Agenda packet — Beaumont City Council, November 4, 2025 (part 4 of 8)

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The Trustee shall have no duty or obligation whatsoever to enforce the collection of Special Taxes or other funds to be deposited w ith it hereunder, or as to the correctness of any amounts received, but its liability shall be limited to the proper accounting for such funds as it shall actually receive. No provision in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of its rights or powers.

The Trustee shall not be deemed to have knowledge of (A) any events of other information, or (B) any default or event of default until an officer at the Trustee’s corporate trust officer responsible for the administration of its duties hereunder shall have actual knowledge thereof or the Trustee shall have received written notice thereof at its corporate trust office.

The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of enforced delay (“unavoidable delay”) in the performance of such obligations due to unforeseeable causes beyond it s control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, war, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, loss or malfunctions of utilities, computer (hardware or softw are) or communications service, accidents, labor disputes, the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of supplies or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.

The Trustee s hall have no responsibility or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds.

The permissive right of the Trustee t o do things enumerated in this Indenture shall not be construed as a duty or in any way expand or impliedly expand the scope of the Trustee’s duties hereunder, and, with respect to such permissive rights, the Trustee shall not be answerable for other than its negligence or willful misconduct.

The Trustee shall be entitled to rely on and shall not be liable for any action taken or omitted to be taken by the Trustee in accordance with the advice of counsel or other professionals retained or consulted by the T rustee. The Trustee may execute any of the trusts or powers hereof and perform any of its duties through attorneys, agents and receivers and shall not be answerable for the conduct of the same if appointed by it with reasonable care.

The Trustee may become the Owner or pledgee of the Bonds and Parity Bonds with the same rights it would have if it were not Trustee.

The Trustee shall perform such duties and only such duties as are specifically set forth in this Indenture and no implied duties or obligations s hall be read into this Indenture against the Trustee.

These duties shall be deemed purely ministerial in nature, and the Trustee shall not be liable except for the performance of such duties, and no implied covenants or obligations shall be read into this Indenture against the Trustee.

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The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Owners pursuant to the provisions of this Indenture unless such Owners shall have offered to the Trustee security or indemnity satisfactory to the Trustee in its sole and exclusive direction against the costs, expenses and liabilities which may be incurred therein or thereby.

The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.

The Trustee agrees to accept and act upon facsimile or electronic transmission of written instructions and/or directions pursuant to this Indenture provided, however, that: (a) such originally executed instructions and/or directions sha ll be signed by a person as may be designated and authorized to sign for the party signing such instructions and/or directions, and (b) the Trustee shall have received a current incumbency certificate containing the specimen signature of such designated person. Any such instructions and directions furnished by electronic transmission shall be in the form of attachments in PDF format.

Notwithstanding anything to the contrary herein, the Trustee shall have no duty to prepare or file any Federal or state tax r eport or return with respect to any funds held pursuant to this Indenture or any income earned thereon, except for the delivery and filing of tax information reporting forms required to be delivered and filed with the Internal Revenue Service.

Section 7.5. Merger or Co nsolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the Trustee without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.

ARTICLE VIII

EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default. Any one or more of the following events shall constitute an “event of default”:
(a) Default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond or Parity Bond when and as the same shall become due and pay able, whether at maturity as therein expressed, by declaration or otherwise; (b) Default in the due and punctual payment of the interest on any Bond or Parity Bond when and as the same shall become due and payable; or (c) Except as described in (a) or (b), default shall be made by the District in the observance of any of the agreements, conditions or covenants on its part contained in this Indenture,

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the Bonds or any Parity Bonds, and such default shall have continued for a period of 30 days after the District shall have been given notice in writing of such default by the Trustee or the Owners of 25% in aggregate principal amount of the Outstanding Bonds and Parity Bonds; provided, however, that if in the reasonable opinion of the District the default stated in the notice can be corrected, but not within such thirty (30) day period, and corrective action is instituted by the District within such thirty (30) day period and diligently pursued in good faith until the default is corrected, such default shall not be an Event of Default hereunder.

The Trustee agrees to give notice to the Owners immediately upon the occurrence of an event of default under (a) or (b) above and within 30 days of the Trustee’s knowledge of an event of default under (c) above.

Section 8.2. Remedies of Owners . Upon the occurrence of an Event of Default, the Trustee may pursue any available remedy at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Bonds and Parity Bonds, and to enforce any rights of the Trustee under or with respect to this Indenture, including:
(a) By mandamus or other suit or proceeding at law or in equity to enforce its rights against the District and any of the members, officers and employees of the District, and to compel the District or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in this Indenture; (b) By suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or
(c) By a suit in equity to require the District and its members, officers and employees to account as the trustee of an express trust.

If an Event of Default shall have occurred and be continuing and if requested so to do by the Owners of at least twenty-five percent (25%) in aggregate principal amount Outstanding Bonds and Parity Bonds and is indemnified to its satisfaction, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article VIII, a s the Trustee, being advised by counsel, shall deem most expedient in the interests of the Owners of the Bonds and Parity Bonds.

No remedy herein conferred upon or reserved to the Trustee or to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law.

The Bonds and any Parity Bonds are not subject to acceleration prior to maturity.

Section 8.3. Application of Revenues and Other Funds After Default . All amounts received by the Trustee pursuant to any right given or action take n by the Trustee under the provisions of this Indenture relating to the Bonds and Parity Bonds shall be applied by the Trustee in the following order upon presentation of the several Bonds and Parity Bonds:

First, to the payment of the fees, costs and expe nses of the Trustee in declaring such Event of Default and in carrying out the provisions of this Article VIII, including reasonable

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compensation to its agents, attorneys and counsel, and to the payment of all other outstanding fees and expenses of the Trustee; and
Second, to the payment of the whole amount of interest on and principal of the Bonds and Parity Bonds then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds and Parity Bonds; provided, however, that in the event such amounts shall be insufficient to pay in full the full amount of such interest and principal, then such amounts shall be applied in the following order of priority:
(a) first to the payment of all installments of interest on the Bonds and Parity Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing, (b) second, to the payment of all installments of principal, including Sinkin g Fund Payments, of the Bonds and Parity Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing, and
(c) third, to the payment of interest on overdue installments of principal and interest on the Bonds and Parity Bonds on a pro rata basis based on the total amount then due and owing.

Section 8.4. Power of Trustee to Control Proceedings . In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of twenty -five percent (25%) in aggregate principal amount of the Bonds and Parity Bonds then Outstanding, it shall have full power, in the exercise of its discretion f or the best interests of the Owners of the Bonds and Parity Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer c ontinues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majority in aggregate principal amount of the Outstanding Bonds and Parity Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other such litigation. Any suit, action or proceeding which any Owner of Bonds or Parity Bonds shall have the right to br ing to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of Bonds and Parity Bonds similarly situated and the Trustee is hereby appointed (and the successive respective Owners of the Bonds and Parity Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney in fact of the respective Owners of the Bonds and Parity Bonds for the purposes of bringing any such sui t, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Bonds and Parity Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact.

Section 8.5. Appointment of Receivers . Upon the occurrence of an Event of Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Owners of the Bonds and Parity Bonds under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Net Special Taxes and other amounts pledged hereunder, pending such proceedings, with such powers as the court making such appointment shall confer.

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Section 8.6. Non-Waiver. Nothing in this Article VIII or in any other provision of this Indenture, or in the Bonds or the Parity Bonds, shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the interest on and pri ncipal of the Bonds and Parity Bonds to the respective Owners of the Bonds and Parity Bonds at the respective dates of maturity, as herein provided, out of the Net Special Taxes and other moneys herein pledged for such payment.

A waiver of any default or b reach of duty or contract by the Trustee or any Owners shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission of the Trustee or any Owner of an y of the Bonds or Parity Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy conferred upon the Trustee or the Owners by the Act or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Owners, as the case may be.

Section 8.7. Limitations on Rights and Remedies of Owners . No Owner of any Bond or Parity Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless (a) such Owner shall have previously given to the Trustee written notice of t he occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of all the Bonds and Parity Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

Such notification, request, tender of i ndemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds and Parity Bonds of any remedy hereunder; it being understood and intended that no one or more Owners of Bonds and Parity Bonds shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be insti tuted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds and Parity Bonds.

The right of any Owner of any Bond and Parity Bond to receive payment of the principal of and interest and premium (i f any) on such Bond and Parity Bond as herein provided or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or an y other provision of this Indenture.

Section 8.8. Termination of Proceedings . In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandon ed for any reason, or shall have been determined adversely, then and in every such case, the District, the Trustee and the Owners shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this In denture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken.

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ARTICLE IX

DEFEASANCE AND PARITY BONDS
Section 9.1. Defeasance. If the District shall pay or cause to be paid, or there shall otherwise be paid, to the Owner of an Outstanding Bond or Parity Bond the interest due thereon and the principal thereof, at the times and in the manner stipulated in this Indenture or any Supplemental Indenture, then the Owner of such Bond or Parity Bond shall cease to be entitled to the pledge of Net Special Taxes, and, other than as set forth below, all covenants, agreements and other obligations of the District to the Owner of such Bond or Parity Bond under this Indenture and any Supplemental Indenture relating to such Parity Bond shall thereupon cease, terminate and become void and be discharged and satisfied. In the event of a defeasance of all Outstanding Bonds and Parity Bonds pursuant to this Section, the Trustee shall execute and deliver to the District all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the District’s general fund all money or securities held by it pursuant to this Indenture which are not required for the payment of the principal of, pr emium, if any, and interest due on such Bonds and Parity Bonds.

Any Outstanding Bond or Parity Bond shall be deemed to have been paid within the meaning expressed in the first paragraph of this Section if such Bond or Parity Bond is paid in any one or more of the following ways:
(a) by paying or causing to be paid the principal of, premium, if any, and interest on such Bond or Parity Bond, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money which, together with the amounts then on deposit in the Special Tax Fund (exclusive of the Administrative Expense Fund) and available for such purpose, is fully sufficient to pay the principal of, premium, if any, and interest on such Bond or Parity Bond, as and when the same shall become due and payable on and prior to the maturity date or redemption date thereof, as applicable; or (c) by depositing with the Trustee or another escrow bank appointed by the District, in trust, Defeasance Securities, in which the District may lawfully invest its money, in such amount as will be sufficient, together with the interest to accrue thereon and mo neys then on deposit in the Special Tax Fund (exclusive of the Administrative Expense Fund) and available for such purpose, together with the interest to accrue thereon, to pay and discharge the principal of, premium, if any, and interest on such Bond or P arity Bond, as and when the same shall become due and payable on and prior to the maturity date or redemption date thereof, as applicable; then, at the election of the District, and notwithstanding that any Outstanding Bonds and Parity Bonds shall not have been surrendered for payment, all obligations of the District under this Indenture and any Supplemental Indenture with respect to such Bon d or Parity Bond shall cease and terminate, except for the obligation of the Trustee to pay or cause to be paid to the Owners of any such Bond or Parity Bond not so surrendered and paid, all sums due thereon. Notice of such election shall be filed with th e Trustee not less than ten days prior to the proposed defeasance date, or such shorter period of time as may be acceptable to the Trustee. In connection with a defeasance under (c) above, there shall be provided to the District a verification report from an independent nationally recognized certified public accountant, stating its opinion as to the sufficiency of the moneys or securities deposited with the Trustee or the escrow bank to pay and discharge the principal of,

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premium, if any, and interest on a ll Outstanding Bonds and Parity Bonds to be defeased in accordance with this Section, as and when the same shall become due and payable, an escrow agreement with respect to the deposits under (b) and (c) above, and an opinion of Bond Counsel (which may rel y upon the opinion of the certified public accountant) to the effect that the Bonds or Parity Bonds being defeased have been legally defeased in accordance with this Indenture and any applicable Supplemental Indenture.

The Bonds shall be deemed Outstanding under this Indenture unless and until they are in fact paid and retired or the above criteria are met.

Upon a defeasance, the Trustee, upon request of the District, shall release the rights of the Owners of such Bonds and Parity Bonds which have been defe ased under this Indenture and any Supplemental Indenture and execute and deliver to the District all such instruments as may be desirable to evidence such release, discharge and satisfaction. In the case of a defeasance hereunder of all Outstanding Bonds and Parity Bonds, the Trustee shall pay over or deliver to the District any funds held by the Trustee at the time of a defeasance, which are not required for the purpose of paying and discharging the principal of or interest on the Bonds and Parity Bonds w hen due. The Trustee shall, at the written direction of the District, send a notice to the Bondowners whose Bonds or Parity Bonds have been defeased, in the form directed by the District, stating that the defeasance has occurred.

Section 9.2. Conditions for the Issuan ce of Parity Bonds and Other Additional Indebtedness. The District may at any time after the issuance and delivery of the Bonds hereunder issue Parity Bonds payable from the Net Taxes and other amounts deposited in the Special Tax Fund and secured by a li en and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds theretofore issued hereunder or under any Supplemental Indenture; provided, however, that Parity Bonds may only be issued for the purpose of refunding all or a portion of the Bonds or Parity Bonds then Outstanding subject to the following specific conditions, which are hereby made conditions precedent to the issuance of any such Parity Bonds:
(a) The District shall be in compliance with all co venants set forth in this Indenture and any Supplemental Indenture then in effect and a certificate of the District to that effect shall have been filed with the Trustee; provided, however, that Parity Bonds may be issued notwithstanding that the District is not in compliance with all such covenants so long as immediately following the issuance of such Parity Bonds the District will be in compliance with all such covenants.
(b) The issuance of such Parity Bonds shall have been duly authorized pursuant to the Act and all applicable laws, and the issuance of such Parity Bonds shall have been provided for by a Supplemental Indenture duly adopted by the District which shall specify the following:
(1) the purpose for which such Parity Bonds are to be issued and the fund or funds into which the proceeds thereof are to be deposited; (2) the authorized principal amount of such Parity Bonds; (3) the date and the maturity date or dates of such Parity Bonds; provided that (i) each maturity date shall fall on a September 1, (ii) all suc h Parity Bonds of like maturity shall

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be identical in all respects, except as to number, and (iii) fixed serial maturities or Sinking Fund Payments, or any combination thereof, shall be established to provide for the retirement of all such Parity Bonds on or before their respective maturity dates; (4) the description of the Parity Bonds, the place of payment thereof and the procedure for execution and authentication;
(5) the denominations and method of numbering of such Parity Bonds; (6) the amount and due date of each mandatory Sinking Fund Payment, if any, for such Parity Bonds;
(7) the amount, if any, to be deposited from the proceeds of such Parity Bonds in the Reserve Account to increase the amount therein to the Reserve Requirement or to the Improvement Area No. 2 Reserve Account to increase the amount therein to the Proportionate Share, provided that if the interest on such Parity Bonds is intended by the District to be excluded from the gross income of the recipients thereof for federal income tax purposes, such amou nt shall not exceed the maximum amount of proceeds that, in the opinion of Bond Counsel, can be so deposited without causing the interest on such Parity Bonds to be included in the gross income of the recipients thereof for federal income tax;
(8) the form of such Parity Bonds; and
(9) such other provisions as are necessary or appropriate and not inconsistent with this Indenture.
(c) The District shall have received the following documents or money or securities, all of such documents dated or certified, as the case ma y be, as of the date of delivery of such Parity Bonds by the Trustee (unless the Trustee shall accept any of such documents bearing a prior date):
(1) a certified copy of the Supplemental Indenture authorizing the issuance of such Parity Bonds;
(2) a written reque st of the District as to the delivery of such Parity Bonds;
(3) an opinion of Bond Counsel to the District to the effect that (i) the District has the right and power under the Act to adopt the Supplemental Indenture relating to such Parity Bonds, and the Supp lemental Indenture has been duly and lawfully adopted by the District, is in full force and effect and is valid and binding upon the District and enforceable in accordance with its terms (except as enforcement may be limited by bankruptcy, insolvency, reor ganization and other similar laws relating to the enforcement of creditors’ rights); (ii) the Indenture creates the valid pledge which it purports to create of the Net Special Taxes and other amounts as provided in the Indenture, subject to the application thereof to the purposes and on the conditions permitted by the Indenture; and (iii) such Parity Bonds are valid and binding limited obligations of the District, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy , insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights) and the terms of the Indenture and all Supplemental Indentures thereto and are entitled to the benefits of

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the Indenture and all such Supplemental Indentu res, and such Parity Bonds have been duly and validly authorized and issued in accordance with the Act (or other applicable laws) and the Indenture and all such Supplemental Indentures; and a further opinion of Bond Counsel to the effect that, assuming compliance by the District with certain tax covenants, the issuance of the Parity Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds and any Parity Bonds theretofore issued on a tax exempt basis, or the exemption from State of California personal income taxation of interest on any Outstanding Bonds and Parity Bonds theretofore issued;
(4) a certificate of the District containing such statements as may be reasonably necessary to show compliance with the requirements of this Indenture; (5) a certificate of an Independent Financial Consultant certifying that in each Bond Year the Annual Debt Service on the Bonds and Parity Bonds to remain Outstanding following the issuance of the Parity Bonds proposed to be issued is less than the Annual Debt Service on the Bonds and Parity Bonds Outstanding prior to the issuance of such Parity Bonds; and (6) Such further documents, money and securities as are required by the provisions of this Indenture and the Supplementa l Indenture providing for the issuance of Parity Bonds.

ARTICLE X

MISCELLANEOUS
Section 10.1. Cancellation of Bonds and Parity Bonds . All Bonds and Parity Bonds surrendered to the Trustee for payment upon maturity or for redemption shall be upon payment therefor, and any Bond or Parity Bond purchased by the District as authorized herein and delivered to the Trustee for such purpose shall be, cancelled forthwith and shall not be reissued. The Trustee shall destroy such Bonds and Parity Bonds, as provided by law, and furnish to the District a certificate of such destruction.

Section 10.2. Execution of Documents and Proof of Ownership . Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Indenture to be signed or executed by Bondo wners may be in any number of concurrent instruments of similar tenor may be signed or executed by such Owners in person or by their attorneys appointed by an instrument in writing for that purpose, or by the bank, trust company or other depository for suc h Bonds. Proof of the execution of any such instrument, or of any instrument appointing any such attorney, and of the ownership of Bonds or Parity Bonds shall be sufficient for the purposes of this Indenture (except as otherwise herein provided), if made in the following manner:
(a) The fact and date of the execution by any Owner or his or her attorney of any such instrument and of any instrument appointing any such attorney, may be proved by a signature guarantee of any bank or trust company located within th e United States of America. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such signature guarantee shall also constitute sufficient proof of his authority.

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(b) As to any Bond or Parity Bond, the person in whose name the same shall be registered in the Bond Register shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any such Bond or Parity Bond, and the interest thereon, shall be made only to or upon the order of the registered Owner thereof or his or her legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond or Parity Bond and the interest thereon to the extent of the sum or sums to be paid. Neither the District nor the Trustee shall be affected by any notice to the contrary.

Nothing contained in this Indenture shall be construed as limiting the Trustee or the District to such proof, it being intended that the Trustee or the District may accept any other evidence of the matters herein stated which the Trustee or the District may deem sufficient. Any request or consent of the Owner of any Bond or Parity Bond shall bind every future Owner of the same Bond or Parity Bond in respect of anything done or suffered to be done by the Trustee or the District in pursuance of such request or consent.

Section 10.3. Unclaimed Moneys . Anything in this Indenture to the contra ry notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Outstanding Bonds and Parity Bonds which remain unclaimed for two years after the date when such Outstanding Bonds or Parity Bonds have become due and pa yable, if such money was held by the Trustee in trust at such date, or for two years after the date of deposit of such money if deposited with the Trustee in trust after the date when such Outstanding Bonds or Parity Bonds become due and payable, shall be repaid by the Trustee to the District, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the District for the payment of such Outstanding Bonds or Parity Bonds; provided, however, that, before being required to make any such payment to the District, the Trustee at the written request of the District or the Authority Trustee shall, at the expense of the District, cause to be mailed by first class mai l, postage prepaid, to the registered Owners of such Outstanding Bonds or Parity Bonds at their addresses as they appear on the registration books of the Trustee a notice that said money remains unclaimed and that, after a date named in said notice, which date shall not be less than 30 days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the District.

Section 10.4. Provisions Constitute Contract . The provisions of this Indenture shall constitute a contract betwe en the District and the Bondowners and the provisions hereof shall be construed in accordance with the laws of the State of California.

In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and, should said suit, action or proceeding be abandoned, or be determined adversely to the Bondowners or the Trustee, then the District, the Trustee and the Bondowners shall be restored to their former positions, rights and remedies as if such suit, action or procee ding had not been brought or taken.

After the issuance and delivery of the Bonds this Indenture shall be irrepealable, but shall be subject to modifications to the extent and in the manner provided in this Indenture, but to no greater extent and in no other manner.

Section 10.5. Future Contracts. Nothing herein contained shall be deemed to restrict or prohibit the District from making contracts or creating bonded or other indebtedness payable from a pledge of the Net Special Taxes which is subordinate to the pledge here under, or which is payable

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from the general fund of the District or from taxes or any source other than the Net Special Taxes and other amounts pledged hereunder.

Section 10.6. Electronic Signatures. Each of the parties hereto agrees that the transaction consisting of this Indenture may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Indenture using an electronic signature, it is signing, adopting, and accepting this Indenture and that signing this Indenture using an electronic signature is the legal equivalent of having placed its handwritten signature on this Indenture on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Indenture in a usable format.

All notices, approvals, consents, requests and any communications to the Trustee hereunder must be in the form of a document that is signed manually or by way of an electronic signature (including electronic images of handwritten signatures a nd digital signatures provided by DocuSign, Orbit, Adobe Sign or any other electronic signature provider acceptable to the Fiscal Agent).

Electronic signatures believed by the Trustee to comply with the ESIGN ACT of 2000 or other applicable law shall be de emed original signatures for all purposes. If the parties choose to use electronic signatures to sign documents delivered to the Trustee, such parties agree to assume all risks arising out of its use of electronic signatures, including without limitation the risk of the Trustee acting on an unauthorized document and the risk of interception or misuse by third parties.

Notwithstanding the foregoing, the Trustee may in any instance and in its sole discretion require that an original document bearing a manual signature be delivered to the Trustee in lieu of, or in addition to, any document signed via electronic signature.

Section 10.7. Further Assurances. The District will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the Owners of the Bonds or any Parity Bonds the rights and benefits provided in this Indenture.

Section 10.8. Entire Agreement; Severability. This Agreement and the exhibits hereto set forth the entire agreement and understanding of the parties related to this transaction and supersedes all prior agreements and understandings, oral or written. If any covenan t, agreement or provision, or any portion thereof, contained in this Indenture, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Indenture and the application of any such covenant, agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable and shall not be affected thereby, and this Indenture, the Bonds and any Parity Bonds issued pursuant hereto shall remain valid and the B ondowners shall retain all valid rights and benefits accorded to them under the laws of the State of California.

Section 10.9. Notices. Any notices required to be given to the District with respect to the Bonds or this Indenture shall be mailed, first class, postage pr epaid, or personally delivered to the City Manager of the City of Beaumont, 550 E. 6th Street, Beaumont, California 92223 , and all notices to the Trustee shall be sent via courier or fax or electronic transmission or mailed, first class, postage prepaid, or personally delivered to the Trustee, Zions Bancorporation, National Association, 707 Wilshire Boulevard, Suite 5000, Los Angeles, California 90017; Attention: Corporate Trust Services. Any such notices or other communications furnished by electronic tra nsmission shall be in the form of attachments in PDF format.

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IN WITNESS WHEREOF, CITY OF BEAUMONT COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) has cause d this Bond Indenture to be signed by its Finance Director and City Clerk, and ZIONS BANCORPORATION , NATIONAL ASSOCIATION in token of its acceptance of the duties of the Trustee created hereunder, has caused this Bond Indenture to be signed in its corporat e name by its officer identified below, all as of the day and year first above written.

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

Finance Director of the City of Beaumont,
acting as the legislative body of City Beaumont
Community Facilities District No. 2023-1
(Fairway Canyon)
ATTEST:

City Clerk of the City of Beaumont, acting as
the legislative body of City Beaumont
Community Facilities District No. 2023-1
(Fairway Canyon)

[SIGNATURES CONTINUED ON NEXT PAGE.]

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[SIGNATURE PAGE CONTINUED.]

ZIONS BANCORPORATION, NATIONAL
ASSOCIATION, as Trustee
By:

Authorized Officer

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EXHIBIT A
FORM OF 2025 SPECIAL TAX BOND
No. __ $[PRINCIPAL AMOUNT]

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

COUNTY OF RIVERSIDE

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) (IMPROVEMENT AREA NO. 2)
2025 SPECIAL TAX BOND
INTEREST RATE: MATURITY DATE: DATED DATE:
_________% September 1, 20__ _________, 2025

REGISTERED OWNER: ZIONS BANCORPORATION, NATIONAL ASSOCIATION, as Trustee under that certain Indenture of Trust dated as of __________ 1, 2025 by and between the Beaumont Public Improvement Authority and Zions Bancorporation, National Association
PRINCIPAL AMOUNT: __________________________________ AND NO/100 DOLLARS CITY OF BEAUMONT COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) (the “District”) situated in the County of Riverside, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from certain amounts held under the Indenture ( as hereinafter defined), to the Registered Owner named above, or registered assigns, on the Maturity Date set forth above, unless redeemed prior thereto as hereinafter provided, the Principal Amount set forth above, and to pay interest on such Principal Am ount from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication hereof, unless (i) the date of authentication is an Interest Payment Date in which event interest shall be payable from such date of authentication, (ii) the date of authentication is after a Record Date (as hereinafter defined) but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentica tion, or (iii) the date of authentication is prior to the close of business on the first Record Date in which event interest shall be payable from the Dated Date set forth above. Notwithstanding the foregoing, if at the time of authentication of this Bond interest is in default, interest on this Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment, interest on this Bond shal l be payable from the Dated Date set forth above. Interest will be paid semiannually on March 1 and September 1 and the final maturity date of the Bonds (each an “Interest Payment Date”), commencing March 1, 2026 at the Interest Rate set forth above, unti l the Principal Amount hereof is paid or made available for

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payment. Except as otherwise provided in the Indenture, the principal of and premium, if any, on this Bond are payable to the Registered Owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the Principal Office of the Trustee (as such term is defined in the Indenture), initially Zions Bancorporation , National Association (the “Trustee”). Interest on this Bond shall be paid by check of the Tr ustee mailed, by first class mail, postage prepaid, or in certain circumstances described in the Indenture by wire transfer to an account within the United States of America, to the Registered Owner hereof as of the close of business on the fifteenth day o f the month preceding the month in which the Interest Payment Date occurs (the “Record Date”) at such Registered Owner’s address as it appears on the registration books maintained by the Trustee.

This Bond is one of a duly authorized issue of “City of Beau mont Community Facilities District No. 2023-1 (Fairway Canyon) (Improvement Area No. 2) 2025 Special Tax Bonds” (the “Bonds”) issued in the aggregate principal amount of $__________ pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, b eing Sections 53311, et seq., of the California Government Code (the “Act”) for the purpose of refinancing certain outstanding special tax bonds of the District and paying certain costs related to the issuance of the Bonds. The issuance of the Bonds and the terms and conditions thereof are provided for by a resolution adopted by the City Council of the City, acting in its capacity as the legislative body of the District (the “Legislative Body”), on ___________, 2025, and a Bond Indenture, dated as of _____ _____ 1, 2025, by and between the District and the Trustee, executed in connection therewith (the “Indenture”), and this reference incorporates the Indenture herein, and by acceptance hereof the Registered Owner of this Bond assents to said terms and condi tions. The Indenture is adopted under and this Bond is issued under, and both are to be construed in accordance with, the laws of the State of California. Capitalized terms not defined herein shall have the meanings set forth in the Indenture.

Pursuant to the Act and the Indenture, the principal of, premium, if any, and interest on this Bond are payable solely from the portion (the “Net Special Taxes”) of the annual special taxes authorized under the Act to be levied and collected within the Improvement A rea (the “Special Taxes”) and certain other amounts pledged to the repayment of the Bonds as set forth in the Indenture. Any amounts for the payment hereof shall be limited to the Net Special Taxes pledged and collected, which include foreclosure proceeds received following a default in payment of the Special Taxes and other amounts deposited to the Special Tax Fund established under the Indenture, except to the extent that other provision for payment has been made by the Legislative Body, as may be permitted by law. The District has covenanted for the benefit of the owners of the Bonds that under certain circumstances described in the Indenture it will commence and diligently pursue to completion appropriate foreclosure proceedings in the event of delinqu encies of Special Tax installments levied for payment of principal and interest on the Bonds.

The Bonds maturing on or after September 1, 20 __ may be redeemed, at the option of the District from any source of funds, on any Interest Payment Date on or after September 1, 20__, in whole, or in part from such maturities as are selected by the District and by lot within a maturity, at a redemption price equal to the principal amount to be redeemed, together with accrued interest to the date of redemption, without premium.

The Bonds are subject to extraordinary redemption as a whole, or in part on a pro rata basis among maturities, on any Interest Payment Date, and shall be redeemed by the Trustee, from Prepayments deposited to the Redemption Account at the follow ing redemption prices, expressed as

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a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

Redemption Dates Redemption
Prices
Any Interest Payment Date through March 1, 20__ 103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20___ and any Interest Payment Date thereafter 100

Notice of redemption with respect to the Bonds to be redeemed shall be mailed to the registered owners thereof not less than 20 nor more than 45 days prior to the redemption date by first class mail, postage prepaid, to the addresses set forth in the regis tration books. Notwithstanding the foregoing, so long as the Authority or the Authority Trustee on the Authority’s behalf is the registered owner of the Bonds, no such notices need be provided. Neither a failure of the Registered Owner hereof to receive such notice nor any defect therein will affect the validity of the proceedings for redemption. All Bonds or portions thereof so called for redemption will cease to accrue interest on the specified redemption date; provided that funds for the redemption ar e on deposit with the Trustee on the redemption date. Thereafter, the registered owners of such Bonds shall have no rights except to receive payment of the redemption price upon the surrender of the Bonds.

This Bond shall be registered in the name of the Registered Owner hereof, as to both principal and interest, and the District and the Trustee may treat the Registered Owner hereof as the absolute owner for all purposes and shall not be affected by any notice to the contrary.

The Bonds are issuable only i n fully registered form in the denomination of $5,000 or any integral multiple thereof and may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same issue and maturity, all as more fully set forth in the Indenture. This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Principal Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provid ed in the Indenture, upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond of authorized denomination or denominations for the same aggregate principal amount of the same issue and maturity will be issued to the transferee in exchange therefor.

The Trustee shall not be required to register transfers or make exchanges of (i) any Bonds for a period of 15 days next preceding any selection of the Bonds to be redeemed, or (ii) any Bonds chosen for redemption.

The rights and obl igations of the District and of the registered owners of the Bonds may be amended at any time, and in certain cases without notice to or the consent of the registered owners, to the extent and upon the terms provided in the Indenture.

THE BONDS DO NOT CONS TITUTE OBLIGATIONS OF THE CITY OF BEAUMONT

OR OF THE DISTRICT FOR WHICH THE CITY OF BEAUMONT OR THE DISTRICT IS

OBLIGATED TO LEVY OR PLEDGE, OR HAS LEVIED OR PLEDGED, GENERAL OR SPECIAL TAXES, OTHER THAN THE SPECIAL TAXES REFERENCED HEREIN. THE

BONDS ARE LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE FROM THE PORTION

OF THE SPECIAL TAXES AND OTHER AMOUNTS PLEDGED UNDER THE INDENTURE

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BUT ARE NOT A DEBT OF THE CITY OF BEAUMONT, THE STATE OF CALIFORNIA OR

ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF A NY CONSTITUTIONAL OR STATUTORY LIMITATION OR RESTRICTION.

This Bond shall not become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Trustee.

IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the District, does not exceed any debt limit prescribed by the laws or Constitution of the State of California.

IN WITNESS WHEREOF, City of Beaumont Community Facilities Distri ct No. 2023-1 (Fairway Canyon) has caused this Bond to be dated as of _________, 2025, to be signed on behalf of the District by the Mayor by his facsimile signature and attested by the facsimile signature of the City Clerk.

Mayor of the City of Beaumont
ATTEST:

City Clerk of the City of Beaumont
[FORM OF TRUSTEE’S CERTIFICATE
OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the within-defined Indenture.

Dated: _________, 2025 ZIONS BANCORPORATION, NATIONAL
ASSOCIATION, as Trustee
By:

Authorized Officer

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[FORM OF LEGAL OPINION]
The following is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth LLP, in connection with the issuance of, and dated as of the date of the original delivery of, the Bonds. A signed copy is on file in my office.

City Clerk of the City of Beaumont
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto

whose tax identification number is ,
the within-mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s)

attorney to transfer the same on the books of the Trustee with full power of substitution in the premises.

Dated:

Signature guaranteed:

NOTE: Signature guarantee shall be made by a
guarantor institution participating in the
Securities Transfer Agents Medallion Program or
in such other guarantee program acceptable to
the Trustee.

NOTE: The signatures(s) on this Assignment
must correspond with the name(s) as written on
the face of the within Bond in every particular
without alteration or enlargement or any change
whatsoever.

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EXHIBIT B

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) (IMPROVEMENT AREA NO. 2)
2025 SPECIAL TAX BONDS

FORM OF REQUISITION FOR

DISBURSEMENT OF FACILITIES PROJECT COSTS
Zions Bancorporation, National Association , as Trustee, is hereby requested to pay from the Project Account of the Community Facilities District No. 2023-1 Acquisition and Construction Fund, established by the Indenture between the Trustee and City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) (the “District”), dated as of _________ 1, 2025 (the “Indenture”), the amount specified and t o the payee named below for payment of the Project Costs set forth in Attachment No. 1 hereto.

Payee:

Address:

Purpose:

Amount: $
The amount is due and payable under purchase order, contract or other authorization and has not formed the basis of any prior request for payment. The conditions for the release of this amount from the Project Account of the Community Facilities District No. 2023 -1 Acquisition and Construction Fund, including those conditions in Section 3.9(b) of the Indenture have been satisfied.

There has not been filed with or served upon the District notice of any lien, right to lien or attachment upon, or stop notice or claim affecting the right to receive payment of the amount specified above which has not been released or will not be relea sed simultaneously with the payment of such amount, other than materialmen’s or mechanic’s liens accruing by mere operation of law.

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

Name:

Title: Finance Director of the City of Beaumont,
acting as the legislative body of City
Beaumont Community Facilities District No.
2023-1 (Fairway Canyon)

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ATTACHMENT NO. 1
[Insert Description of Project Costs.]

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Stradling Yocca Carlson & Rauth
Draft of 10/21/25
4915-7262-1161v5/022599-0040
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

PRELIMINARY OFFICIAL STATEMENT DATED __________, 2025

NEW ISSUE-FULL BOOK ENTRY NO RATING
In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds described herein is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California persona l income taxes. See the caption “LEGAL MATTERS — Tax Matters” with respect to tax consequences relating to the Bonds, including with respect to the alternative minimum tax imposed on certain large corporations.
$9,065,000

BEAUMONT PUBLIC IMPROVEMENT AUTHORITY
LOCAL AGENCY REVENUE BONDS, SERIES 2025B
Dated: Date of Delivery Due: September 1 as shown on inside cover The Bonds described herein are being issued by the Beaumont Public Improvement Authority (the “Authority”) to:
(i) acquire certain specia l tax bonds (the “Local Obligations”) issued for improvement areas within the City of Beaumont Community Facilities District No. 2023 -1 (Fairway Canyon) ( collectively, the “ Improvement Areas”); (ii) make a deposit to the Reserve Fund to satisfy the initial Reserve Requirement; and (i ii) pay costs of issuance of the Bonds. The Local Obligations are being issued to finance certain public improvements to be owned by the City of Beaumont . See the caption “ESTIMATED SOURCES AND USES OF FUNDS” herein.

The Bonds are payable solely from Revenues pledged by the Authority pursuant to that certain Indenture of Trust, dated as of __________ 1, 2025 (the “Indenture”), by and between the Authority and Zions Bancorporation, National Association, as trustee (the “Trustee”). Revenues consist primarily of debt service on the Local Obligations, which are payable from special taxes levied in the Improvement Area s. See the captions “SECURITY FOR THE BONDS” and “SECURITY FOR THE LOCAL OBLIGATIONS” herein.

The Bonds wi ll be issued in denominations of $5,000 or any integral multiple thereof. Interest on the Bonds is payable semiannually on March 1 and September 1 of each year commencing March 1, 2026. The Bonds will be initially issued only in book-entry form and registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York, which will act as securities depository of the Bonds. Principal and interest (and premium, if any) on the Bonds is payable by the Trustee to DTC, which will re mit such payments to its participants for subsequent distribution to the beneficial owners of the Bonds. See the caption “THE BONDS” herein.

The Bonds are subject to redemption prior to maturity as described herein. See “THE BONDS — Redemption.”

CERTAIN EVENTS COULD AFFECT THE ABILITY OF THE AUTHORITY TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS WHEN DUE. THE PURCHASE OF THE BONDS INVOLVES

SIGNIFICANT INVESTMENT RISKS, AND THE BONDS MAY NOT BE SUITABLE INVESTMENTS FOR MANY INVESTORS. SEE THE SECTI ON OF THIS OFFICIAL STATEMENT ENTITLED “SPECIAL RISK FACTORS” FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED, IN

ADDITION TO THE OTHER MATTERS SET FORTH HEREIN, IN EVALUATING THE INVESTMENT QUALITY OF THE BONDS.
___________________________
Maturity Schedule
(see inside cover)
___________________________
The Bonds are offered when, as and if issued and accepted by Stifel, Nicolaus & Company, Incorporated, the Underwriter, subject to the approval as to their legalit y by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, as Bond Counsel and Disclosure Counsel. Certain legal matters will be passed upon for the Authority and the Community Facilities District by Slovak Baron Empey Murphy & Pinkney LLP, Palm Springs, California, for the Underwriter by its counsel, Kutak Rock LLP, and for the Trustee by its counsel. It is anticipated that the Bonds in definitive form will be available for delivery to DTC or its agent on or about ________, 2025. [STIFEL LOGO]
Dated: _____, 2025

 Preliminary, subject to change.

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MATURITY SCHEDULE
$9,065,000

BEAUMONT PUBLIC IMPROVEMENT AUTHORITY
LOCAL AGENCY REVENUE BONDS, SERIES 2025B
Serial Bonds
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price CUSIP†
$ % %

$_____ _____% Term Bonds due September 1, 20__, Yield: _____% Price: _____ CUSIP No.† _____ $_____ _____% Term Bonds due September 1, 20__, Yield: _____% Price: _____CUSIP No.† _____ $_____ _____% Term Bonds due September 1, 20__, Yield: _____% Price: _____ CUSIP No.† _____ $_____ _____% Term Bonds due September 1, 20__, Yield: _____% Price: _____ CUSIP No.† _____

 Preliminary, subject to change.
† CUSIP® Copyright 2025, American Bankers Association. CUSIP® data in this Official Statement is provided by CUSIP Global Services, managed by S&P Capital IQ on behalf of the American Bankers’ Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Service. None of the Authority, the Co mmunity Facilities Districts, the City, or the Underwriter or its counsel takes any responsibility for the accuracy of CUSIP data in this Official Statement. The CUSIP® number for a specific maturity is subject to being changed after the issuance of the B onds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

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BEAUMONT PUBLIC IMPROVEMENT AUTHORITY

BOARD OF DIRECTORS
Mike Lara, Chair
Jessica Voigt, Vice Chair
Lloyd White, Director
Julio Martinez III, Director
David Fenn, Director
_______________________

CITY OF BEAUMONT

CITY COUNCIL
Mike Lara, Mayor
Jessica Voigt, Mayor Pro-Tem
Lloyd White, Councilmember
Julio Martinez III, Councilmember
David Fenn, Councilmember
_______________________

CITY OFFICIALS
Elizabeth Gibbs, City Manager
Jennifer Ustation, Finance Director
_______________________

PROFESSIONAL SERVICES

BOND COUNSEL / DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth LLP
Newport Beach, California

AUTHORITY TRUSTEE / DISTRICT TRUSTEE
Zions Bancorporation, National Association
Los Angeles, California

MUNICIPAL ADVISOR
Urban Futures, Inc.

Walnut Creek, California

SPECIAL TAX CONSULTANT
Spicer Consulting Group, LLC
Murrieta, California

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Investment in the Bonds, involves ris ks which are not appropriate for certain investors. Therefore, only persons with substantial financial resources (in net worth or income) who understand (either alone or with competent investment advice) those risks should consider such an investment.

Except where otherwise indicated, all information contained in this Official Statement has been provided by the Beaumont Public Improvement Authority, the City of Beaumont, and the Community Facilities District. No dealer, broker, salesperson or other person has been authorized by the Authority, the City, the Community Facilities District, the Trustee or the Underwriter to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained herein; a nd, if given or made, such other information or representations must not be relied upon as having been authorized by the Authority, the City, the Community Facilities District, the Trustee or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

The information set forth herein which has been obtained from third party sources is believed to be reliable but is not guaranteed as to accuracy or completeness by the Community Facilities District, the City or the Authority. This Official Statement is not to be construed as a contract with the pu rchasers or Owners of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such are not to be construed as representations of fact.

The Underwriter has provided the following sentence for inclusion in this Official Statement:

The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under th e federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy of completeness of such information.

The information and expressions of opinion herein are subject to change withou t notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority, the City, the Community Facilities District or an y other parties described herein since the date hereof. All summaries of the Indenture, the Local Obligation Indentures or other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the City for further information in connection therewith. While the City maintains an internet website for various purposes, none of the information on that website is i ncorporated by reference herein or intended to assist investors in making any investment decision or to provide any continuing information with respect to the Bonds or any other bonds or obligations of the Authority, the City or the Community Facilities Di strict. Any such information that is inconsistent with the information set forth in this Official Statement should be disregarded.

Certain statements included or incorporated by reference in this Official Statement constitute “forward -looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statement s are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “budget” or other similar words.

The achievement of certain results or other expectations contained in such forward -looking statements involve known and u nknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Th e Authority does not plan to issue any updates or revisions to the forward -looking statements set forth in this Official Statement. The Authority is obligated to provide continuing disclosure for certain historical information only. See the caption “MISCELLANEOUS — Continuing Disclosure” herein.

IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY

OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE

OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

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[INSERT MAPS]

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TABLE OF CONTENTS
Page
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INTRODUCTION ................................................................................................................................................ 1 Financing Purpose .......................................................................................................................................... 1 The Bonds; The Local Obligations ................................................................................................................ 1 Legal Authority .............................................................................................................................................. 2 Sources of Payment for the Bonds and the Local Obligations ....................................................................... 2 Description of the Bonds ................................................................................................................................ 3 The Community Facilities District and the Improvement Areas ................................................................... 3 Appraisal Report ............................................................................................................................................ 5 The City ......................................................................................................................................................... 5 The Authority ................................................................................................................................................. 5 Professionals Involved in the Offering .......................................................................................................... 6 Continuing Disclosure.................................................................................................................................... 6 ESTIMATED SOURCES AND USES OF FUNDS ............................................................................................ 7 THE BONDS ........................................................................................................................................................ 7 General Provisions ......................................................................................................................................... 7 Redemption .................................................................................................................................................... 8 Payment, Registration, Transfer and Exchange of Bonds ............................................................................ 11 Book-Entry Only System ............................................................................................................................. 12 Estimated Debt Service Schedules: Bonds and Local Obligations ............................................................. 13 Debt Service Coverage for the Bonds .......................................................................................................... 14 SECURITY FOR THE BONDS ......................................................................................................................... 15 General ......................................................................................................................................................... 15 Revenues and Flow of Funds ....................................................................................................................... 15 Reserve Fund ............................................................................................................................................... 17 Surplus Fund ................................................................................................................................................ 18 No Additional Bonds Except to Refund Bonds ........................................................................................... 19 SECURITY FOR THE LOCAL OBLIGATIONS ............................................................................................. 19 General ......................................................................................................................................................... 19 Local Obligation Indentures ......................................................................................................................... 20 Local Obligation Parity Bonds ..................................................................................................................... 22 Priority of Lien ............................................................................................................................................. 22 Covenants of the Community Facilities District .......................................................................................... 22 Special Taxes Are Not Within Teeter Plan .................................................................................................. 23 THE COMMUNITY FACILITIES DISTRICT ................................................................................................. 23 IMPROVEMENT AREA NO. 1......................................................................................................................... 24 General ......................................................................................................................................................... 24 Description of Authorized Facilities ............................................................................................................ 24 Property Ownership and the Development .................................................................................................. 24 Assigned Special Taxes ............................................................................................................................... 24 Property Values and the Appraisal Report ................................................................................................... 25 Estimated Value-to-Lien Ratios ................................................................................................................... 26 Direct and Overlapping Debt ....................................................................................................................... 30 Delinquency History .................................................................................................................................... 32 IMPROVEMENT AREA NO. 2......................................................................................................................... 32 General ......................................................................................................................................................... 32 Authorized Uses of Bond Proceeds.............................................................................................................. 32 Property Ownership and the Development .................................................................................................. 33 Assigned Special Taxes ............................................................................................................................... 34 Property Values and the Appraisal Report ................................................................................................... 35

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TABLE OF CONTENTS
(continued)
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Estimated Value-to-Lien Ratios ................................................................................................................... 37 Direct and Overlapping Debt ....................................................................................................................... 40 Delinquency History .................................................................................................................................... 42 SPECIAL RISK FACTORS ............................................................................................................................... 42 Risks of Real Estate Secured Investments Generally ................................................................................... 42 The Bonds are Limited Obligations of the Authority .................................................................................. 43 No Obligation of the City ............................................................................................................................. 43 No Cross-Collateralization Between Improvement Areas ........................................................................... 43 Potential Early Redemption of Bonds from Prepayments or Other Sources ................................................ 43 Property Values ............................................................................................................................................ 44 Natural Disasters .......................................................................................................................................... 44 Property Insurance ....................................................................................................................................... 45 Hazardous Substances .................................................................................................................................. 46 Cybersecurity ............................................................................................................................................... 46 Parity Taxes and Special Assessments ......................................................................................................... 46 Payment of the Special Tax is not a Personal Obligation of the Owners ..................................................... 47 Disclosures to Future Purchasers ................................................................................................................. 47 Special Tax Delinquencies ........................................................................................................................... 47 Insufficiency of Special Taxes ..................................................................................................................... 48 FDIC/Federal Government Interests in Properties ....................................................................................... 49 Bankruptcy and Foreclosure ........................................................................................................................ 50 Funds Invested in the County Investment Pool ............................................................................................ 50 No Acceleration Provision ........................................................................................................................... 51 Limitations on Remedies ............................................................................................................................. 51 Loss of Tax Exemption ................................................................................................................................ 51 No Rating – Limited Secondary Market ...................................................................................................... 52 Proposition 218 ............................................................................................................................................ 52 Ballot Initiatives ........................................................................................................................................... 53 Litigation with Respect to Community Facilities District ........................................................................... 53 LEGAL MATTERS ............................................................................................................................................ 54 Tax Matters .................................................................................................................................................. 54 Absence of Litigation ................................................................................................................................... 56 Legal Opinion .............................................................................................................................................. 56 MISCELLANEOUS ........................................................................................................................................... 56 No Rating ..................................................................................................................................................... 56 Underwriting ................................................................................................................................................ 56 Continuing Disclosure.................................................................................................................................. 57 Additional Information ................................................................................................................................ 57 APPENDIX A RATES AND METHODS OF APPORTIONMENT OF SPECIAL TAXES ....................... A-1 APPENDIX B SUMMARY OF PRINCIPAL LEGAL DOCUMENTS ....................................................... B-1 APPENDIX C APPRAISAL REPORT ......................................................................................................... C-1

APPENDIX D DEMOGRAPHIC INFORMATION REGARDING THE COUNTY OF RIVERSIDE AND THE CITY OF BEAUMONT ................................................................ D-1 APPENDIX E FORM OF BOND COUNSEL OPINION ............................................................................. E-1 APPENDIX F FORM OF CONTINUING DISCLOSURE AGREEMENT ..................................................F-1 APPENDIX G DTC AND THE BOOK-ENTRY-ONLY SYSTEM ............................................................. G-1

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OFFICIAL STATEMENT
$9,065,000

BEAUMONT PUBLIC IMPROVEMENT AUTHORITY
LOCAL AGENCY REVENUE BONDS, SERIES 2025B

INTRODUCTION
The purpose of this Official Statement, which includes the cover page and Appendices hereto (the “Official Statement”), is to provide certain information concerning the sale and issuance of $9,065,000 * Beaumont Public Improvement Authority Local Agency Revenue Bonds, Series 2025B (the “Bonds”).

This Introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents sum marized or described herein. A full review should be made of the entire Official Statement. The offering of the Bonds to potential investors is made only by means of the entire Official Statement.

Financing Purpose
Purpose of the Bonds . The Bonds are be ing issued by the Beaumont Public Improvement Authority (the “Authority”) to (i) acquire the “Local Obligations” described below (see “FINANCING PLAN” herein) ; (ii) make a deposit to the Reserve Fund to satisfy the initial Reserve Requirement; and (iii) the costs of issuing the Bonds.

Purpose of the Local Obligations . The Local Obligations are being issued to finance certain public facilities to be owned and operated by the City of Beaumont (the “City”).

The Bonds; The Local Obligations
The Bonds . The Bon ds are payable from “Revenues,” as defined below, generally consisting of revenues received by the Authority as the result of the payment of debt service on the Local Obligations, and amounts held in the funds and accounts established and held for the bene fit of the Bonds under the Indenture (as defined below).

Local Obligations. The Local Obligations consist of the two separate series of bonds described below issued by the City of Beaumont Community Facilities District No. 2023-1 (Fairway Canyon) (the “Community Facilities District”) formed by the City of Beaumont (the “City”) pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the “Mello-Roos Act”):

Improvement Area No. 1 Bonds : The $2,050,000 * City of Beaumont CFD No. 2023 -1 (Fairway Canyon) (Improvement Area No. 1) 2025 Special Tax Bonds (the “Improvement Area No. 1 Bonds”) are being issued by the Community Facilities District for Improvement Area No. 1 therein (“Improvement Area No. 1”).

The Improvement Area No. 1 Bonds are payable from Special Taxes levied on taxable property in Improvement Area No. 1. See “IMPROVEMENT AREA NO. 1”
Improvement Area No. 2 Bonds : The $7,015,0 00* City of Beaumont CFD No. 2023 -1 (Fairway Canyon) (Improvement Area No. 2) 2025 Special Tax Bonds (the “Improvement Area No. 2 Bonds” and, together with the Improvement Area No. 1 Bonds, the “Local Obligations” ) are being issued by the

 Preliminary, subject to change.

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Community Facilities District for Improvement Area No. 2 therein (“Improvement Area No. 2” and, together with Improvement Area No. 1, the “Improvement Areas”) . The Improvement Area No. 2 Bonds are payable from Special Taxes levied on taxable property in Improvement Area N o. 2. See “ IMPROVEMENT AREA NO. 2.”
Legal Authority
The Bonds. The Bonds are being issued under Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”) and an Indenture of Trust dated as of ______ 1, 2025 (the “Indenture”), by and between the Authority and Zions Bancorporation, National Association, as trustee (the “Trustee”).

The Local Obligations. The Local Obligations are being issued pursuant to the Mello -Roos Act and two separate bond indentures , dated as of _____ 1, 2025, each by and between the Community Facilities District and Zions Bancorporation, National Association, as trustee (each, a “Local Obligation Indenture” and together, the “Local Obligation Indentures”).

Sources of Payment for the Bonds and the Local Obligations The Bonds. The Bonds are secured by a first lien on and pledge of all of the Revenues. “Revenues” are defined in the Indenture to include:
(a) all amounts received from the Local Obligations;
(b) any proceeds of the Bonds originally deposited with the Trustee and all moneys deposited and held from time to time by the Trustee in the funds and accounts established under the Indenture with respect to the Bonds (other than the Administrative Expense Fund, the Rebate Fund and the Surplus Fund); and (c) investment income with respect to any moneys held by the Trustee in the funds and accounts established under the Indenture with respect to the Bonds (other than investment income on moneys held in the Administrative Expense Fund, the Rebate Fund and the Surplus Fund).

Certain Funds Not Pledged. Amounts held in the Administrative Expense Fund, the Rebate Fund and the Surplus Fund are not pledged to the repayment of the Bonds.

See “SECURITY FOR THE BONDS — Revenues and Flow of Funds” herein.

Reserve Fund for the Bonds. A Reserve Fund for the Bonds is established pursuant to the Indenture in an amount equal to the Reserve Requirement. The Reserve Requirement for the Bonds, as of the date of issuance of the Bonds, equals $_____ _____. The Indenture establishes within the Reserve Fund an account with respect to each series of Local Obligations (each a “Reserve Account”). See “SECURITY FOR THE BONDS — Revenues and Flow of Funds” and “— Reserve Fund” herein.

Local Obligations. Each series of Local Obligations are secured by Net Special Taxes collected in the applicable Improvement Area as a result of the levy of the Special Taxes. Net Special Taxes are the Gross Taxes which remain after the payment of Administrative Expenses up t o the amount permitted by the applicable Local Obligation Indenture. See “SECURITY FOR THE LOCAL OBLIGATIONS — Local Obligation Indentures.

The Local Obligations are not cross -collateralized. In other words, Special Taxes from one Improvement Area cannot be used to cover any shortfall in the payment of debt service on the Local Obligation of another Improvement Area. However, the Reserve Fund held by the Trustee and funded with

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proceeds of the Local Obligations will be available in the event of delinquen t Revenues to the extent set forth therein. See “SECURITY FOR THE BONDS — Reserve Fund” herein.

Description of the Bonds
Payments. Interest is payable semiannually on March 1 and September 1 of each year , commencing March 1, 2026. Principal of and pre mium, if any, on the Bonds shall be payable by the Trustee. See “THE BONDS — General Provisions” and “— Book-Entry Only System” herein.

Denominations. The Bonds will be issued in denominations of $5,000 each or integral multiples thereof.

Redemption. T he Bonds are subject to redemption prior to their maturity, including from the prepayment of Special Taxes from within an Improvement Area. See “THE BONDS — Redemption” herein.

Registration, transfers and exchanges. The Bonds will be issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to actual purchasers of the Bonds (the “Beneficial Owners”) under the book -entry system maintained by DTC. S ee “THE BONDS — Payment, Registration, Transfer and Exchange of Bonds” and “— Book-Entry Only System.”
The Community Facilities District and the Improvement Areas General. The Community Facilities District is located in the western portion of the City of Beaumont (the “City”), west of the 10 Freeway and north of Oak Valley Parkway and includes a total of 419 residential lots comprising Planning Area 4B of the Fairway Canyon master planned community. The Fairway Canyon master planned community surrounds the Morongo Golf Club at Tukwet Canyon golf course, which meanders through the community. At buildout, Fairway Canyon is expected to consist of approximately 3,300 residential units on approximately 1,556 acres of land, with 46.4 acres of commercial/indust rial land uses and the balance set aside for public/quasi/public uses. As of October 1, 2025, approximately 2,588 homes within Fairway Canyon have been completed and sold to individual homeowners.

The Community Facilities District consists of Improvement Area No. 1 and Improvement Area No. 2 and is expected to be developed with a total of 419 single family homes.

Improvement Area No. 1 . Improvement Area No. 1 consists of two non -contiguous tax zones, with Tax Zone 1 generally located in the southwest portion of the Community Facilities District, north of West Oak Valley Parkway, and with Tax Zone 2 located in the northeastern portion of the Community Facilities District, west of Tukwet Canyon Parkway and south of Mickelson Drive. Improvement Area No. 1 was developed with 132 single family homes by D.R. Horton Los Angeles Holding Company, Inc., a California corporation (“D.R.

Horton”) in a development known as August II at The Fairways. As of September 5, 2025, the date of value of the Appraisal Report (as defined herein), D.R. Horton had conveyed 132 homes to individuals and owned one completed home within Improvement Area No. 1 which was in escrow to an individual homeowner and expected to close in November 2025 . For more information regarding Improvemen t Area No. 1, see the caption “IMPROVEMENT AREA NO. 1.”
Improvement Area No. 2 . Improvement Area No. 2 is located in the center of the Community Facilities District, along Sorenstam Drive. Improvement Area No. 2 is being developed with 287 single family homes by Meritage Homes of California, Inc., a California corporation (“Meritage”), in three developments known as “Magnolia at The Fairways,” “Holly at The Fairways” and “Azalea at The Fairways.” As of September 5, 2025, the date of value of the Appraisal Report (as defined herein), Meritage had conveyed 271 completed single family homes to individual homeowners and owned three completed homes and 13 homes in various stages of construction. For more information regarding Improvement Area No. 2 and the development

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therein, including development status as of October 8, 2025, see the caption “IMPROVEMENT AREA NO. 2—Property Ownership and the Development.”
Additional information on D.R. Horton and Meritage Homes, including Annual Reports and re lated financial statements, prepared in accordance with generally accepted accounting standards, can be found on the websites of D.R. Horton’s and Meritage Homes’ parent companies. Information on such internet sites is not a part of this Official Statement and is not incorporated by reference into this Official Statement. Neither the Community Facilities District nor the Underwriter makes any representation as to the accuracy or adequacy of the information contained on the internet site.

Formation Proceedi ngs. The Community Facilities District was formed, and Improvement Area No. 1 and Improvement Area No. 2 were designated therein, by the Community Facilities District pursuant to the Mello-Roos Act as discussed below.

The Mello-Roos Act was enacted by t he California legislature to provide an alternative method of financing certain public capital facilities and services, especially in developing areas of the State. Any local agency (as defined in the Mello-Roos Act) may establish a community facilities district to provide for and finance the cost of eligible public facilities and services. Generally, the legislative body of the local agency which forms a community facilities district acts on behalf of such dist rict as its legislative body. Subject to approval by two-thirds of the votes cast at an election and compliance with the other provisions of the Mello- Roos Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district or any improvement area designated therein to repay such indebtedness.

Pursuant to the Mello-Roos Act, on April 4, 2023, the legislative body of the Community Facilities District adopted Resolution No. 2023-06 (the “Resolution of Intention”), stating its intention to form Community Facilities District No. 2023-1, designate Improvement Area Nos. 1 and 2 therein, and to authorize the levy of special taxes on the taxable property within Improvement Area No. 1 and Improvement Area No. 2.

On April 4, 2023 the legislative body of the Community Facilities District also adopted Resolution No. 2023- 07, stating its intention to incur bonded indebtedness in an aggregate principal amount not to exceed $3,500,000 for Improvement Area No. 1 and not to exceed $11,000,00 0 for Improvement Area No. 2 for the purpose of financing the acquisition, construction, expansion, improvement, or rehabilitation of certain public facilities.

Subsequent to a noticed public hearing, the legislative body of the Community Facilities District adopted Resolution Nos. 2023-22 and 2023-23 on June 20, 2023 (the “Resolution of Formation” and the “Resolution to Incur Debt,” respectively) which established the Community Facilities District , des ignated Improvement Area No. 1 and Improvement Area No. 2 therein, authorized the levy of a special tax within Improvement Area No. 2, determined the necessity to incur bonded indebtedness within the Community Facilities District, including for Improvement Area No. 1 and Improvement Area No. 2, and called election s within Improvement Area No. 1 and Improvement Area No. 2 on the propositions of incurring bonded indebtedness, levying special taxes and setting an appropriations limit therein and therefor.

On June 20, 2023, elections were held within Improvement Area No. 1 and Improvement Area No. 2 at which the landowners within each of Improvement Area No. 1 and Improvement Area No. 2 eligible to vote approved the issuance of bonds by the Community Facilities District in an aggregate principal amount not to exceed $3,500,000 for Improvement Area No. 1 and not to exceed $11,000,0 00 for Improvement Area No. 2, and authorized the levy of a special tax to repay the bonds. A separate Notice of Special Tax Lien for each of Improvement Area No. 1 and Improvement Area No. 2 was recorded in the office of the County Recorder on July 6, 2023 as Document No. 2023-0194585 and Document No. 2023-014586, respectively. On July 18 , 2023, the Board, acting as the legislative bod y of the Community Facilities District , adopted Ordinance No. 1161 which authorized the levy of special taxes within Improvement Area No. 1 (the “Improvement Area No. 1 Special Tax”) pursuant to the Rate and Method of Apportionment of Special Tax for Improvement Area

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No. 1 (the “Improvement Area No. 1 Rate and Method”) and within Improvement Area No. 2 (the “Improvement Area No. 2 Special Tax and, together with the Improvement Area No. 1 Special Tax, the “Special Taxes”) pursuant to the Rate and Method of Apportionment of Special Tax for Improvement Area No. 2 (the “Improvement Area No. 2 Rate and Method” and, together with the Improvement Area No. 1 Rate and Method, the “Rates and Methods”), all as approved by the eligible voters at the June 20, 2023, elections.

Copies of the Rates and Methods are attached hereto as Appendix A.

Appraisal Report
An appraisal (the “Appraisal Report”) of the land and existing improvements within the Improvement Areas was prepared by Integra Realty Resources, Los Angeles, California, a Member Appraisal Institute, MAI appraiser) (the “Appraiser”). The Appraisal is dated September 29, 2025 and a copy of the Apprai sal is attached to this Official Statement as Appendix C. The Appraisal Report provides an estimate of the aggregate minimum market value of the as-is condition of certain of the taxable property within each Improvement Area as of the date of value, September 5, 2025, and the assessed value of the remainder of the taxable property in each Improvement Area.

As of September 5, 2025 , the Appraiser estimated the minimum aggregate value of the fee simple interest of the taxable property within Improvement Area No. 1 was not less than $79,893,725, consisting of an aggregate Fiscal Year 2025-26 assessed value of $13,293,725 for the 21 single family homes with a complete improvement value assigned by the County for Fiscal Year 2025 -26, and an aggregate appraised value of $66,600,000 for the 111 single family homes which did not have a complete improvement value assigned by the County for Fiscal Year 2025-26.

As of September 5, 2025 , the Appraiser estimated the minimum aggregate value of the fee simple interest of the taxable property within Improvement Area No. 2 was not less than $ 162,727,411, consisting of an aggregate Fiscal Year 2025 -26 assessed value of $90,399,411 for the 148 single family homes with a complete improvement value assigned by the County for F iscal Year 2025 -26, and an aggregate appraised value of $ 72,328,000 for the 139 single family homes which did not have a complete improvement value assigned by the County for Fiscal Year 2025-26.

The Appraisal Report is based upon a variety of assumptio ns and limiting conditions that are described in Appendix C. The Authority and the Community Facilities District make no representation as to the accuracy of the Appraisal Report. There is no assurance that the property within the Improvement Areas can be sold for the prices set forth in the Appraisal Report or that any parcel can be sold for a price sufficient to pay the Special Taxes for that parcel in the event of a default in payment of Special Taxes by the landowner.

The complete Appraisal Report is attached hereto as Appendix C.

The City
The City is located in the western portion of the County of Riverside (the “County”), California and encompasses approximately 30.9 square miles. The City was incorporated in 1912 as a general law city. As of January 1, 2024, the City had a population of approximately 57,416.

Neither the Bonds nor the Local Obligations are a debt of the City, and no revenues of the City are pledged to repayment of the Bonds or the Local Obligations.

The Authority
The Authority is a joint exercise of powers authority between the City and the City of Beaumont Parking Authority organized and existing pursuant to the Act. The purpose of the Authority is to provide, through the issuance of revenue bonds, a financing po ol to fund capital improvement projects. These revenue

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bonds are to be repaid solely from the revenues of certain public obligations. The Authority has no taxing power. The City Council acts as the governing body of the Authority.

Professionals Involved in the Offering
All proceedings in connection with the issuance of the Bonds are subject to the approval of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel and Disclosure Counsel. Slovak Baron Empey Murphy & Pinkney LLP, Palm Springs, California, will render a legal opinion on certain matters for the Authority and the Community Facilities District. Spicer Consulting Group, LLC, Murrieta, California is acting as Special Tax Consultant to the City. Urban Futures, Inc., Walnut Creek, California, is acting as Municipal Advisor to the City. Zions Bancorporation, National Association, Los Angeles, California, will act as Trustee with respect to the Bonds and the Local Obligations. Stifel, Nicolaus & Company, Incorporated, is acting as underwriter in connection with the issuance and delivery of the Bonds. Kutak Rock LLP is serving as Underwriter’s Counsel.

Payment of the fees of Bond Counsel, Disclosure Counsel, the Municipal Advisor, the Underwriter and counsel to the Underwrit er is contingent upon issuance of the Bonds. Stradling Yocca Carlson & Rauth LLP, represents the Underwriter in connection with financings unrelated to the Authority, the City and the Community Facilities District.

Continuing Disclosure
The Authority will enter into a Continuing Disclosure Agreement with Spicer Consulting Group, LLC, and will covenant therein for the benefit of holders and beneficial owners of the Bonds to provide certain financial information and operating data relating to the Authority and the Improvement Areas by not later than February 10 following the end of its Fiscal Year (which currently ends June 30), commencing with the report for the 2024 -25 Fiscal Year (the “Annual Report”), and to provide notices of the occurrence of certain enumerated events. The first Annual Report will be due February 10, 2026. The Annual Report and notices of certain listed events (the “Listed Events”) will be filed with the Electronic Municipal Market Access System of the Municipal Securities Rulemaking B oard available on the Internet at http://emma.msrb.org (“EMMA”).

The specific nature of the information to be contained in each Annual Report and any notices of the Listed Events is set forth in Appendix F — “FORM OF CONTINUING D ISCLOSURE AGREEMENT.” The se covenants will be made in order to assist the Underwriter in complying with SEC Rule 15c2-12(b)(5) (the “Rule”). See “MISCELLANEOUS — Continuing Disclosure” herein.

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ESTIMATED SOURCES AND USES OF FUNDS
The Bonds. The anticipated sources and uses of funds relating to the Bonds are as follows:

Total
Sources:

Principal Amount of the Bonds
[Plus/Less] [Net] Original Issue [Premium/Discount]
Less Underwriter’s Discount
Total Sources

Uses:

Purchase of Local Obligations (1)
Reserve Fund
Costs of Issuance(2)
Total Uses

(1) Proceeds of the Bonds will be used to acquire the Local Obligations. See the sources and uses of funds for the Local Obligations below.
(2) The Trustee will retain and deposit in the Costs of Issuance Fund each Improvement Area’s proportionate share of the costs of issuance of the Bonds.

Local Obligations. The anticipated sources and uses of funds relating to the Local Obligations and prior funds on hand are as follows:

Improvement Area No. 1 Bonds Improvement Area No. 2 Bonds Sources
Principal Amount
[Plus/Less] [Net] Original Issue
[Premium/Discount]

Less Underwriter’s Discount
Total Sources

Uses
Acquisition and Construction Fund
Reserve Fund(1)
Costs of Issuance(2)
Total Uses

(1) Represents the Proportionate Share of the initial Reserve Requirement for each series of the Local Obligations. (2) Reflects each Improvement Area’s proportionate share of the costs of issuance of the Bonds.

THE BONDS
General Provisions
The Bonds will be dated their date of delivery, and the Bonds will be issued in the aggregate principal amounts set forth on the inside front cover hereof. The Bonds will bear interest from their dated date at the rates per annum set forth on the inside front cover hereof, payable semiannually on each March 1 and September 1, commencing March 1, 2026 (each, an “Interest Payment Date”), and will mature in the amounts and on the dates set forth on the inside front cover hereof. The Bonds will be issued in fully registered form in denominations of $5,000 each or any integral multiple thereof.

Interest on the Bonds will be payable on each Interest Payment Date to the person whose name appears on the Bond Register as the Owner as of the Record Date immediately preceding each Interest

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Payment Date. Interest will be paid by check of the Trustee mailed on the Interest Payment Date by first class mail, postage prepaid, to the Owner at the address as it appears on the Bond Re gister or by wire transfer to an account in the United States of America upon instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds of a Series provided to the Trustee, in writing, at least five (5) Business Days before the Record Date for such Interest Payment Date. The Bonds are issued in fully registered form and will be registered in the name of Cede & Co., as nominee of DTC. DTC will act as securities depository of the Bonds. Ownership interests in the Bonds may be p urchased in book -entry form only in denominations of $5,000 and any integral multiple. See the subsection hereof entitled “— Book-Entry Only System.” Principal of and premium (if any) on any Bond will be paid upon presentation and surrender thereof, at maturity or the prior redemption thereof, at the Trust Office of the Trustee.

Each Bond will bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after a Record Date (the 15th calenda r day of the month preceding the month in which such Interest Payment Date occurs, whether or not such day is a Business Day) and on or before the following Interest Payment Date, in which event it will bear interest from such Interest Payment Date; or (b) it is authenticated on or before February 15, 2026 in which event it will bear interest from the Dated Date; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon, or from the Dated Date if no interest has been paid or made available for payment.

Redemption
Optional Redemption. The Bonds maturing on or before Septem ber 1, 20__ are not subject to optional redemption prior to maturity. The Bonds maturing on or after September 1, 20__ may be redeemed at the option of the Authority, from any source of available funds, prior to maturity on any Interest Payment Date on or after September 1, 20__ as a whole, or in part from maturities of the Local Obligations simultaneously redeemed, if any redemption of Local Obligations is being made in conjunction with such optional redemption, and otherwise from such maturities as are s elected by the Authority, at a redemption price equal to the par amount of the Bonds to be redeemed, together with accrued interest thereon to the date of redemption, without premium.

If the source of funds to optionally redeem the Bonds is to be from a re demption of a Local Obligation, then prior to consenting to the optional redemption of any Local Obligation which it has purchased and is held under the Indenture, the Authority will deliver to the Trustee a certificate of an Independent Accountant or an Independent Financial Consultant verifying that, following such optional redemption of the Local Obligations and redemption of Bonds, the principal and interest generated from the remaining Local Obligations is adequate to make the timely payment of princip al and interest due on the Bonds remaining Outstanding following such optional redemption.

Special Redemption. The Bonds are subject to special redemption on any Interest Payment Date from proceeds of early redemption of Local Obligations from the prepa yment of Special Taxes within an Improvement Area, in connection with Local Obligations, in whole or in part, from maturities corresponding proportionately to the maturities of the Local Obligations simultaneously redeemed, at the principal amount thereof, plus a premium expressed below as a percentage of the principal amount so redeemed, plus accrued interest to the date of redemption thereof:

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Redemption Dates Redemption Prices
Any Interest Payment Date through and including March 1, 20__ 103% September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100

Mandatory Sinking Fund Redemption . The Bonds maturing on September 1, 20__ are subject to mandatory sinking fund redemption prior to maturity, in part, on September 1, 20__, and on each September 1 thereafter by lot, from sinking fund payments at a redemption price equal to the principal amount of Bonds to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:

Redemption Date
(September 1)
Redemption
Amount

(maturity)

The Bonds maturing on September 1, 20__ are subject to mandatory sinking fund redemption prior to maturity, in part, on September 1, 20__, and on each September 1 thereafter by lot, from sinking fund payments at a redemption price equal to the principal amount of Bonds to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:

Redemption Date
(September 1)
Redemption
Amount

(maturity)

The Bonds maturing on September 1, 20__ are subject to mandatory sinking fund redemption prior to maturity, in part, on September 1, 20__, from a sinking fund payment at a redemption price equal to the principal amount of Bonds to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:

Redemption Date
(September 1)
Redemption
Amount

(maturity)

The Bonds maturing on September 1, 20__ are subject to mandatory sinking f und redemption prior to maturity, in part, on September 1, 20__, and on each September 1 thereafter by lot, from sinking fund payments at a redemption price equal to the principal amount of Bonds to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:

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Redemption Date
(September 1)
Redemption
Amount

(maturity)

In the event that Bonds maturing on September 1, 20__, September 1, 20__, September 1, 20__ and September 1, 20__ are redeemed pursuant to the optional or special redemption provisions described above, the sinking fund payments for the applicable Series will be reduced as nearly as practicable on a proportionate basis in integral multiples of $5,000.

Notice of Redemption. So long as the Bonds are held in book -entry form, notice of redemption will be sent by the Trustee to DTC and not to the Beneficial Owners of the Bonds under the DTC book -entry only system. Neither the Authority nor the Trustee is responsible for notifying the B eneficial Owners, who are to be notified in accordance with the procedures in effect for the DTC book -entry system. See Appendix G — “DTC AND THE BOOK-ENTRY-ONLY SYSTEM.”
The Trustee on behalf, and at the expense of, the Authority shall send notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Bond Register, and to the Securities Depositories and to the Information Services, at least twenty (20) but not more than sixty (60) days prior to the date fixed for redemption. Neither failure to receive any such notice so sent nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon. Such notice shall state the date of the notice, the redemption date, the redemption place and the redemption price and shall designate the CUSIP numbers, Bond numbers and the maturity or maturities (in the event of redemption of all of the Bonds of such maturi ty or maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Trust Office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue after the redemption date.

In addition to the foregoing notice, further notice shall be sent by the Trustee in said form to any Bondowner whose Bond has been called for redemption but who has failed to submit his Bond for payment by the date which is sixty days after the redemption date, but no defect in said further notice nor any failure to give or receive all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption.

Unless funds for the optional redempti on of any Bonds are irrevocably deposited with the Trustee prior to rendering notice of redemption to the Bondowners, such notice shall state that such redemption is subject to the deposit of funds by the Authority. Any notice of optional redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under the Indenture. The Authority and the Trustee shall have no liability to the Owners or any other party related to or arising from such rescission of redemption. The Trustee shall send notice of such rescission of redemption in the same manner as the original notice of redemption was sent.

Selection of Bonds of a Maturity for Redemption . Unless otherwise provided under the Indenture, whenever provision is made in the Indenture for the redemption of less than all of the Bonds of a maturity, the Trustee shall sel ect the Bonds to be redeemed from all Bonds of such maturity not previously called for redemption, by lot in any manner which the Trustee in its sole discretion shall deem appropriate and fair. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $5,000 authorized

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denominations, and such separate authorized denominations shall be treated as separate Bonds which may be separately redeemed.

Partial Redemption of Bonds. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same maturity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond to be redeemed.

Effect of Redemption . From and after the date fixed for redemption, if funds available for the payment of the principal of and interest (and premium, if any) on the Bonds so called for redemption have been duly provided, such Bonds so called will cease to be entitled to any benefit under the Indenture other than the right to receive payment of the redemption price, and no interest will accrue thereon from and after the redemption date specified in such notice. All Bonds redeemed pursuant to the Indenture will be cancelled and destroyed.

Payment, Registration, Transfer and Exchange of Bonds
Book-Entry Only System. The Bonds will be issued as fully registered bonds, registe red in the name of Cede & Co. as nominee of DTC, and will be available to actual purchasers of the Bonds (the “Beneficial Owners”) in the denominations set forth above, under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants (as defined in Appendix B) as described herein.

Beneficial Owners will not be entitled to receive physical delivery of the Bonds. See “THE BONDS — Book-Entry Only System.” In the event that the book -entry-only system is no longer used with respect to the Bonds, the Bonds will be registered and transferred in accordance with the Indenture. See “THE BONDS — Book-Entry Only System.”
Transfer of Bonds . Subject to the book -entry only provisions of the Indenture, any Bond may in accordance with its terms, be transferred, upon the Bond Register, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Trustee, duly executed. Whenever any Bond is surrendered for transfer, the Authority will execute and the Trustee will thereupon authenticate and deliver to the transferee a new Bond or Bonds of like tenor, maturity and aggregate principal amount. No Bonds selected for redemption will be subject to transfer pursuant to the Indenture nor will any Bond be subject to transfer during the fifteen days prior to the selection of Bonds for redemption.

The cost of printing an y Bonds and any services rendered or any expenses incurred by the Trustee in connection with any transfer or exchange will be paid by the Authority. However, the Owners of the Bonds will be required to pay any tax or other governmental charge required to be paid for any exchange or registration of transfer and the Owners of the Bonds will be required to pay the reasonable fees and expenses of the Trustee and Authority in connection with the replacement of any mutilated, lost or stolen Bonds.

Exchange of Bo nds. Subject to the book -entry only provisions of the Indenture, Bonds may be exchanged at the Trust Office of the Trustee for Bonds of the same tenor and maturity and of other authorized denominations. No Bonds selected for redemption will be subject to exchange pursuant to the Indenture, nor will any Bond be subject to exchange during the fifteen days prior to the selection of Bonds for redemption.

The cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection wi th any transfer or exchange will be paid by the Authority.

Temporary Bonds. The Bonds may be issued initially in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, will be of such denominations as may be determined by the Authority and may contain such reference to any of the provisions of the Indenture as may be appropriate. Every temporary Bond will be executed by the Authority and be registered and authenticated by the Trustee upon the same conditions and in substantially the same

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manner as the definitive Bonds. If the Authority issues temporary Bonds, it will execute and furnish definitive Bonds without delay, and thereupon the temporary Bonds may be surrendered for cancellation, in exchange therefor at the Trust Office of the Trustee, and the Trustee will authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds will be entitled to the same benefits under the Indenture as definitive Bonds authenticated and delivered thereunder.

Bond Register. The Trustee will keep or cause to be kept at its Trust Office sufficient records for the registration and transfer of the Bonds, which will be the Bond Register and will at all times during regular business hours be open to inspection by the Authority upon reasonable notice; and, upon presentation for such purpose, the Trustee will, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said records, Bonds as provided in the Indenture.

Bonds Mutilated, Lost, Destroyed or Stolen . If any Bond becomes mutilated, the Authority, at the expense of the Owner of said Bond, will execute, and the Trustee will thereupon authenticate and deliver, a new Bond of like tenor and authorized denomination in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee will be cancelled by it and destroyed in accordance with the retention policy of the Trustee then in effect. If any Bond issued under the Indenture is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to it and indemnity satisfactory to it is given, at the expense of the Bond Owner, the Authority will execute, and the Trustee will thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond has matured or has been called for redemption, instead of issuing a substitute Bond the Trustee may pay the same without surrender thereof upon receipt of indemnity satisfactory to the Trustee). The Trustee may require payment of a reasonable fee for each new Bond issued under the Indenture and of the expenses which may be incurred by the Authority and the Trustee. Any Bond issued under the Indenture in lieu of any Bond alleged to be lost, destroyed or stolen will constitute an original contractual obligation on the part of the Authority whether or not the Bond alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and will be equally and proportionately entitled to the benefits of the Indenture with all other Bonds secured by the Indenture.

Book-Entry Only System
While the Bonds are subject to the book -entry system, the principal, interest and any redemption premium with respect to a Bond will be paid by the Trustee to DTC, which in turn is obligated to remit such payment to its DTC Participants for subsequent disbursement to Beneficial Owners of the Bonds, as described in Appendix G — “DTC AND THE BOOK-ENTRY-ONLY SYSTEM” herein. So long as Cede & Co. is the registered owner of the Bonds, references herein to the Owners of the Bonds shall mean Cede & Co. and not the Beneficial Owners of the Bonds. The Authority gives no assurance that DTC or the DTC Participants will distribute payments or notices to Beneficial Owners.

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Estimated Debt Service Schedules: Bonds and Local Obligations The following table presents the debt service schedule for the Bonds, assuming there are no early redemptions of Bonds prior to maturity (other than mandatory sinking fund redemption):

TABLE 1

ANNUALIZED DEBT SERVICE SCHEDULE FOR THE BONDS
Year Ending
September 1 Principal Interest
Total
Debt Service
2026 $ $ $
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
2055
Total $ $ $

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The following table summarizes the anticipated debt service payments to be received by the Authority as the result of its ownership of the Local Obligations, assuming there are no early redemptions of Local Obligations prior to their respective maturities (other than mandatory sinking fund redemption).

TABLE 2

ANNUALIZED DEBT SERVICE SCHEDULE FOR THE LOCAL OBLIGATIONS Bond Year
Ending
September 1
Improvement Area No. 1
Bonds
Improvement Area No. 2
Bonds Total
2026 $ $ $
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2055
2051
2052
2053
2054
2055
Total $ $ $

Source: Underwriter.

Debt Service Coverage for the Bonds
Scheduled payments of principal of and interest on the Bonds equals 100% of the projected Revenues that will be generated by the anticipated payment of debt service on each of the Local Obligations while the Bonds are outstanding. According to the Special Tax Consultant, based on the annual debt service for the Local Obligations, with respect to each Improvement Area, the Special Taxes levied at the maximum Special Tax rates under the related Rate and Method (as defined below), less estimated Administrativ e Expenses and assuming no delinquencies, would generate in each Fiscal Year not less than 110% of debt service payable with respect to each related series of Local Obligations. See “ IMPROVEMENT AREA NO. 1 ” and “IMPROVEMENT AREA NO. 2.” However, under the Mello-Roos Act, under no circumstances may Special Taxes levied against any parcel of property used for private residential purposes in an Improvement Area be

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increased by more than ten percent (10%) as a consequence of delinquency or default by the owne r of any other parcel within in such Improvement Area. See “SECURITY FOR THE LOCAL OBLIGATIONS.”

SECURITY FOR THE BONDS
General
As described below, the Bonds are payable primarily from Revenues consisting primarily of amounts received by the Authority as the result of its acquisition of the Local Obligations.

The Bonds are special obligations of the Authority payable solely from and secured solely by the Revenues and amounts in certain funds and accounts pledged therefor in the Indenture. The Bonds are not a debt or liability of the City, the State of California or any political subdivisions thereof other than the Authority to the limited extent described herein. The faith and credit of the Authority is not pledged to secure the payment of Bonds, nor is any of its political subdivisions liable therefor, nor in any event shall the Bonds or any interest or redemption premium thereunder be payable out of any funds or properties other than those of the Authority as set forth in the Indenture. The Authority has no taxing power.

Revenues and Flow of Funds
Bonds; Revenues. Subject to the provisions of the Indenture, the Bonds are secured by a first lien on and pledge (which shall be effected in the manner and to the extent provided in the Indenture) of all of the Revenues. The Bonds are equally secured by a pledge, charge and lien upon the Revenues without priority for any Bond over any other Bond; and the payment of the interest on and principal of the Bonds and any premiums upon the redemption of any Bonds a re secured by an exclusive pledge, charge and lien upon the Revenues. So long as any of the Bonds are Outstanding, the Revenues shall not be used for any purpose except as is expressly permitted by the Indenture.

Collection by the Trustee . The Authority has transferred in trust, granted a security interest in and assigned to the Trustee, for the benefit of the Owners from time to time of the Bonds, respectively, all of the Revenues and all of the right, title and interest of the Authority in the Local Obligations, subject to the terms of the Indenture. The Trustee is entitled to and will collect and receive all of the Revenues and any Revenues collected or received by the Authority will be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and will forthwith be paid by t he Authority to the Trustee. The Trustee also is entitled to and, s ubject to the provisions of the Indenture, the Trustee will take all steps, actions and proceedings reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of the rights of the Authority and all of the obligations of the City and the Community Facilities District under the Local Obligations.

Deposit of Revenues. All Revenues derived from the Local Obligations, other than Local Obligation Delinquency Revenues, will be promptly deposited by the Trustee upon receipt thereof in the Revenue Fund.

Any Revenues which represent the payment of delinquent principal of or interest on an issue of Local Obligations will be first applied to make payments req uired pursuant to the Indenture upon the occurrence of an Event of Default and next to be deposited to the Reserve Fund to replenish the amount on deposit therein to the Reserve Requirement.

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Application of Revenues. On each Interest Payment Date, the Trustee will transfer from the Revenue Fund, and deposit into the following respective accounts for the Bonds, the following amounts in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority:

Interest Account. On each Interest Payment Date, the Tru stee shall deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest becoming due and payable on such Interest Payment Date on all Outstanding Bonds on such date. All moneys in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds redeemed prior to maturity). In the event that t he amounts on deposit in the Interest Account on any Interest Payment Date, after any transfers from the Reserve Fund pursuant to the Indenture, are insufficient for any reason to pay the aggregate amount of interest then coming due and payable on the Outs tanding Bonds, the Trustee shall apply such amounts to the payment of interest on each of the Outstanding Bonds on a pro rata basis.

Principal Account. On each September 1 on which principal of the Bonds shall be payable, the Trustee shall deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of, and premium (if any) on, the Bonds coming due and payable on such date, or required to be redeemed on such date pursuan t to the Indenture; provided, however, that no amount shall be deposited to effect an optional redemption of Bonds pursuant to the Indenture unless the Trustee has first received a certificate of an Independent Accountant or an Independent Financial Consultant certifying that such deposit to effect an optional redemption of the Bonds will not impair the ability of the Authority to make timely payment of the principal of and interest on the Bonds, assuming for such purposes that the Community Facilities Dist rict continues to make timely payments on all Local Obligations not then in default. All moneys in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of (i) paying the principal of the Bonds at the maturity thereof or (ii) paying the principal of and premium (if any) on any Bonds upon the redemption thereof pursuant to the Indenture.

Reserve Fund. On each Interest Payment Date on which the balance in the Reserve Fund is less than the Reserve Requirement, or amounts are due to an insurer under a Reserve Credit Facility, after making deposits to the Interest Account and the Principal Account as described above, the Trustee shall transfer from the Revenue Fund , an amount sufficient to increase the balance in the Reserve Fu nd to the Reserve Requirement or to reimburse an insurer for draws under a Reserve Credit Facility, by depositing the amount necessary to make the various accounts therein equal to, together, the Reserve Requirement, provided the value of the moneys deposited therein, as invested, shall be valued at market value on such transfer date for purposes of making such determination; and provided, further, that the replenishment of the accounts of the Reserve Fund shall be made in accordance with the Indenture as described under “—Reserve Fund” below.

Deficiencies. If on any Interest Payment Date or date for redemption the amount on deposit in the Revenue Fund is inadequate to make the transfers above as a result of a payment default on an issue of Local Obligations, the Trustee will immediately notify the issuer of such Local Obligations of the amount needed to make the required deposits under “— Application of Revenues .” In the event that following such notice the Trustee receives Local Obligations Delinquency Re venues from the issuer of such Local Obligation to cure such shortfall, the Trustee shall deposit such amounts to the Revenue Fund for application in accordance with the Indenture. The Trustee shall disburse or transfer all Revenues representing Local Obligations Delinquency Revenues of the Community Facilities District first to cure any event of default on the Bonds caused by the nonpayment of the Local Obligations of such Improvement Area and then to replenish the amount in the Reserve Fund to the Reserv e Requirement, subject to the limitations described under the caption “ —Reserve Fund” below.

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Rebate Fund. On each Interest Payment Date after making the transfers required described above, upon receipt of a Request of the Authority to do so, the Truste e shall transfer from the Revenue Fund to the Rebate Fund for deposit in the accounts therein the amounts specified in such Request of the Authority.

Surplus Fund. On September 1 of each year, after making the deposits described above, the Trustee will transfer all amounts remaining on deposit in the Revenue Fund to the Administrative Expense Fund unless the Trustee has received a request of the Authority directing it to transfer all or a portion of the said amounts to the Surplus Fund, in which case the Trustee shall make the transfer to the Surplus Fund.

Reserve Fund
An account for each issue of Local Obligations will be established in the Reserve Fund (each, a “Reserve Account”). On the date of issuance of the Bonds, the Authority will deposit proceeds of the Bonds in the amount of $_____ into the Reserve Fund, which amount equals the Reserve Requirement as of the date of issuance of the Bonds. Each Local Obligation’s initial Proportionate Share will initially be as follows:
 $______ in the Improvement Area No. 1 Reserve Account  $______ in the Improvement Area No. 2 Reserve Account The Indenture defines “Proportionate Share” to mean as of the date of calculation for any issue of the Local Obligations, the ratio derived by dividing the outstanding principal amount of such Local Obligations by the principal amount of the Outstanding Bonds.

The aggregate of the foregoing amounts is equal to the Reserve Requirement as of the date of issuance of the Bonds, which is an amount equal to the lowest of (i) 10% of th e initial principal amount of the Bonds, (ii) Maximum Annual Debt Service on the Outstanding Bonds, or (iii) 125% of average Annual Debt Service on the Outstanding Bonds. Pursuant to the Indenture, the Reserve Requirement shall never be greater than the initial Reserve Requirement. In the event that the amount of the Reserve Requirement is changed, the Trustee will, upon receipt of a Request of the Authority, adjust the shares of each Reserve Account to reflect the new Reserve Requirement.

Subject to the limitations set forth in the following paragraph, moneys in the Reserve Fund will be used to pay the principal of and interest on the Bonds when the moneys in the Interest Account and the Principal Account of the Revenue Fund are insufficient therefor. In addition, amounts in the Reserve Fund may be applied (i) in connection with an optional redemption of Bonds or a defeasance thereof, (ii) when the balance therein equals the principal and interest due on the Bonds to and including maturity, (iii) credited to an Improvement Area as a result of a reduction in the Reserve Requirement resulting from the redemption of the Local Obligations relating to such Improvement Area and the Bonds so redeemed in connection therewith, or (iv) when amounts in certain accoun ts of the Reserve Fund are transferred to the Interest Account and the Principal Account as a credit against the payments due on the Local Obligations in the event amounts in a Reserve Account are sufficient to repay the remaining principal and interest du e on the related Local Obligations that will be applied to the Bonds, as specified below.

If the amounts in the Interest Account or the Principal Account of the Revenue Fund are insufficient to pay the principal of or interest on the Bonds when due or mand atory sinking fund payments on the Bonds when due, the Trustee shall withdraw from the applicable Reserve Account or Reserve Accounts an amount equal to the deficiency resulting from the delinquency in the payment of scheduled debt service on the applicable Series of Local Obligations and transfer such amount to the Interest Account, the Principal Account or both, as applicable. If there are insufficient funds on deposit in a Reserve Account to cover a deficiency resulting from the delinquency in the payme nt of scheduled debt service on the applicable Series of Local Obligations, the Trustee shall withdraw from each of the other Reserve Accounts an amount based upon the Proportionate Share applicable to each such Reserve Account of such remaining deficiency and transfer such amounts to the Interest Account, the Principal Account or both, as applicable.

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Upon the transfer by the Trustee to the Reserve Fund of delinquent Revenues, such Revenues shall be allocated to the Reserve Accounts as follows:

First, to the Reserve Account for any series of Local Obligations, other than the Reserve Account to which such delinquent Revenues relate, that amount necessary to increase the amount on deposit in such account to the Reserve Requirement on a Proportionate Sha re basis if the deficiency in the amount on deposit in such account resulted from draws on such account due to delinquencies in the payment of scheduled debt service on that series of Local Obligations from which such delinquent Revenues were received. In the event that such delinquent Revenues are not sufficient to increase the amount on deposit in each of the applicable Reserve Accounts to the Reserve Requirement, a Proportionate Share of such delinquent Revenues shall be deposited in each such Reserve Account.

Second, after increasing the amount on deposit in each applicable Reserve Account to the applicable Proportionate Share of the Reserve Requirement pursuant to the second step, to the Reserve Account for the series of Local Obligations from which t he delinquent Revenues were received that amount necessary to replenish the amount on deposit in such Reserve Account to the applicable Proportionate Share of the Reserve Requirement.

Third, after making all deposits pursuant to the three steps above, the remaining delinquent Revenues, if any, shall be transferred to the Revenue Fund.

When amounts in a Reserve Account are sufficient to repay the remaining principal and interest due on the related Local Obligations that will be applied to the Bonds, such amo unts will be transferred to the Interest Account and the Principal Account as a credit against the payments due on such Local Obligations, with the amount transferred from a Reserve Account being deposited first to the Interest Account as a credit on the i nterest due on such Local Obligations on such date and the balance being deposited to the Principal Account as a credit on the principal due on such Local Obligations on such date.

Surplus Fund
Any amounts transferred to the Surplus Fund pursuant to the In denture shall no longer be considered Revenues and are not pledged to repay the Bonds. So long as Local Obligations are outstanding, on September 1 of each year after setting aside any amount specified in a Request of the Authority as necessary to pay Administrative Expenses, the remaining balance, if any, in the Surplus Fund shall (i) be transferred by the Trustee to the City for credit to the special tax fund for the Local Obligations, and the Community Facilities District shall be credited a percentage of the total amount available on each September 1 that is equal to the percentage which each series of its outstanding Local Obligation represents of all outstanding Local Obligations held by the Trustee as of the date of disbursement or (ii) as set forth in a Request of the City be applied to the redemption of Local Obligations pursuant to the terms of the Local Obligation Indenture with each series of Local Obligations to be credited a percentage of the total amount available on each September 1 that is e qual to the percentage which a series of outstanding Local Obligations represents of all outstanding Local Obligations held by the Trustee as of the date of disbursement. In the event that the Local Obligations have been redeemed or defeased in whole or i n part, then such credit shall be applied among the Local Obligations based on a Certificate of an Independent Financial Consultant prepared at the direction of the Authorized Representative of the City. In the event the Community Facilities District is no longer obligated to levy Special Taxes to repay Local Obligations, then any amounts in the Surplus Fund may be used by the Authority for any lawful purpose, including, but not limited to, the payment of expenses of the Authority, the City or the Communit y Facilities District relating to the Bonds, the Local Obligations, the Community Facilities District, or any other purpose as specified in a Request of the Authority delivered to the Trustee.

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No Additional Bonds Except to Refund Bonds
The Authority may is sue Additional Bonds in such principal amount as will be determined by the Authority, pursuant to a Supplemental Indenture adopted or entered into by the Authority.

Additional Bonds may only be issued subject to the following conditions precedent establi shed by the Indenture:
(a) The Authority is in compliance with all covenants set forth in the Indenture and all Supplemental Indentures.
(b) The proceeds of such Additional Bonds will be applied to accomplish a refunding of all or a portion of the Bonds or any Additional Bonds Outstanding. (c) The Supplemental Indenture providing for the issuance of such Additional Bonds will provide that interest thereon will be payable on September 1 and March 1, and principal thereof will be payable on September 1 in any year in which principal is payable.
(d) Prior to the delivery of any Additional Bonds, a written certificate must be provided to the Authority and the Trustee by an Independent Financial Consultant which certifies that following the issuance of the Series of Additional Bonds and the Local Obligations, the principal and interest generated from the Local Obligations is adequate to make the timely payment of principal and interest due on the Bonds and the Series of Additional Bonds to be issued under the Indenture. (e) The Supplemental Indenture providing for the issuance of Additional Bonds may provide for the establishment of separate funds and accounts.
(f) No Event of Default has occurred and be continuing with respect to the Bonds or any of the Local Obligations.
(g) The Authority will deliver to the Trustee a written Certificate of the Authority certifying that the conditions precedent to the issuance of such Additional Bonds set forth in subsections (a), (b), (c), (d) and (f) above have been satisfied an d that, upon the issuance of such Additional Bonds an amount equal to the Reserve Requirement, as adjusted (if necessary) to reflect the issuance of such Additional Bonds will be on deposit in the Reserve Fund.

SECURITY FOR THE LOCAL OBLIGATIONS
General
Each series of Local Obligations is a limited obligation of the Community Facilities District payable solely from Net Special Taxes (defined below) collected in the applicable Improvement Area and amounts deposited by the Community Facilities District in the applicable Special Tax Fund. The Community Facilities District’s limited obligation to pay the principal of, premium, if any, and interest on the applicable Local Obligations from Net Special Taxes collected in the applicable Improvement Area and amounts in the applicable Special Tax Fund is absolute and unconditional.

No Local Obligation (and no obligations issued on a parity therewith under the Local Obligation Indentures relating to the Local Obligations, each a “Local Obligation Parity Bond”) is a legal or equitable pledge, charge, lien or encumbrance upon any of the Community Facilities District’s respective property, or upon any of their income, receipts or revenues, except the Net Special Taxes collected in the applicable Improvement Area and other amounts in the applicable Special Tax Fund which are, under the ter ms of each Local Obligation Indentures and the Mello -Roos Act, set aside for the payment of the Local Obligations and

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interest thereon and neither the respective members of the legislative body of the Community Facilities District or the City Council nor a ny persons executing the Bonds are liable personally on the Bonds by reason of their issuance.

The “Special Taxes” for each Improvement Area are levied and collected according to the Rate and Method established for such Improvement Area. The complete Rate and Method for each of the Improvement Areas is attached hereto as Appendix A — “RATES AND METHODS OF APPORTIONMENT OF SPECIAL TAXES.”
The Local Obligations are not cross -collateralized. In other words, Special Taxes collected in one Improvement Area cannot be used to cover any shortfall in the payment of debt service on the Local Obligations of another Improvement Area. However, the Reserve Fund held by the Trustee and funded at the Reserve Requirement will be available in the event of delinquent Revenu es. See “SECURITY FOR THE BONDS — Reserve Fund” herein.

Except for the foregoing, no other taxes are pledged to the payment of the Local Obligations and Local Obligation Parity Bonds . The Local Obligations and any Local Obligation Parity Bonds are not general or special obligations of the City nor general obligations of the Community Facilities District , but are limited obligations of the Community Facilities District payable solely from amounts deposited by the Community Facilities District in certain funds established under the Local Obligation Indentures, as more fully described herein. The Community Facilities District’s limited obligation to pay the principal of, premium, if any, and interest on the Local Obligations and any Local Obligation Parity Bonds from amounts in certain funds established under the Local Obligation Indentures is absolute and unconditional, free of deductions and without any abatement, offset, recoupment, diminution or set -off whatsoever. No Owner of the Local Obligations or any Local Obligation Parity Bonds may compel the exercise of the taxing power by the Community Facilities District (except as pertains to the Special Taxes) or the City or the forfeiture of any of their property. The principal of and interest on the Local Obligations and any Local Obligation Parity Bonds and premiums upon the redemption thereof, if any, are not a debt of the City, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction.

The Special Taxes are collected in the manner and at the same time as ad valorem property taxes are collected and is subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem property taxes; provided, however, that the Community Facilities District may directly bill the Special Tax, and may collect Special Taxes at a different time or in a different manner as determined by the City Council.

Under the Mello-Roos Act under no circumstances will the Special Taxes levied against any parcel in an Improvement Area for which an occupancy permit for private residential use has been issued be increased by more than ten percent (10%) per Fiscal Year as a consequence of delinquency or default by the owner of any other parcel within such Improvement Area. Therefore, even though the maximum Special Tax rates may allow for Special Tax increases greater than 10%, in the event of high delinquencies in an Improvement Area, the Community Facilities District could not increase the Special Taxes in such Improvement Area in the Fiscal Year following such delinquencies by more than 10% on the residential units. See “SPECIAL RISK FACTORS — Special Tax Delinquencies.”
Local Obligation Indentures
The Local Obligations will be issued under separate Local Obligation Indentures to be executed and delivered in connection with such issuance. The following describes certain provisions of the Local Obligation Indentures, which are substantially similar.

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Under the Local Obligation Indentures, the “Net Special Taxes” pledged by the Community Facilities District to the Local Obligations (and any related Local Obligation Parity Bonds) is defined as “Gross Special Taxes” minus amounts set aside to pay Administrative Expenses. “Gross Special Taxes” is defined in each Local Obligation Indenture as the amount of all Special Taxes received by the Community Facilities District from the Improvement Area, together with the proceeds collected from the sale of property pursuant to the foreclosure provisions of the Local Obligation Indenture for the delinquency of such Special Taxes remaining after the payment of all costs related to such foreclosure actions.
“Administrative Expenses” are the administrative costs with respect to the calculation and collection of the Special Taxes, including all attorneys’ fees and other costs related thereto, the fees and expenses of the Trustee, any fees and related costs for credit enhancement for the Local Obligations or which are not otherwise paid as Costs of Issuance, any costs related to the Community Facilities District’s compliance with state and federal laws requiring continuing disclosure of information concerning the Local Obligations, the Community Facilities District, and any other costs otherwise incurre d by the City on behalf of the Community Facilities District, in order to carry out the purposes of the Community Facilities District, as set forth in the Resolution of Formation and any obligation of the Community Facilities District under the Local Obligation Indenture.

Administrative Expenses also include the administrative costs with respect to the collection of Delinquency Proceeds.

The portion of any Prepayment received by the Community Facilities District that is to be applied to the redemption of Local Obligations will be identified as such by the Community Facilities District and transferred to Zions Bancorporation , National Association (“Zions Bancorporation”) for deposit in the Redemption Account. Except for the foregoing portion of any Prepayment to be deposited to the Redemption Account, the Community Facilities District will, as soon as practicable, transfer the Special Taxes received by the Community Facilities District to Zions Bancorporation for deposit in the applicable Special Tax Fund to be held by Zions Bancorporation in trust for the Owners of the Local Obligations . Zions Bancorporation wil l transfer the Special Taxes on deposit in the Special Tax Fund on the dates and in the amounts se t forth in the Local Obligation Indenture, in the following order of priority, to:
(1) The Administrative Expense Fund;
(2) The Interest Account of the Special Tax Fund;
(3) The Principal Account of the Special Tax Fund;
(4) The Trustee for deposit in the Reserve Account under the Authority Indenture the amount necessary to cause the balance on deposit therein to equal the applicable Improvement Area’s Proportionate Share of the Reserve Requirement;
(5) The Redemption Account of the Special Tax Fund; and (6) The Surplus Fund.

Each Local Obligation Indenture creates and establishes a Surplus Fund to be maintained by Zions Bancorporation. As soon as practicable after each September 1, and in any event prior to each October 1, Zions Bancorporation will transfer all remaining amounts in the Special Tax Fund to the Surplus Fund, unless on or prior to such date, it has received a Certificate of an Authorized Representative directing that certain amounts be retained in the Special Tax Fund because the Community Fac ilities District has included such amounts as being available in the Special Tax Fund in calculating the amount of the levy of Special Taxes for such Fiscal Year. The amounts in the Surplus Fund are not pledged to the repayment of the Local Obligations

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or any related Local Obligation Parity Bonds and may be used by the Community Facilities District for any lawful purpose.

Local Obligation Parity Bonds
The Local Obligation Indentures authorize the Community Facilities District to issue additional bonds payable from Special Taxes on a parity with the related Local Obligations but only for the purpose of refunding all or a portion of the applicable Local Obligations or Local Obligation Parity Bonds. Local Obligations will only be refunded if a corresponding amount of Bonds is refunded. For a description of the conditions established in each Local Obligation Indentures for the issuance of Local Obligation Parity Bonds, see Appendix B — “SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” Priority of Lien
Each installment of the Special Taxes and any interest and penalties thereon, constitutes a lien on the parcel of land on which it was imposed until the same is paid. Such lien is co -equal to and independent of the lien for general taxes or any other community facilities district special taxes.

Covenants of the Community Facilities District
In its respective Local Obligation Indenture, the Community Facilities District has made certain covenants, certain of which are described below.

Punctual Payment. The Community Fa cilities District will duly and punctually pay or cause to be paid the principal of and interest on every Local Obligation and Local Obligation Parity Bond issued under its Local Obligation Indenture , together with the premium, if any, thereon on the date, at the place and in the manner set forth in the Local Obligations and Local Obligation Parity Bonds and in accordance with its Local Obligation Indenture to the extent that Net Special Taxes and other amounts pledged thereunder are available therefor, and that the payments into the Funds and Accounts created thereunder will be made, all in strict conformity with the terms of the Local Obligations , any Local Obligation Parity Bonds, and its Local Obligation Indenture , and that it will faithfully observe and perform all of the conditions, covenants and requirements of its Local Obligation Indenture and all Supplemental Indentures and of the Local Obligations and any Local Obligation Parity Bonds issued under its Local Obligation Indenture.

Against Encumbrance. The Community Facilities District will not mortgage or otherwise encumber, pledge or place any charge upon any of the Net Special Taxes except as provided in the Local Obligation Indenture, and will not issue any obligation or security having a lien or charge upon the Net Special Taxes superior to or on a parity with the Local Obligations, other than Local Obligation Parity Bonds. Nothing in the Local Obligation Indenture shall prevent the Community Facilities District from issuing or incurring indebtedness which is payable from a pledge of Net Special Taxes which is subordinate in all respects to the pledge of Net Special Taxes to repay the Local Obligations and the Local Obligation Parity Bonds.

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Levy of Special Tax . So long as any Local Obligations or Local Obligation Parity Bonds issued are Outstanding, the Community Facilities District covenants to levy the Special Tax in an amount sufficient, together with other amounts on deposit in the Special Tax Fund and available for such purpose, to pay (1) the principal of and interest on the Local Obligations and Local Obligation Parity Bonds when due, (2) the Administrative Expenses, (3) any amounts required to maintain the Reserve Account of the Special Tax Fund at the Reserve Requirement, and (4) any amounts required to replenish the applicable Reserve Account under the Authority Indenture to the Proportionate Share resulting from the delinquency in the payment of scheduled debt service on the Local Obligations and any Local Obligation Parity Bonds. The Community Facilities District further covenants that it will take no actions that would discontinue or cause the discontinuance of the Special Tax levy or the Community Facilities District’s authority to levy the Special Tax for so long as the Local Obligations and any Local Obligation Parity Bonds are Outstanding.

Commence Foreclosure Proceedings. The Community Facilities District covenants for the benefit of the Owners of the Local Obligations and any Local Obligation Parity Bonds that it will review the public records of the County of Riverside, California, in connection with the collection of the Special Tax not later than July 1 of each year to determine the amount of Special Tax collected in the prior Fiscal Year; and with respect to individual delinq uencies within an Improvement Area , if the Community Facilities District determines that any single property owner subject to the Special Tax is delinquent in the payment of Special Taxes in the aggregate of $2,500 or more or as to any single parcel the de linquent Special Taxes represent more than 5% of the aggregate Special Taxes within an Improvement Area , then the Community Facilities District will send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the proper ty owner within 45 days of such determination, and (if the delinquency remains uncured) the Community Facilities District will cause judicial foreclosure proceedings to be filed in the Superior Court within ninety (90) days of such determination against al l properties for which the Special Taxes remain delinquent; provided that, notwithstanding the foregoing, the Community Facilities District may elect to defer foreclosure proceedings on any parcel so long as the amount in the Reserve Account is at least eq ual to the Reserve Requirement and the amount in the Reserve Account for any series of Local Obligations is at least equal to the applicable Improvement Area’s Proportionate Share. The Community Facilities District may, but shall not be obligated to, adva nce funds from any source of legally available funds in order to maintain the Reserve Account and the Reserve Account for any series of Local Obligations . The Community Facilities District may treat any delinquent Special Tax sold to an independent third-party or to any funds of the City for at least 100% of the delinquent amount as having been paid. Proceeds of any such sale up to 100% of the delinquent amount will be deposited in the Special Tax Fund.

Special Taxes Are Not Within Teeter Plan
The Special Taxes are not encompassed within the alternate procedure for the distribution of certain property tax levies on the secured roll pursuant to Chapter 3, Part 8, Division 1 of the California Revenue and Taxation Code (Section 4701 et seq.), commo nly referred to as the “Teeter Plan.” The County has adopted a Teeter Plan under which a tax distribution procedure is implemented and secured roll taxes are distributed to taxing agencies within the County on the basis of the tax levy, rather than on the basis of actual tax collections.

However, by policy, the County does not include special taxes, assessments or assessments in its Teeter Plan.

The Special Taxes of the Improvement Areas are not included in the County’s Teeter Plan.

THE COMMUNITY FACILITIES DISTRICT
The Community Facilities District was formed by the City Council, and Improvement Area No. 1 and Improvement Area No. 2 were designated therein, pursuant to the Mello -Roos Act in 2023 . The Community Facilities District is located in the western portion of the City, west of the 10 Freeway and north of Oak Valley Parkway and includes a total of 419 residential lots comprising Planning Area 4B of the Fairway Canyon master planned community. The Fairway Canyon master planned community surr ounds the Morongo Golf Club at Tukwet Canyon golf course, which meanders through the community. At buildout, Fairway Canyon is expected to consist of approximately 3,300 residential units on approximately 1,556 acres of land, with 46.4

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acres of commercial/industrial land uses and the balance set aside for public/quasi/public uses. As of October 1, 2025, approximately 2,588 homes within Fairway Canyon have been completed and sold to individual homeowners.

The Community Facilities District consists of Impro vement Area No. 1 and Improvement Area No. 2 and is expected to be developed with a total of 419 single family homes, as described further under the captions “IMPROVEMENT AREA NO. 1” and “IMPROVEMENT AREA NO. 2.” IMPROVEMENT AREA NO. 1
General
Improvement Area No. 1 consists of two non-contiguous tax zones, with Tax Zone 1 generally located in the southwest portion of the Community Facilities District, north of West Oak Valley Parkway, and with Tax Zone 2 located in the northeastern portion of the Community Facilities District, west of Tukwet Canyon Parkway and south of Mickelson Drive. The property within Improvement Area No. 1 consists of 132 completed single family homes.

For the property within Improvement Area No. 1, water service is provided by the Be aumont-Cherry Valley Water District, sewer service is supplied by the City, electricity is currently supplied by Southern California Edison and gas by Southern California Gas Company. Public education instruction is provided by the Beaumont Unified School District.

According to the Seismic Safety Commission, the area within Improvement Area No. 1 is located within Zone 4, which is considered to be the highest risk zone in California. There are only two zones in California: Zone 4, which is assigned to are as near major earthquake faults, and Zone 3, which is assigned to all other areas of more moderate seismic activity. In addition, the property within Improvement Area No. 1 is located in a Fault-Rupture Hazard Zone (formerly referred to as an Alquist -Priolo Study Zone). Furthermore, a substantial portion of Improvement Area No. 1 is located in an area which the Department of Forestry and Fire Protection of the State of California has designated as either a high or very high fire hazard severity zone.

Improvement Area No. 1 is not located within a 500 -year floodplain. Property in Improvement Area No. 1 may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. See “SPECIAL RISK FACTORS — Natural Disasters.”
Description of Authorized Facilities
Proceeds of the Improvement Area No. 1 Bonds are authorized to be used to pay for the costs of the design, engineering, acquisition and construction of certain City facilities.

Property Ownership and the Development
Improvement Area No. 1 was developed with 132 single family homes by D.R. Horton Los Angeles Holding Company, Inc., a California corporation (previously defined as “D.R. Horton”) in a development known as August II at The Fairways. As of September 5, 2025, the date of value of the Appraisal Report, D.R.

Horton had conveyed 131 completed single family homes to individual homeowners and owned one completed home. The final home within Improvement Area No. 1 is in escrow and scheduled to close in November 2025.

For further i nformation regarding D.R. Horton’s development within Improvement Area No. 1, see the Appraisal Report attached hereto as Appendix C.

Assigned Special Taxes
Table 4 below sets forth the current Assigned Special Taxes that may be levied on the property within Improvement Area No. 1 in Fiscal Year 2025-26 based on the development status within Improvement Area

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No. 1 as of September 1, 2025. All 132 parcels within Improvement Area No. 1 will be classified as Developed Property for purposes of the Fiscal Year 2025-26 Special Tax levy and the District expects to levy Special Taxes on all 132 parcels within Improvement Area No. 1 at 100% of the Assigned Rate. For the complete text of the Improvement Area No. 1 Rate and Method, see Appendix A — “RATES AND METHODS OF APPORTIONMENT OF SPECIAL TAXES.”
The Special Tax levy in Improvement Area No. 1 for Fiscal Year 2025-26 is shown in Table 4 below.

TABLE 4

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) IMPROVEMENT AREA 1
ASSIGNED SPECIAL TAX RATES FOR FISCAL YEAR 2025-26
Zone/Land
Use Class Land Use Type
Residential
Floor
Area (sq. ft.)
Assigned
Special
Tax
Rates
Fiscal
Year
2025-26
Special
Tax Levy
Rates
Fiscal Year
2025-26
Percentage of
Assigned Rate
Number
of Units
Aggregate
Estimated
Special
Taxes
Fiscal Year
2025-26(1)
Percentage
of Total
Zone 1
1 Residential Property <2,100 sq ft $1,328 $1,328 100.0% 18 $ 23,904 13.4% 2 Residential Property 2,100 - 2,400 sq ft 1,376 1,376 100.0 18 24,768 13.9 3 Residential Property >2,400 sq ft 1,414 1,414 100.0 19 26,866 15.1 Zone 2
1 Residential Property <1,600 sq ft $1,106 $1,106 100.0% 17 $ 18,802 10.6% 2 Residential Property 1,600 - 1,800 sq ft 1,215 0 0.0 0 0 0.0 3 Residential Property 1,801 - 2,000 sq ft 1,325 1,325 100.0 15 19,875 11.2 4 Residential Property >2,000 sq ft 1,414 1,414 100.0 45 63,630 35.8 Total 132 $ 177,845 100.0%

(1) Includes estimated Administrative Expenses of $30,000.

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

Property Values and the Appraisal Report
General. The extent to which the Special Tax within Improvement Area No. 1 provides security for the Improvement Are No. 1 Bonds is, at least in part, a function of the value of each parcel of land within Improvement Area No. 1 that is subject to the Special Tax because, in the event that a property owner defaults in the payment of the applicable Special Tax, such property owner will not have any personal liability for the payment of the Special Tax, and the principal remedy available to the Community Facilities District will be to take foreclosure proceedings with respect to the subject property.

Assessed Value. The assessed value of the property within Improvement Area No. 1 represents the secured assessed valuation established by the County Assessor. Assessed values do not necessarily represent market values. Article XIIIA of the California Constitution (Proposition 13) defines “full cash value” to mean “the County assessor’s valuation of real property as shown on the 1975/76 roll under ‘full cash value’, or, thereafter, the appraised value of real property when purchased or newly constructed or when a change in ownership has occurred after the 1975 assessment,” subject to exemptions in certain circumstances of property transfer or reconstruction. The “full cash value” is subject to annual adjustment to reflect increases, not to exceed 2% for any year, or decreases in the consumer price index or comparable local data, or to reflect reductions in property value caused by damage, destruction or other factors. Because of the general limitation to 2% per year in increases in full cash value of properties which remain in the same ownership, the County tax roll does not reflect values uniformly proportional to actual market values. There can be no assurance that the assessed valuations of the properties within Improvement Area No. 1 accurately reflect their respective market values, and the future fair market values of those properties may be lo wer than their current assessed

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valuations. The Fiscal Year 2025-26 assessed value of the property in Improvement Area No. 1 is $67,338,268.

Appraised Values. As a result of the requirements of Article XIIIA of the California Constitution, a property’s assessed value is not necessarily indicative of its market value. In order to provide information with respect to the value of the property within the Distric t, the City engaged Integra Realty Resources, the Appraiser, to prepare the Appraisal Report. The Appraiser has an “MAI” designation from the Appraisal Institute and has prepared numerous appraisals for the sale of land -secured municipal bonds. The Appra iser has no material relationships with the City, the Community Facilities District, the developers or the owners of the land within the Community Facilities District other than the relationship represented by the engagement to prepare the Appraisal Report . The City instructed the Appraiser to prepare its analysis and report in conformity with City-approved guidelines and the Appraisal Standards for Land Secured Financings published in 1994 and revised in 2004 by the California Debt and Investment Advisory Commission. A copy of the Appraisal Report is included as Appendix C —“APPRAISAL REPORT” to this Official Statement.

The purpose of the Appraisal Report was to estimate the market value of the property within the District subject to the lien of the Special Taxes. Subject to the assumptions and limiting conditions set forth in the Appraisal Report, as of September 5, 2025 , the Appraiser estimated the minimum aggregate value of the fee simple interest of the taxable property within Improvement Area No. 1 w as not less than $79,893,725, consisting of an aggregate Fiscal Year 2025-26 assessed value of $13,293,725 for the 21 single family homes with a complete improvement value assigned by the County for Fiscal Year 2025 -26, and an aggregate appraised value of $66,600,000 for the 111 single family homes which did not have a complete improvement value assigned by the County for Fiscal Year 2025-26.

Reference is made to Appendix C for a complete list of the assumptions and limiting conditions and a full discussion of the appraisal methodology and the basis for the Appraiser’s opinions. In the event that any of the contingencies, assumptions and limiting conditions are not actually realized, the value of the property within Improvement Area No. 1 may be less than the amount reported in the Appraisal Report. In any case, there can be no assurance that any portion of the property within Improvement Area No. 1 would actually sell for the amount indicated by the Appraisal Report.

The Appraisal Report merely indicates the Appraiser’s opinion as to the market value of the property referred to therein as of the date and under the conditions specified therein. The Appraiser’s opinion refle cts conditions prevailing in the applicable market as of the date of the Appraisal Report. The Appraiser’s opinion does not predict the future value of the subject property, and there can be no assurance that market conditions will not change adversely in the future.

It is a condition precedent to the issuance of the Bonds that the Appraiser deliver to the Community Facilities District a certification to the effect that, while the Appraiser has not updated the Appraisal Report since its date and has not un dertaken any obligation to do so, nothing has come to the attention of the Appraiser subsequent to the date of the Appraisal Report that would cause the Appraiser to believe that the value of the property that it appraised in Improvement Area No. 1 is less than the value reported in the Appraisal Report. However, the Appraiser notes that acts and events may have occurred since the date of the Appraisal Report which could result in both positive and negative effects on market value within Improvement Area No. 1.

Estimated Value-to-Lien Ratios
Table 5 below incorporates the values assigned to parcels in the Appraisal Report, the estimated principal amount of the Improvement Area No. 1 Bonds allocable to each category of parcels and the estimated assessed/appraised value -to-lien ratios for various categories of parcels based upon land values as of September 5, 2025, as set forth in the Appraisal Report. Based on the principal amount of the Improvement Area No. 1 Bonds, the estimated assessed/appraised value -to-lien ratio for Improvement Area No. 1 including

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all Taxable Property is 38.97-to-1. This ratio does not include other direct and overlapping debt within the District. See “ —Direct and Overlapping Indebtedness” below. Taking that direct and overlapping debt into account, the ratio of the aggregate assessed/appraised value of the Taxable Property within Improvement Area No. 1 to the total principal amount of all direct and overlapping bonded debt for Improvement Area No. 1 is approximately 16.60-to-1*.

Table 6 below summarizes the assessed/appraised value -to-lien of the property within Improvement Area No. 1 by value-to-lien ranges for purposes of the Fiscal Year 2025-26 Special Tax levy.

 Preliminary, subject to change.

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TABLE 5

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

ESTIMATED VALUE-TO-LIEN RATIOS
FISCAL YEAR 2025-26 PROJECTED LEVY ON ALL TAXABLE PROPERTIES Property Owner
Numbe
r of
Parcels
Appraised/Ass
essed
Property
V alue(2)
Percentage of
Appraised/Assesse
d V alue
Fiscal
Year
2025 -26
Maximum
Tax
Fiscal
Year
2025 -26
Percentag
e of
Maximum
Tax
Projecte
d
Fiscal
Year
2025 -26
Levy(3)*
Percentag
e of
Estimated
Fiscal
Year
2025 -26
Levy
Improvement Area No.
1 Bonds (4)
All Other
Overlapping Debt
Issued(5)
Appraised/Asse
ssed
V alue-to- Lien
Ratio*
Developed Property(1)
Developed
Individually Owned
131 $79,293,725 99.25% $194,562 99.27% $176,431 99.20% $2,033,701 $ 2,740,055 16.61:1 Developed - DR
Horton Owned
1 600,000 0.75 1,429 0.73 1,414 0.80 16,299 21,960 15.68:1 T otal Developed 132 $79,893,725 100.00% $195,990 100.00% $177,845 100.00% $2,050,000 $ 2,762,015 16.60:1

T otal 132 $79,893,725 100.00% $195,990 100.00% $177,845 100.00% $2,050,000 $ 2,762,015 16.60:1 *

* Preliminary, subject to change.
(1) Ownership status as shown in the Appraisal Report. All of the parcels in Improvement Area No. 1 had building permits issuer prior to March 1, 2025 and are therefore considered Developed Property.
(2) Reflects the assessed/appraised values shown in the Appraisal Report . (3) Estimated Fiscal Year 2025 -26 Special Tax levy based upon development status as of March 1 , 2025 and preliminary debt service with administration of $30,000. (4) Includes the principal amount of the Improvement Area No. 1 Bonds. Responsibility of the principal amount of the Improvement Area No. 1 Bonds has been allocated based on the projected Fiscal Year 2025 -26 Special Tax levy.
(5) See Table 7.

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

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TABLE 6

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) IMPROVEMENT AREA 1
FISCAL YEAR 2025-26 PROJECTED VALUE-TO-LIEN STRATIFICATION V alue-to-Lien Category
Number of
Parcels of
Developed
Property
Percentage
of
Developed
Property
Appraised/Assessed
V alue(1)
Percentage of
Appraised/Assessed
V alue
Improvement
Area No. 1
Fiscal Year
2025 -26 Levy
Percent Share of
Projected
Fiscal Year
2025 -26 Levy
Improvement Area
No. 1 Bo nds(2)*
Percent Share
of
Improvement
Area No. 1
Bonds*
All Other
Overlapping
Debt(3)
Aggregate
Appraised/Assessed
V alue-to-Lien*
Less than 16.00:1 (4) 45 34.09% $ 27,008,000 33.80% $ 63,630 35.78% $ 733,456 35.78% $ 988,203 15.69:1 Between 16.00:1 to 18.00:1 70 53.03 42,685,725 53.43 95,413 53.65 1,099,815 53.65 1,481,808 16.53:1 Greater than 18.00:1(4) 17 12.88 10,200,000 12.77 18,802 10.57 216,729 10.57 292,004 20.05:1 Totals 132 100.00% $ 79,893,725 100.00% $177,845 100.00% $ 2,050,000 100.00% $ 2,762,015 16.60:1

* Preliminary, subject to change.
(1) Reflects the assessed/appraised values shown in the Appraisal Report . (2) Responsibility of the par amount has been allocated based on the estimated Fiscal Year 2025-26 Special Tax levy , with development status as of September 5, 2025, and preliminary bond sizing as provided by the Underwriter.
(3) See Table 7.
(4) The minimum value-to -lien in the Less than 16.00:1 category is 15.68:1 *. The maximum value-to -lien in the Greater than 18.00:1 category is 20.05:1 *.

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

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Direct and Overlapping Debt
Improvement Area No. 1 is included within the boundaries of overlapping local agencies providing governmental services. Some of these local agencies have outstanding bonds, and/ or the authority to issue bonds, payable from taxes or assessments. The existing and authorized indebtedness payable from taxes and assessments that may be levied upon the property within Improvement Area No. 1 is shown in Table 7 below.

In addition to c urrent debt, new community facilities districts and/or special assessment districts could be formed in the future encompassing all or a portion of the property within Improvement Area No. 1; and such districts or the agencies that formed them could issue m ore bonds and levy additional special taxes or assessments.

TABLE 7

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

DIRECT AND OVERLAPPING DEBT
AS OF SEPTEMBER 5, 2025
I. Assessed/Appraisal V alue(1) $ 79,893,725

II. Land Secured Bond Indebtedness
Outstanding Direct and|
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable
Parcels in
Improvement
Area No. 1 (3)
Amount
Applicable
BEAUMONT USD CFD NO. 2022-1 IA 1, SERIES 2025 CFD $ 2,540,000 $ 2,540,000 100.000% 132 $ 2,540,000 CITY OF BEAUMONT CFD NO. 2023-1 IA 1, SERIES 2025 CFD 2,050,000 * 2,050,000 100.000 132 2,050,000 * TOTAL LAND SECURED BONDED DEBT (2) $ 4,590,000 *

Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable
Parcels in
Improvement
Area No. 1 (3)
Amount
Applicable
BEAUMONT USD CFD NO. 2022-1 IA 1, SERIES 2025 CFD $ 11,000,000 $ 8,460,000 100.000% 132 $ 8,460,000 CITY OF BEAUMONT CFD NO. 2023-1 IA 1, SERIES 2025 CFD 3,500,000 * 0 100.000 132 0 TOTAL UNISSUED LAND SECURED INDEBTEDNESS (2) $ 8,460,000 *

TOTAL OUTSTANDING AND UNISSUED LAND SECURED INDEBTEDNESS $ 13,050,000 *

III. General Obligation Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable
Parcels in
Improvement
Area No. 1 (3)
Amount
Applicable
BEAUMONT UNIFIED SCHOOL DISTRICT GO $ 140,998,583 $ 121,631,194 0.015% 132 $ 130,292 SAN GORGONIO PASS MEM HOSPITAL GO 108,000,000 86,960,000 0.011 132 70,405 MT SAN JACINTO JR COLLEGE GO 295,000,000 233,100,000 0.001 132 21,318 TOTAL OUTSTANDING GENERAL OBLIGA TION BONDED DEBT (2) $ 222,015

Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable
Parcels in
Improvement
Area No. 1 (3)
Amount
Applicable
BEAUMONT UNIFIED SCHOOL DISTRICT GO $ 141,000,000 $ 1,417 0.015% 132 $ 0 SAN GORGONIO PASS MEM HOSPITAL GO 108,000,000 0 0.011 132 0 MT SAN JACINTO JR COLLEGE GO 295,000,000 0 0.001 132 0 TOTAL UNISSUED GENERAL OBLIGA TION INDEBTEDNESS(2) $ 0

TOTAL OUTSTANDING AND UNISSUED GENERAL OBLIGA TION INDEBTEDNESS $ 222,017

TOTAL OF ALL OUTSTANDING DIRECT AND OVERLAPPING BONDED DEBT $ 4,812,015 * TOTAL OF ALL OUTSTANDING DIRECT AND UNISSUED DIRECT OVERLAPPING INDEBTEDNESS $ 13,272,017 *

IV . Ratios to Appraisal V alue
Outstanding Land Secured Bonded Debt................................ ........ 17.41:1 * Total Outstanding Bonded Debt ................................ ................... 16.60:1*

* Preliminary, subject to change.
(1) Based on the assessed/appraised value set f orth in the Appraisal Report. (2) Parity Bonds may be issued to f inance additional public improvements and f or ref unding purposes. (3) All parcels have subdivided into 132 individual parcels. Based on development status as of September 5, 2025, all 132 parcels are classif ied as Developed Property under the Improvement Area No. 1 Rate and Method f or Fiscal Year 2025-26.

Source: County of Riverside Assessor’s Of f ice; Spicer Consulting Group, LLC.

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Table 8 below describes the estimated Fiscal Year 2025-26 effective tax burden for a property within Improvement Area No. 1 based on the average value of a home within Improvement Area No. 1 with a complete improvement value assigned by the County for Fiscal Year 2025 -26, the estimated Fiscal Year 2025- 26 Special Tax levy and the Fiscal Year 2025-26 levies for all other overlapping taxing jurisdictions. Based on the foregoing and the projected debt service on the Improvement Area No. 1 Bonds and the Administrative Expenses Cap of $30,000 in Fiscal Year 202 5-26 (which amount shall escalate at 2.00% per Fis cal Year), the projected effective tax rate to be levied in Improvement Area No. 1 will average approximately 1.91%.

TABLE 8

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) IMPROVEMENT AREA 1
ESTIMATED AVERAGE FISCAL YEAR 2025-26 TAX OBLIGATION
A verage Home V alue (1) $ 633,035

Ad V alorem Property T axes(2)
General Purpose $ 6,330
Beaumont Unified School (0.07274%) 460
Mt San Jacinto Jr College (0.00254%) 16
San Gorgonio Pass Mem Hospital (0.04568%) 289
San Gorgonio Pass Water Debt Svc (0.17500%) 1,108
T otal General Property T axes $ 8,204

Assessment, Special T axes & Parcel Charges(3)
San Gorgonio Hospital Measure H $ 61
Flood Control Stormwater / Cleanwater / Santa Ana 4
Beaumont USD CFD No. 2022-1 1,395
CFD No. 2023-1 - Safety Special Tax 561
CFD No. 2023-1 - Maintenance Services Special Tax 450
CFD No. 2023-1 - Facilities Special Tax 1,410
T otal Assessments & Special T axes $ 3,881

Projected T otal Property T ax $ 12,085*
Projected Effective T ax Rate 1.91% *

* Preliminary, subject to change.
(1) Average home value is based upon average assessed values for developed parcels with improvement value for Fiscal Year 2025-26 per Riverside County Equalized Roll data.
(2) Average Fiscal Year 2025-26 tax rates based upon Fiscal Year 2025-26 overlapping taxes and assessment rates . (3) Reflects the average Fiscal Year 2025 -26 Special Tax levy within Improvement Area No. 1 for facilities for developed parcels with an assessed value for improvements.

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

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Delinquency History
For each Fiscal Year, the first installment of the Special Taxes becomes delinquent on December 10 and the second installment becomes delinquent on April 10. Fiscal Year 2024-25 was the first fiscal year in which Special Taxes were levied within Improvement Area No. 1. Table 9 below summarizes the Special Tax payments within Improvement Area No. 1 for Fiscal Year 2024 -25 and delinquencies as of September 15, 2025.

TABLE 9

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) IMPROVEMENT AREA 1
SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES FISCAL YEAR 2024-25 Delinquencies as of September 15, 2025
Fiscal
Year
Amount
Levied
Parcels
Levied Parcels Delinquent
Amount
Delinquent
Percent
Delinquent
2024-25 $123,136 91 1 $1,325 1.08%

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

IMPROVEMENT AREA NO. 2
General
Improvement Area No. 2 is located in the center of the Community Facilities District, along Sorenstam Drive. Improvement Area No. 2 is being developed with 287 single family homes by Meritage Homes of California, Inc., a California corporation (“Meritage” ), in three developments known as “Magnolia at The Fairways,” “Holly at The Fairways” and “Azalea at The Fairways.” For the property within Improvement Area No. 2 , water service is provided by the Beaumont -Cherry Valley Water District, sewer service is s upplied by the City, electricity is currently supplied by Southern California Edison and gas by Southern California Gas Company. Public education instruction is provided by the Beaumont Unified School District.

According to the Seismic Safety Commission, the area within Improvement Area No. 2 is located within Zone 4, which is considered to be the highest risk zone in California. There are only two zones in California: Zone 4, which is assigned to areas near major earthquake faults, and Zone 3, which is a ssigned to all other areas of more moderate seismic activity. In addition, the property within Improvement Area No. 2 is located in a Fault -Rupture Hazard Zone (formerly referred to as an Alquist -Priolo Study Zone). Furthermore, a substantial portion of Improvement Area No. 2 is located in an area which the Department of Forestry and Fire Protection of the State of California has designated as either a high or very high fire hazard severity zone.

Improvement Area No. 2 is not located within a 500 -year floodplain. Property in Improvement Area No. 2 may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. See “SPECIAL RISK FACTORS — Natural Disasters.”
Authorized Uses of Bond Proceeds
Proceeds of the Bonds are authorized to be used to pay for the costs of the design, engineering, acquisition and construction of certain City facilities.

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Property Ownership and the Development
The information about the property in Improvement Area No. 2 under this caption has been provided by representatives of Meritage, and has not been independently confirmed or verified by the Underwriter, the City or the Community Facilities District. The Underwriter, the City, and the Community Facilities District make no representation as to the accuracy or adequacy of the information contained in this caption. There may be material adverse changes in this information after the date of this Official Statement. Neither the Improvement Area No. 2 Bonds nor the Net Tax es securing the Improvement Area No. 2 Bonds are personal obligations of Meritage or any affiliate thereof or any other property owner and, in the event that any property owner defaults in the payment of its Special Taxes, the Community Facilities District may proceed with judicial foreclosure but has no direct recourse to the assets of any property owner or any affiliate thereof. See the caption “SPECIAL RISK FACTORS.”
Meritage Homes. As previously defined in this Official Statement, “Meritage” is Meritage Homes of California, Inc., a California corporation. Meritage Homes is a subsidiary of Meritage Homes Corporation (“Meritage Homes Corporation”), a Maryland corporation. Meritage Homes Corporation is a homebuilder focused primarily on high -growth regi ons of the western and southern United States. Meritage Homes Corporation operates as a holding company, has no independent assets or operations, and is traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “MTH.” Homebuilding, construct ion, development and sales activities are conducted through subsidiaries. As of July 1, 2024, Meritage Homes Corporation had operations in three geographic regions comprised of nine states: (Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina and Tennessee).

Meritage Homes Corporation is subject to the informational reporting requirements of the Exchange Act, and in accordance therewith is obligated to file reports, proxy statements and other information with the SEC. Such filings set forth, among other things, certain data relative to the consolidated results of operations and financial position of Meritage Homes Corporation and its subsidiaries (e.g., see Meritage Homes Corporation’s Annual Report on Form 10 -K for the fiscal year ended December 31, 202 3, as filed with the SEC on February 14, 2024 , Quarterly Report on Form 10 -Q for the quarterly period ending June 30, 2024 as filed with the SEC on July 26, 202 4) and Quarterly Report on Form 10 -Q for the quarterly period ended September 30, 202 4, as filed with the SEC on October 31, 2024) as of the dates described therein. The SEC maintains an Internet website that contains reports, proxy and information statement s and other information regarding registrants that file electronically with the SEC, including Meritage Homes Corporation. The address of such Internet website is www.sec.gov. All documents subsequently filed by Meritage Homes Corporation pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in such manner as the SEC prescribes. Copies of Meritage Homes Corporation’s annual report, quarterly reports and current reports, including any a mendments, will be available from Meritage Homes Corporation’s website at www.meritagehomes.com.

The foregoing internet websites are included for reference only and the information on these internet sites is not a part of this Official Statement and is not incorporated by reference into this Official Statement.

No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on such internet websites. Neither Meritage Homes nor Meritage Home Corporation is obligated to advance funds for construction or development or to pay ad valorem property taxes or the Special Taxes and investors should not rely on the information and financial statements contained on such internet sites in evaluating whether to buy, hold or sell the Bonds.

Meritage Development Plan . Improvement Area No. 2 is being developed with 287 single family homes by Meritage in three developments known as “Magnolia at The Fairways,” “Holly at The Fairways” and “Azalea at The Fairways.” As of Septem ber 5, 2025, the date of value of the Appraisal Report (as defined herein), Meritage had conveyed 271 completed single family homes to individual homeowners and owned three completed homes and 13 homes in various stages of construction.

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Since September 5, 2025, and as of October 8, 2025, Meritage had completed construction of all of the homes within Improvement Area No. 2 and owned eight completed homes, all of which were in escrow with individual homeowners and all of which were expected to close in Nove mber 2025. The table below summarizes the product mix and development status of the homes within Improvement Area No. 2 as of October 8, 2025.

TABLE 10

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

MERITAGE HOMES PRODUCT MIX AND DEVELOPMENT STATUS
(As of October 8, 2025)
Neighborhood/
Floor Plan Living Space Total Units
Closed to
Individual
Homeowners
Meritage
Owned
Completed
Homes
Homes Under
Construction
Base Home
Price(1)
Holly
Residence 1 2,527 22 22 -- -- N/A
Residence 2 2,992 22 22 -- -- N/A
Residence 3 3,247 21 21 -- -- N/A

Magnolia
Residence 1 2,176 34 31 3 -- $574,000
Residence 2 2,493 14 14 -- -- N/A
Residence 3 2,833 36 34 2 -- $642,000
Residence 4 3,153 27 26 1 -- $648,000

Azalea
Residence 1 1,628 32 32 -- -- N/A
Residence 2 1,910 28 26 2 -- $536,000
Residence 3 2,541 32 32 -- -- N/A
Residence 4 2,771 9 9 -- -- N/A
Residence 5 2,948 10 10 -- -- N/A
Total 287 279 8 0

(1) Base prices exclude lot premiums, options, upgrades, incentives, and any selling concessions or price reductions that may be offered and are subject to change at any time.

Source: Meritage Homes.

Although the information in this Official Statement reflects the current development expectations of Meritage, no assurance can be given that home construction and sales will be carried out on the schedule and according to the plans described herein, or that the home construction and sale plans or base prices set forth herein will not change after the date of thi s Official Statement. Meritage reserves the right to change its development at any time without notice. Additionally, homes under contract to be sold may not result in closed escrows as sales contracts are subject to cancellation.

Assigned Special Taxes
Table 1 below sets forth the current Assigned Special Taxes that may be levied on the property within Improvement Area No. 2 in Fiscal Year 2025-26 based on the development status within Improvement Area No. 2 as of September 1, 2025. All 287 parcels wi thin Improvement Area No. 2 will be classified as Developed Property for purposes of the Fiscal Year 2025 -26 Special Tax levy and the District expects to levy

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Special Taxes on all 287 parcels within Improvement Area No. 2 at 100% of the Assigned Rate. For the complete text of the Improvement Area No. 2 Rate and Method, see Appendix A — “RATES AND METHODS OF APPORTIONMENT OF SPECIAL TAXES.”
The Special Tax levy in Improvement Area No. 2 for Fiscal Year 2025 -26 is shown in Table 11 below.

TABLE 11

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) IMPROVEMENT AREA 2
ASSIGNED SPECIAL TAX RATES FOR FISCAL YEAR 2025-26
Zone/Land
Use Class Land Use Type
Residential Floor
Area (sq. ft.)
Assigned
Special
Tax Rates
Fiscal Year
2025 -26
Special Tax
Levy Rates
Fiscal Year
2025 -26
Percentag e
of
Assigned
Rate
Number
of Units
Aggregate
Estimated
Special Taxes
Fiscal Year
2025 -26 (1)
Percentag e
of Total
Zone 1
1 Residential Property <1,900 sq ft $1,481 $1,481 100.0% 32 $ 47,392 9.0% 2 Residential Property 1,900 - 2,100 sq ft 1,574 1,574 100.0 28 44,072 8.3 3 Residential Property 2,101 - 2,300 sq ft 1,609 0 0.0 0 0 0.0 4 Residential Property 2,301 - 2,500 sq ft 1,732 0 0.0 0 0 0.0 5 Residential Property 2,501 - 2,700 sq ft 1,809 1,809 100.0 32 57,888 10.9 6 Residential Property 2,701 - 2,900 sq ft 1,895 1,895 100.0 9 17,055 3.2 7 Residential Property >2,900 sq ft 1,954 1,954 100.0 10 19,540 3.7 Zone 2
1 Residential Property <2,200 sq ft $1,736 $1,736 100.0% 33 $ 57,288 10.8% 2 Residential Property 2,200 - 2,500 sq ft 1,837 1,837 100.0 14 25,718 4.9 3 Residential Property 2,501 - 2,800 sq ft 1,938 0 0.0 0 0 0.0 4 Residential Property 2,801 - 3,100 sq ft 1,969 1,969 100.0 35 68,915 13.0 5 Residential Property >3,100 sq ft 2,067 2,067 100.0 27 55,809 10.5 Zone 3
1 Residential Property <2,600 sq ft $1,884 $1,884 100.0% 23 $ 43,332 8.2% 2 Residential Property 2,600 - 2,850 sq ft 1,960 1,960 100.0 1 1,960 0.4 3 Residential Property 2,851 - 3,100 sq ft 2,061 2,061 100.0 22 45,342 8.6 4 Residential Property >3,100 sq ft 2,135 2,135 100.0 21 44,835 8.5 T otal 287 $529,146 100.0%

(1) Includes estimated Administrative Expenses of $30,000.

Source: Spicer Consulting Group, LLC.

Property Values and the Appraisal Report
General. The extent to which the Special Tax within Improvement Area No. 2 provides security for the Improvement Are No. 2 Bonds is, at least in part, a function of the value of each parcel of land within Improvement Area No. 2 that is subject to the Special Tax because, in the event that a property owner defaults in the payment of the applicable Special Tax, such property owner will not have any personal liability for the payment of the Special Tax, and th e principal remedy available to the Community Facilities District will be to take foreclosure proceedings with respect to the subject property.

Assessed Value. The assessed value of the property within Improvement Area No. 2 represents the secured assesse d valuation established by the County Assessor. Assessed values do not necessarily represent market values. Article XIIIA of the California Constitution (Proposition 13) defines “full cash value” to mean “the County assessor’s valuation of real property as shown on the 1975/76 roll under ‘full cash value’, or, thereafter, the appraised value of real property when purchased or newly constructed or when a change in ownership has occurred after the 1975 assessment,” subject to exemptions in certain circumsta nces of property transfer or reconstruction. The “full cash value” is subject to annual adjustment to reflect increases, not to exceed 2% for any year, or decreases in the consumer price index or comparable local data, or to reflect

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reductions in property value caused by damage, destruction or other factors. Because of the general limitation to 2% per year in increases in full cash value of properties which remain in the same ownership, the County tax roll does not reflect values uniformly proportional to actual market values. There can be no assurance that the assessed valuations of the properties within Improvement Area No. 2 accurately reflect their respective market values, and the future fair market values of those properties may be lower than their current assessed valuations. The Fiscal Year 2025 -26 assessed value of the property in Improvement Area No. 2 is $133,428,526.

Appraised Values. As a result of the requirements of Article XIIIA of the California Constitution, a property’s assessed value is not necessarily indicative of its market value. In order to provide information with respect to the value of the property within the District, the City engaged Integra Realty Resources, the Appraiser, to prepare the Appraisal Report. The Appraiser has an “MAI” designation from the Appraisal Institute and has prepared numerous appraisals for the sale of land -secured municipal bonds. The Appraiser has no material relationships with the City, the Community Facilities District, the developers or the owner s of the land within the Community Facilities District other than the relationship represented by the engagement to prepare the Appraisal Report. The City instructed the Appraiser to prepare its analysis and report in conformity with City -approved guidelines and the Appraisal Standards for Land Secured Financings published in 1994 and revised in 2004 by the California Debt and Investment Advisory Commission. A copy of the Appraisal Report is included as Appendix C —“APPRAISAL REPORT” to this Official Statement.

The purpose of the Appraisal Report was to estimate the market value of the property within the District subject to the lien of the Special Taxes. Subject to the assumptions and limiting conditions set forth in the Appraisal Report, as of September 5, 2025 , the Appraiser estimated the minimum aggregate value of the fee simple interest of the taxable property within Improvement Area No. 2 was not less than $ 162,727,411, consisting of an aggregate Fiscal Year 2025-26 assessed value of $90,399,411 for the 148 single family homes with a complete improvement value assigned by the County for Fiscal Year 2025 -26, and an aggregate appraised value of $72,328,000 for the 139 single family homes which did not have a complete improvement value assigned by the County for Fiscal Year 2025-26.

Reference is made to Appendix C for a complete list of the assumptions and limiting conditions and a full discussion of the appraisal methodology and the basis for the Appraiser’s opinions. In the event that any of the cont ingencies, assumptions and limiting conditions are not actually realized, the value of the property within Improvement Area No. 2 may be less than the amount reported in the Appraisal Report. In any case, there can be no assurance that any portion of the property within Improvement Area No. 2 would actually sell for the amount indicated by the Appraisal Report.

The Appraisal Report merely indicates the Appraiser’s opinion as to the market value of the property referred to therein as of the date and under t he conditions specified therein. The Appraiser’s opinion reflects conditions prevailing in the applicable market as of the date of the Appraisal Report. The Appraiser’s opinion does not predict the future value of the subject property, and there can be n o assurance that market conditions will not change adversely in the future.

It is a condition precedent to the issuance of the Bonds that the Appraiser deliver to the Community Facilities District a certification to the effect that, while the Appraiser has not updated the Appraisal Report since its date and has not undertaken any obligation to do so, nothing has come to the attention of the Appraiser subsequent to the date of the Appraisal Report that would cause the Appraiser to believe that the value of t he property that it appraised in Improvement Area No. 2 is less than the value reported in the Appraisal Report. However, the Appraiser notes that acts and events may have occurred since the date of the Appraisal Report which could result in both positive and negative effects on market value within Improvement Area No. 2.

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Estimated Value-to-Lien Ratios
Table 12 below incorporates the values assigned to parcels in the Appraisal Report, the estimated principal amount of the Improvement Area No. 2 Bonds allocable to each category of parcels and the estimated assessed/appraised value -to-lien ratios for various categories of parcels based upon land values as of September 5, 2025, as set forth in the Appraisal Report. Based on the principal amount of the Improve ment Area No. 2 Bonds, the estimated assessed/appraised value -to-lien ratio for Improvement Area No. 2 including all Taxable Property is 23.20 -to-1. This ratio does not include other direct and overlapping debt within the District. See “ —Direct and Over lapping Indebtedness” below. Taking that direct and overlapping debt into account, the ratio of the aggregate assessed/appraised value of the Taxable Property within Improvement Area No. 2 to the total principal amount of all direct and overlapping bonded debt for Improvement Area No. 2 is approximately 11.91-to-1*.

Table 13 below summarizes the assessed/appraised value -to-lien of the property within Improvement Area No. 2 by value-to-lien ranges based on the Fiscal Year 2025-26 Special Tax levy.

 Preliminary, subject to change.

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TABLE 12

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

ESTIMATED VALUE-TO-LIEN RATIOS
FISCAL YEAR 2025-26 PROJECTED LEVY ON ALL TAXABLE PROPERTIES Property Owner(1)
Number
of
Parcels
Appraised/As
sessed
Property
V alue(2)
Percentage of
Appraised/As
sessed V alue
Fiscal Year
2025 -26
Maximum
Tax
Fiscal Year
2025 -26
Percentage of
Maximum
Tax
Projected
Fiscal Year
2025 -26
Levy(3)*
Percentage
of
Estimated
Fiscal Year
2025 -26
Levy*
Improvement
Area No. 2
Bonds(4)*
All Other
Overlapping
Debt Issued(5)
Appraised/As
sessed V alue-
to- Lien
Ratio*
Developed Property
Developed Individually
Owned
271 $158,054,411 97.13% $560,340 94.46% $499,777 94.45% $ 6,625,649 $6,275,938 12.25:1 Developed - Meritage Homes
Owned
16 4,673,000 2.87 32,891 5.54 29,369 5.55 389,351 368,801 6.16:1 T otal Developed 287 $162,727,41 1 100.00% $593,231 100.00% $529,146 100.00% $ 7,015,000 $6,644,738 11.91:1

T otal 287 $162,727,41 1 100.00% $593,231 100.00% $529,146 100.00% $ 7,015,000 $6,644,738 11.91:1

* Preliminary, subject to change.
(1) Ownership status as shown in the Appraisal Report. All of the parcels in Improvement Area No. 2 had building permits issuer prior to March 1, 2025 and are therefore considered Developed Property.
(2) Reflects the assessed/appraised values shown in the Appraisal Report . (3) Estimated Fiscal Year 2025 -26 Special Tax levy based upon development status as of March 1 , 2025 and preliminary debt service with administration of $30,000. (4) Includes the principal amount of the Improvement Area No. 2 Bonds. Responsibility of the principal amount of the Improvement Area No. 2 Bonds has been allocated based on the projected Fiscal Year 2025 -26 Special Tax levy.
(5) See Table 14.

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

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TABLE 13

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) IMPROVEMENT AREA 2
FISCAL YEAR 2025-26 PROJECTED VALUE-TO-LIEN STRATA FOR DEVELOPED PROPERTY AS OF SEPTEMBER 5, 2025 V alue-to-Lien
Category
Number
of Parcels
of
Developed
Property
Percentage
of
Developed
Property
Appraised/Assessed
V alue(1)
Percentage of
Appraised/Assessed
V alue
Improvement
Area No. 2
Projected
Fiscal Year
2025 -26 Levy
Percent
Share of
Projected
Fiscal Year
2025 -26
Levy
Improvement
Area No. 2
Bonds(2)*
Percent
Share of
Improvement
Area No. 2
Bonds*
All Other
Overlapping
Debt(3)
Aggregate
V alue-to-
Lien*
Less than 10.00:1 (4) 13 4.53% $ 3,048,000 1.87% $ 23,631 4.47% $ 313,281 4.47% $ 296,746 5.00:1 Between 10.01:1 to

12.00:1
87 30.31 49,720,247 30.55 171,222 32.36 2,269,926 32.36 2,150,116 11.25:1 Between 12.01:1 to

14.00:1
184 64.11 108,276,071 66.54 329,757 62.32 4,371,658 62.32 4,140,916 12.72:1 Greater than

14.00:1 (4)
3 1.05 1,683,093 1.03 4,536 0.86 60,135 0.86 56,961 14.37:1 Totals 287 100.00% $162,727,411 100.00% $529,146 100.00% $7,015,000 100.00% $ 6,644,738 11.91:1

* Preliminary, subject to change.
(1) Reflects the assessed/appraised values shown in the Appraisal Report. (2) Responsibility of the par amount has been allocated based on the estimated Fiscal Year 2025-26 Special Tax levy , with development status as of September 5, 2025, and preliminary bond sizing as provided by the Underwriter.
(3) See Table 14.
(4) The minimum value to lien in the less than 10.01:1 category is 4.42:1 *. The maximum value to lien in the Greater than 14.00:1 category is 14.53:1 *.

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

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Direct and Overlapping Debt
Improvement Area No. 2 is included within the boundaries of overlapping local agencies providing governmental services. Some of these local agencies have outstanding bonds, and/ or the authority to issue bonds, payable from taxes or assessments. The existing and authorized indebtedness payable from taxes and assessments that may be levied upon the property within Improvement Area No. 2 is shown in Table 14 below.

In addition to current debt, new community facilities districts and/or special assessment districts could be formed in the future encompassing all or a portion of the property within Improvement Area No. 2; and such districts or the agencies that formed them could issue more bonds and levy additional special taxes or assessments.

TABLE 14

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

DIRECT AND OVERLAPPING DEBT
AS OF SEPTEMBER 5, 2025
I. Assessed/Appraisal V alue (1) $ 162,727,411

II. Land Secured Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable
Parcels in
Improvement
Area No. 2(3)
Amount
Applicable
BEAUMONT USD CFD NO. 2022-1 IA 2, SERIES 2025 CFD $ 5,135,000 $ 5,135,000 100.000% 287 $ 5,135,000 CITY OF BEAUMONT CFD NO. 2023-1 IA 2, SERIES 2025 CFD 7,015,000 * 7,015,000 100.000 287 7,015,000 * TOTAL LAND SECURED BONDED DEBT (2) $ 12,150,000 *

Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable
Parcels in
Improvement
Area No. 2(3)
Amount
Applicable
BEAUMONT USD CFD NO. 2022-1 IA 2, SERIES 2025 CFD $ 7,000,000 $ 1,865,000 100.000% 287 $ 1,865,000 CITY OF BEAUMONT CFD NO. 2023-1 IA 2, SERIES 2025 CFD 11,000,000 0 100.000 287 0* TOTAL UNISSUED LAND SECURED INDEBTEDNESS (2) $ 1,865,000 *

TOTAL OUTSTANDING AND UNISSUED LAND SECURED INDEBTEDNESS $ 14,015,000 *

III. General Obligation Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt Type Issued Outstanding
%
Applicable
Parcels in
Improvement
Area No. 2(3)
Amount
Applicable
BEAUMONT UNIFIED SCHOOL DISTRICT GO $140,998,583 $121,631,194 0.728% 287 $ 886,008 SAN GORGONIO PASS MEM HOSPITAL GO 108,000,000 86,960,000 0.551 287 478,764 MT SAN JACINTO JR COLLEGE GO 295,000,000 233,100,000 0.062 287 144,966 TOTAL OUTSTANDING GENERAL OBLIGA TION BONDED DEBT (2) $ 1,509,738

Authorized but Unissued Direct and
Overlapping Indebtedness Type Authorized Unissued
%
Applicable
Parcels in
Improvement
Area No. 2(3)
Amount
Applicable
BEAUMONT UNIFIED SCHOOL DISTRICT GO $141,000,000 $ 1,417 0.728% 287 $ 10 SAN GORGONIO PASS MEM HOSPITAL GO 108,000,000 0 0.551 287 0 MT SAN JACINTO JR COLLEGE GO 295,000,000 0 0.062 287 0 TOTAL UNISSUED GENERAL OBLIGA TION INDEBTEDNESS (2) $ 10

TOTAL OUTSTANDING AND UNISSUED GENERAL OBLIGA TION INDEBTEDNESS $ 1,509,749

TOTAL OF ALL OUTSTANDING DIRECT AND OVERLAPPING BONDED DEBT $ 13,659,738 * TOTAL OF ALL OUTSTANDING DIRECT AND UNISSUED DIRECT OVERLAPPING INDEBTEDNESS $ 15,524,749 *

IV . Ratios to Appraisal V alue
Outstanding Land Secured Bonded Debt .................... 13.39:1* Total Outstanding Bonded Debt ................................ 11.91:1*

* Preliminary, subject to change.
(1) Based on the assessed/appraised value set f orth in the Appraisal Report. (2) Parity Bonds may be issued to f inance additional public improvements and f or ref unding purposes. (3) All parcels have subdivided into 287 individual parcels. Based on development status as of September 5, 2025, all 287 parcels are classif ied as Developed Property under the Improvement Area No. 2 Rate and Method f or Fiscal Year 2025-26.

Source: County of Riverside Assessor’s Of f ice; Spicer Consulting Group, LLC.

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Table 15 below describes the estimated Fiscal Year 2025-26 effective tax burden for a property within Improvement Area No. 2 based on the average value of a home within Improvement Area No. 2 with a complete improvement value assigned by the County for Fiscal Year 2025 -26, the estimated Fiscal Year 2025- 26 Special Tax levy and the Fiscal Year 2025-26 levies for all other overlapping taxing jurisdictions. Based on the foregoing and the projected debt service on the Improvement Area No. 2 Bonds and the Administrative Expenses Cap of $30,000 in Fiscal Year 202 5-26 (which amount shall escalate at 2.00% per Fiscal Year), t he projected effective tax rate to be levied in Improvement Area No. 2 will average approximately 1.97%.

TABLE 15

CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2023-1 (FAIRWAY CANYON) IMPROVEMENT AREA 2
ESTIMATED AVERAGE FISCAL YEAR 2025-26 TAX OBLIGATION
A verage Home V alue (1) $610,807

Ad V alorem Property T axes(2)
General Purpose $ 6,108
Beaumont Unified School (0.07274%) 444
Mt San Jacinto Jr College (0.00254%) 16
San Gorgonio Pass Mem Hospital (0.04568%) 279
San Gorgonio Pass Water Debt Svc (0.17500%) 1,069
T otal General Property T axes $ 7,916

Assessment, Special T axes & Parcel Charges(3)
San Gorgoio Hospital Measure H $ 61
Flood Control Stormwater / Cleanwater / Santa Ana 4
Beaumont USD CFD No. 2022-1 1,160
CFD No. 2023-1 - Safety Special Tax 561
CFD No. 2023-1 - Maint Services Special Tax 450
CFD No. 2023-1 - Facilities Special Tax 1,898
T otal Assessments & Special T axes $ 4,134

Projected T otal Property T ax $ 12,050*
Projected Effective T ax Rate 1.97% *

* Preliminary, subject to change.
(1) Average home value is based upon average assessed values for developed parcels with improvement value for Fiscal Year 2025-26 per Riverside County Equalized Roll data.
(2) Average Fiscal Year 2025-26 tax rates based upon Fiscal Year 2025-26 overlapping taxes and assessment rates . (3) Reflects the average Fiscal Year 2025 -26 Special Tax levy within Improvement Area No. 2 for facilities for developed parcels with an assessed value for improvements.

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

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Delinquency History
For each Fiscal Year, the first installment of the Special Taxes becomes delinquent on December 10 and the second installment becomes delinquent on April 10. Fis cal Year 2024-25 was the first fiscal year in which Special Taxes were levied within Improvement Area No. 2. Table 16 below summarizes the Special Tax payments within Improvement Area No. 2 for Fiscal Year 2024-25 and delinquencies as of September 15, 2025.

TABLE 16

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

SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES FISCAL YEAR 2024-25
Delinquencies as of September 15, 2025
Fiscal
Year
Amount
Levied
Parcels
Levied
Parcels
Delinquent
Amount
Delinquent
Percent
Delinquent
2024-25 $394,750 210 1 $2,067 0.52%

Source: County of Riverside Assessor’s Office; Spicer Consulting Group, LLC.

SPECIAL RISK FACTORS
The Bonds have not been rated by any rating agency, and t he purchase of the Bonds involves significant risks and is not a suitable investment for all investors. The following is a discussion of certain risk factors which should be considered, in addition to other matters set forth herein, in evalua ting the investment quality of the Bonds. This discussion does not purport to be comprehensive or definitive and does not purport to be a complete statement of all factors which may be considered as risks in evaluating the credit quality of the Bonds. The occurrence of one or more of the events discussed herein could adversely affect the ability or willingness of property owners in the Improvement Areas to pay their Special Taxes when due. Such failures to pay Special Taxes could result in the inability of the Community Facilities District to make full and punctual payments of debt service on the Local Obligations which comprise the Revenues available to pay debt service on the Bonds. In addition, the occurrence of one or more of the events discussed her ein could adversely affect the value of the property in the Improvement Areas. See “—Property Values” and “ —No Rating – Limited Secondary Market.”
Risks of Real Estate Secured Investments Generally
Because the timely payment of debt service on the Bonds w ill be dependent upon the timely payment of the Local Obligations and the timely payment of the Local Obligations will be dependent upon the timely payment of Special Taxes, which are secured ultimately by the Taxable Property within the Improvement Areas, the Bond Owners will be subject to the risks generally incident to an investment secured by real estate, including, without limitation, (i) adverse changes in local market conditions, such as changes in the market value of real property in and around the vicinity of the Improvement Area s, the supply of or demand for competitive properties in such area, and the market value of residential property or buildings and/or sites in the event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, governmental rules (including, without limitation, zoning laws and laws relating to endangered species and hazardous materials) and fiscal policies; (iii) natural disasters (including, without limitation, earthquakes, wildfires, floods, drought and windstorms), which may result in uninsured losses; and (iv) adverse changes in local market conditions.

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The Bonds are Limited Obligations of the Authority
The Bonds are limited obligations of the Authority payable only from amounts pledged und er the Indenture, which consist primarily of payments made to the Trustee on the Local Obligations and the Reserve Fund. Funds for the payment of the principal of and the interest on the Local Obligations are derived only from payments of Special Taxes. The amount of Special Taxes that are collected could be insufficient to pay principal of and interest on the Local Obligations due to non -payment of the Special Taxes levied or due to insufficient proceeds received from a judicial foreclosure sale of land within the Improvement Areas following delinquency. The Community Facilities District’s legal obligations with respect to any delinquent Special Taxes is limited to the institution of judicial foreclosure proceedings under certain circumstances with respe ct to any parcels for which Special Taxes is delinquent. The Bonds cannot be accelerated in the event of any default.

Failure by owners of the parcels within the Improvement Areas to pay Special Tax installments when due, delay in foreclosure proceedings, or the inability of the Community Facilities District to sell parcels which have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of Special Taxes levied against such parcels may result in the inability o f the Community Facilities District to make full or timely payments of debt service on the Local Obligations, which may, in turn, result in the depletion of the Reserve Fund and the inability of the Authority to make full or timely payment on the Bonds.

No Obligation of the City
The Local Obligations and the interest thereon, and in turn, the Bonds, are not payable from the general funds of the City. Except with respect to the Special Taxes, neither the credit nor the taxing power of the Community Faciliti es District or the City is pledged for the payment of the Local Obligations or the interest thereon, and except to compel a levy of the Special Taxes securing the Local Obligations, no Owner of the Bonds may compel the exercise of any taxing power by the C ommunity Facilities District or the City or force the forfeiture of any property of the City or the Community Facilities District. The principal of, premium, if any, and interest on the Bonds are not a debt of the City or the Community Facilities District or a legal or equitable pledge, charge, lien or encumbrance upon any of the City’s or the Community Facilities District’s property or upon any of the City’s or the Community Facilities District’s income, receipts or revenues, except the Revenues and other amounts pledged under the Indenture.

No Cross-Collateralization Between Improvement Areas
The Local Obligations are not cross -collateralized. In other words, the Special Taxes from one Improvement Area cannot be used directly to cover any shortfall in the payment of debt service on the Local Obligations of another Improvement Area . However, all amounts in the Reserve Fund are available to pay debt service on the Bonds if the amounts in the Interest Account or the Principal Account of the Revenue Fund are insufficient to pay the principal of or interest on the Bonds when due . See the caption “SECURITY FOR THE BONDS — Reserve Fund.”
Potential Early Redemption of Bonds from Prepayments or Other Sources Property owners within the Improvement Area s are permitted to prepay their Special Taxes at any time. Such prepayments could also be made from the proceeds of bonds issued by or on behalf of an overlapping community facilities district. Such prepayments wi ll result in a redemption of Local Obligations on the first March 1 or September 1 which is more than 30 days following the receipt of the prepayment. The proceeds of the Local Obligations so redeemed will then be used to make a mandatory redemption of th e Bonds. Such mandatory redemption of Bonds that were purchased at a price greater than par could reduce the otherwise expected yield on such Bonds. See “THE BONDS — Redemption — Special Redemption.”

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Property Values
The value of property within the Improvement Area s is an important factor in evaluating the investment quality of the Bonds. In the event that a property owner defaults in the payment of a Special Tax installments, a Community Facilities District’s only remedy is to judicially foreclose on th at property.

Prospective purchasers of the Bonds should not assume that the property within the Improvement Areas could be sold for the assessed values described herein at a foreclosure sale for delinquent Special Tax installments or for an amount adequate to pay delinquent Special Tax installments.

The assessed values set forth in this Official Statement do not represent market values arrived at through an appraisal process and generally reflect only the sales price of a parcel when acquired by its curr ent owner, increased or decreased annually by an amount determined by the Riverside County Assessor based on current market conditions, generally not to exceed an increase of more than 2% per Fiscal Year from the date of purchase (except in the case of new construction subsequent to such acquisition). No assurance can be given that a parcel could actually be sold for its assessed value.

The actual market value of the property is subject to future events such as downturn in the economy, occurrences of certa in acts of nature and the decisions of various governmental agencies as to land use, all of which could adversely impact the value of the property in the Improvement Area s which is the security for the Local Obligations, which secure the Bonds. As discuss ed herein, many factors could adversely affect property values within the Improvement Area s.

Natural Disasters
General. The market value of the property within the Improvement Areas can be adversely affected by a variety of factors which may affect publ ic and private improvements. Such additional factors include, without limitation, geologic conditions (such as earthquakes), topographic conditions (such as earth movements) and climatic conditions (such as droughts, fire hazard and floods). In the event of a severe earthquake, fire, flood or other natural disaster, there may be significant damage to both property and infrastructure in the Improvement Areas . As a result, a substantial portion of the property owners may be unable or unwilling to pay the S pecial Taxes when due. In addition, the value of land in the Improvement Areas could be diminished in the aftermath of such a natural disaster, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Specia l Taxes.

Geologic Conditions and Seismic Activity . Southern California is a seismically active area. Seismic activity represents a potential risk for damage to buildings, roads, bridges and property within the Taxing Jurisdictions. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event. According to the Seismic Safety Commission, the area within the Improvement Areas are located within Zone 4, which is considered to be the highest risk zone in California. There are only two zones in California: Zone 4, which is assigned to areas near major earthquake faults, and Zone 3, which is assigned to all other areas of more moderate seismic activity. In addition, the property within the Improvement Areas are located in a Fault-Rupture Hazard Zone (formerly referred to as an Alquist -Priolo Study Zone).

Flooding. The Improvement Areas are not located within a 500-year floodplain.

Wildfires. In recent years, wildfires have cau sed extensive damage throughout the State, including within the County. Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes. In some instances entire neighborhoods have been destroyed. Severa l fires in recent years damaged or destroyed property in areas that were not previously considered to be at risk from such events. In particular, certain electrical operators in the State have seen their distribution/transmission lines cause billions of d ollars in property damage and the loss of lives. In 2023, as in several prior years, for example, devastating wildfires burned in various communities in the State, causing wide -spread damage. In 2025, communities in Los Angeles County, including Pacific Palisades, Malibu and Altadena, experienced

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widespread devastation from wildfires causing losses of life, thousands of burned homes, and billions of dollars in property damage. Riverside County is also periodically subject to large -scale wildfires and is expected to be subject to wildfires in the future. In recent years, wildfires have burned hundreds of acres at a time and destroyed dozens of homes and structures in Riverside County. The City is located in the San Gorgonio Pass between the San Bernardino Mountains and the San Jacinto Mountains. Both mountain regions are heavily forested and routinely subject to forest fires.

On January 16, 2025, Governor Gavin Newsom issued Executive Order N -10-25 (the “Governor’s Order) which canceled penalties, cost s and interest on overdue property taxes (including special taxes) within certain zip codes affected by the Palisades Fire during calendar year 2025. This will likely cause a delay in the payment of special taxes by certain property owners in any community facilities districts affected by Governor’s Order. Unless the majority of property owners within the community facilities districts pay their special taxes voluntarily or have mortgage impound accounts, it is likely that the community facilities distric ts will need to draw upon a reserve fund to make debt service payments on outstanding bonds prior to the expiration of the Governor’s Order and it is possible that outstanding bonds will experience a payment default.

In the event of a major fire or other natural disaster affecting the Improvement Areas, a similar order affecting the Improvement Areas could impact the debt service payment for the Bonds .

In March 2025, the California Department of Forestry and Fire Protection (“ Cal Fire”) released an updated Fire Hazard Severity Zone map for the Southern California region . The Cal Fire Hazard Severity Zone maps evaluate fire hazard, which is defined as the likelihood and expected fire behavior over a 30 to 50- year period without considering mitigation measures such as home hardening, recent wildfire or fuel reduction efforts, as opposed to risk, which is the potential damage a fire can do to the area under existing conditions, accounting for any modifications such as fuel reduction projects, defensible space, and ignition resistant building construction. Pursuant to State law, the State Fire Marshal is mandated to classify the state responsibility areas where the state has financial responsibility for wildfire protection and prevention into Fire Hazard Severi ty Zones classified as “Moderate,” “High” or “Very High.” In areas designated as local responsibility areas, where local agencies have financial responsibility for wildfire protection and prevention, Cal Fire’s Fire Hazard Severity Zone maps make recommen dations for the classification of Moderate, High or Very High Fire Hazard Severity Zones and the local agencies must adopt maps which either adopt Cal Fire’s recommendations or place the relevant areas in a higher classification. For more information on C al Fire’s Fire Hazard Severity Zone maps, see the C al Fire website.

A substantial portion of the property in the Improvement Areas is located in an area which the Department of Forestry and Fire Protection of the State of California has designated as either a high or very high fire hazard severity zone. There is a risk of residential property within the Improvement Areas being destroyed by wildfires and no assurance can be given as to the severity or frequency of wildfires within the vicinity of the Improvement Area. Additionally, property located adjacent to burn areas can be subject to mudslides and flooding, which can cause significant damage and destruction to property.

Property Insurance
In recent years, homeowners in many areas in the State have experienced significant increases in premiums for property and homeowners’ insurance policies as well as difficulty in obtaining such insurance from commercial insurance companies. The increases have been driven by, among other factors, the risk of wildfire damage to property in the State.

In addition, no assurances can be made that adequate homeowners’ insurance coverage will be available in the future from reputable insurance companies, with premiums comparable to historical rates, or at all. The ina bility to obtain adequate insurance coverage could impact the ability of the homeowners’ in the Improvement Areas to reconstruct their homes in the event of damage.

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Hazardous Substances
While government taxes, assessments and charges are a common claim aga inst the value of a parcel, other less common claims may also be relevant. One of the most serious in terms of the potential reduction in the value of a parcel is a claim with regard to a hazardous substance. In general, the owners and operators of a parcel may be required by law to remedy conditions relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Super Fund Act,” is the most well -known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar in effect.

Under many of these laws, the owner (or operator) is obligated to remedy a hazardous s ubstance condition of a parcel whether or not the owner (or operator) had anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the parcels within the Improvement Areas be affected by a hazardous substance, is to reduce the marketability and value by the costs of remedying the condition.

The Community Facilities District is not aware of the presence of any federally or state classified hazardous substances in violation of any environmental laws, located on t he property within the Improvement Areas. However, it is possible that such materials do currently exist and that the Community Facilities District is not aware of them.

It is possible that property in the Improvement Areas may be liable for hazardous sub stances in the future as a result of the existence, currently, of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or the existence, currently, on the property of a substance not presently classified as hazardous but which may in the future be so classified. Additionally, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling such substance. All of these possibilities could have the effect of reducing the value of the applicable property.

Cybersecurity
The City, like many other public and private entities, rel ies on computer and other digital networks and systems to conduct their operations. The City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the efforts of the City to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City, or the administration of the Bonds.

The City is also reliant on other entities and service providers in connection with the administration of the Bonds, including without limitation the County tax collector for the levy and collection of Special Taxes and the Trustee. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the levy and collection of Special Taxes or the payment of debt service on the Bonds.

Parity Taxes and Special Assessments
Property within the Improvement Areas is subject to taxes and other charges levied by several other public agencies. None of the Authority, the Commu nity Facilities District or the City has control over the ability of other entities and districts to issue indebtedness secured by special taxes or assessments payable from all or a portion of the property within the Improvement Areas.

The Special Taxes and any penalties thereon will constitute a lien against the lots and parcels of land on which they will be annually imposed until they are paid. Such lien is on a parity with the lien of all special taxes and special assessments levied by other agencies and is co -equal to and independent of the lien for general ad valorem property taxes regardless of when they are imposed upon the same property. The Special Taxes have priority over all existing and future private liens imposed on the property. See “— Bankruptcy and Foreclosure” below.

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None of the Authority, the Community Facilities District or the City has control over the ability of other entities and districts to issue indebtedness secured by special taxes, ad valorem taxes or assessments payable from all or a portion of the property within the Improvement Area s. In addition, the landowners within the Improvement Area s may, without the consent or knowledge of the Authority, the Community Facilities District or the City, petition other public agencies t o issue public indebtedness secured by special taxes, ad valorem taxes or assessments. Any such special taxes, ad valorem taxes or assessments may have a lien on such property on a parity with the Special Taxes and could reduce the estimated value -to-lien ratios for property within the Improvement Areas described in this Official Statement.

Payment of the Special Tax is not a Personal Obligation of the Owners An owner of a taxable parcel is not personally obligated to pay the Special Tax. Rather, the Special Tax is an obligation which is secured only by a lien against the taxable parcel. If the proceeds received from the sa le of a taxable parcel following a Special Tax delinquency are not sufficient, taking into account other liens imposed by public agencies, to pay the full amount of the Special Tax delinquency, the Community Facilities District has no recourse against the owner of the parcel.

Disclosures to Future Purchasers
The willingness or ability of an owner of a parcel to pay the Special Tax may be affected by whether or not the owner was given due notice of the Special Tax authorization at the time the owner purchased the parcel, was informed of the amount of the Specia l Tax on the parcel should the Special Tax be levied at the maximum tax rate and the risk of such a levy and, at the time of such a levy, has the ability to pay it as well as pay other expenses and obligations. The City has caused a notice of the Special Tax that may be levied against the taxable parcels in each Improvement Area to be recorded in the Office of the Recorder for the County.

While title companies normally refer to such notices in title reports, there can be no guarantee that such reference w ill be made or, if made, that a prospective purchaser or lender will consider such Special Tax obligation in the purchase of a property within the Improvement Areas or lending of money thereon.

The Mello-Roos Act requires the subdivider (or its agent or re presentative) of a subdivision to notify a prospective purchaser or long -term lessor of any lot, parcel, or unit subject to a Mello -Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form. California Ci vil Code Section 1102.6b requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statu te. Failure by an owner of the property to comply with the above requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Special Tax, could adversely affect the willingness and ability of the purchaser o r lessor to pay the Special Tax when due.

Special Tax Delinquencies
Under provisions of the Mello -Roos Act, the Special Taxes, from which funds necessary for the payment of principal of and interest on the Local Obligations and, thus, the Bonds are derived , are customarily billed to the properties within the Improvement Areas on the ad valorem property tax bills sent by the County to owners of such properties. The Mello -Roos Act currently provides that such Special Tax installments are due and payable, and bear the same penalties and interest for non -payment, as do ad valorem property tax installments.

See the captions “IMPROVEMENT AREA NO. 1 — Delinquency History” and “IMPROVEMENT AREA NO. 2 — Delinquency History” f or the delinquency history of each Improv ement Area over the last five Fiscal Years.

See “SECURITY FOR THE LOCAL OBLIGATIONS — Covenants of the Community Facilities District — Commence Foreclosure Proceedings ,” for a discussion of the provisions which apply, and

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procedures which the Community Fac ilities District is obligated to follow under the Local Obligation Indentures, in the event of delinquencies in the payment of Special Taxes. See “ — Bankruptcy and Foreclosure” below for a discussion of the policy of the Federal Deposit Insurance Corporat ion (the “FDIC”) regarding the payment of special taxes and assessment and limitations on the Community Facilities District’s ability to foreclose on the lien of the Special Taxes in certain circumstances.

The Community Facilities District has the authorit y and the obligation, subject to the Mello-Roos Act and the maximum Special Tax rates set forth in each Rate and Method, to increase the levy of Special Taxes against non-delinquent property owners in the applicable Improvement Area in the event other owners within such Improvement Area are delinquent. Pursuant to each Rate and Method, under no circumstances may the Special Tax levied against any parcel for which an occupancy permit for private residential use has been issued be increased by more than 10% per Fiscal Year as a consequence of delinquency or default by the owner of any other parcel or parcels within the Improvement Area. Thus, the Community Facilities District may not be able to increase Special Tax levies in future Fiscal Years by enough to make up for delinquencies for prior Fiscal Years. This would result in draws on the Reserve Fund, and if delinquencies continue and in the aggregate exceed the Reserve Fund balance, defaults would occur in the payment of principal and interest on the Bonds.

Insufficiency of Special Taxes
Notwithstanding that the maximum Special Taxes that may be levied in the Improvement Area s exceeds debt service due on the Local Obligations, the Special Taxes collected could be inadequate to make timely payment of debt s ervice either because of nonpayment or because property becomes exempt from taxation. Each Rate and Method exempts certain specified property from the Special Tax levy. See Appendix D — “RATES AND METHODS OF APPORTIONMENT OF SPECIAL TAXES.” If for any re ason property within an Improvement Area becomes exempt from taxation by reason of ownership by a non-taxable entity such as the federal government, another public agency or other organization determined to be exempt, subject to the limitations of the maxi mum authorized rates, the Special Tax will be reallocated to the remaining taxable properties within such Improvement Area. This could result in certain owners of property paying a greater amount of the Special Tax and could have an adverse impact upon th e ability and willingness of the owners of such property to pay the Special Tax when due.

The Mello-Roos Act provides that, if any property within an Improvement Area not otherwise exempt from the Special Tax is acquired by a public entity through a negoti ated transaction, or by gift or devise, the Special Tax will continue to be levied on and enforceable against the public entity that acquired the property.

In addition, the Mello -Roos Act provides that, if property subject to the Special Tax is acquired b y a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment and be paid from the eminent domain award. The constitutionality and operation of these provisions of the Mello -Roos Act have not been tested in the courts.

Due to problems of collecting taxes from public agencies, if a substantial portion of land within an Improvement Area became owned by public agencies, collection of the Special Ta x might become more difficult and could result in collections of the Special Tax which might not be sufficient to pay principal of and interest on the related Local Obligations when due, or if a substantial portion of land within an Improvement Area became exempt from the Special Tax because of public ownership, or otherwise, the maximum Special Taxes which could be levied upon the remaining taxable property therein might not be sufficient to pay principal of and interest on the related Local Obligations wh en due, and in either case a default could occur with respect to the payment of such principal and interest, and, in turn, a default could occur in the payment of the principal and interest on the Bonds.

Moreover, under no circumstances may the Special Tax levied against any parcel for which an occupancy permit for private residential use has been issued within an Improvement Area be increased by more than 10% per Fiscal Year as a consequence of delinquency or default by the owner of any other parcel or

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parcels within such Improvement Area. Thus, the Community Facilities District may not be able to increase Special Tax levies in an Improvement Area in future Fiscal Years by enough to make up for delinquencies within such Improvement Area for prior Fiscal Ye ars. This may result in draws on the Reserve Fund, and if delinquencies continue and in the aggregate exceed the Reserve Fund balance, defaults would occur in the payment of principal and interest on the Bonds. See “SECURITY FOR THE LOCAL OBLIGATIONS.” FDIC/Federal Government Interests in Properties
General. The ability of the Community Facilities District to foreclose the lien of delinquent unpaid Special Tax installments may be limited with regard to properties in which the Federal Deposit Insurance Corporation (the “FDIC”), the Drug Enforcement Agency, the Internal Revenue Service, or other federal agency has or obtains an interest.

The supremacy clause of the United States Constitution reads as follows: “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitut ion or Laws of any State to the contrary notwithstanding.”
This means that, unless Congress has otherwise provided, if a federal governmental entity owns a parcel that is subject to Special Taxes within the Improvement Areas but does not pay taxes and asse ssments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.

Moreover, unless Congress has otherwise provided, if the federal government h as a mortgage interest in the parcel and the Community Facilities District wishes to foreclose on the parcel as a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government’s mortgage interest. In Rust v. Johnson (9th Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, Ninth Circuit held that the Federal National Mortgage Association ( “FNMA”) is a federal instrumentality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of state power over a mortgage interest held by FNMA constitutes an exercise of state power over propert y of the United States.

The Community Facilities District has not undertaken to determine whether any federal governmental entity currently has, or is likely to acquire, any interest (including a mortgage interest) in any of the parcels subject to the Spec ial Taxes within the Improvement Areas, and therefore expresses no view concerning the likelihood that the risks described above will materialize while the Bonds are outstanding.

FDIC. In the event that any financial institution making any loan which is s ecured by real property within the Improvement Areas is taken over by the FDIC, and prior thereto or thereafter the loan or loans go into default, resulting in ownership of the property by the FDIC, then the ability of the Community Facilities District to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited. The FDIC ’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”) provides that property owned by the FDIC is subject to state and local real property taxes only if those taxes are assessed according to the property ’s value, and that the FDIC is immune from real property taxes assessed on any basis other than property value. Acco rding to the Policy Statement, the FDIC will pay its property tax obligations when they become due and payable and will pay claims for delinquent property taxes as promptly as is consistent with sound business practice and the orderly administration of the institution’s affairs, unless abandonment of the FDIC ’s interest in the property is appropriate. The FDIC will pay claims for interest on delinquent property taxes owed at the rate provided under state law, to the extent the interest payment obligation i s secured by a valid lien. The FDIC will not pay any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts. If any property taxes (including interest) on FDIC -owned property are secured by a valid lien (in effe ct before the

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property became owned by the FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC’s consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC ’s consent.

The Policy Statement states that the FDIC generally will not pay non -ad valorem taxes, including special assessments, on prop erty in which it has a fee interest unless the amount of tax is fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Special taxes imposed under the Mello-Roos Act and a special tax formula which determines the special tax due each year are specifically identified in the Policy Statement as being imposed each year and therefore covered by the FDIC ’s federal immunity. Th e Ninth Circuit has issued a ruling on August 28, 2001 in which it determined that the FDIC, as a federal agency, is exempt from special taxes under the Mello-Roos Act.

The Community Facilities District is unable to predict what effect the application of t he Policy Statement would have in the event of a delinquency in the payment of Special Taxes on a parcel within an Improvement Area in which the FDIC has or obtains an interest, although prohibiting the lien of the Special Taxes to be foreclosed out at a j udicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. Such an outcome could cause a draw on the Reserve Fund and perhaps, ultimately, if enough property were to become owned by the FDI C, a default in payment on the Bonds.

Bankruptcy and Foreclosure
In the event of a delinquency in the payment of the Special Taxes, the Community Facilities District, under certain circumstances, is required to commence enforcement proceedings as described under the heading “SECURITY FOR THE LOCAL OBLIGATIONS — Covenants of the Community Facilities District.” However, prosecution of such proceedings could be delayed due to crowded local court calendars, dilatory legal tactics, or bankruptcy. It is also po ssible that the Community Facilities District will be unable to realize proceeds in an amount sufficient to pay the applicable delinquency. Moreover, the ability of the Community Facilities District to commence and prosecute enforcement proceedings may be limited by bankruptcy, insolvency and other laws generally affecting creditors’ rights (such as the Soldiers’ and Sailors’ Relief Act of 1940) and by the laws of the State relating to judicial and non -judicial foreclosure. Although bankruptcy proceedings would not cause the liens of the Special Taxes to become extinguished, the amount and priority of any Special Tax liens could be modified if the value of the property falls below the value of the lien. If the value of the property is less than the lien, such excess amount could be treated as an unsecured claim by the bankruptcy court. In addition, bankruptcy of a property owner could result in a delay in the enforcement proceedings because federal bankruptcy laws provide for an automatic stay of foreclos ure and tax sale proceedings. Any such delay could increase the likelihood of delay or default in payment of the principal of and interest on the Local Obligations, and the possibility of delinquent tax installments not being paid in full.

The various le gal opinions delivered in connection with the issuance of the Bonds, including Bond Counsel’s approving legal opinion, are qualified as to the enforceability of the Bonds, the Indenture, the Local Obligations and the Local Obligation Indentures by referenc e to bankruptcy, reorganization, moratorium, insolvency and other laws affecting the rights of creditors generally or against public corporations such as the Community Facilities District.

Funds Invested in the County Investment Pool
On January 24, 1996, t he United States Bankruptcy Court for the Central District of California held that a State statute providing for a priority of distribution of property held in trust conflicted with, and was preempted by, federal bankruptcy law. In that case, the court ad dressed the priority of the disposition of moneys held in a county investment pool upon bankruptcy of the county. Following payment of the Special Taxes to the Community Facilities District and prior to payment by Zions Bancorporation of debt service on

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the Local Obligations, such funds may be invested in the name of the City or the Community Facilities District for a period of time in the County investment pool. In the event of a petition of or the adjustment of County debts under Chapter 9 of the Federa l Bankruptcy Code, a court might hold that the Community Facilities District and in turn the Authority and the Bond owners do not have a valid and/or prior lien on the Special Taxes or debt service payments on the Local Obligations where such amounts are d eposited in the County investment pool and may not provide the Bond owners with a priority interest in such amounts. In that circumstance, unless the Bond owners could “trace” the funds that have been deposited in the County investment pool, the Bond owne rs would be unsecured (rather than secured) creditors of the County. There can be no assurance that the Bond owners could successfully so trace the Special Taxes or debt service payments.

No Acceleration Provision
The Bonds do not contain a provision allo wing for the acceleration of the Bonds in the event of a payment default or other default under the terms of the Bonds or the Indenture. Pursuant to the Indenture, an Owner of the Bonds is given the right for the equal benefit and protection of all owners similarly situated to pursue certain remedies described in Appendix B — “SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — SUMMARY OF AUTHORITY INDENTURE — EVENTS OF DEFAULT AND REMEDIES.” Limitations on Remedies
Remedies available to the Owners of the Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Bonds.

Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the Indenture to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium, or other similar laws affecting generally the enforcement of creditors’ rights, by equitable principles, by the exercise of judicial discretion and by limitations on remedies against public agencies in the State. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the owners of the Bonds.

Loss of Tax Exemption
As discussed under the caption “LEGAL MATTERS — Tax Matters” herein, interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the Bonds were issued, as a result of future acts or omission s of the Authority, the City or the Community Facilities District in violation of covenants in the Indenture or the Local Obligation Indentures, respectively.

Should such an event of taxability occur, the Bonds are not subject to a special redemption and will remain outstanding until maturity or until redeemed under one of the other redemption provisions contained in the Indenture.

Future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Bond s to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. The introduc tion or enactment of legislative proposals, clarification of the Code or court decisions may also affect the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

It is possible that subsequent to the issuance of the Bonds there might be federal, State, or local statutory changes (or judicial or regulatory interpretations of federal, State, or local law) that affect the federal, State, or local tax treatment of the Bonds or the market value of the Bonds. No assurance can be given that

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subsequent to the issuance of the Bonds such changes or interpre tations will not occur. See “LEGAL MATTERS — Tax Matters” below.

No Rating – Limited Secondary Market
The Authority has not applied to have the Bonds rated by any nationally recognized bond rating company, and it does not expect to do so in the future.

There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Although the Authority has committed to provide certain statutorily required financial an d operating information, there can be no assurance that such information will be available to Bondowners on a timely basis. See “INTRODUCTION — Continuing Disclosure” and Appendix F — “FORM OF CONTINUING DISCLOSURE AGREEMENT.” Any failure to provide annual financial information, if required, does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions, lack of current information, the absence of a credit rating for the Bonds or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.

Proposition 218
An initiative measure commonly referred to as the “Right to Vote on Taxes Act” (the “Initiative”) was approved by the voter s of the State of California at the November 5, 1996 general election. The Initiative added Article XIIIC and Article XIIID to the California Constitution. According to the “Title and Summary” of the Initiative prepared by the California Attorney General , the Initiative limits “the authority of local governments to impose taxes and property -related assessments, fees and charges.” The provisions of the Initiative continue to be interpreted by the courts. The Initiative could potentially impact the Specia l Taxes available to the Community Facilities District to pay the principal of and interest on the Local Obligations as described below.

Among other things, Section 3 of Article XIII states that “. . . the initiative power shall not be prohibited or otherw ise limited in matters of reducing or repealing any local tax, assessment, fee or charge.” The Mello-Roos Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the rate and method of apportionment of an exis ting special tax. However, the Mello -Roos Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Mello -Roos Act unless such legislative body determines that the reduction or termination of the special tax would not interfere with the timely retirement of that debt. On August 1, 1997, a bill was signed into law by the Governor of the State enacting Government Code Section 5854, which states that:

Section 3 of Article XIIIC of the California Constitution, as adopted at the November 5, 1996, general election, shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after that date, assumes the risk of, or in any way consents to, any action by initiative measure that constitutes an impairment of contractual rights protected by Section 10 of Article I of the United States Constitution.

Accordingly, although the matter is not free from doubt, it is likely that the Initiative has not conferred on the voters the power to repeal or reduce the Special Taxes if such reduction would interfere with the timely retirement of the Local Obligations.

The interpretation and application of the Initiative will continue to be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainty

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the outcome of such determination or the timeliness of any remedy afforded by the courts. See “SPECIAL RISK FACTORS — Limitations on Remedies.”
Ballot Initiatives
Articles XIII A, XIII B, XIII C and XIII D, all of which placed certain limitations on the power of local agencies to tax, collect and expend revenues, were adopted purs uant to measures qualified for the ballot pursuant to California’s constitutional initiative process and the State Legislature has in the past enacted legislation which has altered the spending limitations or established minimum funding provisions for part icular activities. From time to time, other initiative measures could be adopted by California voters or legislation enacted by the legislature. The adoption of any such initiative or legislation might place limitations on the ability of the State, the C ity, or the Community Facilities District to increase revenues or to increase appropriations or on the ability of the landowners within the Improvement Areas to complete proposed future development.

Litigation with Respect to Community Facilities District Shapiro. The California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in City of San Diego v. Melvin Shapiro (2014) 228 Cal.App.4th 756 (the “San Diego Decision”). The case involved a Convention Center Facilities District ( the “CCFD”) established by the City of San Diego ( “San Diego”). The CCFD is a financing district much like a community facilities district established under the provisions of the Mello-Roos Act. The CCFD is comprised of all of the real property in San Die go. However, the special tax to be levied within the CCFD was to be levied only on hotel properties located within the CCFD.

The election authorizing the special tax was limited to owners of hotel properties and lessees of real property owned by a governm ental entity on which a hotel is located. Thus, the election was not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was modeled after Section 53326(c) of the Mello-Roos Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed district whose property would be subject to the special tax. The Cou rt held that the CCFD special tax election was invalid under the California Constitution because Article XIIIA, Section 4 thereof and Article XIIIC, Section 2 thereof require that the electors in such an election be the registered voters within the distric t.

Horizon. The Sacramento County Superior Court had issued a tentative ruling in Horizon Capital Investments, LLC v. City of Sacramento et al. (Case No. 34-2017-80002661). That ruling subsequently became the court ’s final order. As described below, this case involved an election to approve the levy of a special tax within a community facilities district (“CFD”) formed under the Mello-Roos Act.

In 2017, the City of Sacramento initiated proceedings to form a CFD to finance certain costs to operate and maintain a streetcar line. As permitted by the Mello-Roos Act, the proposed district included non - contiguous parcels of non -residential property. Because there were fewer than 12 registered voters residing within th e territory of the proposed CFD, the City Council submitted the special tax proposed to be levied within the proposed CFD to the owners of land within the proposed CFD, as required by the Mello-Roos Act.

The proposed special tax received the requisite two -thirds vote in the landowner election.

Petitioners Horizon Capital Investments, LLC et al. filed a writ of mandate and complaint for reverse validation and declaratory relief. Petitioners argued, and the superior court agreed in its final ruling, that under section 4(a) of article XIII A of th e California Constitution (which provides that “Cities, Counties and special districts, by a two -thirds vote of the qualified electors of such district [sic], may impose special taxes on such district…”) the phrase “qualified electors” means the registered voters of the entire City of Sacramento and not just the owners of the property within the boundaries of the proposed CFD. Citing the San Diego Decision, the

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tentative ruling states that the phrase “qualified electors of the district ” refers to the regis tered voters of the entity imposing the special tax, which in this case was the City of Sacramento . Because the vote within the proposed CFD was by landowners only and not by all registered voters in the City of Sacramento , the final ruling states that the special tax is invalid.

The superior court’s final ruling is not binding upon other courts within the State and does not directly apply to the Improvement Areas, the Special Taxes, or the Local Obligations. The City of Sacramento did not appeal the superior court’s ruling.

The Special Tax Election in the Improvement Areas. With respect to the San Diego Decision, the facts of such case show that there were thousands of registered voters within the CCFD ( viz., all of the registered voters in San Diego). The elections held in the Improvement Area s had less than 12 registered voters at the time of the election to authorize the Special Taxes. In the San Diego Decision, the court expressl y stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Mello- Roos Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the court ’s holding in the San Diego Decision doe s not apply to the Special Tax election s in the Improvement Areas. Moreover, Section 53341 of the Mello-Roos Act provides that any “action or proceeding to attack, review, set aside, void or annul the levy of a special tax…shall be commenced within 30 day s after the special tax is approved by the voters.” Similarly, Section 53359 of the Mello-Roos Act provides that any action to determine the validity of bonds issued pursuant to the Mello-Roos Act be brought within 30 days of the voters approving the issuance of such bonds. The petitioners in Horizon filed the writ of mandate within 30 days of the landowner election.

Voters in each Improvement Area s approved their respective Special Tax one June 20, 2023 . Based on Sections 53341 and 53359 of the Mello-Roos Act and analysis of existing laws, regulations, rulings and court decisions, the Community Facilities District believes that no successful challenge to the their respective Special Taxes being levied in accordance with the applicable Rate and Method may now be brought.

LEGAL MATTERS
Tax Matters
In the opinion of Stradling Yocca Carlson & Rauth LLP , Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of calcul ating the federal alternative minimum tax imposed on individuals. However, it should be noted that, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), generally certain corpor ations with more than $1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of comp uting the alternative minimum tax imposed by Section 55 of the Code on such corporations. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax.

The excess of the stated redemption price at maturity of a Bond over the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity is to be sold to the public) constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Beneficial Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by the Beneficial Owner will increase the Beneficial Owner’s basis in the applicable Bond.

Bond Counsel’s opinion as to the exclusion from gross income for federal i ncome tax purposes of interest (and original issue discount) on the Bonds is based upon certain representations of fact and certifications made by the Authority, the Community Facilities District and others and is subject to the

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condition that the Authority and the Community Facilities District comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must b e satisfied subsequent to the issuance of the Bonds to assure that interest (and original issue discount) on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might c ause the interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Authority and the Community Facilities District will covenant to comply with all such requirements.

The amount by which a Beneficial Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes a mortizable bond premium, which must be amortized under Section 171 of the Code; such amortizable bond premium reduces the Beneficial Owner’s basis in the applicable Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of bond premium may result in a Beneficial Owner realizing a taxable gain when a Bond is sold by the Beneficial Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Beneficial Owner. Purchasers of the Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable bond premium.

Bond Counsel’s opinions may be affected by actio ns taken (or not taken) or events occurring (or not occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture, the Local Obligations In dentures and the Tax Certificate relating to the Bonds permit certain actions to be taken or to be omitted if a favorable opinion of a bond counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the effect on the exclusion from gross income for federal income tax purposes of interest on any Bond if any such action is taken or omitted based upon the advice of counsel other than Bond Counsel.

Although Bond Counsel will render an opinion that interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes provided that the Authority and the Community Facilities District continue to comply with certain requirements of the Code, the ownership of the Bonds and the accrual or receipt of i nterest (and original issue discount) with respect to the Bonds may otherwise affect the tax liability of certain persons. Bond Counsel expresses no opinion regarding any such tax consequences.

Accordingly, before purchasing any of the Bonds, all potenti al purchasers should consult their tax advisors with respect to collateral tax consequences relating to the Bonds.

The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing of tax - exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of similar bonds). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation thereof) subsequent to the issuance of the Bonds to the extent that it adversely affects the exclusion from gross income of interest (and original issue discount) on the Bonds or their market value.

SUBSEQUENT TO THE ISSUANCE OF THE BONDS THERE MIGHT BE FEDERAL, STATE,

OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY CHANGES TO OR

INTERPRETATIONS OF FEDERA L, STATE, OR LOCAL LAW) THAT AFFECT THE FEDERAL,

STATE, OR LOCAL TAX TREATMENT OF THE BONDS INCLUDING THE IMPOSITION OF

ADDITIONAL FEDERAL INCOME OR STATE TAXES BEING IMPOSED ON OWNERS OF TAX - EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE BONDS. THESE CHA NGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE BONDS. NO ASSURANCE

CAN BE GIVEN THAT SUBSEQUENT TO THE ISSUANCE OF THE BONDS STATUTORY CHANGES

WILL NOT BE INTRODUCED OR ENACTED OR JUDICIAL OR REGULATORY INTERPRETATIONS WILL NOT OCCUR HAV ING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF

THE BONDS, ALL POTENTIAL PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS

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REGARDING POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR

INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCE S RELATING TO THE BONDS.

See Appendix E — “FORM OF BOND COUNSEL OPINION” for a form of the opinion to be provided by Bond Counsel on the date of issuance of the Bonds.

Absence of Litigation
The Authority will certify at the time the Bonds are issued that n o litigation is pending or threatened concerning the validity of the Bonds or the Local Obligations and that no action, suit or proceeding is known by the Authority to be pending that would restrain or enjoin the delivery of the Bonds or the Local Obligations, or contest or affect the validity of the Bonds or the Local Obligations or any proceedings of the Authority taken with respect to the Bonds or the Local Obligations. The Community Facilities District will also certify, at the time the Bonds are issue d, that no litigation is pending or threatened concerning the validity the Local Obligations and that no action, suit or proceeding is known by the Community Facilities District to be pending that would restrain or enjoin the delivery of the Local Obligations, or contest or affect the validity of the Local Obligations or any proceedings of the Community Facilities District taken with respect to the Local Obligations.

Legal Opinion
Certain proceedings in connection with the issuance of the Bonds are subject to the approval as to their legality of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel for the Authority in connection with the issuance of the Bonds. The opinion of Bond Counsel approving the validity of the Bonds substantia lly in the form attached as Appendix E hereto will be attached to each Bond. Bond Counsel’s employment is limited to a review of legal procedures required for the approval of the Bonds and to rendering an opinion as to the validity of the Bonds and the ex emption of interest (and original issue discount) on the Bonds from income taxation. Bond Counsel expresses no opinion to the Owners of the Bonds as to the accuracy, completeness or fairness of this Official Statement or other offering materials relating to the Bonds and expressly disclaims any duty to do so.

Payment of the fees of Bond Counsel, Disclosure Counsel, the Underwriter and Underwriter’s Counsel is contingent upon issuance of the Bonds.

MISCELLANEOUS
No Rating
The Authority has not made, and does not contemplate making, an application to any rating organization for the assignment of a rating on the Bonds.

Underwriting
The Bonds are being purchased by Stifel, Nicolaus & Company, Inc. (the “Underwriter”), at a purchase price o f $_________ (representing the par amount of the Bonds, [plus/less] [net] original issue [premium/discount] of $_________, less Underwriter’s discount of $______).

The purchase agreement relating to the Bonds between the Authority and the Underwriter provides that all Bonds will be purchased if any are purchased, and that the obligation to make such purchase is subject to certain terms and conditions set forth in said purchase contract, including, but not limited to, the approval of certain legal matters by counsel.

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The Underwriter and its affiliates comprise a full -service financial institution engaged in activities which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal in vestment, hedging, market making, brokerage and other financial and non - financial activities and services. The Underwriter and its affiliates may have provided, and may in the future provide, a variety of these services to the Authority or City and to per sons and entities with relationships with the Authority or City, for which they received or will receive customary fees and expenses.

In the ordinary course of these business activities, the Underwriter and its affiliates may purchase, sell or hold a bro ad array of investments and actively trade securities, derivatives, loans and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the Authority or City (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the Authority or City.

The Underwriter and its affiliates may also communicate independent i nvestment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire such assets, secur ities and instruments. Such investment and securities activities may involve securities and instruments of the Authority or City.

Continuing Disclosure
The Authority will execute a Continuing Disclosure Agreement by and between the Authority and Spicer Co nsulting Group, LLC, as Dissemination Agent, in the form attached hereto as Appendix F for the benefit of the Owners and Beneficial Owners of the Bonds to provide certain financial information and operating data relating to the Authority and the Improvement Areas (the “Annual Report”) and to provide notices of the occurrence of certain enumerated events (the “Listed Events”). The Annual Report will be filed by the Dissemination Agent with the Electronic Municipal Market Access System of the Municipal Secur ities Rulemaking Board (“EMMA”) and notices of Listed Events will be filed by the Dissemination Agent with EMMA. The specific nature of the information to be included in the Annual Reports and the notices of Listed Events is set forth in Appendix F — “FORM OF CONTINUING DISCLOSURE AGREEMENT .” The Continuing Disclosure Agreement will be executed and delivered by the Authority in order to assist the Underwriter in complying with the Rule. The Annual Reports are to be filed by the Authority no later than th e February 10 after the end of the Authority’s Fiscal Year, which is currently June 30. The first Annual Report will be due February 10, 2026.

The City will assist the Authority in preparing the Annual Reports. In order to ensure ongoing compliance by th e Community Facilities District with its continuing disclosure undertaking, (i) City staff will take steps to ensure that the filing due date is correctly documented in policies and procedures and a single City staff member has been assigned primary respon sibility to monitor compliance; and (ii) the City has contracted with Spicer Consulting Group, LLC to assist in filing accurate, complete and timely disclosure reports on behalf of the Authority. In addition, the City has adopted policies and procedures w ith respect to its continuing disclosure practices.

Additional Information
References are made herein to certain documents and reports which are brief summaries thereof which do not purport to be complete or definitive, and reference is made to such docume nts and reports for full and complete statements of the contents thereof.

Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Authority and the purchasers or Owners of any of the Bonds.

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The execution and delivery of this Official Statement has been duly authorized by the Authority.

BEAUMONT PUBLIC IMPROVEMENT AUTHORITY
By:

Executive Director

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APPENDIX A

RATES AND METHODS OF APPORTIONMENT

OF SPECIAL TAXES FOR

THE IMPROVEMENT AREAS

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 sche dules (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 dis charge 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 discl osure 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 p arcel 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.

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A-60
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“Assessor’s Parcel Map” means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.
“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 refund ing 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 residentia l 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 de termined 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 Di strict 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 anot her 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 adjacen t residential dwelling units. The

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Beaumont City CouncilNovember 4, 2025

Beaumont City Council
November 4, 2025