section 4.1 Facilities to be Owned by the City; Conveyance of Land and Easements to City. Acceptable Title to all property on, in or over which each Facility to be acquired by the City will be located, shall be deeded over to the City by way of grant deed, or dedication of such property, or easement thereon, if such conveyance of interest is approved by the City as being a sufficient interest therein to permit the City to properly own, operate and maintain such Facility located therein, thereon or thereover, and to permit the Owner to perform its obligations as set forth in this Acquisition Agreement. The Owner agrees to assist the City in obtaining such documents as are required to obtain Acceptable Title. Completion of the transfer of title to land shall be accomplished prior to the payment of the Purchase Price for a Facility (or the last Discrete Component thereof) and shall be evidenced by recordation of the acceptance thereof by the City Council or the designee thereof.

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Section 4.2 Facilities to be Owned by the City; Title Evidence . The Owner shall furnish to the City a preliminary title report for land with respect to Facilities to be acquired by the City and not previously dedicated or otherwise conveyed to the City, for review and approval at least thirty (30) business days prior to the transfer of the Acceptable Tit le to a Facility to the City. The City shall approve the preliminary title report unless it reveals a matter which, in the judgment of the City, could materially affect the City’s use and enjoyment of any part of the property or easement covered by the preliminary title report. In the event the City does not approve the preliminary title report, the City shall not be obligated to accept title to the land with respect to such Facility or pay the Purchase Price for such Facility (or the last Discrete Compon ent thereof) until the Owner has cured such objections to title to the reasonable satisfaction of the City and caused a standard title insurance policy to be issued to the City with respect to such land in the amount of the Purchase Price. In the event the Owner cannot cure such objections to title, City agrees to consider the use of eminent domain pursuant to Section 4.3 hereof for such purpose.

Section 4.3 Facilities Constructed on Private Lands. If any Facilities to be acquired are located on privately-owned land, the owner thereof shall retain title to the land and the completed Facilities until acquisition of the Facilities under Article III hereof. Pending the completion of such transfer, the Owner shall not be entitled to receive any payment for any such Facil ity or the last Discrete Component thereof. The Owner shall, however, be entitled to receive payment for Discrete Components (other than the last Discrete Component) upon making an irrevocable offer of dedication of such land in form and substance acceptable to the Director. Notwithstanding the foregoing, upon written request of the City before payment for any Discrete Component of such a Facility, the Owner shall convey or cause to be conveyed Acceptable Title thereto in the manner described in Sections 4.1 and 4.2 hereof.

It shall be the responsibility of the Owner to acquire all property rights on property which is not owned by the City or the Owner which is necessary for the construction of any of the Facilities.

In the event, despite its exercise of b est efforts to do so, the Owner is unable to acquire such property rights, the City shall in good faith consider the undertaking of proceedings to acquire such property rights through its exercise of the power of eminent domain, and the costs of such proce edings and acquisition shall be the responsibility of the Owner and shall comprise part of the Purchase Price of the related Facility.

Section 4.4 Facilities Constructed on City Land. If the Facilities to be acquired are on land owned by the City, including land as to which the City has acquired sufficient property rights in the manner described in Section 4.3 or otherwise, the City hereby grants to the Owner a license to enter upon such land for purposes related to the construction (and maintenance pending acquisitio n) of the Facilities. The provisions for inspection and acceptance of such Facilities otherwise provided herein shall apply.

Section 4.5 Maintenance and Warranties. The Owner shall maintain or cause to be maintained each Discrete Component in good and safe condition until the Acceptance Date of the Facility of which such Discrete Component is a part. Prior to the Acceptance Date, the Owner shall be responsible for performing any required maintenance on any completed Discrete Component or Facility. On or before the Acceptance Date of the Facility, the Owner shall assign to the City all of the Owner’s rights in any warranties, guarantees, maintenance obligations or other evidence of contingent obligations of third persons with respect to such Facility. For each Facil ity to be owned by the City, the Owner shall provide a warranty bond reasonably acceptable in form and substance to the Director to remain in effect for a period of one year from the date of acceptance of each Facility.

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The City shall be responsible for maintenance of each Facility from and after the Acceptance Date thereof, except that with respect to landscaping improvements, the Owner shall maintain or cause to be maintained such landscape improvements for a period of one year following the Acceptance D ate thereof or shall provide a bond reasonably acceptable in form and substance to the Director for such period and for such purpose (for landscaping improvements only, and for the posting of a warranty bond to remain in effect for one year as to other Facilities), to insure that defects, which appear within said period will be repaired, replaced, or corrected by the Owner, at its own cost and expense, to the satisfaction of the Director. The Owner shall commence to repair, replace or correct any such defects within thirty (30) days after written notice thereof by the City to the Owner, and shall complete such repairs, replacement or correction as soon as practicable. Any warranties, guarantees or other evidences of contingent obligations of third persons with respect to the Facilities to be acquired by the City shall be delivered to the Director as part of the transfer of title.

Section 4.6 Allocation of Costs. If Owner incurs costs that (1) apply to more than one Facility or Discrete Component (e.g., soft costs) or (2) apply to both Facilities or Discrete Components and improvements other than the Facilities or Discrete Components (e.g., grading), Owner shall allocate, or cause the contractor to reasonably allocate, such costs between the Facilities or Discrete Components (in the case of clause (1)) or between the Facilities or Discrete Components and the improvements other than the Facilities or Discrete Components (in the case of clause (2)) (the “Owner Allocation”). The Owner Allocation shall be presumed to be rea sonable and shall be accepted for all purposes of this Acquisition Agreement unless the City notifies Owner of its good - faith reasonable disapproval of the allocation as part of the City’s written response to the applicable Payment Request. If the City has properly disapproved the Owner Allocation, then the City and Owner shall promptly allocate such costs, on a reasonable basis, between the Facilities or Discrete Components (in the case of clause (1)) or between the Facilities or Discrete Components and th e improvements other than the Facilities or Discrete Components (in the case of clause (2)) (the “Agreed-Upon Allocation”). Based on the Owner Allocation or the Agreed-Upon Allocation, as applicable, the City shall include the costs allocated to a specific Facility or Discrete Component as part of the Actual Costs of such Facility or Discrete Component when such Facility or Discrete Component is subject to a Payment Request.

Section 4.7 Expectations of the Parties. The City understands and agrees that (i) Owner will be constructing Facilities or Discrete Components prior to the availability of sources that will be used to pay for such Facilities or Discrete Components, (ii) the City or the other public agencies that will own and operate such Facilities or Discrete Components may be inspecting such Facilities or Discrete Components and processing and completing payment requests for the payment on such Facilities or Discrete Components with knowledge that there may be insufficient sources available at such time, (iii) the Facilities or Discrete Components may be conveyed to and accepted by the City or other local agency that will own and operate such Facilities or Discrete Components when there are insufficient sources to pay the Purchase Prices of such Facilities or Discr ete Components, and (iv) in any such case, the payment of any approved payment requests for the Purchase Prices of such Facilities or Discrete Components will be deferred until there are sufficient sources available to pay the Purchase Prices of such Facilities or Discrete Components, at which time the City will make such payments in accordance with this Acquisition Agreement. At all times, Owner will be constructing such Facilities or Discrete Components with the expectation that the Purchase Prices for s uch Facilities or Discrete Components will be paid solely from the sources. The conveyance of Facilities or Discrete Components to the City or a local agency that will own and operate such Facilities or Discrete Components prior to receipt of the Purchase Prices for such Facilities or Discrete

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Components shall not be construed as a dedication or gift, or a waiver of the payment of the Purchase Prices, or any part thereof, for such Facilities or Discrete Components.

ARTICLE V

INSURANCE
Section 5.1 Insurance Requirements. The Owner shall, at all times prior to the final Acceptance Date of all Facilities, maintain and deliver to the City evidence of and keep in full force and effect, not less than the following coverage and limits of insurance, which shall be maintained with insurers and under forms of policies satisfactory to the Director: (i) Workers Compensation and Employer’s Liability - Workers’ Compensation - coverage as required by law; Employer’s Liability - limits of at least $1,000,000.00 per occurrence; (ii) Comprehensive General Liability - Combined Single Limit - $2,000,000.00; (iii) Automobile Liability - Combined Single Limit - $1,000,000.00; and (iv) Errors and Omissions Insurance - Combined Single Limit - $2,000,000.00.

All of the Owner’s insurance policies shall contain an endorsement providing that written notice shall be given to the City at least 30 calendar days prior to termination or cancellation of coverage of the policy.

The Comprehensive General Liability and Bodily Injury and Property Damage Liability policies shall contain the following:
(a) An endorsement extending coverage to the City and its agents as an additional insured, as respects liabilities arising out of the performance of any work related to the Facilities. Which insurance shall be primary insura nce as respects the interest of the City, and any other insurance maintained by the City shall be excess and not contributing insurance with the insurance required hereunder.
(b) Severability of interest clause.
(c) Provision or endorsement stating that such insurance, subject to all of its other terms and conditions, applies to contractual liability assumed by the Owner.

Promptly on execution of this Acquisition Agreement by the Owner, the Owner shall deliver to the Director copies of all required certificates of insurance and endorsements thereto on forms which are acceptable to the Director and the City Attorney.

The Owner shall require and verify similar insurance on the part of its contractors and subcontractors.

The foregoing requirements as to the types, limi ts and City approval of insurance coverage to be maintained by the Owner are not intended to and shall not in any manner limit or qualify the liabilities and obligations assumed by the Owner under this Acquisition Agreement.

Any policy or policies of insurance that the Owner or its contractors or subcontractors elect to carry as insurance (i) against loss or damage to their construction equipment and tools or other personal property used in fulfillment of this Acquisition Agreement or a contract related to the Facilities shall include a provision waiving the insurer’s right of subrogation against the City, and (ii) in fulfillment of this Acquisition Agreement involving a dual obligee bond may contain a clause

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to the effect that: “provided that Principal and Surety shall not be liable to the Obligees or any of them unless the Obligees or any of them have performed the obligations to the Principal in accordance with the terms of said contract; and provided, further, that Principal and Surety shall not be liable to all Obligees in the aggregate in excess of the penal sum above stated.” Section 5.2 Standards Applicable. The Owner may effect such coverage under blanket insurance policies, provided, however, that (i) such policies are written on a per occurrence basis, (ii) such policies comply in all other respects with the provisions of Section 5.1, and (iii) the protection afforded the City under any such policy shall be no less than that which would be available under a separate, policy relating only to this Acquisition Agreement. All policies of insurance shall be with companies licensed or approved by the State of California Insurance Commissioner and rated (i) A or better with respect to primary levels of coverage, and (ii) B+12 or better with respect to excess levels of coverage, in the most recent edition of Best’s Insurance Guide and shall be issued and delivered in accordance with State law and regulations.

Section 5.3 Evidence of Insurance. Prior to the Acceptance Date, the Owner shall furnish to the City, from time to time upon request of the Director, a certificate of insurance regarding each insurance policy required to be maintained by the Owner hereunder.

ARTICLE VI

REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.1 Representations, Covenants and Warranties of the Owner. The Owner represents and warrants for the benefit of the City, as follows:
(a) Organization. Owner is a California corporation and is validly doing business and in good standing in the State of California, is in compliance with all applicable laws of the State, and has the power and authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated.
(b) Authority. The Owner has the power and authority to enter into this Acquisition Agreement, and has taken all action necessary to cause this Acquisition Agreement to be executed and delivered, and this Acquisition Agreement has been d uly and validly executed and delivered by the Owner.
(c) Binding Obligation. This Acquisition Agreement is a legal, valid and binding obligation of the Owner, enforceable against the Owner in accordance with its terms, subject to bankruptcy and other equitable principles.
(d) Compliance with Laws. The Owner shall not with knowledge commit, suffer or permit any act to be done in, upon or to the lands of the Owner in the District or the Facilities in violation of any law, ordinance, rule, regulation or order of any governmental authority or any covenant, condition or restriction now or hereafter affecting the lands in the District or the Facilities. (e) Requests for Payment. The Owner represents and warrants that (i) it will not request payment from the City for the acquisition of any improvements that are not part of the Facilities, and (ii) it will diligently follow all procedures set forth in this Acquisition Agreement with respect to the Payment Requests.

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(f) Financial Records. Until the final acceptance of the Facilities, the Owner covenants to maintain proper books of record and account for the construction of the Facilities and all costs related thereto. Which accounting books shall be maintained in accordance with generally accepted accounting principles, and shall be available for inspection by the City or its agent at any reasonable time during regular business hours on reasonable notice. (g) Prevailing Wages. The Owner covenants that, with respect to any contracts or subcontracts for the construction of the Facilities to be acquired from the Owner hereunder, it has assured complete compliance with any applicable law or regulation for the payment of prevailing wages for such construction.
(h) Plans. The Owner represents that it has obtained or will obtain approval of the Plans for the Facilities to be acquired from the Owner hereunder from all appropriate departments of the City and from any other public entity or public utility from which such approval must be obtained. The Owner further agrees that the Facilities to be acquired from the Owner hereunder have been or will be constructed in full compliance with such approved plans and specifications and any supplemental agreements (change orders) thereto, as approved in the same manner.

Section 6.2 Indemnification and Hold Harmless. The Owner shall assume the defense of, indemnify and save harmless the City, members of the City Council, their officers, officials, employees and agents and each of them, from and against all actions, damages, claims, losses or expense of every type and description to which they may be subjected or put, by reason of, or resulting from the breach of any provision of this Acquisition Agreement by the Owner, the Owner’s or any other entity’s negligent design, engineering and/or construction of any of the Fa cilities acquired from the Owner hereunder, the Owner’s non-payment under contracts between the Owner and its consultants, engineer’s, advisors, contractors, subcontractors and suppliers in the provision of the Facilities, any claims of persons employed by the Owner or its agents to construct the Facilities, claims for damages to persons or property related to the actions of Owner contemplated by this Acquisition Agreement or any claims arising out of any alleged misstatement of a material fact or omission of a material fact with respect to provisions in any Official Statement for the Bonds for which the Owner certifies in a customary certificate executed in connection with the printing of the Official Statement for such Bonds. Notwithstanding the foregoing , no indemnification is given hereunder for any action, damage, claim, loss or expense directly attributable solely to the intentional acts or negligence of the City, or its officers, directors, employees or agents hereunder.

No provision of this Acquisition Agreement shall in any way limit the Owner’s responsibility for payment of damages resulting from the operations of the Owner, its agents, employees or its contractors.

ARTICLE VII

TERMINATION
Section 7.1 Mutual Consent. This Acquisition Agreement may be terminated by the mutual, written consent of the City and the Owner, in which event the City may let contracts for any remaining work related to the Facilities not theretofore acquired from the Owner hereunder, and use all or any portion of the monies in the Improvement Fund to pay for same, and the Owner shall have no claim or right to the Purchase Price of Facilities or Discrete Components hereunder, except as otherwise may be provided in such written consent. In any event, this Acquisition Agreement shall

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terminate upon the earlier of (i) ten (10) years following the issuance of building permits for all dwelling units expected to be built within the District or (ii) the funding of all Facilities pursuant to this Acquisition Agreement.

Section 7.2 City Election to Terminate for Cause. The following events shall constitute grounds for the City, at its option and in its sole discretion, to terminate this Acquisition Agreement, without the consent of the Owner:
(a) The Owner shall voluntarily file for reorganization or other relief under any Federal or State bankruptcy or insolvency law.
(b) The Owner shall have any involuntary bankruptcy or insolvency action filed against it, or shall suffer a trustee in bankruptcy or insolvency or receiver to take possession of the assets of Owner, or shall suffer an attachment or levy of execution to be made against the property it owns within the District unless, in any of such cases, such circumstance shall have been terminated or released within ninety (90) days thereafter.
(c) The Owner shall abandon construction of the Facilities. Failure for a period of six consecutive months to undertake substantial work related to the construction of Facilities that are required to be constructed at that time pursuant to the Conditions of Approval, other than for a reason specified in Section 7.3 hereof, shall constitute a non-inclusive example of such abandonment. (d) The Owner shall breach any material covenant or default in the performance of any material obligation hereunder.
(e) The Owner shall transfer any of its rights or obligations under this Acquisition Agreement without the prior written consent of the City or as otherwise permitted hereunder.
(f) The Owner shall have made any material misrepresentation or omission of any written materials furnished in connection with any prelim inary official statement, official statement or bond purchase contract used in connection with the sale of any series of the Bonds.

If any such event occurs, the City shall give written notice of its knowledge thereof to the Owner, and the Owner agrees to meet and confer with the Director and other appropriate City staff and consultants as to options available to assure timely completion of the Facilities. Such options may include, but not be limited to the termination of this Acquisition Agreement by the City. If the City elects to terminate this Acquisition Agreement, the City shall first notify the Owner (and any mortgagee or trust deed beneficiary specified in writing by the Owner to the City to receive such notice) of the grounds for such termination and allow the Owner a reasonable period (minimum of thirty (30) days) to eliminate or mitigate to the satisfaction of the Director the grounds for such termination. Such period may be extended, at the sole discretion of the City, if the Owner, to the satisfaction of the City, is proceeding with diligence to eliminate or mitigate such grounds for termination. If at the end of such period (and any extension thereof, as determined solely by the City), the Owner has not eliminated or completely mitigated such grounds, to the satisfaction of the City, the City may then terminate this Acquisition Agreement.

Notwithstanding the foregoing, so long as any event listed in any of clauses (a) through and including (f) above has occurred, notice of which has been given by the City to the Owner, and such

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event has not been cured or otherwise eliminated by the Owner, the City may in its sole discretion cease making payments for the Purchase Price of Facilities or Discrete Components under Article III hereof.

Section 7.3 Force Majeure. Whenever performance is required of a party hereunder, that party shall use all due diligence and take all necessary measures in good faith to perform, but if completion of performance is delayed by reasons of floods, earthquakes, inclement weather or o ther acts of God, war, civil commotion, riots, strikes, acts of terrorism, pandemic, picketing, other labor disputes, damage to work in progress by casualty, government shutdowns, moratoria or other restrictive laws or regulations, or the acts, omissions or breach of agreement by the other party to this Acquisition Agreement or its agents, contractors or subcontractors, or by other cause beyond the reasonable control of the party (financial inability excepted), then the specified time for performance shall be extended by the amount of the delay actually so caused.

ARTICLE VIII

MISCELLANEOUS
Section 8.1 Limited Liability of City. The Owner agrees that any and all obligations of the City arising out of or related to this Acquisition Agreement are special and limited obligations of the District and City and the City’s obligations to make any payments hereunder are restricted entirely to the moneys, if any, in the Improvement Fund and from no other source. No member of the City Council, or City staff member, employee or agent shall in cur any liability hereunder to the Owner or any other party in their individual capacities by reason of their actions hereunder or execution hereof.

Section 8.2 Excess Costs. Subject to the limitations of this Acquisition Agreement, the Owner agrees to pay all costs of the Facilities that it is obligated to construct in excess of the monies available therefor in the Improvement Fund.

Section 8.3 Review of Records. The Director and/or the Finance Manager or other finance officer of the City shall have the right, during normal business hours and upon the giving of two (2) business days prior written notice to the Owner, to review all books and records of the Owner pertaining to the Actual Cost incurred by the Owner in or to any of the Facilities, and any bids taken or received for the construction thereof or materials therefor. Owner shall have the right, during normal business hours and upon the giving of two (2) business days prior written notice to the Finance Manager, to review all books and records of the City and District per taining to the Special Taxes and Bonds.

Section 8.4 Attorney’s Fees. In the event that any action or suit is instituted by either party against the other arising out of this Acquisition Agreement, the party in whose favor final judgment shall be entered shall be entitled to recover from the other party all costs and expen ses of suit, including reasonable attorneys’ fees.

Section 8.5 Notices. Any notice, payment or instrument required or permitted by this Acquisition Agreement to be given or delivered to either party shall be deemed to have been received when personally delivered, or transmitted by telecopy or facsimile transmission (which shall be immediately confirmed by telephone and shall be followed by overnight delivery an original of the same within twenty-four hours after such transmission), addressed as follows:

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City and District: City of Beaumont
550 East 6th Street
Beaumont, CA 92223
Attention: City Manager, City Clerk
With a copy to: John Pinkney
Slovak Baron Empey Murphy & Pinkney, LLP
1800 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Owner: Meritage Homes of California, Inc.
5 Peters Canyon Road, Suite 310
Irvine, CA 92606
Attention: Efrem Joelson, Forward Planning Manager
With a copy to: David Hendryx Consulting
3407 S Main Street, Unit A
Santa Ana, CA 92707
Attention: David Hendryx
and a copy to: John Yeager
O’Neil LLP
19900 MacArthur Blvd., Suite 1050
Irvine, CA 92612
Each party may change its address or addresses for delivery of notice by delivering written notice of such change of address to the other party.

Section 8.6 Severability. If any part of this Acquisition Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Acquisition Agreement shall be given effect to the fullest extent possible.

Section 8.7 Successors and Assigns. This Acquisition Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. This Acquisition Agreement shall not be assigned by the Owner, except in whole to an Affiliate, or to any other entity of which the Owner and/or its members or partners will be managing members or general partners which assume all of the Owner’s obligations hereunder (which transfer is expressly authorized hereunder, upon prior written notice to the City without further act of the City), witho ut the prior written consent of the City, which consent shall not be unreasonably withheld or delayed. In connection with any required consent of the City, the City may condition its consent upon the acceptability of the financial condition of the proposed assignee, the assignee’s express assumption of all obligations of the Owner hereunder, and/or upon any other factor which the City deems relevant in the circumstances. In any event, any such assignment shall be in writing, shall clearly identify the scope of the rights and/or obligations assigned, and shall not be effective until approved by the City. Without the City’s written consent (except in whole to an Affiliate, or to any other entity of which the Owner and/or its members or partners will be mana ging members or general partners which assume all of the Owner’s obligations hereunder), no assignment shall release the Owner from its obligations and liabilities under this Acquisition Agreement.

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Section 8.8 Other Agreements. The obligations of the Owner hereunder shall be those of a party hereto and not as an owner of property in the District. Nothing herein shall be construed as affecting the City’s or the Owner’s rights, or duties to perform their respective obligations, under other agreements, if any, use regulations or subdivision requirements relating to the development of the lands in the District. This Acquisition Agreement shall not confer any additional rights, or waive any rights given, by either party hereto under any development or other agreement to w hich they are a party.

Section 8.9 Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Acquisition Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by the other party with the terms of this Acquisition Agreement thereafter.

Section 8.10 Merger. No other agreement, statement or promise made by any party or any employee, officer or agent of any party with respect to any matters covered hereby that is not in writing and signed by all the parties to this Acquisition Agreement shall be binding.

Section 8.11 Parties in Interest. Nothing in this Acquisition Agreement, expressed or implied, is intended to or shall be construed to confer upon or to give to any person or entity other than the City, the District and the Owner any rights, remedies or claims under or by reason of this Acquisition Agreement or any covenants, conditions or stipulations hereof; and all covenants, conditions, promises, and agreements in this Acquisition Agreement contained by or on behalf of the City, the District or the Owner shall be for t he sole and exclusive benefit of the City, the District and the Owner.

Section 8.12 Amendment. This Acquisition Agreement may be amended, from time to time, by written Supplement hereto and executed by the City, the District and the Owner; provided, further, that Exhibit A may be modified to add additional authorized facilities or make adjustments to the existing Facilities only with the written approval of the Director and the Owner.

Section 8.13 Counterparts. This Acquisition Agreement may be executed in counterparts, each of which shall be deemed an original.

Section 8.14 Termination. This Acquisition Agreement shall terminate and be of no further force as provided in Section 7.1, unless extended by agreement of all the parties. If the Acquisition Agreement is terminated as provided herein , none of the City, the District or the Owner shall have any further responsibility or liability pursuant to this Acquisition Agreement. Upon the termination of this Agreement, the City shall direct the use of any remaining Bond or Special Tax proceeds to complete any remaining authorized facilities, redeem Bonds or use in any way permitted by the Act.
[Signature Page Follows]

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4892-6939-1454v2/022599-0032
IN WITNESS WHEREOF, the parties have executed this Acquisition Agreement as of the day and year first-above written.

CITY OF BEAUMONT
By:

City Manager
ATTESTED :

City Clerk

CITY OF BEAUMONT COMMUNITY FACILITIES
DISTRICT NO. 2023-1 (FAIRWAY CANYON)
By:

City Manager of the City of Beaumont
ATTESTED:

City Clerk
[SIGNATURES CONTINUED ON NEXT PAGE.]

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[SIGNATURE PAGE CONTINUED]
MERITAGE HOMES OF CALIFORNIA, INC.,
a California corporation

By:
[NAME]
Authorized Signatory

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ACQUISITION AGREEMENT
(CFD NO. 2023-1)

EXHIBIT A

DESCRIPTION OF FACILITIES AND DISCRETE COMPONENTS ELIGIBLE FOR

ACQUISITION FROM THE OWNER
Facility1, 2, 3 Estimated Cost
Sorenstam Road Improvement $ 2,706,083.00
PA 21B Park Improvements 4,999,342.00
TOTAL: $ 7,705,425.00

1 The description of the above Facilities shall also include any appurtenant cost required for completion of such Facility including, but not limited to, grading, wet utility improvements, paving, dry utilities, performance bonds, design, planning, and engineering costs, etc.
2 Unless agreed to otherwise by the Owner and the City, dry utility cost reimbursements shall not exceed 5% of the proceeds of any series of Bonds.
3 The estimated costs of these Facilities represents the current estimates at the time of this Acquisition Agreement. The amount for any Facility may increase to include other costs subsequently submitted by Owner and approved by the City.

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ACQUISITION AGREEMENT

EXHIBIT B

FORM OF PAYMENT REQUEST (FACILITIES)
PAYMENT REQUEST NO. ____
The undersigned (the “Owner”), hereby requests payment to the Payees listed on Attachment 2 in the total amount of $__________ for the Facilities (as defined in th e Acquisition Agreement, dated as of May 1, 2023 by and among the City of Beaumont (the “City”), the City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) and the Owner), or Discrete Components thereof (as described in Exhibit A to that Acquisition Agreement), all as more fully described in Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby represents and warrants to the City as follows:

1. He (she) is a duly authorized officer of the Owner, qualified to execute this Payment Request for payment on behalf of the Owner and is knowledgeable as to the matters set forth herein.

2. All costs of the Facilities or Discrete Components thereof for which payment is requested hereby are Actual Costs (as defined in the Acquisition Agreement referenced above) and have not been inflated or misrepresented in any respect. The amount of the payment requested has not been previously paid by the City.

3. Supporting documentation (such as third party invoices) is attached with respect to each cost for which payment is requested.

4. There has been full compliance with applicable laws relating to prevailing wages for the work to construct the Facilities or Discrete Components thereof for which payment is requested.

5. The Facilities or Discrete Components thereof for which payment is requested were constructed in accordance with all applicable City or other governmental standards, and in accordance with Plans approved by the City.

6. The Owner is in compliance with the terms and provisions of the Acquisition Agreement.

7. The Purchase Price for each Facility or Discrete Component (a detailed calculation of which is shown in Attachment 2 hereto for each such Facility or Discrete Component), has been calculated in conformance with the terms of the Acquisition Agreement.

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B-2
4892-6939-1454v2/022599-0032
I hereby declare under penalty of perjury that the above representations and warranties are true and correct.

Dated: OWNER:

MERITAGE HOMES OF CALIFORNIA, INC.,
a California corporation

By:

Name:

Title:

Dated: CITY:

Payment Request Approved for Submission to
Finance Manager
By:

Director of Public Works

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B-3
4892-6939-1454v2/022599-0032

ACQUISITION AGREEMENT
ATTACHMENT 1

EXHIBIT B
[List here all Facilities or Discrete Components thereafter which payment is requested, and attach support documentation.]

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B-4
4892-6939-1454v2/022599-0032

ACQUISITION AGREEMENT
ATTACHMENT 2

EXHIBIT B

CALCULATION OF PURCHASE PRICE
[Use a separate sheet for each Facility or Discrete Component for which payment is being requested]

1. Description (by reference to Exhibit A to the Acquisition Agreement) of the Facility or Discrete Component
$

2. Actual Cost (list here total of supporting invoices and/or other documentation supporting determination of Actual Cost):
$

3. Subtractions from Purchase Price: $
A. Holdback for Lien releases (if any, see Section 3.4 of the Acquisition Agreement)
$
B. Retention (if any, see Section 3.4 of the Acquisition Agreement)
$

4. Total disbursement requested (Amount listed in 2, less amounts, if any, listed in 3)
$

Payment shall be directed to following payee(s):

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B-5
4892-6939-1454v2/022599-0032
I hereby declare under penalty of perjury that the above representations and warranties are true and correct.

Dated: __________________
OWNER:
______________________
By:

Name:

Title:

By:

Name:

Title:

Dated: __________________
CITY:

Payment Request Approved for Submission to
Finance Manager
By:

Director of Public Works

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C-1
4892-6939-1454v2/022599-0032

ACQUISITION AGREEMENT

EXHIBIT C

CITY CFD POLICIES

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CITY OF BEAUMONT
CFD Public Hearing Report
COMMUNITY FACILITIES DISTRICT NO. 2023-1
(FAIRWAY CANYON)
MAY 2023

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Table of Contents

Sections Page _____________________________________________ 1 Introduction ______________________________________________________ 1 2 Description of Facilities ____________________________________________________ 2 3 Cost Estimate ______________________________________________________ 4 4 Proposed Development ___________________________________________________ 6 5 Rate and Method of Apportionment __________________________________________ 7 6 Certifications ______________________________________________________ 9

Tables Page
3-1 Cost Estimate for Facilities – Special Tax A ____________________________________ 4 3-1 Cost Estimate for Maintenance Services – Special Tax B _________________________ 4 3-1 Cost Estimate for Maintenance Services – Special Tax C (Contingent) ______________ 5 3-1 Cost Estimate for Public Services – Special Tax D ______________________________ 5

Appendices Page _____________________________________________ A Rate and Method of Apportionment for Improvement Area 1 B Rate and Method of Apportionment for Improvement Area 2 __________________ C Proposed Boundary Map _________________________________________ D Resolution of Intention

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1 Introduction Page | 1
City of Beaumont
CFD No. 2023-1 (Fairway Canyon)
Public Hearing Report
Background
On April 4, 2023, the City Council (the “City Council”) of the City of Beaumont (the “City”), adopted a Resolution of Intention to form Community Facilities District No. 2023-1 (Fairway Canyon) Improvement Areas 1 and 2 of the City of Beaumont (“CFD No. 2023-1” or “District”), Resolution No. 2023-06, pursuant to the provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, (“Act”).

The District is currently comprised of 7 parcels and approximately 111 gross acres to include a total of 419 residential properties at buildout. There are two separate Improvement Areas included within the boundaries of CFD No. 2023-1.

Improvement Area 1 includes two separate Tax Zones, Tax Zones 1 (55 Lots) and 2 (77 Lots) inclusive of Tract Maps TR 31462-23 and TR 31462-26 to include a total of 132 proposed detached residential properties at build-out. Improvement Area 2 includes three separate Tax Zones, Tax Zones 1 (111 Lots), 2 (109 Lots), and 3 (67 Lots) inclusive of Tract Maps TR 31462-16, TR 31462-24, TR 31462-25, and TR 31462-20 to include a total of 287 proposed detached residential properties at build-out. The property is located in the northwestern part of the City, west of Cherry Valley Blvd, and north of San Timoteo Canyon Rd.

For a map showing the boundaries of CFD No. 2023-1 please see Appendix C.

Purpose of Public Hearing Report
WHEREAS, this Community Facilities District Report (“Report”) is being provided to the City Council and generally contains the following:

1. A brief description of CFD No. 2023-1;

2. A brief description of the Facilities and Services required at the time of formation to meet the needs of CFD No. 2023-1.

3. A brief description of the Boundaries of CFD No. 2023-1; and

4. An estimate of the cost of financing the bonds used to pay for the Facilities, including all costs associated with formation of the District, issuance of bonds, costs to provide maintenance services, costs associated with public safety services, determination of the amount of any special taxes, collection of any special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the City with respect to the District, and any other incidental expenses to be paid through the proposed financing.

For particulars, reference is made to the Resolution of Intention as previously approved and adopted and is included in Appendix D.

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2 Description of Facilities Page | 2
City of Beaumont
CFD No. 2023-1 (Fairway Canyon)
Public Hearing Report
NOW, THEREFORE, the undersigned, authorized representative of Spicer Consulting Group, LLC, the appointed responsible officer, or person directed to prepare this Report, does hereby submit the following data:

Types of Facilities
A Community Facilities District may pay for facilities which may include all amounts necessary to eliminate any fixed special assessment liens or to pay, repay, or defease any obligation to pay for any indebtedness secured by any tax, fee, charge, or assessment levied, provide for the purchase, construction, expansion, or rehabilitation for any real or other tangible property with an estimated useful life of five (5) years or longer, including all furnishings, equipment and supplies related thereto (collectively, the “Facilities”) which is necessary to meet increased demands placed upon local agencies as a result of development and/or rehabilitation occurring within the District.

The types of facilities that are proposed by CFD No. 2023-1 and financed with the proceeds of special taxes and bonds issued by CFD No. 2023-1 consist of the construction, purchase, modification, rehabilitation, expansion and/or improvement of roadway, bridge, sewer, domestic and reclaimed water, dry utilities, storm drain, curb and gutter, medians, traffic signals and any other facilities permitted pursuant to the Act, parks, trails, police facilities, fire facilities, library facilities, public community facilities, and appurtenances and appurtenant work, and development impact fees that are used by the City to construct infrastructure including design, engineering and planning costs associated therewith. The Facilities include, but are not limited to:

PA 21B Park Improvements
Sorenstam Road Improvement
Water Facilities of Beaumont Cherry Valley Water District Types of Maintenance Services
The types of Maintenance Services that are proposed to be provided by the Community Facilities District and funded with the proceeds of special taxes levied by the Community Facilities District consist of services permitted to be financed under the Act including, without limitation, street sweeping, traffic signal maintenance, the maintenance of landscaping and lighting of publicly owned parks, parkways, streets, roads and open spaces, flood and storm protection services, and the operation of storm drainage systems. All of the Maintenance Services to be financed must be in addition to those provided within the boundaries of the Community Facilities District before the Community Facilities District is created, and shall not supplant services already available within that territory when the Community Facilities District is created.

Types of Public Services
The types of Public Services that are proposed to be provided by the Community Facilities District and funded with the proceeds of special taxes levied by the Community Facilities District consist of services permitted to be financed under the Act, including, without limitation, police and fire protection and ambulance and paramedic services. All of the Public Services to be financed must be in addition to those provided within the boundaries of the Community Facilities District before The Community Facilities District is created, and shall not supplant services already available within that territory when the Community Facilities District is created.

Types of Incidental Expenses
The Incidental Expenses to be paid from bond proceeds and/or special taxes include:
a) The cost of engineering, planning and designing the Facilities; and b) All costs, including costs of the property owner petitioning to form the District, associated with the creation of the District, the issuance of the bonds, the determination of the amount of special taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the District; and c) Any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities.

Capitalized terms used and not defined herein shall have the meaning set forth in the Rate and Method of Apportionment of Special Taxes for the District.

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2 Description of Facilities Page | 3
City of Beaumont
CFD No. 2023-1 (Fairway Canyon)
Public Hearing Report
All costs associated with the creation of CFD No. 2023-1, the issuance of bonds, the determination of the amount of special taxes to be levied, costs incurred in order to carry out the authorized purposes of CFD No. 2023-1, including legal fees, fees of consultants, engineering, planning, designing and the annual costs to administer CFD No. 2023-1 and any obligations.

The description of the eligible public facilities, services and incidental expenses above are preliminary and general in nature.

The final plans and specifications approved by the applicable public agency may show substitutes or modifications in order to accomplish the work or serve the new development and any such substitution or modification shall not constitute a change or modification in the proceedings relating to CFD No. 2023-1.

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3 Cost Estimate Page | 4
City of Beaumont
CFD No. 2023-1 (Fairway Canyon)
Public Hearing Report
Below is the estimated cost of facilities to be provided to the District. a) The cost estimate of facilities, including incidental expenses, to be financed through the issuance of CFD No. 2023- 1 Bonds is estimated to be $1,990,000 for Improvement Area 1 and $6,895,000 for Improvement Area 2 based upon current dollars (Fiscal Year 2022-23).
b) For further particulars please reference Table 3-1 below and incorporated herein by reference. c) Pursuant to Section 53340 of the Act, the proceeds of any special tax levied and collected by CFD No. 2023-1 may be used only to pay for the cost of providing public facilities, services, and incidental expenses. As defined by the Act, incidental expenses include, but are not limited to, the annual costs associated with determination of the amount of special taxes, collection of special taxes, payment of special taxes, or costs otherwise incurred in order to carry out the authorized purposes of the District. The incidental expenses associated with the annual administration of CFD No. 2023-1 are estimated to be $30,000 per Improvement Area in the initial Fiscal Year. However, it is anticipated that the incidental expenses will vary due to inflation and other factors that may not be foreseen today, and the actual incidental expenses may exceed these amounts accordingly.

Table 3-1
Cost Estimate for Facilities – Special Tax A

City Facilities Total Cost
IA 1
Bond Allocation(1)
IA 2
Bond Allocation(1)
Total
Allocation
Sorenstam Road Improvements $2,706,083 $1,605,900 $1,100,183 $2,706,083 PA 21B Park Improvements $5,621,764 $0 $4,999,342 $4,999,342 Total City Facilities $8,327,847 $1,605,900 $6,099,525 $7,705,425

Beaumont Cherry Valley Water District Total Cost
IA 1
Bond Allocation(1)
IA 2
Bond Allocation(1)
Total
Allocation
Water Improvements $3,365,413 $0 $0 $0
Total BCVWD Fees $3,365,413 $0 $0 $0

Total Eligible Fees/Improvements $11,693,260 $1,605,900 $6,099,525 $7,705,425 Incidental Financing Costs $384,100 $795,475 $1,179,575 Total Funded by Bond Proceeds $1,990,000 $6,895,000 $8,885,000

Total Funded by Developer $3,987,835
(1) Amounts are allocated based upon estimated bond sizing and may change based upon market conditions at the time of bond issuance. Allocation of bond proceeds between facility types to be determined at the time of bond issuance.

Table 3-2
Cost Estimate for Maintenance Services – Special Tax B
Item Description Estimated Cost
1 Streetlighting $13,320
2 Street Maintenance $60,997
3 Drainage $14,650
4 Parks $67,040
5 Graffiti $1,432
6 Administration $15,879
7 Reserves $4,589
Total $177,907
Table 3-3

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3 Cost Estimate Page | 5
City of Beaumont
CFD No. 2023-1 (Fairway Canyon)
Public Hearing Report
Table 3-3
Cost Estimate for Maintenance Services – Special Tax C (Contingent) Item Description Estimated Cost
1 Sidewalk $30,657
2 Drainage $59,672
3 Trails $96
4 Administration $4,656
5 Reserves $9,042
Total $104,123

Table 3-4
Cost Estimate for Public Services – Special Tax D
Item Description Estimated Cost
1 Police and Fire Services $191,944
2 Administration $21,327
Total $213,271

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4 Proposed Development Page | 6
City of Beaumont
CFD No. 2023-1 (Fairway Canyon)
Public Hearing Report
The CFD No. 2023-1 includes approximately 111 gross acres to include a total of 419 residential properties at buildout.

There are two separate Improvement Areas included within the boundaries of CFD No. 2023-1. Improvement Area 1 includes two separate Tax Zones, Tax Zones 1 (55 Lots) and 2 (77 Lots) inclusive of Tract Maps TR 31462-23 and TR 31462-26 to include a total of 132 proposed detached residential properties at build-out. Improvement Area 2 includes three separate Tax Zones, Tax Zones 1 (111 Lots), 2 (109 Lots), and 3 (67 Lots) inclusive of Tract Maps TR 31462-16, TR 31462- 24, TR 31462-25, and TR 31462-20 to include a total of 287 proposed detached residential properties at build-out. The property is located west of Cherry Valley Blvd, and north of San Timoteo Canyon Rd.

As of Fiscal Year 2022-23 the proposed CFD No. 2023-1 includes the following Assessor's Parcel Numbers:

Assessor’s Parcel
Number
413-790-067
413-790-068
413-790-069
413-790-070
413-790-071
413-790-072
413-790-073
A map showing the boundaries of CFD No. 2023-1 is included in Appendix C.

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5 Rate and Method of Apportionment Page | 7
City of Beaumont
CFD No. 2023-1 (Fairway Canyon)
Public Hearing Report
The Rate and Method of Apportionment allows each property owner within CFD No. 2023-1 Improvement Area 1 and Improvement Area 2 to estimate the annual Special Tax amount that would be required for payment. The Rate and Method of Apportionment of the Special Taxes established pursuant to these proceedings, is attached hereto as Appendix A and Appendix B (the “Rate and Methods”). The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties, the same procedure, sale and lien priority in the case of delinquency; provided, however, that the CFD Administrator may directly bill the Special Taxes, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of CFD No. 2023-1, and provided further that CFD No. 2023-1 may covenant to foreclose and may actually foreclose on parcels having delinquent Special Taxes as permitted by the Act.

All of the property located within CFD No. 2023-1, unless exempted by law or by the Rate and Methods proposed for CFD No. 2023-1, shall be taxed for the purpose of providing necessary facilities and services to serve the District. The Boundary Map for CFD No. 2023-1 is attached hereto as Appendix C. Pursuant to Section 53325.3 of the Act, the tax imposed “is a Special Tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property.” The Special Tax may be based on the benefit received by property, the cost of making facilities or authorized services available or other reasonable basis as determined by the City, although the Special Tax may not be apportioned on an ad valorem basis pursuant to Article XIIIA of the California Constitution. A property owner within the District may choose to prepay in whole or in part the Special Tax A. The available method for so doing is described in Section G of the Rate and Methods (“Prepayment of Special Tax”).

For each year that any Bonds are outstanding the Special Tax A shall be levied on all parcels subject to Special Tax A. If any delinquent Special Tax A remains uncollected prior to or after all Bonds are retired, the Special Tax A may be levied to the extent necessary to reimburse CFD No. 2023-1 for uncollected Special Tax A associated with the levy of such Special Tax A, but the Special Tax A shall not be levied after 2063-64 Fiscal Year.

Special Tax B pays for certain costs as required to meet the needs of CFD No. 2023-1 for Maintenance Services. The costs to be covered shall be the (i) direct costs for Maintenance Services, (ii) amount necessary to fund an operating reserve for the costs of Maintenance Services as determined by the CFD Administrator, and (iii) Administrative Expenses applicable to the Special Tax B, less (iv) a credit in an amount equal to the Operating Fund Balance. Under no circumstances shall the Special Tax B Requirement include funds for bonds.

On each July 1, commencing July 1, 2024, the Maximum Special Tax B for the prior Fiscal Year shall be adjusted by the greater of (i) an amount equal to the percentage change in the Consumer Price Index for the twelve-month period ending in January of the prior Fiscal Year or (ii) two percent (2%). The Special Tax B shall be levied in perpetuity to fund Special Tax B Requirement, unless no longer required as determined at the sole discretion of the City Council.

The City Council may levy the Special Tax C (Contingent), applicable to all Zones, commencing in the first Fiscal Year following the occurrence of any of the following events (each such event, a “Failure to Perform”):
a. the Property Owner Association files a voluntary petition in bankruptcy or the approval by a court of competent jurisdiction of a petition applicable to the Property Owner Association of any proceedings instituted under the Federal Bankruptcy Code, as amended;
b. the Property Owner Association is dissolved;
c. the Property Owner Association fails to levy annual assessments sufficient to fund (i) the maintenance for the then Property Owner Association owned and/or Property Owner Association maintained Maintenance Services (Contingent) or (ii) the replacement of such facilities related to the Maintenance Services (Contingent) in accordance with (A) the requirements of the then current reserve funding plan of the Property Owner Association performed pursuant to California Civil Code Section 5550 or (B) if California Civil Code 5550 is no longer applicable, the requirements of the then applicable law and/or regulations governing the Property Owner Association’s requirements to budget for and finance such replacement; or

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5 Rate and Method of Apportionment Page | 8
City of Beaumont
CFD No. 2023-1 (Fairway Canyon)
Public Hearing Report
d. the Property Owner Association fails to maintain the Maintenance Services (Contingent) at the same level as defined within the Property Owner Association maintenance specifications. In the event the Property Owner Association maintenance specifications do not meet either the City or County maintenance requirements, the City Council will have sole discretion to determine the required level of maintenance required for purposes of this section.

In the event of the occurrence of a Failure to Perform described in “c.” or “d.” above, the City shall give the Property Owner Association written notice of such event. If such Failure to Perform is reasonably capable of being cured within sixty (60) days from the date of such notice, the Property Owner Association shall have such period of time to cure such Failure to Perform prior to the levy by the City Council of Special Tax C (Contingent). If such Failure to Perform is such that it is reasonably capable of being cured, but not within such sixty (60) day period and the Property Owner Association (i) initiates corrective action within such sixty (60) day period, and (ii) diligently, continually, and in good faith works to effect a cure of such Failure to Perform as soon as possible, then the Property Owner Association shall have such additional time, as is reasonably necessary, to cure such Failure to Perform prior to the levy by the City Council of Special Tax C (Contingent).

The City Council may suspend the levy of Special Tax C (Contingent) if the Property Owner Association has cured the Failure to Perform to the satisfaction of the City Council and the Property Owner Association has agreed to such conditions as the City Council may find necessary to minimize the occurrence of such Failure to Perform in the future. In the event the City Council initiates the Special Tax C (Contingent), it will apply to all Assessor’s Parcels of Taxable Property in addition to, and not in lieu of, the Special Tax B.

On each July 1, commencing July 1, 2024, the Maximum Special Tax C (Contingent) for the prior Fiscal Year shall be adjusted by the greater of (i) an amount equal to the percentage change in the Consumer Price Index for the twelve-month period ending in January of the prior Fiscal Year or (ii) two percent (2%). The Special Tax C (Contingent) shall be levied in perpetuity to fund the Special Tax C (Contingent) Requirement, unless no longer required as determined at the sole discretion of the City Council.

Special Tax D pays for certain costs as required to meet the needs of CFD No. 2023-1 for Public Services. The Public Services are the services permitted under the Act including, without limitation, police and fire protection, ambulance and paramedic services provided within the boundaries of CFD No. 2023-1 and the City. The costs to be covered shall be the (i) direct costs for Public Services, (ii) amount necessary to fund an operating reserve for the costs of Public Services as determined by the CFD Administrator, and (iii) Administrative Expenses applicable to the Special Tax D, less (iv) a credit in an amount equal to the Operating Fund Balance. Under no circumstances shall the Special Tax D include funds for bonds.

On each July 1, commencing July 1, 2024, the Maximum Special Tax D for the prior Fiscal Year shall be adjusted by the greater of (i) an amount equal to the percentage change in the Consumer Price Index for the twelve-month period ending in January of the prior Fiscal Year or (ii) five percent (5%). The Special Tax D shall be levied in perpetuity to fund the Special Tax D Requirement, unless no longer required as determined at the sole discretion of the City Council.

For particulars as to the Rate and Methods for CFD No. 2023-1, see the attached and incorporated in Appendix A and B.

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6 Certifications Page | 9
City of Beaumont
CFD No. 2023-1 (Fairway Canyon)
Public Hearing Report
Based on the information provided herein, it is my opinion that the described services herein are those that are necessary to meet increased demands placed upon the City of Beaumont as a result of development occurring within the CFD No. 2023-1 and benefits the lands within said CFD No. 2023-1. Further, it is my opinion that the special tax rates and method of apportionment, as set forth herein, are fair and equitable, uniformly applied and not discriminating or arbitrary.

Date: May 16, 2023 SPICER CONSULTING GROUP, LLC

__________________________

SHANE SPICER

SPECIAL TAX CONSULTANT FOR

CITY OF BEAUMONT

RIVERSIDE COUNTY

STATE OF CALIFORNIA

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APPENDIX A
Rate and Method of Apportionment
For Improvement Area 1

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City of Beaumont
Improvement Area No. 1 of Community Facilities District No. 2023‐1 (Fairway Canyon) Page 1 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2023‐1 (FAIRWAY CANYON) OF THE CITY OF BEAUMONT
IMPROVEMENT AREA NO. 1

Special Taxes (all capitalized terms are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of Improvement Area No. 1 (“IA No. 1”) of Community Facilities District No. 2023‐1 (Fairway Canyon) of the City of Beaumont ("CFD No. 2023‐1"). The amount of Special Taxes to be levied in each Fiscal Year on an Assessor’s Parcel, shall be determined by the City Council of the City of Beaumont, acting in its capacity as the legislative body of CFD No. 2023‐1 by applying the appropriate Special Tax for Developed Property, Final Map Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof, shall be taxed to the extent and in the manner herein provided.

A. DEFINITIONS

The terms hereinafter set forth have the following meanings:

“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel with a stand‐alone Dwelling Unit.

"Acre" or "Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded County parcel map or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560.

"Act" means the Mello‐Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1, Division 2 of Title 5 of the Government Code of the State of California.

"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of IA No. 1: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City, designee thereof, or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD, or any designee thereof complying with arbitrage rebate requirements; the costs to the City, CFD, or any designee thereof complying with City or major property owner disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs associated with the release of funds from an escrow account; and the costs associated with the issuance of Bonds, the City's annual administration fees, and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or The CFD for any other administrative purposes, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure, or otherwise addressing the disposition of delinquent Special Taxes.

"Assessor’s Parcel" means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number within the boundaries of the CFD and Improvement Area No.1.

"Assessor’s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.

Page 1235 of 1667 ends

City of Beaumont
Improvement Area No. 1 of Community Facilities District No. 2023‐1 (Fairway Canyon) Page 2 "Assigned Special Tax A" means the Special Tax of that name described in Section D below.

"Backup Special Tax A" means the Special Tax of that name described in Section D below.

"Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long‐term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long‐term contracts, or any refunding thereof, to which Special Taxes A of IA No. 1 have been pledged.

"Boundary Map" means a recorded map of the CFD which indicates the boundaries of the CFD and Improvement Area No. 1.

"Building Permit" means a permit for new construction for a residential dwelling or non‐residential structure.

For purpose of this definition, “Building Permit” shall not include permits for construction or installation, retaining walls, utility improvements, or other such improvements not intended for human habitation.

"Building Square Footage" or "BSF" means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, as determined by reference to the building permit application for such Assessor’s Parcel, as determined by the CFD Administrator.

"Calendar Year" means the period commencing January 1 of any year and ending the following December 31.

"CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax A Requirement, the Special Tax B Requirement, the Special Tax C (Contingent) Requirement, the Special Tax D Requirement, and providing for the levy and collection of the Special Taxes.

"CFD No. 2023‐1" or "CFD" means City of Beaumont Community Facilities District No. 2023‐1 (Fairway Canyon) established by the City under the Act.

"City" means the City of Beaumont.

"City Council" means the City Council of the City, acting as the legislative body of CFD No. 2023‐1, or its designee.

"Consumer Price Index" or “CPI” means the Consumer Price Index published by the U.S. Bureau of Labor Statistics for “All Items for All Urban Consumers: in the Riverside‐San Bernardino‐Ontario area.” In the event this index ceases to be published, the Consumer Price Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Consumer Price Index for the Riverside‐San Bernardino‐ Ontario area.

"County" means the County of Riverside.

"Developed Property" means all Assessor’s Parcels of Taxable Property that are included in a Final Map that was recorded prior to January 1st preceding the Fiscal Year in which the Special Tax is being levied and for which a Building Permit for new construction has been issued on or prior to March 1st preceding the Fiscal Year in which the Special Tax is being levied, as determined by the CFD Administrator.

"Dwelling Unit" or “DU” means each separate residential dwelling unit that comprises an independent facility capable of conveyance or rental separate from adjacent residential dwelling units. The Building Square Footage of an Accessory Dwelling Unit shall be included when classifying the property for Special Tax A, but an Accessory

Page 1236 of 1667 ends

Beaumont City CouncilJune 20, 2023

Beaumont City Council
June 20, 2023