Exhibit 5 - Preliminary Official Statement — Corona City Council, June 15, 2022

Stradling Yocca Carlson & Rauth
Draft of 6/1/2022
This Preliminary Official Statement and the
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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 JUNE __, 2022
NEW ISSUE – BOOK-ENTRY ONLY NO RATING
In the opinion of Best Best & Krieger, LLP Riverside, California (“Bond Counsel”), subject to certain qualifications described in this Official Statement, under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, the interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income tax. See “LEGAL MATTERS — Tax Exemption.” County of Riverside State of California
$15,385,000*
COMMUNITY FACILITIES DISTRICT NO. 2018-2
(SIERRA BELLA) OF THE CITY OF CORONA
2022 SPECIAL TAX BONDS, SERIES A
Dated: Date of Delivery Due: September 1, as shown on the inside cover page The Community Facilities District No. 2018-2 (Sierra Bella) of the City of Corona 2022 Special Tax Bonds, Series A (the “Bonds”) are being issued and delivered to (i) finance various public improvements needed with respect to the development within Community Facilities District No. 2018-2 (Sierra Bella) of the City of Corona, County of Riverside, State of California (the “District”) to be owned by the City of Corona (the “City”), (ii) fund a reserve fund securing the Bonds, and (iii) pay costs of issuance of the Bonds. The District has been formed by the City and is located in the south-western portion of the City, in the County of Riverside, California (the “County”).

The Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Sections 53311 et seq. of the Government Code of the State of California), and pursuant to a Fiscal Agent Agreement, dated as of __________ 1, 2022 (the “Fiscal Agent Agreement”), by and between the City, for and on behalf of the District, and The Bank of New York Mellon Trust Company, N.A. as fiscal agent (the “Fiscal Agent”). The Bonds are special obligations of the City and the District and are payable solely from revenues derived from certain annual Special Taxes (as defined in this Official Statement) to be levied on and collected from the owners of certain taxable land within the District and from certain other funds pledged under the Fiscal Agent Agreement, all as further described in this Official Statement. The Special Taxes are to be levied according to the rate and method of apportionment for the District approved by the City Council of the City and the qualified electors within the District. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes” and APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” The City Council of the City is the legislative body of the District.

The Bonds are issuable in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Individual purchases may be made in integral multiples of $5,000 and will be in book-entry form only. Purchasers of Bonds will not receive certificates representing their beneficial ownership of the Bonds but will receive credit balances on the books of their respective nominees. The Bonds will not be transferable or exchangeable except for transfer to another nominee of DTC or as otherwise described in this Official Statement. Interest on the Bonds will be payable semiannually on each March 1 and September 1, commencing September 1, 2022. Principal of and interest on the Bonds will be paid by the Fiscal Agent to DTC for subsequent disbursement to DTC Participants who are obligated to remit such payments to the beneficial owners of the Bonds. See “THE BONDS — General Provisions,” “— Book-Entry Only System” and APPENDIX G — “INFORMATION CONCERNING DTC.” Neither the faith and credit nor the taxing power of the City, the County, the State of California or any political subdivision of such entities is pledged to the payment of the Bonds. Except for the Special Tax Revenues (as defined herein), no other taxes are pledged to the payment of the Bonds. The Bonds are special obligations of the City and the District payable solely from Special Tax Revenues and certain other amounts held under the Fiscal Agent Agreement as more fully described in this Official Statement.

The Bonds are subject to optional redemption, mandatory redemption prior to maturity from special tax prepayments and mandatory sinking fund redemption as described in this Official Statement. See “THE BONDS — Redemption.” Investment in the Bonds involves risks that are not appropriate for certain investors. Certain events could affect the ability of the City to pay the principal of and interest on the Bonds when due. See the section of this Official Statement entitled “RISK FACTORS” for a discussion of certain risk factors that should be considered, in addition to the other matters set forth in this Official Statement, in evaluating the investment quality of the Bonds.

This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms of this issue. Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision.
____________________

MATURITY SCHEDULE
(See Inside Cover Page)
____________________
The Bonds are offered when, as and if issued and accepted by Stifel, Nicolaus & Company, Incorporated, the Underwriter, subject to approval as to their legality by Best Best & Krieger LLP, Riverside, California, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the City and the District by the City Attorney and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel, for the Underwriter by Jones Hall, A Professional Law Corporation, San Francisco, California, as counsel to the Underwriter, and for the Fiscal Agent by its counsel. It is anticipated that the Bonds in book-entry form will be available for delivery to DTC in New York, New York, on or about June __, 2022.. [STIFEL LOGO]
Dated: June __, 2022.
*
Preliminary, subject to change.
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$15,385,000*
COMMUNITY FACILITIES DISTRICT NO. 2018-2
(SIERRA BELLA) OF THE CITY OF CORONA
2022 SPECIAL TAX BONDS, SERIES A
Base CUSIP No.† __________
$__________ Serial Bonds
Maturity Date
(September 1)
Principal
Amount Interest Rate Yield Price CUSIP No.†

$__________ _____% Term Bonds due __________ 1, 2052 Yield: ______% Price: ______ CUSIP No.† ___

* Preliminary, subject to change.
†
CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of The American Bankers Association. This information is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services Bureau. CUSIP numbers have been assigned by an independent company not affiliated with the City, the District or the Underwriter and are included solely for the convenience of the registered owners of the applicable Bonds. None of the City, the District or the Underwriter is responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds 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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CITY OF CORONA

MAYOR AND CITY COUNCIL
Wes Speake, Mayor
Tony Daddario, Vice Mayor
Jacque Casillas, Council Member
Tom Richins, Council Member
Jim Steiner, Council Member

CITY STAFF
Jacob Ellis, City Manager
Chad Willardson, City Treasurer
Kim Sitton, Finance Director
Dean Derleth, Esq., City Attorney

BOND COUNSEL
Best Best & Krieger LLP
Riverside, California

DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth, a Professional Corporation Newport Beach, California

MUNICIPAL ADVISOR
CSG Advisors Incorporated
San Francisco, California

SPECIAL TAX CONSULTANT
Spicer Consulting Group, LLC
Temecula, California

APPRAISER
Kitty Siino & Associates, Inc.

Tustin, California

FISCAL AGENT
The Bank of New York Mellon Trust Company, N.A.

Los Angeles, California
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Except where otherwise indicated, all information contained in this Official Statement has been provided by the City and the District. No dealer, broker, salesperson or other person has been authorized by the City, the District, the Fiscal Agent 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 in this Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the City, the District, the Fiscal Agent 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.

This Official Statement is not to be construed as a contract with the purchasers 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 in this Official Statement, are intended solely as such and are not to be construed as representations of fact. This Official Statement, including any supplement or amendment to this Official Statement, is intended to be deposited with the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board, which can be found at www.emma.msrb.org.

The information set forth in this Official Statement which has been obtained from third party sources is believed to be reliable but is not guaranteed as to accuracy or completeness by the City or the District. The information and expressions of opinion in this Official Statement are subject to change without 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 City or the District or any other parties described in this Official Statement since the date of this Official Statement. All summaries of the Fiscal Agent Agreement 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 made by this Official Statement to such documents on file with the City for further information. While the City maintains an Internet website for various purposes, none of the information on that website is incorporated by reference in this Official Statement 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 City. Any such information that is inconsistent with the information set forth in this Official Statement should be disregarded.

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 the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

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 statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “budget” or other similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information under the caption “THE DISTRICT.”

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN

SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN 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. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

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.

TABLE OF CONTENTS
i
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INTRODUCTION ......................................................... 1 General ...................................................................... 1 The District ............................................................... 1 Sources of Payment for the Bonds ............................ 3 Description of the Bonds ........................................... 4 Redemption ............................................................... 5 Tax Matters ............................................................... 5 Professionals Involved in the Offering ...................... 5 Continuing Disclosure ............................................... 5 Bondowners’ Risks ................................................... 6 Forward Looking Statements .................................... 6 Other Information ...................................................... 6 THE FINANCING PLAN ............................................. 6 Estimated Sources and Uses of Funds ....................... 7 THE BONDS ................................................................ 7 General Provisions .................................................... 7 Authority for Issuance ............................................... 8 Redemption ............................................................... 9 Registration, Transfer and Exchange ...................... 11 Book-Entry Only System ........................................ 12 Debt Service Schedule ............................................ 13 SOURCES OF PAYMENT FOR THE BONDS ......... 14
Limited Obligations ................................................ 14 Special Taxes .......................................................... 14 Special Tax Fund ..................................................... 19 Surplus Account ...................................................... 20 Bond Fund ............................................................... 21 Reserve Fund ........................................................... 22 No Superior Obligations; No Parity Bonds
Except for Refunding ........................................... 23 THE DISTRICT .......................................................... 23 General Description of the District ......................... 23 Description of Authorized Facilities ....................... 24 Lennar ..................................................................... 24 Lennar Development Plan ....................................... 25 Estimated Direct and Overlapping Indebtedness .... 26
Expected Tax Burden .............................................. 27 Appraisal Report ..................................................... 30 Estimated Value-to-Lien Ratio ................................ 30 Delinquency History ............................................... 33 City’s Collection Practices ...................................... 33 RISK FACTORS ......................................................... 33 Risks of Real Estate Secured Investments
Generally .............................................................. 33 Limited Obligations ................................................ 34 Insufficiency of Special Taxes ................................ 34 Special Tax Delinquencies ...................................... 35 Increasing Mortgage Interest Rates ......................... 36 Natural Disasters ..................................................... 36 Hazardous Substances ............................................. 37 Parity Taxes and Special Assessments .................... 38 Disclosures to Future Purchasers ............................ 38 Non-Cash Payments of Special Taxes ..................... 39 Payment of the Special Tax Is Not a Personal
Obligation of the Owners ..................................... 39 Concentration of Ownership ................................... 39 Land Values ............................................................ 39 FDIC/Federal Government Interests in Properties .. 40
Bankruptcy and Foreclosure .................................... 41 No Acceleration Provision ...................................... 42 Loss of Tax Exemption ........................................... 42 Limitations on Remedies ......................................... 43 Limited Secondary Market ...................................... 43 Proposition 218 ....................................................... 43 Litigation with Respect to Community Facilities
Districts ................................................................ 44 IRS Audit of Tax-Exempt Bond Issues ................... 45 Ballot Initiatives ...................................................... 45 Potential Early Redemption of Bonds from
Prepayments or Bond Proceeds ............................ 46 CONTINUING DISCLOSURE .................................. 46 City Continuing Disclosure ..................................... 46 LEGAL MATTERS .................................................... 46 Tax Exemption ........................................................ 46 Legal Opinion .......................................................... 47 Litigation ................................................................. 47 No Rating ................................................................ 47 Underwriting ........................................................... 47 Municipal Advisor ................................................... 48 Financial Interests ................................................... 48 Pending Legislation ................................................. 48 Additional Information ............................................ 48 APPENDIX A—RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAX ............. A-1
APPENDIX B—APPRAISAL REPORT ................... B-1
APPENDIX C—SUPPLEMENTAL

INFORMATION CONCERNING CITY OF
CORONA AND COUNTY OF RIVERSIDE ........ C-1
APPENDIX D—SUMMARY OF FISCAL AGENT
AGREEMENT ...................................................... D-1 APPENDIX E—FORM OF CONTINUING
DISCLOSURE CERTIFICATE OF THE CITY .... E-1
APPENDIX F—PROPOSED FORM OF BOND
COUNSEL OPINION ............................................ F-1 APPENDIX G—INFORMATION CONCERNING
DTC ....................................................................... G-1 4855-5307-4459v4/200444-0007
[DISTRICT LOCATION MAP]
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[AERIAL PHOTO]
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$15,385,000*
COMMUNITY FACILITIES DISTRICT NO. 2018-2
(SIERRA BELLA) OF THE CITY OF CORONA
2022 SPECIAL TAX BONDS, SERIES A

INTRODUCTION
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. A full review should be made of the entire Official Statement. The sale and delivery of Bonds (as defined below) to potential investors is made only by means of the entire Official Statement. All capitalized terms used in this Official Statement and not defined shall have the meaning set forth in APPENDIX D — “SUMMARY OF FISCAL AGENT AGREEMENT — DEFINITIONS” or APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
General
The purpose of this Official Statement (the “Official Statement”) is to provide certain information concerning the issuance of the $15,385,000*
Community Facilities District No. 2018-2 (Sierra Bella) of the City of Corona 2022 Special Tax Bonds, Series A (the “Bonds”). The proceeds of the Bonds will be used to (i) finance various public improvements needed with respect to the development within Community Facilities District No. 2018-2 (Sierra Bella) of the City of Corona, County of Riverside, State of California (the “District”) to be owned by the City of Corona (the “City”), (ii) fund a reserve fund securing the Bonds, and (iii) pay costs of issuance of the Bonds.

The District
The District contains approximately 137 gross acres, located southwest of Green River Road in the southwestern portion of the City. The District is generally bounded by existing residential developments to the north, the upper foothills of the Santa Ana Mountains to the south, vacant land and rural residential to the west and undeveloped land to the east. The District is planned for 237 single family detached homes at buildout and is being developed by Lennar Homes of California, LLC, a California limited liability company (“Lennar”).

As of the March 15, 2022 date of value (the “Date of Value”) of the Appraisal Report (as defined below), 162 of the 237 planned single family detached homes had been completed and conveyed to individual homeowners. As of such date, Lennar owned four completed model homes, 55 homes under construction (13 of which were over 95% complete and 46 of which were in escrow) and 16 finished lots. The development in the District has progressed since the Date of Value. As of May 13, 2022, 181 of the 237 planned single family detached homes had been completed and conveyed to individual homeowners, and Lennar owned four completed model homes, 2 completed production homes, and 50 homes under construction, with 46 homes in escrow but unclosed.
*
Preliminary, subject to change.
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The development within the District consists of four product lines being marketed by Lennar. Two of the product lines, “Adagio at Sierra Bella” and “Sonata at Sierra Bella,” each include 50 single family detached homes, all of which have been conveyed to individual homeowners. The remaining two product lines, “Crescendo at Sierra Bella” and “Toccata at Sierra Bella,” include 63 and 74 single family detached homes, respectively, and are actively selling.

As of March 1, 2022, Lennar had obtained building permits for 222 of the 237 lots within the District.

Based on the number of building permits obtained for lots within the District as of March 1, 2022, 222 lots will be classified as Developed Property and 15 lots will be classified as Approved Property under the Rate and Method (as defined below) for the Fiscal Year 2022-23 Special Tax levy. Since March 1, 2022, Lennar has obtained building permits for the remaining 15 lots in the District and all 237 lots will be classified as Developed Property under the Rate and Method beginning in Fiscal Year 2023-24. See “THE DISTRICT — General Description of the District” and APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
Lennar has completed the major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District. The substantial majority of the in-tract infrastructure within the District, which primarily consists of streets for individual lot access and associated gutters and landscape improvements, is complete. Lennar expects to complete construction of the in-tract improvements associated with the remaining lots that it owns within the District as home construction on such lots is completed.

Formation Proceedings. The District was formed by the City pursuant to the Act. The Act was enacted by the California legislature to provide an alternative method of financing certain public capital facilities and services, especially in developing areas of the State of California (the “State”). Any local agency (as defined in the Act) may establish a community facilities district under the Act to provide for and finance the cost of eligible public facilities and services. Generally, the legislative body of the local agency which forms a district acts on behalf of such district 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 Act, a legislative body of a local agency may issue bonds for a district and may levy and collect a special tax within such district to repay such indebtedness.

Pursuant to the Act, the City Council of the City (the “City Council”), acting as the legislative body of the District, adopted the necessary resolutions stating its intent to establish the District, to authorize the levy of Special Taxes (defined below) on taxable property within the boundaries of the District, and to incur bonded indebtedness to fund the design, construction, installation and/or acquisition of various public improvements which are necessary to meet increased demands placed upon the City as a result of the development of the District (the “City Facilities”). Following public hearings conducted pursuant to the provisions of the Act, the City Council adopted resolutions establishing the District and calling special elections to submit the levy of the special taxes and the incurring of bonded indebtedness to the qualified voters of the District. On September 19, 2018 at a special election held pursuant to the Act, Lennar as the sole landowner in the District and therefore the only qualified voter of the District, authorized the District to incur bonded indebtedness within the District in an aggregate principal amount not to exceed $20,000,000 and the levy of Special Taxes (as defined below) to repay such bonded indebtedness in accordance with the Rate and Method of Apportionment for the District (the “Rate and Method”). The Rate and Method is attached hereto as APPENDIX A.

The Assigned Special Tax A (as defined in the Rate and Method) is the special tax that will be levied to pay debt service on the Bonds. The Assigned Special Tax A is referred to in this Official Statement as the “Special Tax” or the “Special Taxes.” At the time of the establishment of the District, special taxes were also approved for the District to fund maintenance services (i.e. lighting of parks, parkways, streets, roads and open space, maintenance and operation of water quality improvements and public street sweeping, maintenance of open space and flood and storm drain protection services) and to maintain certain public facilities should the homeowners’ association fail to maintain such public facilities (i.e. public street right-of-ways, public 3 4855-5307-4459v4/200444-0007
landscaping, public open spaces and other similar landscaped areas) (collectively, the “Services Special Taxes”). The Services Special Taxes are not pledged to repay the Bonds.

Section H of the Rate and Method provides for the process by which the City shall, upon the issuance of the Bonds, reduce the Assigned Special Tax rate for any Plan Type in a Land Use Category such that the Total Effective Tax Rate (as such terms are defined in the Rate and Method) for such Plan Type will not exceed 1.95%. In accordance with Section H of the Rate and Method, the City caused a price point study (the “Price Point Study”), to be prepared by Zonda, Newport Beach, California. Based on the Price Point Study, there will not be any changes to the Assigned Special Tax rate for any Land Use Category.

Appraisal Report. Kitty Siino & Associates, Inc. (the “Appraiser”) has conducted an Appraisal datedMay 10, 2022 of the land within the District subject to the Special Tax (the “Appraisal Report”). The Appraisal Report sets forth an estimate of the market value of the fee simple interest of the taxable land and improvements within the District. The Appraiser is of the opinion that, based upon the assumptions and conditions contained in the Appraisal Report, the minimum market value of the taxable land and improvements in existence within the District, as of the March 15, 2022, Date of Value, was $192,471,291. This estimate of value results in an overall appraised value-to-lien ratio of approximately 12.51-to-1* for the District based on
the estimated amount of land secured debt allocated to parcels within the District (which upon the issuance of the Bonds, is expected to only include the Bonds). See “THE DISTRICT — Appraisal Report,” APPENDIX B — “APPRAISAL REPORT” and “SPECIAL RISK FACTORS — Parity Taxes and Special Assessments.”
Sources of Payment for the Bonds
Special Taxes. The Special Tax is that tax which has been authorized to be levied against certain land within the District pursuant to the Act and in accordance with the Rate and Method to satisfy the Special Tax A Requirement (as defined in the Rate and Method). “Special Tax Revenues” are defined in the Fiscal Agent Agreement to mean the proceeds of the Special Taxes received by the City, including any scheduled payments, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes in the amount of said lien and interest and penalties thereon. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes” and APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” Under the Fiscal Agent Agreement, the District has pledged to repay the Bonds from the Special Tax Revenues (subject to the deposit of certain amounts in the Administrative Expense Fund for each Fiscal Year) and amounts on deposit in the Bond Fund and the Reserve Fund established under the Fiscal Agent Agreement.

Reserve Fund. The Fiscal Agent Agreement establishes a Reserve Fund for the Bonds to be maintained at the Reserve Requirement. The Fiscal Agent Agreement provides that the Reserve Requirement shall be, as of the date of calculation, as determined by the City and provided in writing to the Fiscal Agent, the lesser of (i) ten percent (10%) of the original issue price of the Bonds calculated in accordance with Treasury Regulations Section 1.148-2(f)(1), (ii) Maximum Annual Debt Service on the Bonds or (iii) 125 percent (125%) of average Annual Debt Service on the Bonds. The initial Reserve Requirement for the Bonds shall be $______. Subject to the maximum annual amounts of Special Taxes contained in the Rate and Method, if the amount in the Reserve Fund is less than the Reserve Requirement, the City will covenant in the Fiscal Agent Agreement to restore the amount therein to the Reserve Requirement by the inclusion of a sufficient amount in the next annual Special Tax levy within the District. The ability of the City Council to increase the annual Special Taxes levied in the District to replenish the Reserve Fund is subject to the maximum annual amounts of Special Taxes authorized for the District and certain limitations in the Act. The moneys in the Reserve Fund will be used only for payment of the principal of, and interest and any redemption premium on, the Bonds, and, at the direction of the City, for deposit in the Rebate Fund. See “SOURCES OF PAYMENT FOR THE BONDS — Reserve Fund.”
*
Preliminary, subject to change.
4 4855-5307-4459v4/200444-0007
The Special Tax Revenues are the primary security for the repayment of the Bonds. In the event that the Special Taxes are not paid when due, the only sources of funds available to pay the debt service on the Bonds are amounts held by the Fiscal Agent in the Bond Fund and the Reserve Fund, to the limited extent described in the Fiscal Agent Agreement. See “SOURCES OF PAYMENT FOR THE BONDS — Reserve Fund.”
Foreclosure Proceeds. The City will covenant in the Fiscal Agent Agreement, for the benefit of the owners of the Bonds, that it will order, and cause to be commenced, judicial foreclosure proceedings against properties in the District with delinquent Special Taxes in excess of $5,000 by the October 1 following the close of the Fiscal Year in which such Special Taxes were due, and (ii) following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than ninety-five percent (95%) of the total Special Taxes levied, if the amount on deposit in the Reserve Fund or any reserve account established in connection with Parity Bonds is less than the applicable Reserve Requirement it will commence judicial foreclosure proceedings against all properties in the District with delinquent Special Taxes by October 1, and diligently pursue to completion such foreclosure proceedings. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.” There is no assurance that the property within the District can be sold for the appraised value or assessed values described in this Official Statement, or for a price sufficient to pay the principal of and interest on the Bonds in the event of a default in payment of Special Taxes by the current or future property owners within the District. See “RISK FACTORS — Land Values” and APPENDIX B — “APPRAISAL REPORT.”

EXCEPT FOR THE SPECIAL TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CITY

OR THE DISTRICT, BUT ARE SPECIAL OBLIGATIONS OF THE CITY AND THE DISTRICT

PAYABLE SOLELY FROM SPECIAL TAX REVENUES AND AMOUNTS HELD UNDER THE

FISCAL AGENT AGREEMENT AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT.

No Superior Obligations; No Parity Bonds Except for Refunding. The District and the City will covenant in the Fiscal Agent Agreement that they will not issue any other obligations payable, as to principal or interest, from the Special Tax Revenues which have, or purport to have, any lien upon the Special Tax Revenues superior to the lien of the Bonds. The City will further covenant in the Fiscal Agent Agreement that it will not issue Parity Bonds of the District secured by the Special Tax Revenues on a parity with the Bonds (“Parity Bonds”), except for the purpose of refunding all or a portion of the Outstanding Bonds or any Parity Bonds. See “SOURCES OF PAYMENT FOR THE BONDS — No Superior Obligations; No Parity Bonds Except for Refunding.”
Description of the Bonds
The Bonds will be issued and delivered 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”) in integral multiples of $5,000, under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants.

Beneficial Owners will not be entitled to receive physical delivery of the Bonds. In the event that the bookentry only system described in this Official Statement is no longer used with respect to the Bonds, the Bonds will be registered and transferred in accordance with the Fiscal Agent Agreement. See APPENDIX G — “INFORMATION CONCERNING DTC.”
Principal of, premium, if any, and interest on the Bonds is payable by the Fiscal Agent to DTC, as the registered Owner of the Bonds. Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants.

In the event that the book-entry only system is no longer used with respect to the Bonds, principal, interest and 5 4855-5307-4459v4/200444-0007
redemption premium, if any, shall be paid to the registered Owner thereof in accordance with the Fiscal Agent Agreement. See “THE BONDS — Book-Entry Only System” and see APPENDIX G — “INFORMATION CONCERNING DTC.”
Redemption
The Bonds are subject to optional redemption, mandatory redemption from Special Tax Prepayments and mandatory sinking fund redemption as described in this Official Statement. For a more complete description of the Bonds and the documentation pursuant to which they are being sold and delivered, see “THE BONDS” and APPENDIX D — “SUMMARY OF FISCAL AGENT AGREEMENT.” Tax Matters
In the opinion of Bond Counsel, subject to certain qualifications described in this Official Statement, under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, the interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income tax. For a more complete discussion of such opinion and certain other tax consequences incident to the ownership of the Bonds, including certain exceptions to the tax treatment of interest, see “LEGAL MATTERS — Tax Exemption.”
Professionals Involved in the Offering
The Bank of New York Mellon Trust Company, N.A. will act as Fiscal Agent under the Fiscal Agent Agreement. Stifel, Nicolaus & Company, Incorporated is the Underwriter of the Bonds. Certain proceedings in connection with the issuance and delivery of the Bonds are subject to the approval of Best Best & Krieger LLP, Riverside, California, Bond Counsel. Certain legal matters will be passed on for the City and the District by the City Attorney’s Office and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel, and for the Underwriter by Jones Hall, A Professional Law Corporation, San Francisco as Underwriter’s Counsel. Other professional services have been performed by Spicer Consulting Group, LLC, Temecula, California, as Special Tax Consultant, CSG Advisors Incorporated, San Francisco, California, as Municipal Advisor and Kitty Siino & Associates, Tustin, California, as Appraiser. At times, Bond Counsel and Disclosure Counsel represent the Underwriter in matters unrelated to the Bonds.

For information concerning the respects in which certain of the above-mentioned professionals, advisors, counsel and agents may have a financial or other interest in the offering of the Bonds, see “LEGAL MATTERS — Financial Interests.”
Continuing Disclosure
Pursuant to a Continuing Disclosure Certificate to be executed by the City (the “City Continuing Disclosure Certificate”), the City will agree to provide, or cause to be provided, on an annual basis, to the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board (the “MSRB”), which can be found at www.emma.msrb.org (“EMMA”), certain financial information and operating data. The City will further agree to provide notice to EMMA of certain enumerated events. These covenants are being made in order to assist the Underwriter in complying with Rule 15c2-12(b)(5) (the “Rule”) adopted by the Securities and Exchange Commission (the “SEC”).

See “CONTINUING DISCLOSURE” and Appendix E for a description of the specific nature of the annual reports to be filed by the City, on behalf of the District, and notices of listed events to be provided by the City, on behalf of the District.
6 4855-5307-4459v4/200444-0007
Bondowners’ Risks
Certain events could affect the timely repayment of the principal of and interest on the Bonds when due. See the section of this Official Statement entitled “RISK FACTORS” for a discussion of certain factors which should be considered, in addition to other matters set forth in this Official Statement, in evaluating an investment in the Bonds. The Bonds are not rated by any nationally recognized rating agency.

Forward Looking Statements
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 statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “budget” or other similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information under the caption “THE DISTRICT.”

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN

SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN 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. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES

OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

Other Information
This Official Statement speaks only as of its date, and the information contained in this Official Statement is subject to change.

Brief descriptions of the Bonds and the Fiscal Agent Agreement are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references to the Fiscal Agent Agreement, the Bonds and the constitution and laws of the State as well as the proceedings of the City Council, acting as the legislative body of the District, are qualified in their entirety by references to such documents, laws and proceedings, and with respect to the Bonds, by reference to the Fiscal Agent Agreement.

Copies of the Fiscal Agent Agreement, the City Continuing Disclosure Certificate and other documents and information referred to in this Official Statement are available for inspection and (upon request and payment to the City of a charge for copying, mailing and handling) for delivery from the City at 400 South Vicentia Avenue, Corona, CA 92882, Attention: Finance Director.

THE FINANCING PLAN
A portion of the Bond proceeds will be used by the District to design, construct and/or acquire certain authorized City Facilities. See “THE DISTRICT — Description of Authorized Facilities” for a description of the public facilities authorized to be financed with the proceeds of the Bonds. 7 4855-5307-4459v4/200444-0007
Estimated Sources and Uses of Funds
The following table sets forth the expected sources and uses of Bond proceeds:

Sources of Funds
Principal Amount of Bonds $_________
Plus Net Original Issue Premium
Total Sources $

Uses of Funds
Project Fund $
Reserve Fund
Costs of Issuance Fund(1)
Underwriter’s Discount
Total Uses $

(1) Costs of Issuance include legal fees, printing costs, Appraisal Report costs, Municipal Advisor fees, Special Tax Consultant fees, and Fiscal Agent fees, in addition to other miscellaneous costs incidental to Bond issuance.

THE BONDS
General Provisions
The Bonds will be dated their date of delivery and will bear interest at the rates per annum set forth on the inside cover page, payable semiannually on each March 1 and September 1, commencing on September 1, 2022 (each, an “Interest Payment Date”), and will mature in the amounts and on the dates set forth on the inside cover page of this Official Statement. The Bonds will be issued in fully registered form in integral multiples of $5,000. See “— Book-Entry Only System.”
Interest will be calculated on the basis of a 360-day year comprised of twelve 30-day months. Each Bond will bear interest from the Interest Payment Date next preceding the date of authentication of that Bond, unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the fifteenth day of the month preceding such Interest Payment Date (such fifteenth day, the “Record Date”), in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the dated date of the Bonds; provided, however, that if at the time of authentication of a Bond, interest is in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment or from the date of the Bonds, if no interest has previously been paid or made available for payment.

Interest on any Bond will be paid to the person whose name appears as its registered Owner in the registration books held by the Fiscal Agent on the close of business on the Record Date. Interest will be paid by check of the Fiscal Agent mailed by first class mail, postage prepaid, to the registered Owner at its address on the registration books. Pursuant to a written request prior to the Record Date of a Bondowner of at least $1,000,000 in aggregate principal amount of Bonds, payment will be made by wire transfer in immediately available funds to a designated account in the United States.

Principal of the Bonds and any premium due upon redemption is payable upon presentation and surrender of the Bonds at the principal corporate trust office of the Fiscal Agent in Los Angeles, California. 8 4855-5307-4459v4/200444-0007
Authority for Issuance
The Bonds are issued pursuant to the Act and the Fiscal Agent Agreement. As required by the Act, the City Council has taken the following actions with respect to establishing the District and the Bonds:

Resolutions of Intention. On August 15, 2018 the City Council adopted a resolution stating its intention to establish the District and to authorize the levy of a special tax therein, and a resolution declaring the necessity to have the District incur bonded indebtedness in an amount not to exceed $20,000,000.

Resolutions of Formation. Following a noticed public hearing conducted on September 19, 2018, the City Council adopted on September 19, 2018 resolutions which established the District, authorized the levy of a special tax within the District, and determined the necessity for the District to incur bonded indebtedness in a maximum aggregate principal amount of $20,000,000.

Resolution Calling Election. The resolutions adopted by the City Council on September 19, 2018 also called for a consolidated special election by the landowners in the District on the issues of the levy of the Special Tax, the incurring of bonded indebtedness within the District, and the establishment of an appropriations limit.

Landowner Election and Declaration of Results. On September 19, 2018, an election was held at which the landowners within the District approved ballot propositions authorizing the issuance of up to $20,000,000 of bonds to finance the design, construction, installation and/or acquisition of various public improvements, including those improvements funded by certain City impact fees, including park facilities and street and traffic signals, the levy of the Special Tax and the establishment of an appropriations limit for the District. The landowners within the District approved ballot propositions authorizing the District to issue bonds in an aggregate principal amount not to exceed $20,000,000 for financing public facilities. On September 19, 2018, the City Council adopted a resolution approving the canvass of the votes and declaring the District to be fully formed with the authority to levy the Special Taxes, to incur the bonded indebtedness, and to have the established appropriations limit.

Special Tax Lien and Levy. The Notice of Special Tax Lien for the District was recorded in the Office of the County Recorder of the County on September 21, 2018 as Document No. 2018-0378781 reflecting a continuing lien against the taxable property within the District (the “Notice of Special Tax Lien”).

Ordinance Levying Special Taxes. On October 17, 2018, the City Council adopted Ordinance No. 3283 which authorized the levy of Special Taxes within the District.

Resolution Authorizing Issuance of the Bonds. On ___________, the City Council adopted a resolution approving issuance of the Bonds.
9 4855-5307-4459v4/200444-0007
Redemption
Optional Redemption.* The Bonds are subject to redemption prior to their stated maturity dates at the option of the City on September 1, 2029 or any Interest Payment Date thereafter, from such maturities as selected by the City (and by lot within any one maturity), in integral multiples of $5,000, from moneys derived by the City from any source, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:

Redemption Dates Redemption Prices
September 1, 2029 and March 1, 2030 103%
September 1, 2030 and March 1, 2031 102
September 1, 2031 and March 1, 2032 101
September 1, 2032 and each Interest Payment Date thereafter 100 Mandatory Redemption From Special Tax Prepayments.* The Bonds are subject to mandatory redemption prior to their stated maturity dates on any Interest Payment Date, as selected among maturities by the City (and by lot within any one maturity), in integral multiples of $5,000, from moneys derived by the City from Special Tax Prepayments, at redemption prices (expressed as a percentage of the principal amount of the Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:

Redemption Dates Redemption Prices
September 1, 2029 and March 1, 2030 103%
September 1, 2030 and March 1, 2031 102
September 1, 2031 and March 1, 2032 101
September 1, 2032 and each Interest Payment Date thereafter 100 Special Tax Prepayments and amounts released from the Reserve Fund, and from a reserve fund established with respect to Parity Bonds, if applicable, in connection with Special Tax Prepayments will be allocated to the payment at maturity and redemption of Bonds and any Parity Bonds as nearly as practicable on a proportionate basis based on the outstanding principal amount of the Bonds and any Parity Bonds and such amounts shall be applied to redeem Bonds and Parity Bonds as nearly as practicable on a pro rata basis among maturities in increments of $5,000, as directed in writing by the City.

See the caption “SPECIAL RISK FACTORS—Potential Early Redemption of Bonds from Prepayments or Bond Proceeds” for a discussion of the potential for a lower than expected yield on the Bonds as a result of a special mandatory redemption from prepayment of Special Taxes or from bond proceeds of other community facilities districts.

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

(Maturity)
The amounts in the foregoing schedule shall be reduced by the City pro rata among sinking fund redemption dates, in order to maintain substantially level Debt Service, as a result of any prior or partial optional or mandatory redemption from Special Tax Prepayments of the Bonds, and the City shall provide the Fiscal Agent with a revised sinking fund schedule.

Purchase of Bonds. In lieu of payment at maturity or redemption under the Fiscal Agent Agreement, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer’s Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer’s Certificate may provide, but in no event may Bonds be purchased at a price in excess of the redemption price thereof, plus interest accrued to the date of purchase. In such event, the City shall, as may be appropriate, provide to the Fiscal Agent a revised maturity schedule or a revised mandatory sinking fund schedule for the Bonds, or both.

Notice to Fiscal Agent. An Authorized Officer shall give the Fiscal Agent written notice of the City’s intention to redeem Bonds not less than 45 days (or such lesser number of days acceptable to the Fiscal Agent) prior to the applicable redemption date. Such written notice shall specify whether Bonds are to be redeemed by optional redemption or mandatory redemption from Special Tax Prepayments. The requirement to provide such notice to the Fiscal Agent shall not apply to mandatory sinking fund redemption of the Bonds.

Redemption Procedure by Fiscal Agent. So long as the Bonds are held in book-entry form by the DTC, or its nominee, notice of redemption will be given to DTC in such manner as is set forth in the procedures of DTC. It is the responsibility of DTC Participants to provide such notice. See APPENDIX H — “BOOK-ENTRY ONLY SYSTEM.”
If the Bonds are no longer registered in the name of DTC, or its nominee, the Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, at least 30 days but not more than 60 days prior to the date fixed for redemption, or electronically submitted, to the Securities Depositories and to one or more Information Services selected by an Authorized Officer, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond registration books maintained by the Fiscal Agent at its Principal Office; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds. The Fiscal Agent shall also cause notice of any redemption to be mailed, in such manner and within such time, to the Underwriter.

Such notice shall state the date of such notice, the date of issue of the Bonds, the place or places of redemption, the redemption date, the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed, by giving the individual CUSIP number and Bond number of each Bond to be redeemed, or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called for redemption in part the portion of the principal of the Bond to be redeemed, shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further 11 4855-5307-4459v4/200444-0007
interest on such Bonds will not accrue from and after the redemption date. The cost of the mailing and publication of any such redemption notice shall be paid by the District.

Any notice of optional redemption of the Bonds delivered in accordance with the Fiscal Agent Agreement may be conditional and if any condition stated in the notice of redemption shall not have been satisfied on or prior to the redemption date, said notice shall be of no force and effect and the City shall not be required to redeem such Bonds and the redemption shall not be made and the Fiscal Agent shall within a reasonable time thereafter give notice, to the persons and in the manner in which the notice of redemption was given, that such condition or conditions were not met and that the redemption was cancelled.

Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer.

In the event of a mandatory redemption from Special Tax Prepayments pursuant to the Fiscal Agent Agreement, the City shall transfer or cause to be transferred to the Fiscal Agent for deposit in the Bond Fund moneys in an amount equal to the redemption price of the Bonds being redeemed on or before the fifteenth day of the month preceding the Interest Payment Date upon which such Bonds are to be redeemed.

Selection of Bonds for Redemption. If less than all the Bonds Outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or a multiple thereof, and, in selecting portions of such Bonds for redemption, the Fiscal Agent shall treat each such Bond as representing the number of Bonds of $5,000 denomination which is obtained by dividing the principal amount of such Bond to be redeemed in part by $5,000.

Whenever provision is made in the Fiscal Agent Agreement for the redemption of less than all of the Bonds of a maturity or any given portion thereof, the Fiscal Agent shall select the Bonds of such maturity to be redeemed, from all Bonds of such maturity or such given portion thereof not previously called for redemption, by lot within a maturity in any manner which the Fiscal Agent in its sole discretion shall deem appropriate.

Partial Redemption of Bonds. Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the Owner, at the expense of the District, a new Bond or Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds.

Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds called for redemption shall have been deposited in the Bond Fund, such Bonds shall cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price, and interest shall cease to accrue on the Bonds to be redeemed on the redemption date specified in the notice of redemption.

All Bonds redeemed and purchased by the Fiscal Agent pursuant to the Fiscal Agent Agreement shall be cancelled by the Fiscal Agent.

Registration, Transfer and Exchange
Registration. The Fiscal Agent will keep sufficient books for the registration and transfer of the Bonds. The ownership of the Bonds will be established by the Bond registration books held by the Fiscal Agent.

Transfer or Exchange. Whenever any Bond is surrendered for registration of transfer or exchange, the Fiscal Agent will authenticate and deliver a new Bond or Bonds of the same maturity, for a like aggregate principal amount of authorized denominations; provided that the Fiscal Agent will not be required to register 12 4855-5307-4459v4/200444-0007
transfers or make exchanges of (i) Bonds for a period of 15 days next preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds selected for redemption.

Book-Entry Only System
The Bonds will be issued in book-entry form, and The Depository Trust Company of New York, New York (“DTC”) will act as securities depository. So long as the Bonds are held in book-entry form, principal of, premium, if any, and interest on the Bonds will be paid by the Fiscal Agent directly to DTC for distribution to the beneficial owners of the Bonds in accordance with procedures adopted by DTC. See APPENDIX G — “INFORMATION CONCERNING DTC.”
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Debt Service Schedule
The following table presents the annual debt service on the Bonds (including sinking fund redemptions), assuming there are no optional redemptions or mandatory redemptions from Special Tax Prepayments pursuant to the Rate and Method. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes” and “THE BONDS — Redemption.”

ANNUAL DEBT SERVICE SCHEDULE
Bond Year Ending
September 1 Principal Interest(1)
Total Annual
Debt Service
$ $ $

Total $__________ $ $

Source: Underwriter.

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SOURCES OF PAYMENT FOR THE BONDS
Limited Obligations
The Bonds are special, limited obligations of the City and the District payable only from amounts pledged under the Fiscal Agent Agreement and from no other sources.

The Special Tax Revenues are the primary security for the repayment of the Bonds. Under the Fiscal Agent Agreement, the City and the District have pledged to repay the Bonds from the Special Tax Revenues (which are the proceeds of the Special Taxes received by the City, including any scheduled payments, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes in the amount of said lien and interest and penalties thereon) (subject to the deposit of certain amounts in the Administrative Expense Fund for each Fiscal Year) and all moneys deposited in the Bond Fund and the Reserve Fund.

In the event that the Special Tax Revenues are not received when due, the only sources of funds available to pay the debt service on the Bonds are amounts held by the Fiscal Agent in the Bond Fund and the Reserve Fund for the exclusive benefit of the Owners of the Bonds.

Neither the faith and credit nor the taxing power of the City, the County of Riverside, the State of California or any political subdivision thereof is pledged to the payment of the Bonds. Except for the Special Tax Revenues, no other taxes are pledged to the payment of the Bonds. The Bonds are not general obligations of the City or the District, but are Special Obligations of the City and the District payable solely from Special Taxes and amounts held under the Fiscal Agent Agreement as more fully described in this Official Statement.

Special Taxes
Authorization and Pledge. In accordance with the provisions of the Act, the City Council established the District on September 19, 2018 for the purpose of financing the design, construction, installation and/or acquisition of various public improvements, including those improvements funded by certain City impact fees, including park facilities and street and traffic signals. At a special election held on September 19, 2018, the owners of the property within the District authorized the District to incur indebtedness in an amount not to exceed $20,000,000 and approved the Rate and Method which authorizes the Special Tax to be levied to repay District indebtedness, including the Bonds. On October 17, 2018, the Board adopted Ordinance No. 3283 which authorized the levy of Special Taxes in the District.

The District will covenant in the Fiscal Agent Agreement that each year it will levy Special Taxes up to the maximum rates permitted under the Rate and Method in an amount sufficient, together with other amounts on deposit in the Special Tax Fund, to pay the principal of and interest on any Outstanding Bonds (including any Parity Bonds that may be issued), to replenish the Reserve Fund and to pay the estimated Administrative Expenses. Notwithstanding the foregoing, pursuant to Section 53321(d) of the Act, under no circumstances will the Special Taxes levied against any Assessor’s Parcel used as a private residence be increased as a consequence of delinquency or default by the owner of any other Assessor’s Parcel or Assessor’s Parcels within the District by more than 10%.

The Special Taxes levied in any Fiscal Year may not exceed the maximum rates authorized pursuant to the Rate and Method. See APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” There is no assurance that the Special Tax proceeds will, in all circumstances, be adequate to pay the principal of and interest on the Bonds when due. See “RISK FACTORS — Insufficiency of Special Taxes.”
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Rate and Method of Apportionment of Special Tax. All capitalized terms used in this section shall have the meaning set forth in Appendix A.

Under the Rate and Method, each Fiscal Year, each parcel in the District will be classified as Taxable Property or Exempt Property. In addition, each parcel will be classified as Developed Property, Approved Property, Undeveloped Property or Public Property and/or Property Owner’s Association Property.

For purposes of the levy of Special Taxes to satisfy the Special Tax A Requirement, a parcel will be classified as Developed Property if it is Taxable Property for which a building permit for residential dwelling units or non-residential construction was issued on or prior to March 1 of the Fiscal Year preceding the Special Tax levy. Under the Rate and Method, Taxable Property with no building permit will be categorized as Approved Property, if a Final Map is recorded prior to the January 1 preceding the Fiscal Year in which the Special Tax is being levied.

The Maximum Special Tax for each parcel of Developed Property will be the greater of (a) the applicable amount set forth in Table 1 of the Rate and Method (ranging from $4,187 per parcel to $5,383 per parcel for parcels classified as Single Family Residential Property, depending upon the size of the residence, and $26,299 per acre for parcels classified as Non-Residential Property or Multifamily Property, in each case as shown in Table 1 below), and (b) the applicable amount of “Backup Special Tax A.” The Maximum Special Tax for each parcel of Approved Property expected to be classified as Single Family Residential Property shall be the Backup Special Tax A computed in the manner described in the following paragraph.

The total amount of the Backup Special Tax A for Assessor’s Parcels of Taxable Property which is Single Family Residential Property is $4,964 per Residential Unit, based on the land use configurations of the current Final Maps (i.e. Tract Map Nos. 36451, 36451-1 and 36451-2) within the District. In the event any superseding tract map is recorded as a Final Map within the boundaries of the District or any portion of Tract Map Nos. 36451, 36451-1 and 36451-2 are changed, the Backup Special Tax A for all Assessor’s Parcels within such superseding Final Map or the area that changed, as the case may be, shall be $26,299 per acre.

The Backup Special Tax A shall not apply to Multifamily Residential Property, Non-Residential Property, Public Property, or Property Owners’ Association Property.

After classifying the parcels in the District, the City Council will determine the Special Tax A Requirement for the District for the Fiscal Year. “Special Tax A Requirement” means for the District that amount required in any Fiscal Year after taking into consideration available funds pursuant to the Fiscal Agent Agreement: (i) the debt service or the periodic costs on all outstanding Bonds due in the calendar year that commences in such Fiscal Year, (ii) an allocable share of Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish the Reserve Fund established under the Fiscal Agent Agreement, (v) an amount equal to any reasonable anticipated shortfall due to Special Tax delinquencies, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by the District provided that the inclusion of such amount does not cause an increase in the levy of the Special Tax on Approved Property or Undeveloped Property, less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Fiscal Agent Agreement.

The Special Tax will be levied first Proportionately on each Assessor’s Parcel of Developed Property in the District up to 100% of the applicable Assigned Special Tax Rate for the District is set forth in Table 1 of the Rate and Method. If additional moneys are needed to satisfy the Special Tax A Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax A Requirement. If additional moneys are needed to satisfy the Special Tax A Requirement after the first two steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax A Requirement. If additional moneys are needed 16 4855-5307-4459v4/200444-0007
to satisfy the Special Tax A Requirement after the first three steps have been completed, then the Special Tax on each Assessor’s Parcel of Developed Property whose Maximum Special Tax is the Backup Special Tax A shall be increased Proportionately from the Assigned Special Tax up to 100% of the Backup Special Tax A as needed to satisfy the Special Tax A Requirement. If additional moneys are needed to satisfy the Special Tax A Requirement after the first four steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax A Requirement.

However, pursuant to Section 53321(d) of the Act, notwithstanding the above, under no circumstances will the Special Tax levied against any taxable parcel of residential property within the District be increased by more than 10% as a consequence of a delinquency or default by the owner of any other parcel within the District.

The District intends to size the Bonds so that, assuming no delinquencies, Special Taxes, levied in accordance with the Rate and Method, will generate in each Fiscal Year beginning in Fiscal Year 2022-23 not less than 110% of debt service payable with respect to the Bonds in the calendar year that begins in that Fiscal Year, plus Administrative Expenses. See Table 1 below.
[Remainder of Page Intentionally Left Blank]
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TABLE 1

CITY OF CORONA
COMMUNITY FACILITIES DISTRICT NO. 2018-2 (SIERRA BELLA) SPECIAL TAX RATES FOR FISCAL YEAR 2022-23
Land Use Type
Taxable
Unit
Residential Floor
Area (sq. ft.)
Assigned
Special Tax
Rates
Fiscal Year
2022-23
Special Tax
Levy Rates
Fiscal Year
2022-23
Percent of
Maximum/
Assigned Rate
No. of
Units
Aggregate
Estimated
Special Taxes
Fiscal Year
2022-23(1)
Percent of
Total
Single Family Residential Property RU Less than 2,200 $ 4,187.00 $ 4,187.00 100.0% 0 $ 0.00 0.0% Single Family Residential Property RU 2,201 - 2,500 4,374.00 4,374.00 100.0 30 131,220.00 11.9 Single Family Residential Property RU 2,501 - 2,800 4,568.00 4,568.00 100.0 31 141,608.00 12.9 Single Family Residential Property RU 2,801 - 3,100 4,762.00 4,762.00 100.0 41 195,242.00 17.8 Single Family Residential Property RU 3,101 - 3,400 4,957.00 4,957.00 100.0 10 49,570.00 4.5 Single Family Residential Property RU 3,401 - 3,700 5,158.00 5,158.00 100.0 51 263,058.00 24.0 Single Family Residential Property RU Greater than 3,701 5,383.00 5,383.00 100.0 59 317,597.00 28.9 Approved Property RU N/A 4,964.00 0.00 0.0 15 0.00 0.0 Multifamily Property Acre N/A 26,299.00 0.00 0.0 0 0.00 0.0 Non-Residential Property Acre N/A 26,299.00 0.00 0.0 0 0.00 0.0 Total 237 $ 1,098,295.00 100.0% (1) Includes Administrative Expenses of $32,473. Based on building permits issued as of March 1, 2022. Since March 1, 2022, Lennar has obtained building permits for the remaining 15 lots in the District and all 237 lots will be classified as Developed Property under the Rate and Method beginning in Fiscal Year 2023-24.

Source: Spicer Consulting Group, LLC.
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Prepayment of Special Taxes. The City Council may allow property owners to fully or partially prepay the obligation of parcels of Taxable Property to pay the Special Taxes with respect to the Special Tax A Requirement.

Additionally, the City will covenant in the Fiscal Agent Agreement that the City shall cause all applications of owners of property in the District to prepay and satisfy the Special Tax obligation for their property to be reviewed by the Special Tax Consultant. The City will not accept any such prepayment unless the Special Tax Consultant certifies in writing that following the acceptance of the proposed prepayment by the City and the redemption of Bonds with such prepayment, the ratio of the maximum amount of the Special Taxes that may be levied on all Taxable Property in the District which following such prepayment will be subject to the levy of the Special Taxes will be at least 1.10 times Maximum Annual Debt Service on the Bonds which will remain Outstanding following such prepayment plus the estimated annual Administrative Expenses. See APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX” and “THE BONDS — Redemption — Mandatory Redemption from Special Tax Prepayments.” Collection and Application of Special Taxes. The Special Taxes are collected by the Treasurer-Tax Collector of the County in the same manner and at the same time as ad valorem property taxes. The District may, however, collect the Special Taxes at a different time or in a different manner if necessary to meet its financial obligations.

Covenants to Protect Special Tax Rates. The City will make certain covenants in the Fiscal Agent Agreement for the purpose of ensuring that the current maximum Special Tax rates and method of collection of the Special Taxes are not altered in a manner that would impair the City’s ability to collect sufficient Special Taxes to pay debt service on the Bonds, any Parity Bonds and Administrative Expenses when due. The City will covenant that it will not initiate proceedings under the Act to reduce the Maximum Special Tax rates (the “Maximum Rates”) on then existing Developed Property in the District below the amounts which are necessary to provide Special Tax Revenues in an amount equal to estimated Administrative Expenses for the then current Fiscal Year plus an amount equal to 110% of Maximum Annual Debt Service on the Outstanding Bonds and any Parity Bonds. See “RISK FACTORS — Proposition 218.” The City will further covenant that in the event an ordinance is adopted by initiative pursuant to Section 3 of Article XIII C of the California Constitution, which purports to reduce or otherwise alter the Maximum Rates, it will commence and pursue legal action seeking to preserve its ability to comply with the covenant described above.

The City will covenant not to permit the tender of Bonds in payment of any Special Taxes except upon receipt of a certificate of an Independent Financial Consultant certifying that accepting such tender will not result in the City having insufficient Special Tax Revenues to pay the principal of and interest on the Outstanding Bonds following such tender. See “RISK FACTORS — Non-Cash Payments of Special Taxes.” Although the Special Taxes constitute liens on taxable parcels within the District, they do not constitute a personal indebtedness of the owners of property within the District. Moreover, other liens for taxes and assessments already exist on the property located within the District and others could come into existence in the future in certain situations without the consent or knowledge of the City or the landowners in the District. See “RISK FACTORS — Parity Taxes and Special Assessments.” There is no assurance that property owners will be financially able to pay the annual Special Taxes or that they will pay such taxes even if financially able to do so, all as more fully described in the section of this Official Statement entitled “RISK FACTORS.”
Proceeds of Foreclosure Sales. The net proceeds received following a judicial foreclosure sale of land within the District resulting from a landowner’s failure to pay the Special Taxes when due are included within the Special Tax Revenues pledged to the payment of principal of and interest on the Bonds under the Fiscal Agent Agreement.
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Pursuant to Section 53356.1 of the Government Code, the City will covenant in the Fiscal Agent Agreement with and for the benefit of the Owners of the Bonds and any Parity Bonds that (i) it will order, and cause to be commenced, judicial foreclosure proceedings against properties in the District with delinquent Special Taxes in excess of $5,000 by the October 1 following the close of the Fiscal Year in which such Special Taxes were due, and (ii) following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Taxes levied, if the amount on deposit in the Reserve Fund, or any reserve account established in connection with Parity Bonds, is less than the applicable Reserve Requirement, it will commence judicial foreclosure proceedings against all properties in the District with delinquent Special Taxes by October 1, and diligently pursue to completion such foreclosure proceedings. See APPENDIX D — “SUMMARY OF FISCAL AGENT AGREEMENT — OTHER COVENANTS OF THE CITY.”
If foreclosure is necessary and other funds (including amounts in the Reserve Fund) have been exhausted, debt service payments on the Bonds could be delayed until the foreclosure proceedings have ended with the receipt of any foreclosure sale proceeds. Judicial foreclosure actions are subject to the normal delays associated with court cases and may be further slowed by bankruptcy actions, involvement by agencies of the federal government and other factors beyond the control of the City and the District. See “RISK FACTORS — Bankruptcy and Foreclosure.” Moreover, no assurances can be given that the real property subject to foreclosure and sale at a judicial foreclosure sale will be sold or, if sold, that the proceeds of such sale will be sufficient to pay any delinquent Special Tax installment. See “RISK FACTORS — Land Values.” Although the Act authorizes the District to cause such an action to be commenced and diligently pursued to completion, the Act does not impose on the District or the City any obligation to purchase or acquire any lot or parcel of property sold at a foreclosure sale if there is no other purchaser at such sale. The Act provides that, in the case of a delinquency, the Special Tax will have the same lien priority as is provided for ad valorem taxes.

No Teeter Plan. Although the Riverside County Board of Supervisors has adopted the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”) which allows each entity levying secured property taxes in the County to draw on the amount of property taxes levied rather than the amount actually collected, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code, the District is not included in the County Teeter Plan. Consequently, the City may not draw on the County Tax Loss Reserve Fund in the event of delinquencies in Special Tax payments within the District.

Special Tax Fund
Pursuant to the Fiscal Agent Agreement, there will be established, as a separate fund to be held by the Fiscal Agent, the “Community Facilities District No. 2018-2 of the City of Corona Special Tax Fund” (the “Special Tax Fund”) to the credit of which the City will deposit, not later than 10 Business Days after receipt, all Special Tax Revenues received by the City. The Fiscal Agent Agreement will also establish a Surplus Account the (“Surplus Account”) in the Special Tax Fund, as a separate account to be held by the Fiscal Agent.

Moneys in the Special Tax Fund (excluding any amounts held in the Surplus Account) will be held by the Fiscal Agent for the benefit of the City and the Owners of the Bonds and any Parity Bonds, will be disbursed as provided below and, pending disbursement, will be subject to a lien in favor of the Owners of the Bonds and any Parity Bonds. Notwithstanding the foregoing, any amounts received by the City which constitute Special Tax Prepayments will be transferred by the City not later than 10 business days after receipt to the Fiscal Agent for deposit by the Fiscal Agent in the “Special Tax Prepayments Account” established pursuant to the Fiscal Agent Agreement.

As soon as practicable after the receipt from the City of any Special Tax Revenues, but no later than 10 Business Days after such receipt, the Fiscal Agent will withdraw from the Special Tax Fund and deposit in the Administrative Expense Fund, an amount equal to the Priority Administrative Expense Requirement.

Thereafter, the Fiscal Agent shall deposit in the Interest Account and the Principal Account of the Bond Fund the amounts required by the Fiscal Agent Agreement, as described under “— Bond Fund” below. If after such 20 4855-5307-4459v4/200444-0007
deposits are made to the Administrative Expense Fund, the Interest Account and the Principal Account there are funds remaining on deposit in the Special Tax Fund, the City shall instruct the Fiscal Agent by an Officer’s Certificate (upon which the Fiscal Agent may conclusively rely) to transfer such amount from the Special Tax Fund to and deposit it, pro rata based on the Outstanding principal amount of the Bonds and any Parity Bonds, in the Reserve Fund and to any reserve accounts established in connection with Parity Bonds, to the extent that the amounts on deposit therein are less than the applicable Reserve Requirement. Any funds remaining after such deposits shall be deposited into the Surplus Account and disbursed as described below.

The term “Priority Administrative Expense Requirement” is defined in the Fiscal Agent Agreement to mean an annual amount equal to $32,473, which amount shall escalate by 2% in each Fiscal Year beginning July 1, 2023.

On September 2 of each year, the amount, if any, on deposit in the Special Tax Fund, including the Surplus Fund, together with the amount then on deposit in the Bond Fund (including the Principal Account therein but excluding the Interest Account and the Special Tax Prepayments Account), as determined by the City, shall not exceed the greater of (i) one year’s earnings on such amounts, or (ii) 1/12th of Annual Debt Service for the then current Bond Year. If on September 2 of any year the amount on deposit in the Special Tax Fund, together with the amount then on deposit in the Bond Fund (other than such excluded amounts), exceeds the maximum amount allowable pursuant to the preceding sentence, as determined by the City and communicated in writing by an Authorized Officer to the Fiscal Agent (upon which the Fiscal Agent may conclusively rely), moneys shall be transferred from the Special Tax Fund to the Administrative Expense Fund to pay any additional Administrative Expenses during the then current Fiscal Year, and thereafter shall be deposited into the Surplus Account all as directed in writing by the City.

Moneys in the Special Tax Fund will be invested and deposited in accordance with the Fiscal Agent Agreement. Investment earnings will be retained in the Special Tax Fund to be used for the purposes of such fund to the extent set forth in the Fiscal Agent Agreement. See APPENDIX D — “SUMMARY OF FISCAL AGENT AGREEMENT.”
Surplus Account
Moneys deposited in the Surplus Account will be transferred by the Fiscal Agent at the direction of an Authorized Officer of the City (i) to the Interest Account and the Principal Account of the Bond Fund to pay the principal of, including mandatory sinking fund payments, premium, if any, and interest on the Bonds and any Parity Bonds when due in the event that moneys in the Special Tax Fund, the Reserve Fund, and the reserve account established for Parity Bonds, as applicable, are insufficient therefor; (ii) to the Reserve Fund and to the reserve account established for any Parity Bonds in order to replenish such fund and account to the applicable Reserve Requirement; (iii) to the Administrative Expense Fund to pay Administrative Expenses to the extent that the amounts on deposit in the Administrative Expense Fund are insufficient to pay Administrative Expenses; (iv) to the Project Fund to pay for additional costs of the Project until September 1, 20__, after which date no further deposits shall be made to the Project Account; and (v) thereafter to the City for any lawful purpose.

The amounts in the Surplus Account are not pledged to the repayment of the Bonds or any Parity Bonds. In the event that the City reasonably expects to use any portion of the moneys in the Surplus Account to pay debt service on any Bonds or Parity Bonds, the City will notify the Fiscal Agent in a certificate of an Authorized Officer and the Fiscal Agent will segregate such amount into a separate subaccount (the “Surplus Debt Service Subaccount”) and the moneys on deposit in such subaccount of the Surplus Account shall be invested at the written direction of the City in Permitted Investments the interest on which is excludable from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax under the Code) or in Permitted Investments at a yield not in excess of the yield on the issue of Bonds or Parity Bonds to which such amounts are to be applied, unless, in the opinion of Bond Counsel, investment at a higher yield will not adversely affect the exclusion 21 4855-5307-4459v4/200444-0007
from gross income for federal income tax purposes of interest on the Bonds or any Parity Bonds which were issued on a tax-exempt basis for federal income tax purposes. Moneys in the Surplus Debt Service SubAccount will be used to pay the principal of, including mandatory sinking fund payments, premium, if any, and interest on the Bonds and any Parity Bonds when due in the event that moneys in the Interest Account and Principal Account are insufficient therefor.

Bond Fund
Pursuant to the Fiscal Agent Agreement, there will be established, as a separate fund to be held by the Fiscal Agent, the “Community Facilities District No. 2018-2 of the City of Corona Bond Fund” (the “Bond Fund”) and within the Bond Fund, an Interest Account, a Principal Account, and a Special Tax Prepayments Account. Moneys in the Bond Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds and any Parity Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds and any Parity Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds and any Parity Bonds.

On or before each Interest Payment Date, the Fiscal Agent shall transfer from the Special Tax Fund and deposit into the following respective accounts in the Bond Fund, 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 Special Tax 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 or before each Interest Payment Date, the Fiscal Agent 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 the Bonds and any Parity Bonds on such date. No deposit need be made into the Interest Account on any Interest Payment Date if the amount on deposit therein is at least equal to the interest becoming due and payable on the Bonds and any Parity Bonds on such date. All moneys in the Interest Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of paying the interest on the Bonds and any Parity Bonds as it shall become due and payable (including accrued interest on any Bonds and any Parity Bonds redeemed prior to maturity). All amounts on deposit in the Interest Account on the first day of any Bond Year, to the extent not required to pay any interest then having become due and payable on the Outstanding Bonds and any Parity Bonds, shall be withdrawn therefrom by the Fiscal Agent and transferred to the Special Tax Fund.

Principal Account. On or before each Interest Payment Date which occurs on September 1, the Fiscal Agent 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 the Bonds and any Parity Bonds becoming due and payable on such date, or the redemption price of the Bonds and any Parity Bonds (consisting of the principal amount thereof and any applicable redemption premium) required to be redeemed on such date pursuant to the Fiscal Agent Agreement. All moneys in the Principal Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of (i) paying the principal of the Bonds and any Parity Bonds at the maturity thereof, or (ii) paying the principal of and premium (if any) on any Bonds and any Parity Bonds upon the redemption thereof pursuant to the Fiscal Agent Agreement. All amounts on deposit in the Principal Account on the first day of any Bond Year, to the extent not required to pay the principal of any Outstanding Bonds and any Parity Bonds then having become due and payable, shall be withdrawn therefrom by the Fiscal Agent and transferred to the Special Tax Fund.

In the event that moneys on deposit in the Special Tax Fund will be insufficient on any Interest Payment Date for the Fiscal Agent to deposit the required amounts in the Interest Account and the Principal Account, as provided above, the Fiscal Agent shall deposit the available funds first to the Interest Account up to the full amount required to cause the aggregate amount on deposit therein to equal the amount of interest becoming due and payable on the Bonds and any Parity Bonds on the Interest Payment Date, and shall then deposit the remaining available funds in the Special Tax Fund to the Principal Account up to the full amount 22 4855-5307-4459v4/200444-0007
required to cause the aggregate amount on deposit therein to equal the amount, if any, of principal becoming due and payable on the Bonds and any Parity Bonds on the Interest Payment Date. If, after making such deposits to the Interest Account and the Principal Account, and after transferring moneys from the Reserve Fund and any reserve account established in connection with Parity Bonds to such accounts, as provided in the Fiscal Agent Agreement, the amount on deposit in the Interest Account and Principal Account is insufficient to pay the full amount of the interest and principal of the Bonds which is due or is to be redeemed on the Interest Payment Date, the Fiscal Agent shall make a prorated payment first of the interest due until all of such interest is paid, and second to the principal of the Bonds as specified in an Officer’s Certificate provided to the Fiscal Agent.

Reserve Fund
In order to secure further the payment of principal of and interest on the Bonds, the City will, upon delivery of the Bonds, deposit in the Reserve Fund and thereafter to maintain in the Reserve Fund an amount equal to the Reserve Requirement. The Fiscal Agent Agreement provides that the Reserve Requirement for the Bonds shall as determined by the City and provided in writing to the Fiscal Agent, equal the lesser of (i) ten percent (10%) of the original issue price of the Bonds calculated in accordance with Treasury Regulations Section 1.148-2(f)(1), (ii) Maximum Annual Debt Service on the Bonds or (iii) 125 percent (125%) of average Annual Debt Service on the Bonds. The initial Reserve Requirement for the Bonds shall be $______.

Moneys in the Reserve Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of the principal of and interest and any premium on the Bonds and shall be subject to a lien in favor of the Owners of the Bonds. The Reserve Fund may be maintained in the form of one or more separate sub-accounts, to the extent detailed in a Supplemental Agreement, which are established for the purpose of holding the proceeds of the Bonds in conformity with applicable provisions of the Code.

Subject to the limits on the maximum annual Special Tax which may be levied within the District, as described in the Rate and Method, the City will covenant to levy Special Taxes in an amount that is anticipated to be sufficient, in light of the other intended uses of the Special Tax proceeds, to maintain the balance in the Reserve Fund at the Reserve Requirement. The ability of the legislative body of the District to increase the annual Special Taxes levied in the District to replenish the Reserve Fund is additionally subject to certain additional limitations under the Act restricting the amount by which Special Taxes on taxable parcels can be increased due to delinquencies of other taxable parcels.

Except as otherwise provided in the Fiscal Agent Agreement, all amounts on deposit in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Interest Account and the Principal Account of the Bond Fund in the event of any deficiency at any time in either of such accounts of the amount then required for payment of the principal of and interest and any premium on the Bonds or, in accordance with the provisions of the Fiscal Agent Agreement for the purpose of redeeming Bonds as described below.

Whenever the balance in the Reserve Fund is equal to or exceeds the amount required to redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer (upon which the Fiscal Agent may conclusively rely), transfer the amount in the Reserve Fund to the Interest Account and the Principal Account, in the priority specified in the Fiscal Agent Agreement, to be applied, on the next succeeding Interest Payment Date, to the payment and redemption, in accordance with the Fiscal Agent Agreement, of all of the Outstanding Bonds. In the event that the amount available to be so transferred from the Reserve Fund to the Interest Account and the Principal Account exceeds the amount required to pay and redeem the Outstanding Bonds, the excess shall be transferred to the City to be used for any lawful purpose of the City.
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In the event of a prepayment of Special Taxes, under certain circumstances, a portion of the Reserve Fund will be credited to the amount being prepaid and be applied to redeem Bonds.

The City may establish a reserve fund or account for Parity Bonds. Such reserve fund or account established for Parity Bonds will not secure the Bonds.

See APPENDIX D — “SUMMARY OF FISCAL AGENT AGREEMENT.”
No Superior Obligations; No Parity Bonds Except for Refunding The District and the City will covenant in the Fiscal Agent Agreement that they will not issue any other obligations payable, as to principal or interest, from the Special Tax Revenues which have, or purport to have, any lien upon the Special Tax Revenues superior to the lien of the Bonds. The City will further covenant in the Fiscal Agent Agreement that it will not issue Parity Bonds of the District secured by the Special Tax Revenues on a parity with the Bonds, except for the purpose of refunding all or a portion of the Outstanding Bonds or any Parity Bonds.

THE DISTRICT
General Description of the District
The District contains approximately 137 gross acres, located southwest of Green River Road in the southwestern portion of the City. The District is generally bounded by existing residential developments to the north, the upper foothills of the Santa Ana Mountains to the south, vacant land and rural residential to the west and undeveloped land to the east. The District is planned for 237 single family detached homes at buildout and is being developed by Lennar.

As of the March 15, 2022, Date of Value, 162 of the 237 planned single family detached homes had been completed and conveyed to individual homeowners. As of such date, Lennar owned four completed model homes, 55 homes under construction (13 of which were over 95% complete and 46 of which were in escrow) and 16 finished lots. The development in the District has progressed since the Date of Value. As of May 13, 2022, 181 of the 237 planned single family detached homes had been completed and conveyed to individual homeowners, and Lennar owned four completed model homes, 2 completed production homes, and 50 homes under construction, with 46 homes in escrow but unclosed.

The development within the District consists of four product lines being marketed by Lennar. Two of the product lines, “Adagio at Sierra Bella” and “Sonata at Sierra Bella,” each include 50 single family detached homes, all of which have been conveyed to individual homeowners. The remaining two product lines, “Crescendo at Sierra Bella” and “Toccata at Sierra Bella,” include 63 and 74 single family detached homes, respectively, and are actively selling. The following table summarizes the ownership and development status within the District as of May 13, 2022.

Property Owner
Completed
Homes(1)
Under
Construction
Finished
Lots
Individual Owner 181 N/A N/A
Lennar(2) 6 50 0
TOTAL: 187 50 0

(1) Four completed homes owned by Lennar are model homes. (2) Includes a total of 46 homes/lots in escrow.

Source: Lennar.

As of March 1, 2022, Lennar had obtained building permits for 222 of the 237 lots within the District.

Based on the number of building permits obtained for lots within the District as of March 1, 2022, 222 lots will 24 4855-5307-4459v4/200444-0007
be classified as Developed Property and 15 lots will be classified as Approved Property under the Rate and Method (as defined below) for the Fiscal Year 2022-23 Special Tax levy. Since March 1, 2022, Lennar has obtained building permits for the remaining 15 lots in the District and all 237 lots will be classified as Developed Property under the Rate and Method beginning in Fiscal Year 2023-24. See “THE DISTRICT — General Description of the District” and APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
Lennar has completed the major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District. The substantial majority of the in-tract infrastructure within the District, which primarily consists of streets for individual lot access and associated gutters and landscape improvements, is complete. Lennar expects to complete construction of the in-tract improvements associated with the remaining lots that it owns within the District as home construction on such lots is completed.

Description of Authorized Facilities
The City Facilities authorized to be financed from Bond proceeds consist of park facilities, street and traffic signals, as well as incidental expenses related to the planning, design and completion of such facilities.

The estimated costs of the City Facilities to be paid from the proceeds of the Bonds and Special Taxes levied and collected by the District are approximately $14.8 million.

Lennar
On February 1, 2022, Lennar Homes of California, Inc., a California corporation, converted into a limited liability company, and is now known as Lennar Homes of California, LLC, a California limited liability company. As previously defined in this Official Statement, “Lennar” refers to Lennar Homes of California, LLC, a California limited liability company. Lennar Homes of California, LLC is for all purposes the same entity that existed prior to conversion. All property owned, obligations, and causes of action that existed prior to the conversion remain with the resulting entity - Lennar Homes of California, LLC. As used in this section of the Official Statement, the term “Lennar” refers to Lennar Homes of California, Inc. prior to February 1, 2022 and Lennar Homes of California, LLC on and after February 1, 2022.

Lennar is based in Irvine, California and has been in the business of developing residential real estate communities in California since 1996. Lennar is wholly-owned by U.S. Home, LLC, a Delaware limited liability company (“U.S. Home”). U.S. Home is wholly-owned by Lennar Corporation, which is based in Miami, Florida (“Lennar Corporation”). Founded in 1954, Lennar Corporation completed its initial public offering in 1971 and listed its common stock on the New York Stock Exchange in 1972. Lennar Corporation’s Class A and Class B common stock are listed on the New York Stock Exchange under the symbols “LEN” and “LEN.B.” respectively. Lennar Corporation is one of the largest homebuilders in the United States based on home sales revenues and net earnings, and operates under a number of brand names, including Lennar and U.S.

Home. Lennar primarily develops residential communities both within the Lennar Corporation family of builders and through consolidated and unconsolidated partnerships in which Lennar maintains an interest.

Lennar Corporation is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and, in accordance therewith, files reports, proxy statements, and other information, including financial statements, with the Securities and Exchange Commission (the “SEC”). Such filings, particularly the Annual Report on Form 10-K and its most recent Quarterly Report on Form 10-Q, set forth, among other things, certain data relative to the consolidated results of operations and financial position of Lennar Corporation and its consolidated subsidiaries, including Lennar, as of such dates.

The SEC maintains a website that contains reports, proxy and other information statements and other information regarding registrants that file electronically with the SEC, including Lennar Corporation. The address of such website is www.sec.gov. All documents filed by Lennar Corporation pursuant to the 25 4855-5307-4459v4/200444-0007
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 Lennar Corporation’s Annual Report and related financial statements, prepared in accordance with generally accepted accounting standards, are available from Lennar Corporation’s website at www.lennar.com.

The foregoing website addresses and references to filings with the SEC are given for reference and convenience only, and the information on such websites and on file with the SEC does not form a part of this Official Statement and is not incorporated by reference herein. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on such websites. Lennar Corporation and Lennar are not 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 websites in evaluating whether to buy, hold or sell the Bonds.

Lennar Development Plan
Planned Product Lines. The property within the District is being developed by Lennar and is planned for 237 residential units at buildout. The development within the District consists of four product lines. Two of the product lines, “Adagio at Sierra Bella” and “Sonata at Sierra Bella,” each include 50 single family detached homes, all of which have been conveyed to individual homeowners. The remaining two product lines, “Crescendo at Sierra Bella” and “Toccata at Sierra Bella,” include 63 and 74 single family detached homes, respectively, and are actively selling. Additional details with respect to each product line are set forth below.

Adagio at Sierra Bella. The Adagio at Sierra Bella product line consists of 50 single family detached homes, all of which are owned by individual homeowners. The final closing in this product line occurred in October 2021. Sales prices in the Adagio at Sierra Bella ranged from approximately $709,030 to $1,344,838. Home sizes in this product line range from approximately 2,624 square feet to 4,167 square feet.

Sonata at Sierra Bella. The Sonata at Sierra Bella product line consists of 50 single family detached homes, all of which are owned by individual homeowners. The final closing in this product line occurred in May 2021. Sales prices in the Sonata at Sierra Bella ranged from approximately $634,150 to $1,146,196. Home sizes in this product line range from approximately 2,497 square feet to 3,401 square feet.

Crescendo at Sierra Bella. The Crescendo at Sierra Bella product line consists of 63 single family detached homes. Home sizes in this product line range from approximately 3,423 square feet to 4,134 square feet. As of May 13, 2022, Lennar has closed 40 homes in the Crescendo at Sierra Bella neighborhood to individual homeowners, and Lennar owned two model homes (both in escrow), 2 completed production homes (both in escrow), and 19 homes under construction (all 19 of which were in escrow). Sales prices in Crescendo at Sierra Bella neighborhood have ranged from $833,410 to $1,378,956. Lennar expects to complete the remaining homes that it plans to construct in Crescendo at Sierra Bella neighborhood and convey them to individual homeowners by November, 2022.

Toccata at Sierra Bella. The Toccata at Sierra Bella product line consists of 74 single family detached homes. Home sizes in this product line range from approximately 2,365 square feet to 2,944 square feet. As of May 13, 2022, Lennar has closed on 41 homes in the Toccata at Sierra Bella neighborhood to individual homeowners, and Lennar owned two model homes, and 31 homes under construction (23 of which were in escrow). Sales prices in Toccata at Sierra Bella have ranged from $726,950 to $1,120,995. Lennar expects to complete the remaining homes that it plans to construct in Crescendo at Sierra Bella neighborhood and convey them to individual homeowners by November, 2022. 26 4855-5307-4459v4/200444-0007
Entitlements and Infrastructure. Lennar has obtained all approvals and permits required for development of property within the District except for the remaining approvals required in the normal course of home construction.

Lennar has completed the major infrastructure (sewer, water, storm drains, utilities, and arterial roads) necessary to develop the property within the District. The substantial majority of the in-tract infrastructure within the District, which primarily consists of streets for individual lot access and associated gutters and landscape improvements, is complete. Other than in-tract infrastructure, no other significant site work infrastructure remains to be constructed in order to complete the development in the District. Lennar expects to complete construction of the in-tract improvements associated with the remaining lots that it owns within the District as home construction on such lots is completed.

Financing Plan. As of May 19, 2022, Lennar has financed its land acquisition and various site development and homebuilding costs related to its property in the District through internally generated funds.

As of May 19, 2022, Lennar had expended approximately $163.5 million on land acquisition and development and homebuilding costs in the District and Lennar expects to incur approximately an additional $10.7 million on development and homebuilding, marketing, and sales costs for its projects in the District. Lennar expects to use home sales revenues and internal funding to complete its remaining development within the District, and believes that it will have sufficient funds available to complete its remaining development as described in this Official Statement.

Although Lennar expects to have sufficient funds available to complete its development in the District, commensurate with the development timing described in this Official Statement, there can be no assurance that amounts necessary to finance the remaining development and home construction costs within the District will be available from Lennar, or from any other source, when needed. Neither Lennar nor any of its related entities are under any legal obligation of any kind to expend funds for the remaining development of and construction of homes on its property in the District. Any internal funding by Lennar or its related entities to finance development and home construction costs within the District is made or obtained voluntarily.

If and to the extent that internal funding, including but not limited to home sales revenues, is inadequate to pay the costs to complete the planned development by Lennar within the District and other financing by Lennar is not put into place, there could be a shortfall in the funds required to complete the proposed development by Lennar in the District and the remaining portions of the project in the District may not be developed.

Impact of COVID-19 Pandemic. Except as described herein, Lennar has not experienced any material increases in costs, or any development or home sale delays resulting from decisions to reduce financing for the projects, inability to obtain financing, work stoppages, reduced attendance of workers, lack of or delays in the delivery of building materials or the ability to obtain necessary inspections and approvals, which Lennar attributes to the COVID-19 pandemic. To date, Lennar has continued to fund and implement its projects as described in this Official Statement and intends to do so to complete such projects. However, the development by Lennar is subject to delays caused by the COVID-19 pandemic. As the impacts caused by the outbreak evolve, there could be an adverse impact on the timing and costs of the neighborhoods. See “SPECIAL RISK FACTORS – COVID-19 Pandemic” herein. Lennar cannot predict the ultimate effects of the COVID-19 outbreak or whether any such effects would have a material adverse effect on the ability to develop its projects in the District as planned.

Estimated Direct and Overlapping Indebtedness
Within the boundaries of the District are other overlapping local agencies providing public services.

The approximate amount of the direct and overlapping debt on the parcels within the District as of March 15, 2022 is shown in Table 3 below.
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TABLE 3
COMMUNITY FACILITIES DISTRICT NO. 2018-2 (SIERRA BELLA)

OF THE CITY OF CORONA

DIRECT AND OVERLAPPING DEBT
AS OF MARCH 15, 2022
I. Appraisal Value(1) $ 192,471,291

II. Land Secured Bond Indebtedness
Outstanding Direct and Overlapping Bonded Debt Type Issued Outstanding % Applicable Amount
Applicable
CITY OF CORONA CFD NO. 2018-2 Series A(2) CFD $ 15,385,000 $ 15,385,000 100.000% $ 15,385,000* TOTAL LAND SECURED BONDED DEBT $ 15,385,000*

III. General Obligation Bond Indebtedness
Outstanding Direct & Overlapping Bonded Debt Type Issued Outstanding % Applicable Amount
Applicable
METROPOLITAN WATER DEBT SERVICE GO $ 850,000,000 $ 26,830,000 0.159% $ 42,773 RIVERSIDE COMMUNITY COLLEGE DEBT SERVICE GO 766,284,533 400,926,294 0.151 606,528 CORONA-NORCO UNIFIED SCHOOL DISTRICT GO 620,430,034 554,661,089 0.455 2,524,120 TOTAL OUTSTANDING GENERAL OBLIGATION BONDED DEBT $ 3,173,421

Authorized but Unissued Direct and Overlapping Indebtedness Type Authorized Unissued % Applicable Amount
Applicable
METROPOLITAN WATER DEBT SERVICE GO $ 850,000,000 $ 0 0.159% $ 0 RIVERSIDE COMMUNITY COLLEGE DEBT SERVICE GO 1,000,000,000 233,715,467 0.151 353,568 CORONA-NORCO UNIFIED SCHOOL DISTRICT GO 711,000,000 90,569,966 0.455 412,161 CITY OF CORONA CFD NO. 2018-2 CFD 20,000,000 4,615,000 100.000 4,615,000 TOTAL UNISSUED GENERAL OBLIGATION INDEBTEDNESS $ 5,380,729

TOTAL OUTSTANDING AND UNISSUED GENERAL OBLIGATION INDEBTEDNESS $ 8,554,150 TOTAL OF ALL OUTSTANDING DIRECT AND OVERLAPPING BONDED DEBT $ 18,558,421* TOTAL OF ALL OUTSTANDING DIRECT AND UNISSUED DIRECT OVERLAPPING INDEBTEDNESS $ 23,939,150*

IV. Ratios to Appraisal Value
Outstanding Land Secured Bonded Debt 12.51:1*
Total Outstanding Bonded Debt 10.37:1*

* Preliminary, subject to change. (1) Represents the appraised value as set forth in the Appraisal Report as of the Date of Value. (2) Represents the Bonds. Parity Bonds may be issued only for the purpose of refunding the Bonds.

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

Expected Tax Burden
Based on the appraised values within the District set forth in the Appraisal Report, the projected debt service on the Bonds, and estimated Administrative Expenses of $32,473 for Fiscal Year 2022-23, the City expects that, in Fiscal Year 2022-23, the projected effective tax rates levied on taxable property in the District, will range from approximately 1.73% to 1.83% of average appraised value of homes within each Land Use Category (as defined in the Rate and Method). Subject to the limitations established by the Rate and Method and the provisions of the Act, the City Council will covenant in the Fiscal Agent Agreement to levy Special Taxes on parcels of taxable property in the District in each Fiscal Year in an amount sufficient to pay debt service on the outstanding Bonds.

Table 4 below describes the estimated Fiscal Year 2022-23 effective tax burden for sample units of Developed Property within the District assuming Special Taxes levied in Fiscal Year 2022-23 are levied at the Assigned Special Tax A (as defined in the Rate and Method) rate, Special Tax B is levied at the Maximum Special Tax B rate (as such terms are defined in the Rate and Method), the projected Fiscal Year 2022-23 City of Corona Community Facilities District No. 2016-1 (Public Safety) levy, and Fiscal Year 2021-22 actual levies for all other overlapping taxing jurisdictions.
28 4855-5307-4459v4/200444-0007
The estimated tax rates and amounts presented in this Official Statement are based on currently available information. The actual amounts charged may vary and may increase in future years depending on the amount of Bonds and Parity Bonds outstanding, and the number of delinquencies in the District, among other factors.
[Remainder of Page Intentionally Left Blank]
29 4855-5307-4459v4/200444-0007
TABLE 4
COMMUNITY FACILITIES DISTRICT NO. 2018-2 (SIERRA BELLA)

OF THE CITY OF CORONA
PROJECTED FISCAL YEAR 2022-23 EFFECTIVE TAX OBLIGATION

FOR SAMPLE DEVELOPED PROPERTY
Tract 36541, 36451-1, 36451-2
Project Adagio Sonata Toccata Crescendo Plan Type 1 4 1 4 1 3 1 3 CFD Tax Category 2,501 to 2,800 S.F.

Greater than
3,701 S.F.
2,201 to
2,500 S.F.
3,401 to
3,700 S.F.
2,201 to
2,500 S.F.
2,801 to
3,100 S.F.
3,401 to
3,700 S.F.

Greater than
3,701 S.F.

Home Size(1) 2,624 4,167 2,497 3,401 2,365 2,944 3,423 4,134 Appraisal Value(2) $ 892,160 $ 1,145,925 $ 873,950 $ 969,285 $ 851,400 $ 942,080 $ 975,555 $ 1,136,850 Ad Valorem Property Taxes:

General Purpose $ 8,922 $ 11,459 $ 8,740 $ 9,693 $ 8,514 $ 9,421 $ 9,756 $ 11,369 Metro Water West (0.00350%) 31 40 31 34 30 33 34 40 Riverside Community College (0.01470%) 131 168 128 142 125 138 143 167 Corona- Norco Unified School District (0.09914%) 884 1,136 866 961 844 934 967 1,127 Total General Property Taxes $ 9,968 $ 12,804 $ 9,765 $ 10,830 $ 9,513 $ 10,526 $ 10,900 $ 12,702 Assessment, Special Taxes & Parcel Charges:(3) Flood Control Stormwater / Cleanwater / Santa Ana $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 CSA #152 City of Corona Stormwater 10 10 10 10 10 10 10 10 City of Corona CFD 2016-1 Public Services 634 634 634 634 634 634 634 634 Northwest Mosquito and Vector Control 11 11 11 11 11 11 11 11 MWD Standby charge 10 10 10 10 10 10 10 10 City of Corona CFD 2018-2 Special Tax B(3) 874 874 874 874 874 874 874 874 City of Corona CFD 2018-2 Special Tax A(4) 4,568 5,383 4,374 5,158 4,374 4,762 5,158 5,383 Total Assessments & Special Taxes $ 6,110 $ 6,925 $ 5,916 $ 6,700 $ 5,916 $ 6,304 $ 6,700 $ 6,925 Projected Total Property Tax $ 16,079 $ 19,729 $ 15,681 $ 17,530 $ 15,429 $ 16,830 $ 17,600 $ 19,628 Projected Effective Tax Rate 1.80% 1.72% 1.79% 1.81% 1.81% 1.79% 1.80% 1.73% (1) Reflect the average home size of each plan type within the District. (2) Reflects the average appraised value of each home size as of March 15, 2022, the Date of Value of the Appraisal. (3) The District levies the Special Tax B to finance certain maintenance and services costs. The Special Tax B is not pledged to repay the Bonds. The Special Tax C (Contingent) (as defined in the Rate and Method) is not currently levied. Any amounts of the Special Tax C (Contingent) which may be levied in the future will not available to pay debt service on the Bonds. (4) Reflects the Assigned Special Tax A rates.

Source: County of Riverside Assessor’s office, Spicer Consulting Group, LLC. 30 4855-5307-4459v4/200444-0007
Appraisal Report
The estimated assessed value of the property within the District, as shown on the County’s assessment roll for Fiscal Year 2021-22, is approximately $92,400,704. However, 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 County engaged Kitty Siino & Associates, Inc., 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 was selected by the City and has no material relationships with the City or the owners of the land within the 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 B — “APPRAISAL REPORT” to this Official Statement.

The purpose of the Appraisal Report was to estimate the market value of the fee simple interest of the property within the District subject to the Special Tax levy. The estimate of market value assumes that all improvements and benefits to the subject properties, which are to be funded with the proceeds of the Bonds are completed and in place.

Subject to the assumptions and limiting conditions set forth in the Appraisal Report, the Appraiser concluded that, as of the Date of Value (March 15, 2022), the minimum market value of the property within the District subject to the Special Tax lien was $192,471,291. The Appraisal Report is based upon a variety of assumptions and limiting conditions that are described in Appendix B. The City makes no representation as to the accuracy of the Appraisal Report. See APPENDIX B — “APPRAISAL REPORT.” There is no assurance that the property within the District 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 Tax for that parcel in the event of a default in payment of Special Taxes by the landowner. See “RISK FACTORS — Land Values” and APPENDIX B — “APPRAISAL REPORT.”
Estimated Value-to-Lien Ratio
The appraised value of the property within the District as of the Date of Value is $192,471,291.

Dividing the appraised value by the principal amount of the Bonds results in value to lien ratio of 12.51-to-1* for the District. Dividing the appraised value by the principal amount of the Bonds plus all overlapping general obligation debt results in an estimated assessed value-to-lien ratio of 10.37-to-1* for the District. As of
the date of issuance of the Bonds, the City expects that the only land-secured debt applicable to parcels within the District will be the Bonds. However, additional land-secured special tax or assessment debt could be applicable to the parcels within the District in the future. See “SPECIAL RISK FACTORS — Parity Taxes and Special Assessments.”
The assessed value of the land within the District is approximately $92,400,704 for Fiscal Year 2021-

22. Dividing the assessed value by the principal amount of the Bonds plus all overlapping general obligation debt results in an estimated assessed value-to-lien ratio of 4.98-to-1* for the District.

Table 5 below reflects the values assigned to parcels in the Appraisal Report, the estimated principal amount of the Bonds and the estimated appraised value-to-lien ratios in the District, based on the estimated Fiscal Year 2022-23 Special Tax levy, categorized by property ownership. *
Preliminary, subject to change.
31 4855-5307-4459v4/200444-0007
TABLE 5
COMMUNITY FACILITIES DISTRICT NO. 2018-2 (SIERRA BELLA)

OF THE CITY OF CORONA

ESTIMATED VALUE-TO-LIEN RATIOS

ALLOCATED BY PROPERTY OWNERSHIP
Property Owner(1)
No.
of
Units
Appraised
Property
Value(2)
Percentage
of
Appraised
Value
Maximum
Fiscal Year
2022-23
Special Tax
Percentage
of
Maximum
Fiscal Year
2022-23
Special
Tax
Estimated
Fiscal Year
Special Tax
2022-23
Levy(3)*
Percentage
of Estimated
Fiscal Year
Special Tax
2022-23
Levy
CFD 2018-2
2022
Bonds(4)*
All Other
Overlapping
Debt Issued(5)
Appraised
Value-toLien Ratio*
Developed Property(6)
Individually Owned 181 $ 169,561,496 88.10% $ 925,456 76.42% $ 893,682 81.37% $ 12,518,766 $ 2,582,211 11.23:1 Lennar Owned 41 17,126,611 8.90 211,167 17.44 204,613 18.63 2,866,234 591,210 4.95:1 Subtotal Developed 222 $ 186,688,107 97.00% $ 1,136,623 93.85% $ 1,098,295 100.00% $ 15,385,000 $ 3,173,421 10.06:1 Approved Property(6) Lennar Owned 15 $ 5,783,184 3.00% $ 74,460 6.15% $ 0 0.00% $ 0 $ 0 N/A Subtotal Developer Owned 15 $ 5,783,184 3.00% $ 74,460 6.15% $ 0 0.00% $ 0 $ 0 NA Total 237 $ 192,471,291 100.00% $ 1,211,083 100.00% $ 1,098,295 100.00% $ 15,385,000 $ 3,173,421 10.37:1 (1) Based on ownership as of May 13, 2022. (2) Based on Appraisal Report as of the Date of Value. (3) Estimated Fiscal Year 2022-23 Special Tax Levy based upon development status as of March 1, 2022 and includes Administrative Expenses in the amount of $32,473. (4) Allocated based on the projected Fiscal Year 2022-23 Special Tax levy. (5) See Table 3 above. (6) Based on building permits issued as of March 1, 2022. Pursuant to the Rate and Method, Developed Property means all Assessor’s Parcels of Taxable Property for which a building permit for new construction was issued on or before March 1 preceding the Fiscal Year in which the Special Tax is being levied. Since March 1, 2022, Lennar has obtained building permits for the remaining 15 lots in the District and all 237 lots will be classified as Developed Property under the Rate and Method beginning in Fiscal Year 2023-24.

Source: County of Riverside Assessor’s office; Spicer Consulting Group, LLC. 32 4855-5307-4459v4/200444-0007
Table 6 below sets forth the appraised value-to-lien ratios for the parcels of Developed Property in the District by value-to-lien ranges based on building permits issued as of March 1, 2022 and allocated based on the projected Fiscal Year 2022-23 Special Tax levy. Pursuant to the Rate and Method, Developed Property means all Assessor’s Parcels of Taxable Property for which a building permit for new construction was issued on or before March 1 preceding the Fiscal Year in which the Special Tax is being levied. Since March 1, 2022, Lennar has obtained building permits for the remaining 15 lots in the District and all 237 lots will be classified as Developed Property under the Rate and Method beginning in Fiscal Year 2023-24.

TABLE 6
COMMUNITY FACILITIES DISTRICT NO. 2018-2 (SIERRA BELLA)

OF THE CITY OF CORONA
VALUE-TO-LIEN STRATIFICATION FOR DEVELOPED PROPERTY*
Value-to-Lien Category
No. of
Units
Percent of
Units
Appraised
Value(1)
Percent of
Appraised
Value
CFD 2018-2
Estimated
Fiscal Year
2022-23
Special Tax
Levy(2)
Percentage
Share of
Estimated
Fiscal Year
2022-23
Special Tax
Levy
CFD 2018-2
2022 Bonds(3)
Percentage
Share of
CFD No.
2018-2
2022 Bonds
All Other
Overlapping
Debt(4)
Less than 5.00:1(3) 40 18.02% $ 15,421,824 8.26% $ 203,243 18.51% $ 2,847,043 18.51% $ 587,252 Between 5.01:1 to 8.00:1 7 3.15 4,018,061 2.15 34,654 3.16 485,436 3.16 100,130 Between 8.01:1 to 10.00:1 13 5.86 9,299,627 4.98 58,802 5.35 823,703 5.35 169,903 Between 10.01:1 to 12.00:1 134 60.36 125,962,520 67.47 650,872 59.26 9,117,465 59.26 1,880,634 Greater than 12.01:1(3) 28 12.61 31,986,075 17.13 150,724 13.72 2,111,353 13.72 435,503 Total 222 100.00% $ 186,688,107 100.00% $ 1,098,295 100.00% $ 15,385,000 100.00% $ 3,173,421 * Preliminary, subject to change. (1) Based on Appraisal Report as of the Date of Value. (2) Estimated Fiscal Year 2022-23 Special Tax Levy based upon development status as of March 1, 2022 and includes Administrative Expenses in the amount of $32,473. (3) Allocated based on the projected Fiscal Year 2022-23 Special Tax levy. (4) See Table 3 above. (5) The lowest value to lien for a parcel in the District is approximately 4.60:1* and the highest value to lien for a parcel in the District is approximately 12.60:1*.

Source: County of Riverside Assessor’s office; Spicer Consulting Group, LLC. 33 4855-5307-4459v4/200444-0007
Delinquency History
Fiscal Year 2018-19 was the first year of the Special Tax levy in the District. Unpaid amounts of the Special Taxes become delinquent after December 10 and April 10 of each Fiscal Year. Table 7 below summarizes the Special Tax delinquencies within the District for Fiscal Years 2018-19 through Fiscal Year 2021-22 as of May 17, 2022.

TABLE 7
COMMUNITY FACILITIES DISTRICT NO. 2018-2 (SIERRA BELLA)

OF THE CITY OF CORONA

SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES Delinquencies as of May 17, 2022
Fiscal Year Amount Levied Parcels Levied
Parcels
Delinquent
Amount
Delinquent
Percent
Delinquent
2018-19 $187,490 38 0 $ 0 0.00%
2019-20 390,889 79 0 0 0.00
2020-21 504,896 102 1 4,762 0.94

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

City’s Collection Practices
The staff of the City provides administrative and other support services for the community facilities districts that have been formed by the City. These services include, but are not limited to, attempting to collect delinquent special taxes prior to the commencement of foreclosure proceedings by sending demand letters to property owners whose special taxes are delinquent advising them of the consequences of failing to pay the applicable special taxes. The City will covenant in the Fiscal Agent Agreement to commence foreclosure proceedings against parcels with delinquent Special Taxes under certain circumstances described in this Official Statement. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.”

RISK FACTORS
The purchase of the Bonds involves significant investment risks and, therefore, the Bonds are not suitable investments for many investors. The following is a discussion of certain risk factors which should be considered, in addition to other matters set forth in this Official Statement, in evaluating the investment quality of the Bonds. The Bonds have not been rated by a rating agency. 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 in this section of this Official Statement could adversely affect the ability or willingness of property owners in the District to pay their Special Taxes when due. Such failures to pay Special Taxes could result in the inability of the District to make full and punctual payments of debt service on the Bonds. In addition, the occurrence of one or more of the events discussed in this section of this Official Statement could adversely affect the value of the property in the District. See “— Land Values” and “— Limited Secondary Market” below.

Risks of Real Estate Secured Investments Generally
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 the vicinity of the District, the supply of or demand for competitive properties 34 4855-5307-4459v4/200444-0007
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 and fiscal policies; (iii) natural disasters (including, without limitation, earthquakes and floods), which may result in uninsured losses; and (iv) high rate of inflation, rising interest rates and other economic trends that adversely affects consumers, whether cyclical or resulting from geopolitical events.

No assurance can be given that the individual homeowners will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See “RISK FACTORS — Bankruptcy and Foreclosure” below, for a discussion of certain limitations on the District’s ability to pursue judicial proceedings with respect to delinquent parcels.

Limited Obligations
The Bonds and related interest are not payable from the funds of the City. Except with respect to the Special Taxes, neither the credit nor the taxing power of the District or the City is pledged for the payment of principal or interest of the Bonds, and, except as provided in the Fiscal Agent Agreement, no Owner of the Bonds may compel the exercise of any taxing power by the District or the City or force the forfeiture of any City or District property. The principal of, premium, if any, and interest on the Bonds are not a debt of the City or a legal or equitable pledge, charge, lien or encumbrance upon any of the City’s or District’s property or upon any of the City’s or District’s income, receipts or revenues, except the Special Tax Revenues and other amounts pledged under the Fiscal Agent Agreement.

Insufficiency of Special Taxes
The annual amount of Special Tax to be levied on each taxable parcel in the District will generally be based on the land use class to which such property is assigned under the Rate and Method. See APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX” and “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Rate and Method of Apportionment of Special Tax.” The maximum Special Taxes that may be levied within the District are at least 110% of Maximum Annual Debt Service on the Bonds. Notwithstanding that the maximum Special Taxes that may be levied in the District exceeds debt service due on the Bonds, the Special Taxes collected could be inadequate to make timely payment of debt service either because of nonpayment or because property becomes exempt from taxation as permitted in the Rate and Method.

In order to pay debt service on the Bonds, it is necessary that the Special Taxes be paid in a timely manner. Should the Special Taxes not be paid on time, the City has established a Reserve Fund under the Fiscal Agent Agreement to pay debt service on the Bonds to the extent other funds are not available. See “SOURCES OF PAYMENT FOR THE BONDS — Reserve Fund.” The City will covenant in the Fiscal Agent Agreement to maintain in the Reserve Fund an amount equal to the Reserve Requirement subject, however, to the limitation that the City may not levy the Special Tax in the District in any Fiscal Year at a rate in excess of the maximum amounts permitted under the Rate and Method. In addition, under no circumstances may the Special Tax levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by owner of any other parcel or parcels within the District by more than 10% in any Fiscal Year. As a result, if a significant number of delinquencies occurs, the District could be unable to replenish the Reserve Fund to the Reserve Requirement. If such defaults were to continue in successive years, the Reserve Fund could be depleted and a default on the Bonds could occur.

The City will covenant in the Fiscal Agent Agreement that, under certain conditions, it will institute judicial foreclosure proceedings to sell any property with delinquent Special Taxes in order to obtain funds to pay debt service on the Bonds. If foreclosure proceedings were ever instituted, any mortgage or deed of trust holder could, but would not be required to, advance the amount of the delinquent Special Tax to protect its security interest. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of 35 4855-5307-4459v4/200444-0007
Foreclosure Sales” for provisions which apply in the event of such foreclosure and which the City is required to follow in the event of delinquencies in the payment of the Special Tax.

In the event that sales or foreclosures of property are necessary, there could be a delay in payments to owners of the Bonds (if the Reserve Fund has been depleted) pending such sales or the prosecution of such foreclosure proceedings and receipt by the City on behalf of the District of the proceeds of sale. The City may adjust the future Special Tax levied on taxable parcels in the District, subject to the limitation on the maximum Special Tax, to provide an amount required to pay interest on, principal of, and redemption premiums, if any, on the Bonds, and the amount, if any, necessary to replenish the Reserve Fund to an amount equal to the Reserve Requirement and to pay all current expenses. There is, however, no assurance that the total amount of the Special Tax that could be levied and collected against taxable parcels in the District will be at all times sufficient to pay the amounts required to be paid by the Fiscal Agent Agreement, even if the Special Tax is levied at the maximum Special Tax rates. See “Bankruptcy and Foreclosure” below for a discussion of potential delays in foreclosure actions.

The Rate and Method governing the levy of the Special Tax expressly exempts up to 49.71 acres of property owned by public agencies and other exempt entities in the District. See Section F of APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” If for any reason property within the District becomes exempt from taxation by reason of ownership by a non-taxable entity such as the federal government, another public agency or a religious organization, subject to the limitations of the maximum authorized rates, the Special Tax will be reallocated to the remaining taxable properties within the District.

This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon the ability and willingness of the owners of such property to pay the Special Tax when due.

The Act provides that, if any property within the District not otherwise exempt from the Special Tax is acquired by a public entity through a negotiated 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 Act provides that, if property subject to the Special Tax is acquired by 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 Act have not been tested in the courts. Due to problems of collecting taxes from public agencies, if a substantial portion of land within the District was to become owned by public agencies, collection of the Special Tax 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 Bonds when due and a default could occur with respect to the payment of such principal and interest.

Special Tax Delinquencies
Under provisions of the Act, the Special Taxes, from which funds necessary for the payment of principal of, and interest on, the Bonds are derived, are customarily billed to the properties within the District on the ad valorem property tax bills sent to owners of such properties. The 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 “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales,” for a discussion of the provisions which apply, and procedures which the City is obligated to follow under the Fiscal Agent Agreement, in the event of delinquencies in the payment of Special Taxes. See “RISK FACTORS — FDIC/Federal Government Interests in Properties” below, for a discussion of the policy of the Federal Deposit Insurance Corporation (the “FDIC”) regarding the payment of special taxes and assessment and limitations on the City’s ability to foreclose on the lien of the Special Taxes in certain circumstances where property within the District is owned by the federal government, agencies of the federal government, or, 36 4855-5307-4459v4/200444-0007
possibly, government sponsored enterprises such as Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”).

The City has the authority and the obligation, subject to the Act and the maximum Special Tax rates set forth in the Rate and Method, to increase the levy of Special Taxes against non-delinquent property owners in the District in the event other owners in the District are delinquent. Pursuant to the Rate and Method and the Act, under no circumstances may the Special Tax levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by owner of any other parcel or parcels within the District by more than 10% in any Fiscal Year. Thus, the City 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.

Although the City will covenant in the Fiscal Agent Agreement to commence and diligently pursue foreclosure under the circumstances described under the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales,” foreclosure delays may occur under the circumstances described under the caption “RISK FACTORS — Bankruptcy and Foreclosure.” Delinquencies may result as a consequence of many factors. See “RISK FACTORS,” generally, for a discussion of certain potential causes of delinquencies.

Increasing Mortgage Interest Rates
Between approximately November 2021 and April 2022, mortgage interest rates have increased from approximately 3.1% to 5.0%. Mortgage interest rates are expected to continue to increase in the near term. Increases in mortgage interest rates could have a negative impact on the sale of the remaining homes in the District described herein. With respect to entry-level households, increased mortgage interest rates may adversely impact the affordability of homes and may increase mortgage payment levels for owning a lowerpriced home relative to renting a residence, thereby making purchasing less attractive. With respect to moveup households, higher mortgage interest rates may impact the desire of current homeowners to move from their present home due to the fact that their present home likely has a relatively low mortgage interest rate. In addition, the new home would likely have a higher interest rate on a new mortgage loan as well as a higher purchase price and property taxes. Such considerations may decrease the desire for move-up households to purchase a new home. The foregoing factors could reduce demand for and/or the ability to achieve the sales prices of the remaining homes to be sold within the District as described herein.

Natural Disasters
The District, like all California communities, may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. Southern California is a seismically active area. Seismic activity represents a potential risk for damage to buildings, roads, bridges and property within the District. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event. [The property within the District is not located in an Alquist Priolo Earthquake Study Zone and is not located within one-half mile of an active earthquake fault. Additionally, the District is not located in a flood plain area.] With respect to geologic conditions, building codes require that some of these factors be taken into account in the design of private improvements of the parcels, and the City has adopted the Uniform Building Code standards with regard to seismic standards. Design criteria are established upon the basis of a variety of considerations and may change, leaving previously designed improvements unaffected by more stringent subsequently established criteria. In general, design criteria reflect a balance at the time of establishment between the present costs of protection and the future costs of lack of protection, based in part upon a present perception of the probability that the condition will occur and the seriousness of the condition should it occur.

Consequently, neither the absence of, nor the establishment of, design criteria with respect to any particular condition means that the applicable governmental agency has evaluated the condition and has established 37 4855-5307-4459v4/200444-0007
design criteria in the situations in which the criteria are needed to preserve value, or has established the criteria at levels that will preserve value. To the contrary, the City expects that one or more of such conditions may occur and may result in damage to improvements of varying seriousness; that the damage may entail significant repair or replacement costs; and that repair or replacement may never occur because of the cost, because repair or replacement will not facilitate habitability or other use, or because other considerations preclude repair or replacement. Under any of these circumstances, the actual value of the parcels might depreciate or disappear, notwithstanding the establishment of design criteria for any such condition.

In recent years, wildfires have caused 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. Several fires which occurred in recent years damaged or destroyed property in areas that were not previously considered to be at risk from such events. Additionally, property located adjacent to burn areas can be subject to mudslides and flooding, which can cause significant damage and destruction to property. The District is located in an area which the Department of Forestry and Fire Protection of the State of California has designated as a very high fire hazard severity zone. As part of the City’s approvals for the project in the District, Lennar implemented a fuel modification plan (the “Fuel Modification Plan”) which, among other measures provides for setback zones which generally run along the boundary of the project area and limits the type of vegetation that may be planted therein. Maintenance requirements in the setback zones include maintaining vegetation below certain maximum heights, removal of dry/dead vegetation and keeping the zones properly irrigated. The setback zones are subject to inspection by the City’s fire department and is expected to be maintained by the property owner’s association within the District. Notwithstanding the foregoing mitigation measures, there is a risk of residential property within the District being destroyed by wildfires and no assurance can be given as to the severity or frequency of wildfires within the vicinity of the District.

Certain of the events described above may become more extreme or frequent due to climate change caused by human activities. The effects of climate change could include more variable weather patterns, which can lead to longer and more severe droughts as well as increased risk of flooding.

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 District. As a result, a substantial portion of the property owners may be unable or unwilling to pay the Special Taxes when due. In addition, the value of land in the District 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 Special Taxes.

Hazardous Substances
The presence of hazardous substances on a parcel may result in a reduction in the value of a parcel. In general, the owners and operators of a parcel may be required by law to remedy conditions of the parcel 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 “Superfund 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. Under many of these laws, the owner or operator is obligated to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the taxed parcels be affected by a hazardous substance, is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.

Further, it is possible that liabilities may arise in the future with respect to any of the parcels resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently on the parcel of a substance not presently classified as hazardous but which may in the 38 4855-5307-4459v4/200444-0007
future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of a parcel that is realizable upon a delinquency and the willingness or ability of the owner of any parcel to pay the Special Tax Installments.

The value of the taxable property within the District, as set forth in the Appraisal Report and in the various tables in this Official Statement, does not reflect the presence of any hazardous substance or the possible liability of the owner (or operator) for the remedy of a hazardous substance condition of the property.

The City has not independently verified, but is not aware, that any owner (or operator) of any of the parcels within the District has such a current liability with respect to any such parcel. However, it is possible that such liabilities do currently exist and that the District is not aware of them.

Parity Taxes and Special Assessments
Property within the District is subject to taxes imposed by public agencies also having jurisdiction over the land within the District. See “THE DISTRICT — Estimated Direct and Overlapping Indebtedness.” The Special Taxes and any related penalties 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 all special taxes and special assessments levied by the City and other agencies and is co-equal to and independent of the lien for general 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 except, possibly, for liens or security interests held by the Federal Deposit Insurance Corporation. See “RISK FACTORS — Bankruptcy and Foreclosure” below.

The City has no 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 District.

In addition, the landowners within the District may, without the consent or knowledge of the City, petition other public agencies to 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 District described in this Official Statement. See “SOURCES OF PAYMENT FOR BONDS” and “THE DISTRICT — Estimated Direct and Overlapping Indebtedness.”
Disclosures to Future Purchasers
The willingness or ability of an owner of a parcel to pay the Special Tax even if the value of the parcel is sufficient 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 Special 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 the Notice of Special Tax Lien to be recorded in the Office of the Recorder for the County against each parcel.

While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will 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 District or lending of money thereon.

The Act requires the subdivider (or its agent or representative) 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 Civil 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 statute. Failure by an owner of the property to comply with the above requirements, or 39 4855-5307-4459v4/200444-0007
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 or lessor to pay the Special Tax when due.

Non-Cash Payments of Special Taxes
Under the Act, the City Council as the legislative body of the District may reserve to itself the right and authority to allow the owner of any taxable parcel to tender a Bond in full or partial payment of any installment of the Special Taxes or the interest or penalties thereon. A Bond so tendered is to be accepted at par and credit is to be given for any interest accrued thereon to the date of the tender. Thus, if Bonds can be purchased in the secondary market at a discount, it may be to the advantage of an owner of a taxable parcel to pay the Special Taxes applicable thereto by tendering a Bond. Such a practice would decrease the cash flow available to the City to make payments with respect to other Bonds then outstanding; and, unless the practice was limited by the City, the Special Taxes paid in cash could be insufficient to pay the debt service due with respect to such other Bonds. In order to provide some protection against the potential adverse impact on cash flows which might be caused by the tender of Bonds in payment of Special Taxes, the Fiscal Agent Agreement includes a covenant pursuant to which the City will not authorize owners of taxable parcels to satisfy Special Tax obligations by the tender of Bonds unless the City shall have first obtained a report of an Independent Financial Consultant certifying that doing so would not result in the City having insufficient Special Tax Revenues to pay the principal of and interest on all Outstanding Bonds when due.

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 value of a taxable parcel is not sufficient, taking into account other liens imposed by public agencies, to secure fully the Special Tax, the City has no recourse against the owner.

Concentration of Ownership
Based on ownership status as of May 13, 2022, Lennar is expected to be responsible for approximately 18.63% of the projected Fiscal Year 2022-23 Special Tax levy.

The timely payment of principal of and interest on the Bonds depends upon the willingness and ability of the current and future property owners in the District to pay the Special Taxes prior to delinquency. General and local economic conditions and governmental requirements or restrictions may affect the willingness of the current property owners, or any successor property owners, to pay the Special Taxes, and there is no assurance that the current property owners, or any successor property owners, will pay such Special Taxes even if financially able to do so. Due to the concentration of ownership of the property within the District, a failure by Lennar or any successor property owner thereto to pay the Special Taxes may result in a default in the payment of debt service on the Bonds. See “THE DISTRICT – Lennar.” Land Values
The value of the property within the District is a critical factor in determining the investment quality of the Bonds. If a property owner is delinquent in the payment of Special Taxes, the District’s only remedy is to commence foreclosure proceedings against the delinquent parcel in an attempt to obtain funds to pay the Special Taxes. Reductions in property values due to a downturn in the economy, physical events such as earthquakes, fires or floods, stricter land use regulations, delays in development or other events will adversely impact the security underlying the Special Taxes. See “THE DISTRICT — Appraisal Report” and APPENDIX B — “APPRAISAL REPORT.”
The Appraiser has estimated, on the basis of certain assumptions and limiting conditions contained in the Appraisal Report, that as of the Date of Value, the minimum market value of the property within the 40 4855-5307-4459v4/200444-0007
District was $192,471,291. See “THE DISTRICT — Appraisal Report.” The Appraisal Report indicates the Appraiser’s opinion as to the minimum market value of the properties referred to therein as of the date and under the conditions specified therein. The Appraiser’s opinion reflects conditions prevailing in the applicable market as of the Date of Value. 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.

Prospective purchasers of the Bonds should not assume that the taxable land within the District could be sold for the appraised amount at a foreclosure sale for delinquent Special Taxes. In arriving at the estimate of market value, the Appraiser assumes that any sale will be unaffected by undue stimulus and will occur following a reasonable marketing period, which is not always present in a foreclosure sale. See Appendix B for a description of other assumptions made by the Appraiser and for the definitions and limiting conditions used by the Appraiser. Any event which causes one of the Appraiser’s assumptions to be untrue could result in a reduction of the value of the taxable land and improvements within the District from the market value estimated by the Appraiser.

No assurance can be given that any bid will be received for a parcel with delinquent Special Taxes offered for sale at foreclosure or, if a bid is received, that such bid will be sufficient to pay all delinquent Special Taxes. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.”
FDIC/Federal Government Interests in Properties
General. The ability of the 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 Constitution 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 District but does not pay taxes and assessments 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 has a mortgage interest in the parcel and the City 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 property of the United States.

The City 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 Special Taxes within the District, 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 secured by real property within the District is taken over by the FDIC, and prior thereto or thereafter the loan or loans go into default, 41 4855-5307-4459v4/200444-0007
resulting in ownership of the property by the FDIC, then the ability of the City 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. According 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 is 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 effect before the 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 property 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 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. The Ninth Circuit has issued a ruling on August 28, 2001 in which it determined that the FDIC, as a federal agency, is exempt from MelloRoos special taxes.

The City is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency in the payment of Special Taxes on a parcel within the District in which the FDIC has or obtains an interest, although prohibiting the lien of the Special Taxes to be foreclosed out at a judicial 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 FDIC, a default in payment on the Bonds.

Bankruptcy and Foreclosure
Bankruptcy, insolvency and other laws generally affecting creditors’ rights could adversely impact the interests of owners of the Bonds in at least two ways. First, the payment of property owners’ taxes and the ability of the City to foreclose the lien of a delinquent unpaid Special Tax pursuant to its covenant to pursue judicial foreclosure proceedings may be limited by bankruptcy, insolvency or other laws generally affecting creditors’ rights or by the laws of the State relating to judicial foreclosure. See “SOURCES OF PAYMENT FOR THE BONDS—Special Taxes—Proceeds of Foreclosure Sales.” In addition, the prosecution of a foreclosure could be delayed due to many reasons, including crowded local court calendars or lengthy procedural delays.

Second, the Bankruptcy Code might prevent moneys on deposit in the Project Fund from being applied to pay interest on the Bonds and/or to redeem Bonds if bankruptcy proceedings were brought by or against a landowner or other party and if the court found that the landowner or other party had an interest in such moneys within the meaning of Section 541(a)(1) of the Bankruptcy Code.

Although a bankruptcy proceeding would not cause the Special Taxes to become extinguished, the amount of any Special Tax lien 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 prosecuting 42 4855-5307-4459v4/200444-0007
Superior Court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of delinquent Special Tax installments and the possibility of delinquent Special Tax installments not being paid in full.

On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued its opinion in a bankruptcy case entitled In re Glasply Marine Industries. In that case, the court held that ad valorem property taxes levied by Snohomish County in the State of Washington after the date that the property owner filed a petition for bankruptcy were not entitled to priority over a secured creditor with a prior lien on the property.

Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid taxes imposed after the filing of the bankruptcy petition were declared to be “administrative expenses” of the bankruptcy estate, payable after all secured creditors. As a result, the secured creditor was able to foreclose on the property and retain all the proceeds of the sale except the amount of the pre-petition taxes.

The Bankruptcy Reform Act of 1994 (the “Bankruptcy Reform Act”) included a provision which excepts from the Bankruptcy Code’s automatic stay provisions, “the creation of a statutory lien for an ad valorem property tax imposed by . . . a political subdivision of a state if such tax comes due after the filing of the petition [by a debtor in bankruptcy court].” This amendment effectively makes the Glasply holding inoperative as it relates to ad valorem real property taxes. However, it is possible that the original rationale of the Glasply ruling could still result in the treatment of post-petition special taxes as “administrative expenses,” rather than as tax liens secured by real property, at least during the pendency of bankruptcy proceedings.

According to the court’s ruling, as administrative expenses, post-petition taxes would be paid, assuming that the debtor had sufficient assets to do so. In certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise), it would at that time become subject to current ad valorem taxes.

The Act provides that the Special Taxes are secured by a continuing lien which is subject to the same lien priority in the case of delinquency as ad valorem taxes. No case law exists with respect to how a bankruptcy court would treat the lien for Special Taxes levied after the filing of a petition in bankruptcy.

Glasply is controlling precedent on bankruptcy courts in the State. If the Glasply precedent was applied to the levy of the Special Taxes, the amount of Special Taxes received from parcels whose owners declare bankruptcy could be reduced.

The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel’s approving legal opinion) will be qualified, as to the enforceability of the various legal instruments, by moratorium, bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally.

No Acceleration Provision
The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or in the event interest on the Bonds becomes included in gross income for federal income tax purposes. See “— Limitations on Remedies” below.

Loss of Tax Exemption
As discussed under the caption “LEGAL MATTERS — Tax Exemption,” the interest on the Bonds could become includable in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds as a result of a failure of the City to comply with certain provisions of the Code. Such an event of taxability would not in and of itself result in an early redemption of the Bonds and the Bonds will remain outstanding to maturity or until redeemed under the redemption provisions of the Fiscal Agent Agreement. 43 4855-5307-4459v4/200444-0007
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 or to preserve the tax-exempt status of the Bonds.

Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the Fiscal Agent Agreement 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 and by the exercise of judicial discretion. 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.

Limited Secondary Market
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 City has committed to provide certain financial and operating information on an annual basis, there can be no assurance that such information will be available to Bondowners on a timely basis. See “CONTINUING DISCLOSURE.” The failure to provide the required annual financial information does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions, lack of current information, 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 voters of the State 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 have not yet been interpreted by the courts, although several lawsuits have been filed requesting the courts to interpret various aspects of the Initiative. The Initiative could potentially impact the Special Taxes available to the District to pay the principal of and interest on the Bonds as described below.

Among other things, Section 3 of Article XIII states that “. . . the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.” The Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the Rate and Method of apportionment of an existing special tax. However, the 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 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 July 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.” 44 4855-5307-4459v4/200444-0007
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 Bonds.

It may be possible, however, for voters or the City Council acting as the legislative body of the District to reduce the Special Taxes in a manner which does not interfere with the timely repayment of the Bonds, but which does reduce the maximum amount of Special Taxes that may be levied in any year below the existing levels. Furthermore, no assurance can be given with respect to the future levy of the Special Taxes in amounts greater than the amount necessary for the timely retirement of the Bonds. Therefore, no assurance can be given with respect to the levy of Special Taxes for Administrative Expenses. Nevertheless, to the maximum extent that the law permits it to do so, the City will covenant in the Fiscal Agent Agreement that it will not initiate proceedings under the Act to reduce the Maximum Special Tax rates on then existing Developed Property in the District below the amounts which are necessary to provide Special Tax Revenues in an amount equal to estimated Administrative Expenses for the then current Fiscal Year plus an amount equal to one hundred ten percent (110%) of Maximum Annual Debt Service on the Outstanding Bonds. The City will also covenant in the Fiscal Agent Agreement that, in the event an initiative is adopted which purports to alter the Rate and Method, it will commence and pursue legal action in order to preserve its ability to comply with the foregoing covenant. However, no assurance can be given as to the enforceability of the foregoing covenants.

The interpretation and application of Article XIIIC and Article XIIID will ultimately 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 the outcome of such determination or the timeliness of any remedy afforded by the courts. See “— Limitations on Remedies.”
Litigation with Respect to Community Facilities Districts 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 Act. The CCFD is comprised of all of the real property in San Diego. 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 governmental 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 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 Court 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 district.

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 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 Act, the proposed district included non-contiguous parcels of non-residential property. Because there were fewer than 12 registered voters residing within the territory of the proposed CFD, the City Council submitted the special tax proposed to be levied within the 45 4855-5307-4459v4/200444-0007
proposed CFD to the owners of land within the proposed CFD, as required by the 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 the 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 tentative ruling states that the phrase “qualified electors of the district” refers to the registered 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 District, the Special Taxes, or the Bonds. The City of Sacramento did not appeal the superior court’s ruling.

The Special Tax Election in the District. 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 District had less than 12 registered voters at the time of the election to authorize the Special Taxes. In the San Diego Decision, the court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the court’s holding in the San Diego Decision does not apply to the Special Tax election in the District. Moreover, Section 53341 of the 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 days after the special tax is approved by the voters.” Similarly, Section 53359 of the Act provides that any action to determine the validity of bonds issued pursuant to the 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 the District approved Special Tax on September 19, 2018. Based on Sections 53341 and 53359 of the Act and analysis of existing laws, regulations, rulings and court decisions, the District believes that no successful challenge to the Special Tax being levied in accordance with the Rate and Method may now be brought. In connection with the issuance of the Bonds, Bond Counsel expects to deliver its opinion in the proposed form attached hereto as Appendix F.

IRS Audit of Tax-Exempt Bond Issues
The Internal Revenue Service 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 Internal Revenue Service. 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).

Ballot Initiatives
Article XIII A, XIII B, XIII C and XIII D were adopted pursuant 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 particular activities. On March 6, 1995 in the case of Rossi v. Brown, the State Supreme Court held that an initiative can repeal a tax ordinance and prohibit the imposition of further such taxes and that the exemption from the referendum requirements does not apply to initiatives. From time to time, other initiative measures could be adopted by California voters. The adoption of any such initiative might place limitations on the ability of the State, the City, or local districts to increase revenues or to increase appropriations. 46 4855-5307-4459v4/200444-0007
Potential Early Redemption of Bonds from Prepayments or Bond Proceeds Property owners within the District, including Lennar and any individual property owner, 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 will result in a redemption of the Bonds on the Interest Payment Date for which timely notice may be given under the Fiscal Agent Agreement following the receipt of the prepayment. The resulting redemption of Bonds that were purchased at a price greater than par could reduce the otherwise expected yield on such Bonds. See the caption “THE BONDS—Redemption—Special Mandatory Redemption from Special Tax Prepayments.”

CONTINUING DISCLOSURE
City Continuing Disclosure
Pursuant to the City Continuing Disclosure Certificate, the City will agree to provide, or cause to be provided, to the EMMA system of the Municipal Securities Rulemaking Board, which can be found on the Internet at www.emma.msrb.org, on an annual basis certain financial information and operating data concerning the District. This covenant is being made by the City in order to assist the Underwriter in complying with the Rule.

The City and its related entities have previously entered into continuing disclosure undertakings under Rule 15c2-12 in connection with the issuance of municipal obligations. Within the last five years, the City failed to file and timely file, on behalf of a community facilities district, notices of various rating changes with respect to an issue of bonds that is no longer outstanding.

In order to promote compliance by the City and its related entities with their respective continuing disclosure undertakings, the City has adopted written disclosure policies and procedures.

LEGAL MATTERS
Tax Exemption
In the opinion of Best Best & Krieger LLP, Riverside California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, interest on the Bonds is excluded from gross income for federal income tax purposes. In the further opinion of Bond Counsel, interest on the Bonds is exempt from State of California personal income tax. Bond Counsel notes that interest on the Bonds is not an item of tax preference for purposes of calculating the federal alternative minimum tax.

Bond Counsel’s opinion as to the exclusion from gross income for federal income tax purposes of interest on the Bonds is based upon certain representations of fact and certifications made by the City, on behalf of the District, the Underwriter and others and is subject to the condition that the City complies with all requirements of the Code and the regulations adopted pursuant to the Code (the “Treasury Regulations”) that must be satisfied subsequent to the issuance of the Bonds to assure that interest on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code and the Treasury Regulations might cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City will covenant in the Fiscal Agent Agreement and the Tax Certificate to be delivered in connection with the issuance of the Bonds to comply with all such requirements.

Should the interest on the Bonds become includable in gross income for federal income tax purposes, the Bonds are not subject to early redemption as a result of such occurrence and will remain outstanding until maturity or until otherwise redeemed in accordance with the Fiscal Agent Agreement. 47 4855-5307-4459v4/200444-0007
Future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Bond Owners from realizing the full current benefit of the tax status of such interest. For example, legislative proposals are announced from time to time which generally would limit the exclusion from gross income of interest on obligations like the Bonds to some extent for taxpayers who are individuals and whose income is subject to higher marginal income tax rates. Other proposals have been made that could significantly reduce the benefit of, or otherwise affect, the exclusion from gross income of interest on obligations like the Bonds. The introduction or enactment of any such legislative proposals, clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the 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, and regarding the impact of future legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

Bond Counsel’s opinion may be affected by action taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds. Bond Counsel has not undertaken to determine, or to inform any person, whether any such action or events are taken or do occur, or whether such actions or events may adversely affect the value or tax treatment of a Bond, and Bond Counsel expresses no opinion with respect thereto.

Although Bond Counsel will render an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes provided the City continues to comply with certain requirements of the Code, the accrual or receipt of interest on the Bonds may otherwise affect the tax liability of the recipient. The extent of these other tax consequences will depend upon the recipient’s particular tax status and other items of income or deductions. Bond Counsel expresses no opinion regarding any such consequences. Accordingly, all potential purchasers should consult their tax advisors before purchasing any of the Bonds.

A copy of the proposed form of Bond Counsel opinion is attached hereto as Appendix F.

Legal Opinion
The legal opinion of Bond Counsel, approving the validity of the Bonds in substantially the form set forth as Appendix F, will be made available to the original purchaser at the time of original delivery. A copy of the legal opinion for the Bonds will be provided with each definitive bond. Certain legal matters will be passed upon for the City and the District by the City Attorney’s Office, and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel, and for the Underwriter by Jones Hall, A Professional Law Corporation, San Francisco, California, as counsel to the Underwriter.

Litigation
No litigation is pending or threatened concerning the validity of the Bonds, the pledge of Special Tax Revenues to repay the Bonds, the powers or authority of the City with respect to the Bonds, or seeking to restrain or enjoin development of the land within the District and a certificate of the City to that effect will be furnished to the Underwriter at the time of the original delivery of the Bonds.

No Rating
The District has not made and does not contemplate making application to any rating agency for the assignment of a rating of the Bonds.

Underwriting
The Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”).

The Underwriter has agreed to purchase the Bonds at a price of $__________ (being $__________ aggregate 48 4855-5307-4459v4/200444-0007
principal amount thereof, less Underwriter’s discount of $________ and plus net original issue premium of $_________). The purchase agreement relating to the Bonds provides that the Underwriter will purchase all of the Bonds if any are purchased. The obligation to make such purchase is subject to certain terms and conditions set forth in such purchase agreement, the approval of certain legal matters by counsel and certain other conditions.

Under certain circumstances, the Underwriter may offer and sell the Bonds to certain dealers and others at prices lower or yields greater than the offering prices or yields stated on the inside cover page of this Official Statement. The offering prices or yields may be changed from time to time by the Underwriter.

Municipal Advisor
The District has retained CSG Advisors Incorporated, San Francisco, California, as Municipal Advisor for the sale of the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

CSG Advisors Incorporated, is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities.

Financial Interests
The fees being paid to the Municipal Advisor, the Underwriter, Underwriter’s Counsel, Bond Counsel and Disclosure Counsel are contingent upon the issuance and delivery of the Bonds. From time to time, Bond Counsel and Disclosure Counsel represent the Underwriter on matters unrelated to the Bonds.

Pending Legislation
The District is not aware of any significant pending legislation which would have material adverse consequences on the Bonds or the ability of the District to pay the principal of and interest on the Bonds when due.

Additional Information
The purpose of this Official Statement is to supply information to prospective buyers of the Bonds.

Quotations and summaries and explanations of the Bonds and documents contained in this Official Statement do not purport to be complete, and reference is made to such documents for full and complete statements and their provisions.

The execution of this Official Statement by the City Manager of the City and the delivery thereof have been duly authorized by the City Council acting in its capacity as the legislative body of the District.

CITY OF CORONA

ON BEHALF OF COMMUNITY FACILITIES
DISTRICT NO. 2018-2 (SIERRA BELLA) OF

THE CITY OF CORONA
By:

City Manager
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APPENDIX A

RATE AND METHOD OF APPORTIONMENT FOR
COMMUNITY FACILITIES DISTRICT NO. 2018-2 (SIERRA BELLA)

OF THE CITY OF CORONA
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 the Community Facilities District No. 2018-2 (Sierra Bella) of the City of Corona (“CFD No. 2018-2”). 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 Corona, acting in its capacity as the legislative body of CFD No. 2018-2 by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, Public Property and/or Property Owner’s Association Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed to the extent and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“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 (commencing with Section 53311) of Part 1 of 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 formation, and administration of CFD No. 2018-2 including, but not limited to: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes A to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2018-2 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2018-2 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2018-2 or obligated persons associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs associated with evaluating the Special Tax A effective tax rate prior to the issuance of the first series of Bonds; the costs of the City, CFD No. 2018-2 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2018-2 for any other administrative purposes of CFD No. 2018-2, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
“Approved Property” means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a building permit on or before March 1st preceding the Fiscal Year in which the Special Tax is being levied.

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“Assessor’s Parcel” means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.
“Assessor’s Parcel Map” means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.
“Assessor’s Parcel Number” means that number assigned to an Assessor’s Parcel by the County for purposes of identification.
“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. “Boundary Map” means a recorded map of the CFD which indicates the boundaries of the CFD. “Bonds” means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, to which Special Tax A within CFD No. 2018-2 has been pledged. “Building Permit” means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, “Building Permit” may include any subsequent document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the original issuance, as determined by the CFD Administrator as necessary to fairly allocate Special Tax A to the Assessor’s Parcel, provided that following such determination the Maximum Special Tax A that may be levied on all Assessor’s Parcels of Taxable Property will be at least 1.1 times maximum annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses. “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 for such Assessor’s Parcel.
“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 (i) determining the Special Tax A Requirement, (ii) determining the Special Tax B Requirement, (iii) determining the Special Tax C (Contingent) Requirement, and (iv) providing for the levy and collection of the Special Taxes. “CFD” or “CFD No. 2018‐2” means Community Facilities District No. 2018-2 (Sierra Bella) of the City of Corona established by the City under the Act.
“City” means the City of Corona.
“City Council” means the City Council of the City of Corona, acting as the legislative body of CFD No. 2018-2, or its designee.
“Condominium Plan” means a condominium plan as set forth in the California Civil Code, Section 1352. “County” means the County of Riverside.

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“Developed Property” means all Assessor’s Parcels of Taxable Property for which a Building Permit for new construction was issued on or before March 1st preceding the Fiscal Year in which the Special Tax is being levied.
“Exempt Property” means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.
“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a Condominium Plan pursuant to California Civil Code Section 1352 that creates individual lots for which Building Permits may be issued without further subdivision. “Fiscal Year” means the period commencing on July 1st of any year and ending the following June 30th. “Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.
“Land Use Category” means any of the categories listed in Table 1 of Section D and Table 2 of Section M. “Maximum Special Tax A” means the maximum Special Tax A, determined in accordance with Section D below that can be levied by CFD No. 2018-2 in any Fiscal Year on any Assessor’s Parcel. “Maximum Special Tax B” means the Maximum Special Tax B, as determined in accordance with Section M below that can be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property within CFD No. 2018-2.
“Maximum Special Tax C (Contingent)” means the Maximum Special Tax C (Contingent), as determined in accordance with Section S below that can be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property within CFD No. 2018-2.
“Multifamily Property” means all Assessor’s Parcels of Residential Property for which a building permit has been issued or may be issued for purposes of constructing two or more Residential Units that share common walls, including but not limited to duplexes, triplexes, townhomes, condominiums, and apartment units, as determined by the CFD Administrator.
“Non‐Residential Property” or “NR” means all Assessor’s Parcels of Taxable Property for which a building permit(s) was issued for a non-residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non-Residential Property.
“Partial Prepayment Amount” means the amount required to prepay a portion of the Special Tax A obligation for an Assessor’s Parcel, as described in Section G. “Prepayment Amount” means the amount required to prepay the Special Tax A obligation in full for an Assessor’s Parcel, as described in Section G.
“Property Owner Association” or “POA” means a corporation formed by a real estate developer for the purpose of marketing, managing, and selling of homes and lots in a residential subdivision. “Property Owner’s Association Property” means all Assessor’s Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, have been conveyed, dedicated to, or irrevocably offered for dedication to a property owner association, including any master or sub-association.

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“Proportionately” means for Taxable Property for Special Tax A that is (i) Developed Property, that the ratio of the actual Special Tax A levy to the Assigned Special Tax A is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax A levy to the Maximum Special Tax A is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property, Public Property and Property Owner’s Association Property, that the ratio of the actual Special Tax A levy per Acre to the Maximum Special Tax A per Acre is the same for all Assessor’s Parcels of Undeveloped Property, Public Property and Property Owner’s Association Property.

For Special Tax B that is (i) Developed Property, that the ratio of the actual Special Tax B levy to the Maximum Special Tax B is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax B levy to the Maximum Special Tax B is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property that the ratio of the actual Special Tax B levy per Acre to the Maximum Special Tax B per Acre is the same for all Assessor’s Parcels of Undeveloped Property.

For Special Tax C (Contingent) that is (i) Developed Property, that the ratio of the actual Special Tax C (Contingent) levy to the Maximum Special Tax C (Contingent) is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax C (Contingent) levy to the Maximum Special Tax C (Contingent) is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property that the ratio of the actual Special Tax C (Contingent) levy per Acre to the Maximum Special Tax C (Contingent) per Acre is the same for all Assessor’s Parcels of Undeveloped Property.
“Provisional Undeveloped Property” means Public Property or Property Owner’s Association Property that is not Exempt Property pursuant to Section F.
“Public Property” means all Assessor’s Parcels which, as of July 1st of the Fiscal Year in which the Special Tax is being levied, are used for rights-of-way or any other purpose and is owned by, dedicated to, or irrevocably offered for dedication to the federal government, the State of California, the County, or any other local jurisdiction, provided, however, that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified according to its use. “Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more Residential Units. “Residential Unit” or “RU” means a residential unit that is used or intended to be used as a domicile by one or more persons, as determined by the CFD Administrator. “Single Family Residential Property” means all Assessor’s Parcels of Residential Property for which a Building Permit has been or may be issued for purposes of constructing a detached Residential Unit on an Assessor’s Parcel. Such Residential Unit does not or will not share a common wall with another Residential Unit, as determined by the CFD Administrator.
“Special Tax(es)” means any of the special taxes authorized to be levied within CFD No. 2018-2 pursuant to the Act.
“Special Tax A” means any of the special taxes authorized to be levied within CFD No. 2018-2 pursuant to the Act to fund the Special Tax A Requirement.
“Special Tax A Requirement” means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) an allocable share of Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to establish or replenish any reserve funds established in association A-5
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with the Bonds, (v) an amount equal to any reasonable anticipated shortfall due to Special Tax A delinquencies, and (vi) the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2018-2 provided that the inclusion of such amount does not cause an increase in the levy of Special Tax A on Approved Property or Undeveloped Property as set forth in Step Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture.
“Special Tax B” means the annual special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Taxable Property to fund the Special Tax B Requirement.

Special Tax B Requirement” means that amount to be collected in any Fiscal Year to pay for certain costs as required to meet the needs of CFD No. 2018-2 in both the current Fiscal Year and the next Fiscal Year. The costs to be covered shall be the direct costs for maintenance services including but not limited to (i) maintenance and lighting of parks, parkways, streets, roads and open space, (ii) maintenance and operation of water quality improvements, (iii) public street sweeping, (iv) fund an operating reserve for the costs of Special Tax B Services in the amount not to exceed two times the total Maximum Special Tax B for all Taxable Property for that Fiscal Year, as determined by the CFD Administrator, and (v) Administrative Expenses, less (vi) a credit for funds available to reduce the annual Special Tax B levy, as determined by the CFD Administrator. Under no circumstances shall the Special Tax B Requirement include funds for Bonds. “Special Tax B Services” means the maintenance and operation of the improvements described in Exhibit “C” attached hereto beginning with the date of City acceptance of each improvement for maintenance purposes.
“Special Tax C (Contingent)” means the Special Tax C (Contingent) to be levied in each Fiscal Year on each Assessor’s Parcel of Taxable Property to fund the Special Tax C (Contingent) Requirement, if required. “Special Tax C (Contingent) Requirement” means that amount required to be collected in any Fiscal Year to: (i) pay the direct costs of Special Tax C (Contingent) Services anticipated to be incurred or otherwise payable by the City in the Calendar Year commencing in such Fiscal Year; and (ii) an allocable share of Administrative Expenses, less (iii) a credit for funds available to reduce the annual Special Tax C (Contingent) levy, as determined by the CFD Administrator.
“Special Tax C (Contingent) Services” means the City’s maintenance and operation of the improvements described in Exhibit “D” attached hereto following the POA’s default of its obligation to maintain such improvements, which default shall be deemed to have occurred in each of the circumstances described in Section Q.
“Taxable Property” means all Assessor’s Parcels within CFD No. 2018-2, which are not Exempt Property. “Taxable Unit” means either a Residential Unit or an Acre. “Tract(s)” means an area of land within a subdivision identified by a particular tract number on a Final Map approved for the subdivision.
“Trustee” means the trustee, fiscal agent, or paying agent under the Indenture. “Undeveloped Property” means all Assessor’s Parcels of Taxable Property which are not Developed Property, Approved Property, Public Property or Property Owner’s Association Property.

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B. SPECIAL TAX A
Commencing Fiscal Year 2019-2020 and for each subsequent Fiscal Year, the City Council shall levy Special Tax A on all Taxable Property, up to the applicable Maximum Special Tax A to fund the Special Tax A Requirement.

C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX A
Each Fiscal Year, beginning with Fiscal Year 2019-2020, each Assessor’s Parcel within CFD No. 2018-2 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Public Property and/or Property Owner’s Association Property.

Assessor’s Parcels of Developed Property shall further be classified as Residential Property or Non-Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as a Single Family Residential Property, or Multifamily Property. Each Assessor’s Parcel of Single Family Residential Property shall be further categorized into Land Use Categories based on its Building Square Footage and assigned to its appropriate Assigned Special Tax A rate.

D. MAXIMUM SPECIAL TAX A

1. Developed Property
The Maximum Special Tax A for each Assessor’s Parcel of Single Family Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax A or (ii) the Backup Special Tax A.

The Maximum Special Tax A for each Assessor’s Parcel of Non-Residential Property or Multifamily Residential Property shall be the applicable Assigned Special Tax A described in Table 1 of Section D.
a. Assigned Special Tax A
Each Fiscal Year, each Assessor’s Parcel of Single Family Residential Property, Multifamily Property, or Non-Residential Property shall be subject to an Assigned Special Tax A. The Assigned Special Tax A applicable to an Assessor’s Parcel of Developed Property for Fiscal Year 2019-2020 shall be determined pursuant to Table 1 below.

TABLE 1

ASSIGNED SPECIAL TAX A FOR DEVELOPED PROPERTY
Land Use Category
Taxable
Unit
Building Square
Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 2,200 $4,187.00

2. Single Family Residential Property RU 2,200 to 2,500 $4,374.00

3. Single Family Residential Property RU 2,501 to 2,800 $4,568.00

4. Single Family Residential Property RU 2,801 to 3,100 $4,762.00

5. Single Family Residential Property RU 3,101 to 3,400 $4,957.00

6. Single Family Residential Property RU 3,401 to 3,700 $5,158.00

7. Single Family Residential Property RU Greater than 3,700 $5,383.00

8. Multifamily Property Acres N/A $26,299

9. Non-Residential Property Acres N/A $26,299
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b. Multiple Land Use Categories
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Type. The Maximum Special Tax A levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax A for all Land Use Categories located on the Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be final. c. Backup Special Tax A
The Backup Special Tax A for an Assessor’s Parcel within a Final Map classified or to be classified as Single Family Residential Property shall be $4,964 per Residential Unit. This Backup Special Tax A has been established based on the land use configurations shown on Tentative Tract Map No. 36451, 36451-1, and 36451-2. In the event any portion of Tentative Tract Map No. 36451, 36451-1, and 36451-2 is changed or modified, the Backup Special Tax A for all Assessor’s Parcels within such changed or modified area shall be $26,299 per Acre.

In the event any superseding Tract Map is recorded as a Final Map within the boundaries of the CFD, the Backup Special Tax A for all Assessor’s Parcels within such Final Map shall be $26,299 per Acre.

The Backup Special Tax A shall not apply to Multifamily Residential Property, Non-Residential Property, Public Property, or Property Owners’ Association Property.

2. Approved Property
The Maximum Special Tax A for each Assessor’s Parcel of Approved Property expected to be classified as Single Family Property shall be the Backup Special Tax A computed pursuant to Section D.1.c above.

The Maximum Special Tax A for each Assessor’s Parcel of Approved Property expected to be classified as Multifamily Residential Property or Non-Residential Property shall be $26,299 per Acre.

3. Undeveloped Property, Public Property, and Property Owner’s Association Property that is not Exempt Property pursuant to the provisions of Section F The Maximum Special Tax A for each Assessor’s Parcel of Undeveloped Property, Public Property and/or Property Owners Association Property that is not Exempt Property shall be equal to the product of $26,299 multiplied by the Acreage of such Assessor’s Parcel.

E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX A
Commencing Fiscal Year 2019-2020 and for each subsequent Fiscal Year, the City Council shall levy Special Tax A on all Taxable Property in accordance with the following steps:

Step One: Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax A rates in Table 1 to satisfy the Special Tax A Requirement.

Step Two: If additional moneys are needed to satisfy the Special Tax A Requirement after the first step has been completed, the Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax A applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax A Requirement.

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Step Three: If additional moneys are needed to satisfy the Special Tax A Requirement after the first two steps have been completed, the Annual Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax A applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax A Requirement.

Step Four: If additional moneys are needed to satisfy the Special Tax A Requirement after the first three steps have been completed, then the Special Tax A on each Assessor’s Parcel of Developed Property whose Maximum Special Tax A is the Backup Special Tax A shall be increased Proportionately from the Assigned Special Tax A up to 100% of the Backup Special Tax A as needed to satisfy the Special Tax A Requirement.

Step Five: If additional moneys are needed to satisfy the Special Tax A Requirement after the first four steps have been completed, the Special Tax A shall be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property up to 100% of the Maximum Special Tax A applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax A Requirement.

Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal Year against any Assessor’s Parcel of Residential Property as a result of a delinquency in the payment of the Special Tax A applicable to any other Assessor’s Parcel be increased by more than ten percent (10%) above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default.

F. EXEMPTIONS
The City shall classify as Exempt Property, in order of priority, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, federal or other local governments, including school districts, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners’ association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses, or (vi) Assessor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 49.71 Acres.

Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 49.71 Acres. Assessor’s Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 49.71 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Tax A pursuant to Step Five in Section E.

G. PREPAYMENT OF SPECIAL TAX A
The following additional definitions apply to this Section G:
“CFD Public Facilities” means $13,600,000 expressed in 2018 dollars, which shall increase by the Construction Inflation Index on July 1, 2019, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the public facilities under the authorized bonding program for CFD No. 2018-2, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Tax A levied under this Rate and Method of Apportionment.

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“Construction Fund” means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are currently available for expenditure to acquire or construct public facilities eligible under CFD No. 2018-2.
“Construction Inflation Index” means the annual percentage change in the Engineering News-Record Building Cost Index for the City of Los Angeles, measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles.
“Future Facilities Costs” means the CFD Public Facilities minus public facility costs previously funded, or that can be funded from funds in the Construction Fund. “Outstanding Bonds” means all previously issued Bonds secured by the levy of Special Tax A which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Tax A.

1. Prepayment in Full
The Maximum Special Tax A obligation may be prepaid and permanently satisfied for (i) Assessor’s Parcels of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has been issued, (iii) Approved or Undeveloped Property for which a Building Permit has not been issued, and (iv) Assessor’s Parcels of Public Property or Property Owner’s Association Property that are not Exempt Property pursuant to Section F. The Maximum Special Tax A obligation applicable to an Assessor’s Parcel may be fully prepaid and the obligation to pay the Special Tax A for such Assessor’s Parcel permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel intending to prepay the Maximum Special Tax A obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel. Within 15 days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel. Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be redeemed with the proceeds of such Prepayment Amount.

The Prepayment Amount shall be calculated as follows (capitalized terms are defined below):

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax A for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax A for the Assessor’s A-10
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Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued, Public Property or Property Owner’s Association Property to be prepaid, compute the Maximum Special Tax A for the Assessor’s Parcel.

3. Divide the Maximum Special Tax A derived pursuant to paragraph 2 by the total amount of Special Taxes that could be levied at the Maximum Special Tax A at build out of all Assessor’s Parcels of Taxable Property based on the applicable Maximum Special Tax A for Assessor’s Parcels of Developed Property not including any Assessor’s Parcels for which the Special Tax A obligation has been previously prepaid.

4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the “Bond Redemption Amount”).

5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”).

6. Determine the Future Facilities Costs.

7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor’s Parcel (the “Future Facilities Amount”).

8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from the Prepayment Amount.

9. Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid.

10. Determine the amount the CFD Administrator reasonably expects to derive from the investment of the Bond Redemption Amount and the Redemption Premium from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the Prepayment Amount.

11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”).

12. Verify the administrative fees and expenses of the CFD, including the cost of computation of the Prepayment Amount, the cost to invest the Prepayment Amount, the cost of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Maximum Special Tax A obligation for the Assessor’s Parcel and the redemption of Outstanding Bonds (the “Administrative Fees and Expenses”).

13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the Prepayment Amount, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the Prepayment Amount from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero.

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14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and Expenses, less the Reserve Fund Credit.

15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make debt service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD.

The Prepayment Amount may be sufficient to redeem an aggregate principal amount of Outstanding Bonds which is equally divisible by $5,000. In such event, the increment above $5,000 or an integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next redemption from other Special Tax A prepayments of Outstanding Bonds or to make debt service payments.

As a result of the payment of the current Fiscal Year’s Special Tax A levy as determined pursuant to paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year’s Special Tax A levy for the Assessor’s Parcel from the County tax roll. With respect to any Assessor’s Parcel for which the Maximum Special Tax A obligation is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Maximum Special Tax A obligation and the release of the Special Tax A lien for the Assessor’s Parcel, and the obligation to pay the Special Tax A for such Assessor’s Parcel shall cease.

Notwithstanding the foregoing, no Special Tax A prepayment shall be allowed unless the amount of Maximum Special Tax A that may be levied on all Assessor’s Parcels of Taxable Property after the proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds that will remain outstanding after the prepayment plus the estimated annual Administrative Expenses.

Tenders of Bonds in prepayment of the Maximum Special Tax A obligation may be accepted upon the terms and conditions established by the City Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case‐by‐case basis as specifically approved by the City Council.

2. Prepayment in Part
The Maximum Special Tax A obligation for an Assessor’s Parcel of Developed Property, Approved Property or Undeveloped Property may be partially prepaid. For purposes of determining the partial prepayment amount, the provisions of Section G.1 shall be modified as provided by the following formula:

PP = ((PE –A) x F) +A
These terms have the following meaning:

PP = Partial Prepayment
PE = the Prepayment Amount calculated according to Section G.1 F = the percent by which the owner of the Assessor’s Parcel(s) is partially prepaying the Maximum Special Tax A obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1 The owner of an Assessor’s Parcel who desires to partially prepay the Maximum Special Tax A obligation for the Assessor’s Parcel shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Maximum Special Tax A obligation, (ii) the percentage of the Maximum Special Tax A obligation such owner wishes to prepay, and (iii) the company or agency that will be acting as the escrow agent, if any. Within 5 days of receipt of such notice, the CFD Administrator shall notify such property owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the amount of a A-12
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partial prepayment. Within 15 business days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the amount of the Partial Prepayment for the Assessor’s Parcel. A Partial Prepayment must be made not less than 60 days prior to the redemption date for the Outstanding Bonds to be redeemed with the proceeds of the Partial Prepayment.

With respect to any Assessor’s Parcel for which the Maximum Special Tax A obligation is partially prepaid, the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in Paragraph 15 of Section G.1, and (ii) indicate in the records of the CFD that there has been a Partial Prepayment for the Assessor’s Parcel and that a portion of the Special Tax A obligation equal to the remaining percentage (1.00 - F) of Special Tax A obligation will continue on the Assessor’s Parcel pursuant to Section E.

H. SPECIAL TAX A REDUCTION
The following definitions apply to this Section H:
“Date of Issuance” means the date a bond purchase contract related to the sale of the Bonds is entered into between the underwriter of the Bonds and CFD No. 2018-2. “PACE Charges” means a contractual assessment or special tax as established by a public agency to AB811 or SB555, respectively, levied on certain parcels to fund eligible improvements to private property and entered into voluntarily by the property owner.
“Plan Type” means a discrete residential plan type (generally consisting of residential dwelling units that share a common product type (e.g., detached, attached, cluster) and that have nearly identical amounts of living area) that is constructed or expected to be constructed within CFD No. 2018-2 as identified in the Price Point Study.
“Price Point” means, with respect to the Residential Dwelling Units in each Plan Type, as of the date of the applicable Price Point Study, the base price of such Residential Dwelling Units, estimated by the Price Point Consultant as of such date, including any incentives and concessions, but excluding potential appreciation or premiums, options or upgrades, based upon their actual or expected characteristics, such as living area, view, or lot size.
“Price Point Consultant” means any consultant or firm of such consultants selected by CFD No. 2018-2 that (a) has substantial experience in performing price point studies or otherwise estimating or confirming pricing for Residential Units within community facilities districts, (b) is well versed in analyzing economic and real estate data that relates to the pricing of Residential Units in community facilities districts, (c) is independent and not under the control of CFD No. 2018-2 or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) CFD No. 2018-2, (ii) the City, (iii) any owner of real property in CFD No. 2018-2, or (iv) any real property in CFD No. 2018-2, and (e) is not connected with CFD No. 2018-2 or the City as an officer or employee thereof, but who may be regularly retained to make reports to CFD No. 2018-2 or the City. “Price Point Study” means a price point study or a letter updating a previous price point study, which (a) has been prepared by the Price Point Consultant, (b) sets forth the Plan Types constructed or expected to be constructed within CFD No. 2018-2, (c) sets forth the estimated number of constructed and expected Residential Units for each Plan Type, (d) sets forth such Price Point Consultant’s estimate of the Price Point for each Plan Type and (e) uses a date for establishing such Price Points that is no earlier than 30 days prior to the date the Price Point Study is delivered to the CFD Administrator pursuant to Section H herein. The Price Point Study will only include the for-sale Residential Property in CFD No. 2018-2. “Total Effective Tax Rate” means, for a Plan Type, the quotient of (a) the Total Tax and Assessment Obligation for such Plan Type divided by (b) the Price Point for such Plan Type, converted to a percentage.

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“Total Tax and Assessment Obligation” means, with respect to a Plan Type in CFD No. 2018-2, for the Fiscal Year for which the calculation is being performed, the quotient of (a) the sum of the Assigned Special Tax A, applicable Special Tax B, Special Tax C (Contingent), if it is being levied in such Fiscal Year, and estimated ad valorem property taxes, special assessments, special taxes for any overlapping community facilities districts, and any other governmental taxes, fees and charges (excluding PACE Charges levied on individual Assessor’s Parcels) levied or imposed on all Residential Units of such Plan Type in CFD No. 2018- 2 in such Fiscal Year or that would have been levied or imposed on all such Residential Units had such Residential Units been completed, sold and subject to such levies and impositions in such Fiscal Year divided by (b) the number of Residential Units in such Plan Type in CFD No. 2018-2. The Total Tax and Assessment Obligation for each Plan Type shall be calculated based on the applicable Building Square Footage, Price Point, and number of constructed and expected Residential Dwelling Units for such Plan Type in CFD 2018-2 as identified in the Price Point Study.

Prior to the issuance of the first series of Bonds, the following steps shall be taken for each Land Use Category of for-sale Residential Property in CFD No. 2018-2 for evaluating Special Tax A:

Step No.:

1. At least 30 days prior to the expected Date of Issuance of the first series of Bonds, CFD No. 2018-2 shall cause a Price Point Study to be delivered to the CFD Administrator.

2. As soon as practicable after receipt of the Price Point Study, the CFD Administrator shall calculate the Total Tax and Assessment Obligation and Total Effective Tax Rate for each Plan Type in CFD No. 2018-2.

3. Separately, for each Land Use Category of for-sale Residential Property in CFD No. 2018-2, the CFD Administrator shall determine whether or not the Total Effective Tax Rate for all Plan Types in a Land Use Category is less than or equal to 1.95%.
a. If the Total Effective Tax Rate for all Plan Types in a Land Use Category in CFD No. 2018-2 is less than or equal to 1.95%, then there shall be no change in Special Tax A for such Land Use Category in CFD No. 2018-2.
b. If the Total Effective Tax Rate for any Plan Type in a Land Use Category in CFD No. 2018-2 is greater than 1.95%, the CFD Administrator shall calculate a revised Assigned Special Tax A for such Land Use Category in CFD No. 2018-2, which revised Assigned Special Tax A shall be the highest amount (rounded to the nearest whole dollar) that will not cause the Total Effective Tax Rate for any Plan Type in such Land Use Category to exceed

1.95%.

4. If the Assigned Special Tax A for any Land Use Category is revised pursuant to step 3.b. above, the CFD Administrator shall calculate a revised Backup Special Tax A for all Developed Property within CFD No. 2018-2. The revised Backup Special Tax A per Acre shall be an amount (rounded to the nearest whole dollar) equal to the Backup Special Tax A per Acre as set forth in Section D.1.c. above, reduced by a percentage equal to the weighted average percentage reduction in the Assigned Special Tax A for all Land Use Categories of Residential Property resulting from the calculations in steps 3.a. and 3.b. above. The weighted average percentage will be calculated by taking the sum of the products of the number of units constructed or expected to be constructed in each Land Use Category multiplied by the percentage change in the Assigned Special Tax A (pursuant to step 3.b. above) for each Land Use Category (or 0 for Land Use Categories that are not changing).

This amount is then divided by the total number of units constructed or expected to be constructed within CFD No. 2018-2 and converted to a percentage.

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5. If the Assigned Special Tax A for any Land Use Category is revised pursuant to step 3.b. above, the CFD Administrator shall prepare and execute a Certificate of Reduction in Special Tax A substantially in the form of Exhibit “A” hereto and shall deliver such Certificate of Reduction in Special Tax A to CFD No. 2018-2. The Certificate of Reduction in Special Tax A shall be completed for all Land Use Categories and shall set forth, as applicable, either (i) the reduced Assigned Special Tax A for a Land Use Category as calculated pursuant to step 3.b., or (ii) the Assigned Special Tax A as identified in Table 1 Section D for a Land Use Category that was not revised as determined pursuant to step 3.a.; as well as either (i) the revised Backup Special Tax A as calculated pursuant to step 4, or (ii) the Backup Special Tax A as identified in Section D.1.c. that was not revised as determined pursuant to step 4.

6. If the Date of Issuance of the first series of Bonds is within 120 days of the date of receipt of the Price Point Study by the CFD Administrator, CFD No. 2018-2 shall execute the acknowledgement on such Certificate of Reduction in Special Tax A, dated as of the closing date of such Bonds, and upon the closing of such first series of Bonds, the Assigned Special Tax A for each Land Use Category and the Backup Special Tax A shall be, for all purposes, as set forth in such Certificate of Reduction in Special Tax A. If the Date of Issuance of the first series of Bonds is not within 120 days of the date of receipt of the Price Point Study by the CFD Administrator, such Certificate of Reduction in Special Tax A shall not be acknowledged by CFD No. 2018-2 and shall, as of such date, be void and of no further force and effect. In such case, if subsequently a first series of Bonds is expected to be issued, at least 30 days prior to the expected Date of Issuance of such first series of Bonds, the CFD Administrator shall cause a new Price Point Study to be delivered to the CFD Administrator and, following such delivery, steps 2 through 5 of this section shall be performed based on such new Price Point Study.

7. As soon as practicable after the execution by CFD No. 2018-2 of the acknowledgement on the Certificate of Reduction in Special Tax A, CFD No. 2018-2 shall cause to be recorded in the records of the County Recorder an Amended Notice of Special Tax Lien for CFD No. 2018-2 reflecting the Assigned Special Tax A and the Backup Special Tax A for CFD No. 2018-2 set forth in such Certificate of Reduction in Special Tax A.

8. If the Assigned Special Tax A is not required to be changed for any Land Use Category based on the calculations performed under step 3 above, there shall be no reduction in the Maximum Special Tax A, and no Certificate of Reduction in Special Tax A shall be required. However the CFD Administrator shall prepare and deliver to CFD No. 2018-2 a Certificate of No Reduction in Special Tax A substantially in the form of Exhibit “B” hereto dated as of the closing date of the first series of Bonds that states that the calculations required pursuant to this Section H have been made and that no changes to the Maximum Special Tax A are necessary.

9. CFD No. 2018-2 and the CFD Administrator shall take no further actions under this Section H upon the earlier to occur of the following: (i) the execution of the acknowledgement by CFD No. 2018-2 on a Certificate of Reduction in Special Tax A pursuant to step 6; or (ii) the delivery by the CFD Administrator of a Certificate of No Reduction in Special Tax A pursuant to step 8.

I. TERMINATION OF SPECIAL TAX A
For each Fiscal Year that any Bonds are outstanding the Special Tax A shall be levied on all Assessor’s Parcels subject to the Special Tax A as necessary to satisfy the Special Tax A Requirement. The Special Tax A shall cease not later than the 2060-2061 Fiscal Year, however, Special Tax A will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all required interest and principal payments on the CFD No. 2018-2 Bonds have been paid; (ii) all authorized facilities of CFD No. 2018-2 have been acquired and all reimbursements have been paid pursuant to the Acquisition Agreement, (iii) no A-15
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delinquent Special Tax A remain uncollected and (iv) all other obligations of CFD No. 2018-2 Special Tax A have been satisfied.

J. MANNER OF COLLECTION
The Special Tax A shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2018-2 may collect Special Tax A at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.

K. SPECIAL TAX B
Commencing Fiscal Year 2019-2020 and for each subsequent Fiscal Year, the City Council shall levy Special Tax B on all Taxable Property, up to the applicable Maximum Special Tax B to fund the Special Tax B Requirement.

L. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX B
For each Fiscal Year, all Assessor’s Parcels of Taxable Property within CFD No. 2018-2 shall be classified as Developed Property, Approved Property, or Undeveloped Property, and shall be subject to the levy of Special Tax B as determined pursuant to Sections M and N below. Assessor’s Parcels of Developed Property and Approved Property shall be classified as either Residential Property or Non-Residential Property. Residential Property shall be further classified as Single Family Residential Property or Multi-Family Property. For Single Family Residential Property the number of Residential Units shall be determined by the CFD Administrator.

M. MAXIMUM SPECIAL TAX B
For purposes of determining the applicable Maximum Special Tax B for Assessor’s Parcels of Developed Property which are classified as Single Family Residential Property, all such Assessor’s Parcels shall be assigned the number of Residential Unit(s) constructed thereon, or approved to be constructed thereon, as specified in or shown on the Building Permit(s) issued or Final Map as determined by the CFD Administrator.

Once a single family attached building or buildings have been built on an Assessor’s Parcel, the CFD Administrator shall determine the actual number of Residential Units contained within the building or buildings, and the Special Tax B levied against the Assessor’s Parcel in the next Fiscal Year shall be calculated by multiplying the actual number of Residential Units by the Maximum Special Tax B per Residential Unit.

For purposes of determining the applicable Maximum Special Tax B for Assessor’s Parcels of Developed Property and Approved Property which are classified as Multifamily Property or Non-Residential Property, all such Assessor’s Parcels shall be assigned the number of Acres as shown on the Final Map as determined by the CFD Administrator. Once the CFD Administrator determines the actual number of Acres for an Assessor’s Parcel, the Special Tax B levied against the Assessor’s Parcel in the next Fiscal Year shall be calculated by multiplying the number of Acres by the Maximum Special Tax per Taxable Acre.

1. Developed Property
a. Maximum Special Tax B
The Maximum Special Tax B for each Assessor’s Parcel of Taxable Property for Fiscal Year 2019- 2020 is identified in Table 2 below:

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TABLE 2

MAXIMUM SPECIAL TAX B

FOR DEVELOPED PROPERTY
Land Use Category
Taxable
Unit
Maximum Special Tax Per
Taxable Unit

1. Single Family Residential Property RU $788

2. Multifamily Property Acre $3,757

3. Non-Residential Property Acre $3,757
On each July 1, commencing on July 1, 2020 the Maximum Special Tax B for Developed Property shall increase by i) the percentage increase in the Consumer Price Index (All Items) for Los Angeles - Riverside - Orange County (1982-84 = 100) since the beginning of the preceding Fiscal Year, or ii) by two percent (2.0%), whichever is greater.
b. Multiple Land Use Categories
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax B that can be levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax B that can be levied for each Land Use Category located on that Assessor’s Parcel. For an Assessor’s Parcel that contains more than one land use, the Acreage of such Assessor’s Parcel shall be allocated to each type of property based on the amount of Acreage designated for each land use as determined by reference to the site plan approved by the City for such Assessor’s Parcel.

The CFD Administrator’s allocation to each type of property shall be final.

2. Approved Property and Undeveloped Property
The Maximum Special Tax B for each Assessor’s Parcel of Approved Property and Undeveloped Property for Fiscal Year 2019-2020 is identified in Table 3 below:

TABLE 3

MAXIMUM SPECIAL TAX B RATES
Maximum Special Tax B
Per Acre
$3,757
On each July 1, commencing on July 1, 2020 the Maximum Special Tax B for Approved Property and Undeveloped Property shall increase by i) the percentage increase in the Consumer Price Index (All Items) for Los Angeles - Riverside - Orange County (1982-84 = 100) since the beginning of the preceding Fiscal Year, or ii) by two percent (2.0%), whichever is greater.

N. METHOD OF APPORTIONMENT OF ANNUAL SPECIAL TAX B
Commencing with Fiscal Year 2019-2020 and for each following Fiscal Year, the Council shall determine the Special Tax B Requirement and shall levy the Special Tax B on all Assessor’s Parcels of Taxable Property until the aggregate amount of Special Tax B equals the Special Tax B Requirement. The Special Tax B shall be levied for each Fiscal Year as follows:

Step One: The Special Tax B shall be levied Proportionately on all Assessor’s Parcels of Developed Property up to 100% of the applicable Maximum Special Tax B to satisfy the Special Tax B Requirement;
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Step Two: If additional moneys are needed to satisfy the Special Tax B Requirement after the first step has been completed, the Special Tax B shall be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax B for Approved Property;
Step Three: If additional monies are needed to satisfy the Special Tax B Requirement after the first two steps has been completed, the Special Tax B shall be levied Proportionately on all Assessor’s Parcels of Undeveloped Property up to 100% of the Maximum Special Tax B for Undeveloped Property.

O. DURATION OF SPECIAL TAX B
The Special Tax B shall be levied in perpetuity to fund the Special Tax B Requirement, unless no longer required as determined at the sole discretion of the City Council.

P. MANNER OF COLLECTION
The Special Tax B shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2018-2 may collect the Special Tax B at a different time or in a different manner if necessary to meet its funding requirements.

Q. SPECIAL TAX C (CONTINGENT)
The City Council shall levy Special Tax C (Contingent) commencing in the first Fiscal Year following the POA’s default of its obligation to maintain the improvements described in Exhibit “D” attached hereto, which default shall be deemed to have occurred in each of the following circumstances:
(i) the POA files for bankruptcy;
(ii) the POA is dissolved;
(iii) the POA ceases to levy annual assessments for the maintenance of the improvements described above; or
(iv) the POA fails to maintain such improvements at the same level as the City maintains similar improvements throughout the City and within ninety (90) days after written notice from the City, or such longer period permitted by the City Manager, the POA fails to remedy such maintenance deficiency to the reasonable satisfaction of the City Council.

R. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX C (CONTINGENT) For each Fiscal Year that Special Tax C (Contingent) is authorized to be levied, all Assessor’s Parcels of Taxable Property within CFD No. 2018-2 shall be classified as Developed Property, Approved Property, or Undeveloped Property, and shall be subject to the levy of Special Taxes as determined pursuant to Sections S and T below. Assessor’s Parcels of Developed Property and Approved Property shall be classified as either Residential Property or Non-Residential Property. Residential Property shall be further classified as Single Family Residential Property or Multi-Family Property. For Single Family Residential Property the number of Residential Units shall be determined by the CFD Administrator.

S. MAXIMUM SPECIAL TAX C (CONTINGENT)
For purposes of determining the applicable Maximum Special Tax C (Contingent) for Assessor’s Parcels of Developed Property which are classified as Single Family Residential Property, all such Assessor’s Parcels A-18
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shall be assigned the number of Residential Unit(s) constructed thereon, or approved to be constructed thereon, as specified in or shown on the Building Permit(s) issued or Final Map as determined by the CFD Administrator. Once a single family attached building or buildings have been built on an Assessor’s Parcel, the CFD Administrator shall determine the actual number of Residential Units contained within the building or buildings, and the Special Tax C (Contingent) levied against the Assessor’s Parcel in the next Fiscal Year shall be calculated by multiplying the actual number of Residential Units by the Maximum Special Tax C (Contingent) per Residential Unit identified for the Assessor’s Parcel.

For purposes of determining the applicable Maximum Special Tax C (Contingent) for Assessor’s Parcels of Developed Property and Approved Property which are classified as Multifamily Property or Non-Residential Property, all such Assessor’s Parcels shall be assigned the number of Acres as shown on the Final Map as determined by the CFD Administrator. Once the CFD Administrator determines the actual number of Acres for an Assessor’s Parcel, the Special Tax C (Contingent) levied against an Assessor’s Parcel in the next Fiscal Year shall be calculated by multiplying the number of Acres by the Maximum Special Tax C (Contingent) per Acre.

1. Developed Property
a. Maximum Special Tax C (Contingent)
The Maximum Special Tax C (Contingent) for each Assessor’s Parcel of Taxable Property for Fiscal Year 2019-2020 is identified in Table 2 below:

TABLE 2

MAXIMUM SPECIAL TAX C (CONTINGENT)

FOR DEVELOPED PROPERTY
Land Use Category
Taxable
Unit
Maximum Special Tax Per
Taxable Unit

1. Single Family Residential Property RU $19

2. Multifamily Property Acre $88

3. Non-Residential Property Acre $88
On each July 1, commencing on July 1, 2020 the Maximum Special Tax C (Contingent) for Developed Property shall increase by i) the percentage increase in the Consumer Price Index (All Items) for Los Angeles - Riverside - Orange County (1982-84 = 100) since the beginning of the preceding Fiscal Year, or ii) by two percent (2.0%), whichever is greater. b. Multiple Land Use Categories
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax C (Contingent) that can be levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax C (Contingent) that can be levied for each Land Use Category located on that Assessor’s Parcel. For an Assessor’s Parcel that contains more than one land use, the Acreage of such Assessor’s Parcel shall be allocated to each type of property based on the amount of Acreage designated for each land use as determined by reference to the site plan approved for such Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be final.

2. Approved Property and Undeveloped Property
The Maximum Special Tax C (Contingent) for each Assessor’s Parcel of Approved Property and Undeveloped Property for Fiscal Year 2019-2020 is identified in Table 3 below:

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TABLE 3

MAXIMUM SPECIAL TAX C (CONTINGENT)

FOR APPROVED PROPERTY AND UNDEVELOPED PROPERTY
Maximum Special Tax C
(Contingent)
Per Acre
$88
On each July 1, commencing on July 1, 2020 the Maximum Special Tax C (Contingent) for Approved Property and Undeveloped Property shall increase by i) the percentage increase in the Consumer Price Index (All Items) for Los Angeles - Riverside - Orange County (1982-84 = 100) since the beginning of the preceding Fiscal Year, or ii) by two percent (2.0%), whichever is greater.

T. METHOD OF APPORTIONMENT OF ANNUAL SPECIAL TAX
Commencing with the first Fiscal Year in which Special Tax C (Contingent) is authorized to be levied and for each following Fiscal Year, the Council shall determine the Special Tax C (Contingent) Requirement and shall levy the Special Tax C (Contingent) on all Assessor’s Parcels of Taxable Property until the aggregate amount of Special Tax C (Contingent) equals the Special Tax C (Contingent) Requirement. The Special Tax C (Contingent) shall be levied for each Fiscal Year as follows:

Step One: The Special Tax C (Contingent) shall be levied Proportionately on all Assessor’s Parcels of Developed Property up to 100% of the applicable Maximum Special Tax C (Contingent) to satisfy the Special Tax C (Contingent) Requirement;
Step Two: If additional moneys are needed to satisfy the Special Tax C (Contingent) Requirement after the first step has been completed, the Special Tax C (Contingent) shall be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax C (Contingent) for Approved Property; Step Three: If additional monies are needed to satisfy the Special Tax C (Contingent) Requirement after the first two steps has been completed, the Special Tax C (Contingent) shall be levied Proportionately on all Assessor’s Parcels of Undeveloped Property up to 100% of the Maximum Special Tax C (Contingent) for Undeveloped Property.

U. DURATION OF SPECIAL TAX C (CONTINGENT)
The Special Tax C (Contingent) shall be levied in perpetuity to fund the Special Tax C (Contingent) Requirement, unless no longer required as determined at the sole discretion of the City Council.

V. MANNER OF COLLECTION OF SPECIAL TAX C (CONTINGENT)
The Special Tax C (Contingent) shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2018-2 may collect the Special Tax C (Contingent) at a different time or in a different manner if necessary to meet its funding requirements.

W. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written appeal of the Special Taxes on his/her Assessor’s Parcel(s) with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The A-20
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CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall take any of the following actions, in order of priority, in order to correct the error:
(i) amend the Special Tax levy for the current Fiscal Year prior to the payment date; (ii) require the CFD to reimburse the taxpayer the amount of the overpayment to the extent of the available funds of CFD No. 2018-2; or
(iii) grant a credit against, eliminate or reduce the future Special Taxes levied on the taxpayer’s property within CFD No. 2018-2 in the amount of the overpayment.

The CFD Administrator shall interpret this Rate and Method of Apportionment and make determinations relative to the annual levy and administration of the Special Taxes and any taxpayer who appeals, as herein specified.

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EXHIBIT “A”

CERTIFICATE OF REDUCTION OF SPECIAL TAX A
COMMUNITY FACILITIES DISTRICT NO. 2018‐2 (SIERRA BELLA)

OF THE CITY OF CORONA

1. Pursuant to Section H of the Rate and Method of Apportionment, the Maximum Special Tax A for Developed Property for [certain or all] Land Use Categories within CFD No. 2018-2 has been reduced.

2. The calculations made pursuant to Section H were based upon a Price Point Study that was received by the CFD Administrator on _______________.

3. Tables 1A below show the Assigned Special Tax A for each Land Use Category in CFD No. 2018-2 after such reduction.

TABLE 1A

ASSIGNED SPECIAL TAX A FOR DEVELOPED PROPERTY
Land Use Category
Taxable
Unit
Building Square
Footage
Assigned
Special Tax Per
Taxable Unit

1. Single Family Residential Property RU Less than 2,200 $

2. Single Family Residential Property RU 2,200 to 2,500 $

3. Single Family Residential Property RU 2,501 to 2,800 $

4. Single Family Residential Property RU 2,801 to 3,100 $

5. Single Family Residential Property RU 3,101 to 3,400 $

6. Single Family Residential Property RU 3,401 to 3,700 $

7. Single Family Residential Property RU Greater than 3,700 $

8. Multifamily Property Acres N/A $

4. The Backup Special Tax A for each Assessor’s Parcel of Developed Property shall equal an amount per Acre after such reduction as shown below.

The Backup Special Tax A for an Assessor’s Parcel within a Final Map classified or to be classified as Single Family Residential Property shall be $_____ per unit. This Backup Special Tax A has been established based on the land use configurations shown on Tract Map No. _____. In the event any portion of Tract Map No. _____ is changed or modified, the Backup Special Tax A for all Assessor’s Parcels within such changed or modified area shall be $_____ per Acre.

In the event any superseding Tract Map is recorded as a Final Map within the Boundaries of the CFD, the Backup Special Tax A for all Assessor’s Parcels within such Final Map shall be $_____ per Acre.

5. Upon execution of the Certificate of Reduction of Special Tax A by the City and CFD No. 2018-2 the City shall cause an amended Notice of Special Tax Lien for CFD No. 2018-2 to be recorded reflecting the modifications set forth herein.

Submitted

CFD ADMINISTRATOR
By: Date:

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By execution hereof, the undersigned acknowledges, on behalf of CFD No. 2018-2, receipt of this certificate and modification of the Rate and Method of Apportionment as set forth in this certificate.

Community Facilities District No. 2018-2 (Sierra Bella) of the City of Corona By: Date as of: [closing date of Bonds]

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EXHIBIT “B”

CERTIFICATE OF NO REDUCTION OF SPECIAL TAX A
COMMUNITY FACILITIES DISTRICT NO. 2018‐2 (SIERRA BELLA)

OF THE CITY OF CORONA

1. All calculations required pursuant to Section H of the Rate and Method of Apportionment have been made based upon a Price Point Study that was received by the CFD Administrator on _______________.

2. Total Effective Tax Rate for all Plan Types in all Land Use Categories is less than or equal to 1.95%

3. The Maximum Special Tax A for Developed Property within CFD No. 2018-2, including the Assigned Special Tax A set forth in Sections D.1.a. and the Backup Special Tax A set forth in Section D.1.c. of the Rate and Method of Apportionment, shall remain in effect and not be reduced.

Submitted

CFD ADMINISTRATOR
By: Date as of: [closing date of Bonds]

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EXHIBIT “C”

DESCRIPTION OF AUTHORIZED SPECIAL TAX B SERVICES
COMMUNITY FACILITIES DISTRICT NO. 2018‐2 (SIERRA BELLA)

OF THE CITY OF CORONA
The services which may be funded with proceeds of Special Tax B of CFD No. 2018-2, as provided by Section 53313 of the Act, will include all costs attributable to maintaining, servicing, cleaning, repairing and/or replacing landscaped areas (may include reserves for replacement) in public street right-of-ways, public landscaping, public open spaces and other similar landscaped areas officially dedicated for public use. These services including the following:
(a) maintenance and lighting of perimeter parks, parkways, streets, roads and open space, which maintenance and lighting services may include, without limitation, furnishing of electrical power to street lights; repair and replacement of damaged or inoperative light bulbs, fixtures and standards; maintenance (including irrigation and replacement) of landscaping vegetation situated on or adjacent to parks, parkways, streets, roads and open space; maintenance and repair of irrigation facilities; maintenance of public signage; graffiti removal from and maintenance and repair of public structures situated on parks, parkways, streets, roads and open space; maintenance and repair of playground or recreation program equipment or facilities situated on any park; and
(b) maintenance and operation of water quality improvements which include storm drainage and flood protection facilities, including, without limitation, drainage inlets, catch basin inserts, infiltration basins, flood control channels, fossil fuel filters, and similar facilities. Maintenance services may include but is not limited to the repair, removal or replacement of all or part of any of the water quality improvements, fossil fuel filters within the public right-of-way including the removal of petroleum hydrocarbons and other pollutants from water runoff, or appurtenant facilities, clearing of inlets and outlets; erosion repairs; and cleanup to improvements, and other items necessary for the maintenance, servicing; or both of the water quality basin improvements within flood control channel improvements; and (c) public street sweeping, on the segments of the arterials within the boundaries of CFD No. 2018-2; as well as local roads within residential subdivisions located within CFD No. 2018-2; and any portions adjacent to the properties within CFD No. 2018-2; and In addition to payment of the cost and expense of the forgoing services, proceeds of Special Tax B may be expended to pay “Administrative Expenses,” as said term is defined in the Rate and Method of Apportionment.

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EXHIBIT “D”

DESCRIPTION OF AUTHORIZED SPECIAL TAX C (CONTINGENT) SERVICES COMMUNITY FACILITIES DISTRICT NO. 2018‐2 (SIERRA BELLA)

OF THE CITY OF CORONA
The services which may be funded with proceeds of Special Tax C (Contingent) of CFD No. 2018-2, as provided by Section 53313 of the Act, will include all costs attributable to maintaining, servicing, cleaning, repairing and/or replacing landscaped areas (may include reserves for replacement) in public street right-ofways, public landscaping, public open spaces and other similar landscaped areas officially dedicated for public use. The authorized Special Tax C Services include the following:
(a) maintenance and lighting of interior parks, parkways, streets, roads and open space, which maintenance and lighting services may include, without limitation, furnishing of electrical power to street lights; repair and replacement of damaged or inoperative light bulbs, fixtures and standards; and (b) maintenance and operation of water quality improvements, which include the bio-retention facility and appurtenances as shown on the Final WQMP Site Plan and as an Exhibit in the Report of Responsible Officer, which shall be maintained as described in the Storm Water Management Plan on file with the City of Corona. Maintenance services may include, but are not limited to the repair, removal or replacement of all or part of any of the water quality improvements; and In addition to payment of the cost and expense of the forgoing services, proceeds of Special Tax C (Contingent) may be expended to pay “Administrative Expenses,” as said term is defined in the Rate and Method of Apportionment.

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APPENDIX B

APPRAISAL REPORT
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APPENDIX C

SUPPLEMENTAL INFORMATION CONCERNING

CITY OF CORONA AND COUNTY OF RIVERSIDE
The Bonds will not be secured by any pledge of ad valorem taxes or City General Fund revenues but will be payable solely from Special Taxes to levied on and collected from the owners of certain taxable land within the District. The information set forth below is included in the Official Statement for background purposes only.

General Description and Background
Incorporated in 1896, the City of Corona is a general law city that now functions under a Council/Manager form of government. A five member City Council is elected at large for staggered four-year terms. The Mayor is appointed annually by and from the City Council. The City Manager is appointed by the City Council.

Riverside County, which encompasses 7,303 square miles, was organized in 1893 from territory in San Bernardino and San Diego Counties. Located in the southeastern portion of California, Riverside County is bordered on the north by San Bernardino County, on the east by the State of Arizona, on the South by San Diego and Imperial Counties and on the west by Orange and Los Angeles Counties. There are 28 incorporated cities in Riverside County.

Riverside County’s varying topology includes desert, valley and mountain areas as well as gently rolling terrain. Three distinct geographical areas characterize Riverside County: the western valley area, the higher elevations of the mountains, and the deserts. The western valley, the San Jacinto Mountains and the Cleveland National Forest experience the mild climate typical of Southern California. The eastern desert areas experience warmer and dryer weather conditions. Riverside County is the site for famous resorts, such as Palm Springs, as well as a leading area for inland water recreation. Nearly 20 lakes in Riverside County are open to the public. The dry summers and moderate to cool winters make it possible to enjoy these and other recreational and cultural facilities on a year-round basis.

Population
The following sets forth the City, the County and the State population estimates as of January 1, for the years 2017 to 2021:

CITY OF CORONA, RIVERSIDE COUNTY AND STATE OF CALIFORNIA Estimated Population
Year
(January 1)
City of
Corona
Riverside
County
State of
California
2017 164,863 2,374,555 39,352,398
2018 166,299 2,397,662 39,519,535
2019 166,937 2,419,057 39,605,361
2020 168,332 2,440,719 39,648,938
2021 169,454 2,454,453 39,466,855

Source: State of California Department of Finance, Demographic Research Unit. March 2010 Benchmark.

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Commerce
A summary of historic taxable sales within the City for the years 2017 to 2021 is shown in the following table. Total taxable sales during calendar year 2021 in the City were reported to be $4,135,285,000 a 12.8% increase over the total taxable sales of $3,665,819,000 reported during calendar year 2020.

CITY OF CORONA
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in thousands)
Retail Stores Total All Outlets
Number of
Permits
Taxable
Transactions
Number of
Permits
Taxable
Transactions
2017 2,507 $2,084,193 4,439 $3,704,978
2018 2,602 2,172,191 4,714 3,864,524
2019 2,676 2,138,984 4,874 3,854,258
2020 2,938 1,969,203 5,369 3,665,819
2021 2,548 2,461,524 4,744 4,135,285

Source: California State Board of Equalization, Taxable Sales in California (Sales & Use Tax).

A summary of historic taxable sales within the County during for the years 2017 to 2021 is shown in the following table. Total taxable sales during calendar year 2021 in the County were reported to be $55,337,455,000, a 30.8% increase over the total taxable sales of $42,313,474,000 reported during calendar year 2020.

COUNTY OF RIVERSIDE
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in thousands)
Retail Stores Total All Outlets
Number of
Permits
Taxable
Transactions
Number of
Permits
Taxable
Transactions
2017 38,967 $25,856,341 58,969 $36,407,460
2018 39,577 28,042,692 61,433 38,919,498
2019 40,491 29,063,054 64,063 40,626,998
2020 43,106 30,321,662 69,284 42,313,474
2021 39,456 41,191,009 64,335 55,337,455

Source: California State Board of Equalization, Taxable Sales in California (Sales & Use Tax).

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Employment and Industry
The City is included in the Riverside-San Bernardino-Ontario labor market area. The unemployment rate in the Riverside-San Bernardino-Ontario MSA was 7.4% in 2021, down from 10.0% in 2020. This compares with an unadjusted unemployment rate of 7.3% for California and 5.3% for the nation during the same period. The unemployment rate was 7.3% in Riverside County, and 7.4% in San Bernardino County.

The following table shows the average annual estimated numbers of wage and salary workers by industry. The table does not include proprietors, the self-employed, unpaid volunteers or family workers, domestic workers in households, and persons in labor management disputes.

RIVERSIDE-SAN BERNARDINO-ONTARIO METROPOLITAN STATISTICAL AREA (RIVERSIDE COUNTY)
Civilian Labor Force, Employment and Unemployment
(Annual Averages)
2017 2018 2019 2020 2021
Civilian Labor Force 2,012,900 2,045,000 2,074,500 2,088,600 2,118,200 Civilian Employment 1,909,500 1,956,800 1,989,700 1,880,500 1,961,800 Civilian Unemployment 103,400 88,200 84,800 208,100 156,400 Civilian Unemployment Rate 5.1% 4.3% 4.1% 10.0% 7.4%

Total Farm 14,500 14,500 15,400 14,100 13,900
Total Nonfarm 1,453,300 1,506,600 1,552,800 1,495,200 1,569,100 Total Private 1,202,300 1,249,400 1,291,600 1,247,200 1,325,400 Goods Producing 196,400 206,100 208,900 201,300 205,400 Mining and Logging 1,000 1,200 1,200 1,300 1,400
Construction 97,400 105,200 107,200 104,900 109,200
Manufacturing 98,000 99,800 100,600 95,100 94,800
Service Providing 1,256,900 1,300,500 1,343,800 1,293,900 1,363,700 Trade, Transportation and Utilities 363,900 379,400 395,100 406,900 443,100 Wholesale Trade 63,100 66,100 67,700 65,600 67,000
Retail Trade 180,900 181,200 180,700 168,800 177,600
Transportation, Warehousing and Utilities 119,900 132,100 146,600 172,500 198,600 Information 11,600 11,400 11,500 9,400 9,600
Financial Activities 44,700 44,600 45,000 44,100 44,900 Professional and Business Services 147,300 152,000 158,700 155,400 167,300 Educational and Health Services 226,700 239,500 250,300 248,700 253,300 Leisure and Hospitality 166,300 170,600 175,900 141,300 158,900 Other Services 45,400 45,800 46,200 40,200 43,000
Government 251,000 257,200 261,200 248,000 243,600
Total, All Industries 1,467,800 1,521,100 1,568,100 1,509,300 1,583,000

Note: Does not include proprietors, self-employed, unpaid volunteers or family workers, domestic workers in households and persons involved in labor-management trade disputes. Employment reported by place of work. Items may not add to total due to independent rounding. The “Total, All Industries” data is not directly comparable to the employment data found in this Appendix C.

Source: State of California, Employment Development Department, March 2021 Benchmark.

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Major Employers
The table below shows the 10 largest employers in the City as of June 30, 2021.

CITY OF CORONA

LARGEST EMPLOYERS
(As of June 30, 2021)
Employer
Number of
Employees
% of Total City
Employment)
Corona-Norco Unified School District 5,478 6.80%
Kaiser Permanente 1,335 1.66
Corona Regional Medical Center 1,166 1.45
Fender USA Corona 960 1.19
Monster Energy 865 1.07
City of Corona 668 0.83
All American Asphalt 650 0.81
Veg Fresh Farms 650 0.81
TWR Framing Enterprises 605 0.75
Thermal Structures 302 0.37
Total 12,679 15.74%

Source: City of Corona Annual Comprehensive Financial Report.

The table below shows the 10 largest employers in the County as of June 30, 2021.

COUNTY OF RIVERSIDE

LARGEST EMPLOYERS
(As of June 30, 2021)
Name of Business Employees
% of Total
County
Employment)
County of Riverside 22,952 2.23%
Amazon 10,500 1.02
March Air Reserve Base 9,600 0.93
University of California, Riverside 8,909 0.87
Stater Brothers Markers 8,304 0.81
Moreno Valley Unified School District 6,250 0.61
Kaiser Permanente Riverside Medical Center 5,780 0.56
Corona-Norco Unified School District 5,478 0.53
Hemet Unified School District 4,460 0.43
Ross Dress for Less 4,313 0.42
Total 86,546 8.41%
Source: County of Riverside Annual Comprehensive Financial Report for the year ending June 30, 2021.

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Construction Activity
The following is a summary of the valuation of building permits issued in the City for the years 2016 to 2020.

CITY OF CORONA
Building Permit Valuations
(Valuation in Thousands of Dollars)
2016 2017 2018 2019 2020
Valuation ($000):

Residential $ 23,341 $ 43,818 $ 58,737 $ 127,097 $ 69,330 Non-residential 81,914 36,514 115,688 66,061 30,387
Total $105,225 $80,332 $174,425 $193,158 $99,717
Residential Units:

Single family 66 113 206 195 228
Multiple family 0 108 240 400 26
Total 66 221 446 595 254
Note: Totals may not add to sum due to rounding.

Source: Construction Industry Research Board.

The following is a summary of the valuation of building permits issued in the County for the years 2016 to 2020.

COUNTY OF RIVERSIDE
Building Permit Valuations
(Valuation in Thousands of Dollars)
2016 2017 2018 2019 2020
Valuation ($000’s)
Residential $1,759,535 $1,903,417 $2,558,081 $2,275,405 $2,519,303 Non-Residential 1,346,019 1,433,691 1,959,680 1,285,856 1,153,779 Total $3,105,554 $3,337,108 $4,517,761 $3,561,261 $3,673082

Units
Single Family 5,662 6,265 7,540 6,563 8,443
Multiple Family 1,039 1,070 1,628 1,798 723
Total 6,701 7,335 9,168 8,361 7,335

Note: Totals may not add to sum because of rounding.

Source: Construction Industry Research Board.

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APPENDIX D

SUMMARY OF FISCAL AGENT AGREEMENT
The following is a summary of certain provisions of the Fiscal Agent Agreement which are not described elsewhere. This summary does not purport to be comprehensive and reference should be made to the respective agreements for a full and complete statement of the provisions thereof.

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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE OF THE CITY
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APPENDIX F

PROPOSED FORM OF BOND COUNSEL OPINION
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APPENDIX G

INFORMATION CONCERNING DTC
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, premium, if any, accreted value and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC to the City which the City believes to be reliable, but the City and the Underwriter do not and cannot make any independent representations concerning these matters and do not take responsibility for the accuracy or completeness thereof. Neither the DTC, Direct Participants, Indirect Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.

The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC.

One fully-registered Bond will be issued for each annual maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited through the facilities of DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records.

Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial G-2
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Owners will not receive Bonds representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as prepayments, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being prepaid, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or the Fiscal Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Fiscal Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Fiscal Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

A Bond Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Fiscal Agent, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Fiscal Agent. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Bonds to the Fiscal Agent’s DTC account.

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DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the City or the Fiscal Agent. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered.

The City may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered to DTC.

THE FISCAL AGENT, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE

BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC

PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR

EFFECT WILL NOT AFFECT THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING

TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.

Corona City CouncilJune 15, 2022

Corona City Council
June 15, 2022