Folsom City Council
July 12, 2022

07/12/2022 Item No.11.
written direction of the Community Facilities District, upon receipt of like proof, indemnity and payment of expenses.

Any replacement Bonds issued pursuant to this Section shall be entitled to equal and proportionate benefits with all other Bonds issued hereunder, and the Community Facilities Distiict and the Trustee shall not be required to treat both the original Bond and any replacement Bond as being Outstanding for the pu{pose of determining the principal amount of Bonds which may be issueJ hereunder or for the purpose of determining any percentage of Bonds Outstanding herlunder, but both the original and the replacement Bond shall be treated as one and the same.

Section2.l1. Registration of the Bonds. The Bonds shall be registered in the name of the Authority and delivered to the Authority Trustee upon the issuance thereof in accordance with the provisions of the Local Obligation Purchase Contract.

Section 2.12. CUSIP Numbers. The Community Facilities District in issuing the Bonds may, but shall not be required to, use "CUSIP" numbers (if then generally in use), and, if used, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that the Trustee shall have no liability for any defect in the "CUSIP" numbers as they upp.* on any Bond, notice or elsewhere, and, provided further that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Bonds or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Bonds, and any such redemption shall not be affected by any defect in or omission of such numbers. The Community Facilities District shall promptly noti$ the Trustee.in writing of any change in "CUSIP" numbers, if any. The Community Facilities District does not expect to use 6'CUSIP" numbers for the 2022Bonds.

Section 2.13. Application of Proceeds of Sale of 2022 Bonds. Upon the receipt of payment of the purchase price of the 2022Bonds when the2022 Bonds shall have been duly sold tythe Community Facilities District, the Trustee shall deposit such proceeds of sale of the 2022 Bbnds into a temporary account called the Proceeds Fund which the Trustee shall establish, maintain and hold in trust, and which shall be disbursed in full on the date of receipt (whereupon said temporary account shall be closed) in the following order:
(a) The Trustee shall deposit in the Series 2022Bond Reserve Account the amount of $ , being a sum equal to the Required Bond Reserve, which such account is hereby created in the Bond Reserve Fund; (b) The Trustee shall deposit in the Acquisition and Construction Fund the amount of $
(c) The Trustee shall deposit in the Capitalized Interest Account the amount of $
of$
(d) The Trustee shall deposit in the Costs of Issuance Fund the amount ; and
(e) [The Trustee shall transfer to the City the amount of pursuant to instructions provided by the Cityl.
24 4t4l-6633-r704.3 Page 288
07/12/2022 Item No.11.

Section 2.14. Capitalized Interest Account. There is hereby established a fund to be known as the City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Bonds Capitalized Interest Account. On each of the following dates, the Trustee shall transfer the respective amounts from the Capitalized Interest Account to the Redemption Account for the payment of interest due on the 2022 Bonds:

Date of Transfer Amount
[September 1,2022] $l I
If at any time the Trustee is required by a Supplemental Indenture to deposit any amount of funds therein, the Trustee shall reestablish and maintain a fund to be known as the City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Bonds Capitalizedlnterest Account. On each of the dates set forth in any table set forth in a Supplemental Indenture, the amount set forth shall be transferred from the Capitalized Interest Account to the Redemption Account for the payment of interest due on the Bonds. The Capitalized Interest Account will be closed following the last date of transfer.

Section 2.15. Acquisition and Construction Fund. There is hereby established a fund to be known as the City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Bonds Acquisition and Construction Fund, to be held and administered by the Trustee. All money in the Acquisition and Construction Fund shall be used by the Trustee for payment of the costs of the acquisition and construction of the Facilities, including the repayment of funds advanced by the City for the Community Facilities District and the repayment under any agreement of advances of funds or reimbursement for the lesser of the value or cost of work in-kind provided by any person for the Community Facilities District, upon receipt of a Written Request of the Community Facilities District filed with the Trustee, each of which shall be sequentially numbered and shall state the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against such fund; provi,idgd, that any remaining amount therein after the "o-pl"tiott of such pulpose (as set forth in a Certificate of the Community Facilities District so determining filed with the Trustee) shall be transferred by the Trustee to the Redemption Account.

The Acquisition and Construction Fund will be closed following the last date of transfer.

Section2.16. Costs of Issuance Fund. There is hereby established a fund to be known as the City of Folsom Community Facilities DistrictNo. 23 (Folsom Ranch) Improvement AreaNo. 3 Special Tax Bonds Costs of Issuance Fund, to be held and administered by the Trustee.

All money in the Costs of Issuance Fund shall be used and withdrawn by the Trustee to pay the Costs of Issuance upon receipt of a Written Request of the Community Facilities District filed with the Trustee, each of which shall be sequentially numbered and shall state the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against such fund; provided, that on 20221, or upon a prior determination bY the Community Facilities District that all Costs of Issuance have been paid (as set forth in a Certificate of the Community Facilities District so determining filed with the Trustee), any balance of money remaining in the Costs of Issuance Fund shall be withdrawn from the Costs of Issuance Fund by the Trustee and transferred to the Acquisition and Construction Fund. The Costs of Issuance Fund will be closed following the last date of transfer 25 4t41-6633-1704.3 Page 289
07/12/2022 Item No.11.

ARTICLE III

REDEMPTION OR EXCHANGE OF BONDS
Section 3.01 Redemotion Prices and Terms of Bonds. Any Supplemental Indenture may set forth the provisions for redemption of any Additional Bonds. (a) Mandatory Sinkine Fund Account Redemption of the 2022 Bonds.

The 2022 Bonds maturing on September 1,201 1, are subject to mandatory redemption by the Community Facilities District prior to their maturity date in part on September 1 in each ofthe years 20[ ] through 201 1,both years inclusive; and the 2022Bonds maturing on September 1,201 l, are subject to mandatory redemption by the Community Facilities District prior to their maturity date in part on September I in each of the years 201-l through 201 l, both years inclusive, in each case solely from Minimum Sinking Fund Account Payments deposited in the Sinking Fund Subaccount, upon mailed notice as provided herein, at a redemption price equal to one hundred percent (100%) of the principal amount thereof called for redemption together with accrued interest thereon to the date fixed for redemption.
(b) Optional Redemption of the 2022 Bonds. The 2022 Bonds arc subject to optional redemption by the Community Facilities District prior to their respective maturity dates as a whole or in part on any date on or after September 1,201 1, from funds derived by the Community Facilities District from any source other than such Minimum Sinking Fund Account Payments deposited in the Sinking Fund Subaccount or such prepayments of the Special Tax, upon mailed notice as provided herein, at the following redemption prices (computed upon the principal amount of the 2022 Bonds or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemption:
103% if redeemed on any date on or after September 1,201 l through August 31,201 l;
I02% if redeemed on any date from September 1,201 I through August 31,201 1;
rcl% if redeemed on any date from September l, 20[ I through August 31,201 1;
100% if redeemed on September 1, 20L_l and any date thereafter. (c) Extraordinarv Redemption of the 2022 Bonds. The 2022Bonds ate subject to extraordinary redemption by the Community Facilities District prior to their respective maturity dates, as a whole or in part on any interest payment date on and after [September l, 2022], from funds derived by the Community Facilities District from prepayments of the Special Tax, upon mailed notice as provided herein, at the following redemption prices (computed upon the principal amount of the 2022 Bonds or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemption, to wit:
4l4t-6633-1704.3
26

07/12/2022 Item No.11.

I03% if redeemed on an interest payment date on or after September 1,201 l through March l,20ll;
102% if redeemed on an interest payment date on September 1, 20L-] or March l,20ll;
l0l% if redeemed on an interest payment date on September 1, 20L) or March I,20ll;
100% if redeemed on September l, 20L) or any interest payment date thereafter.

Section 3.02. Selection of Bonds for Redemption. If less than all the Outstanding Bonds are to be redeemed as a result of prepayments of the Special Tax at any one time, the Bonds shall be redeemed pro rata by maturity. If less than all the Outstanding Bonds are to be redeemed at the option of the Community Facilities District at any one time, the Bonds of the latest maturity date or dates shall be redeemed prior to or simultaneously with the redemption of the Bonds maturing prior thereto, and if less than all the Outstanding Bonds of any one maturity date are to be redeemed at any one time, the Trustee shall select the Bonds or the portions thereof of such maturity date to be redeemed in integral multiples of five thousand dollars ($5,000) in a manner that it deems appropriate and fair.

Section 3.03. Notice of Redemption of Bonds. At the Written Request of and at the sole cost and expense of the Community Facilities District, received by the Trustee at least ten (10) days in advance of so sending, such Written Request to contain the information to be contained in the notice of redemption to be sent to Holders, as set forth below, the Trustee shall mail at least twenty (20) and not more than sixty (60) days prior to the date fixed for redemption, notice of redemption pursuant to Section 1 0. 14 to the respective Holders of all Bonds selected for redemption in whole or in part and to all securities depositories and securities information services selected by the Community Facilities District to comply with custom or the rules of any securities exchange or commission or brokerage board or otherwise as may be determined by the Community Facilities District in its sole discretion, but neither failure to receive any such mailed notice nor any immaterial defect contained therein shall affect the sufficiency or the validity of such proceedings for redemption; ppy!!g{, that no notice of redemption need be given to the Authority for any Bonds for which the Authority is the Holder. Such notice shall state the date of such notice, the Bonds to be redeemed, the date of issue of such Bonds, the redemption date, the redemption price, the place of redemption (including the name and appropriate address of the Trustee), and, if iess than all of any such maturrty, the numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed, and shall give notice that further interest on such Bonds or the portions thereof to be redeemed will not accrue from and after the redemption date, and shall require that such Bonds be then surrendered for redemption at the address of the Trustee so designated. If any Bond so chosen for redemption shall not be redeemable in whole, such notice shall also state that such Bond is to be redeemed in part only and that upon presentation of such Bond for redemption there will be issued in lieu of the unredeemed portion of principal thereof a new Bond or Bonds of the same series and maturity date equal in aggregate principal amount to such unredeemed portion. 414r-6633-1704.3
27

07/12/2022 Item No.11.

IntheeventofanoptionalredemptionofBonds,theTrusteeshallmailanoticeof redemption, in the ;;; ;"r"",
^u, uror"ruid, only after receipt of a writtgn Request of the Community facilities nistrict at f"art filJu'' p'io' to.the aut" o" which the Trustee must send notice to the Holders of the Bonds; ptttdd;;&".orr, if sufficient monies for the payment of the redemption pri"" or-utt g;rrO, to b" "de"m"d
are not then on deposit with the-Trustee' such notice
sha' state that such redemption sharl be conditioned ,rpo' ih" iimety deposit of sufficient funds Anynoticeofoptionalredemptionmayberescindedbywritterrnoticegivenbythe community Facilities District io the T;;"; rater ihan three (3) Business Days prior to the date specified for redemption. The Truste" 't'urr
giue notice.of '""i"iott
of the notice of optional
redemption or non-satisfaction of any ""rJiii"ir:specified in the notice of optional redemption as
soon as practicable;lh; ;"*e parties and in the same ma'ner as the notice of redemption was given Pursuant to this Section'
Section 3'04' Partial Redemption o-[' Bqnds' Upon surrender of any Bond redeemedinparton1y,theco**.,,'it@a11executeandtheTrusteeshall authenticate and detvlr to the registereJo;#;i;ih" expense of the.community Facilities District a new Bond or Bonds of the ,*" ,"ri., una *ut*ity date equal in aggregate principal amount to the rr*.Ot'-td portion of the Bond surrendered' section 3.05. Effect of Redemption of B-onds. If notice of redemption has been dulygivenu,,a,,ot,","inded*ufo,",uffiforthepaymentoftheprincipalof and redemption premiums, if any, orr, tog"tt ", yith interest to the redemption date on, the Bonds or portions tt "r"oiro-r"'.a
ro, i.a.-pii* t^ been irrevocabry depositea wit'the Trustee, then on the redemption date designated i1 ,,i.t, ,roti"" such Bonds or such portions thereof shall become irrevocably due and payable, ur-rO from u"J uft"' the date so designatgd inlgrgst on the Bonds or such portions ttrereiisl;;il"d fo, ,"d"rnftion shall ,"ur. to u"cruJ and the Holders of such Bonds sha, have no rights in respect thereof e-xiept to receive payment of the principal of such Bonds or such porrions thereof and the ,.a.-ffi;;;T*t,if';y, thereon gd.lfre interest accrued thereon to the redemption aut", prou1i"J, ttui '"at*ption of Bonds other than from Minimum
Sinking runa ntt-outtlipuv*"tiJ:'nurr rc made only irom and to the extent of funds on deposit with the Trustee ;;d ";;dbre
for such purpose on the date of redemption'
therefor with the Trustee'

ARTICLE IV

SPECIAL TAX
Section 4.01
The CommunttY Facilities District agrees and
covenants that it will deposit the SPecial Tax proceeds inthe CitY ofFolsom CommunitY Facilities District No. 23 (Folsom Ranch) Improvement AreaNo.3 CommunitY Facilities Fund, which fund is herebY established in the treasury of the CitY, for and on behalf of the CommunitY Facilities District, and which fund the CommunitY Facilities District herebY agrees and covenants to maintain so long as any Bonds are Outstanding hereunder. All moneY inthe CommunttY Facilities Fund shall be used and withdrawn bY the CommunitY Facilities District solely for the benefit of the CommunitY Facilities District in accordance with
4r4r-6633-r704.3
28 the Law, including payment of ExPenses

07/12/2022 Item No.11.

The Community Facilities District agrees and covenants that, after payment of its Priority Administrative Expenses, it will transfer to the Trustee from the Community Facilities Fund amounts sufficient and in sufficient time for the Trustee to make the transfers required by Section

4.02 (less any amounts to be transferred pursuant to Section 2.14), and the Trustee shall deposit such proceeds as and when received in the City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement AreaNo. 3 Special Tax Fund, which fund the Trustee shall establish and maintain so long as Bonds remain Outstanding hereunder, and all money in such fund shall be held by the Trustee in trust hereunder and shall be disbursed, allocated and applied solely to the uses and purposes hereinafter set forth in this Article.

Section 4.02. Allocation of Money in the Special Tax Fund. All money in the Special Tax Fund shall be set aside by the Trustee in the following respective special accounts and fund within the Special Tax Fund (each of which accounts and fund is hereby created) in the following order of priority, and all money in each of such accounts and fund shall be applied, used and withdrawn only for the purposes hereinafter authorized in this Section, namely:
(1) Redemption Account; and
(2) Bond Reserve Fund.
(a) Redemption Account. On or before September I and March 1 in each year, beginning on September l, 2022, the Trustee shall,.from the money in the Special Tax Fund, transfer to and deposit in the Redemption Account an amount of money equal to the aggregate amount of interest becoming due and payable on all Outstanding Bonds on such March 1 or September l, as the case may be, and on or before September I in each year, beginning on September 1,2022, the Trustee shall, from the then remaining money in the Special Tax Fund, transfer to and deposit in the Redemption Account an amount of money equal to the aggregate amount of principal becoming due and payable on all Outstanding Serial Bonds on such September 1 plus all Minimum Sinking Fund Account Payments required to be made on such September I into the Sinking Fund Subaccount; provided, that all of the aforesaid payments shall be made without priority of any payment over any other payment, and in the event that money in the Special Tax Fund oouny Murch 1 or September 1 is not equal to the amount of interest becoming due on all Bonds on such date, or in the event that the money in the Special Tax Fund on any September 1 is not equal to the amount of principal of the Bonds becoming due on such date, as the case may be, then such money shall be applied pro rata in such proportion as such interest and principal and Minimum Sinking Fund Account Payments bear to each other.

No deposit need be made into the Redemption Account if the amount of money contained therein is at least equal to the amount required by the terms of the preceding paragraphto be deposited therein at the times and in the amounts herein provided.

All money in the Redemption Account shall be used and withdrawn by the Trustee to pay the interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity) plus the principal of and redemption premiums, if any, on the Bonds as they shall mature or upon the prior 4l4t-6633-1704.3
29

07/12/2022 Item No.11.
redemption thereof, except that any money in the Sinking Fund Subaccount shall be used only to purchase or redeem or retire the Term Bonds as provided herein. (b) Bond Fund. On or before March I and September I in each year, beginning on September 1,2022, the Trustee shall, from the then remaining money in the Special Tax Fund, transfer to and deposit in each Bond Reserve Account within the Bond Reserve Fund such amount of money as shall be required to restore each such Bond Reserve Account to a sum equal to the Required Bond Reserve for the applicable series of Bonds, pro rata,to the extent that amounts are available in the Special Tax Fund for such pufpose; and for this purpose all investments in each Bond Reserve Account shall (beginning on September 1,2022) be valued on March I and September I of each year at the face value thereof if such investments mature within twelve (12) months from the date of valuation, or if such investments mature more than twelve (12) months after the date of valuation, at the price at which such investments are redeemable by the Holder at his or her option, if so redeemable, or if not so redeemfule, at the lesser of (i) the cost of such investments plus the amortization of any premium or minus the amortization of any discount, or (ii) the market value of such investments. For purposes of allocating remaining money in the Special Tax Fund between more than one Bond Reserve Account, any such transfers to and deposits in each Bond Reserve Account shall be made equally and ratably in proportion to the Required Bond Reserve for each series of Bonds.

No deposit need be made into a Bond Reserve Account if the value of the investments contained therein is at least equal to the Required Bond Reserve for the applicable series of Bonds.

All money in each Bond Reserve Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on or principal of the corresponding series of Bonds in the event there is insufficient money in the Redemption Account available for this purpose; provided, that if as a result of any of the foregoing valuations or as a result of any property owner prepayment it is determined that the amount of money in a Bond Reserve Account exceeds or will exceed the Required Bond Reserve for the applicable series of Bonds, the Trustee shall withdraw the amount of money representing such excess from such fund and shall deposit such amount of money in the Redemption Account as provided in the last paragraph of Section 10.05. For the avoidance of doubt, amounts in a Bond Reserve Account are not available to make up a deficiency for the payment of principal and interest on any Bonds other than the specific series of Bonds to which the Bond Reserve Account relates.

ARTICLE V

ANTS OF DISTRI
Section 5.01. Punctual Payment and Performance. The Community Facilities District will punctually pay the interest on and principal of and redemption premium, if any, to become due on every Bond issued hereunder in strict conformity with the terms of the Law and hereof and of the Bonds, and will faithfully observe and perform all the agreements, conditions, 4r4r-6633-1704.3
30

07/12/2022 Item No.11.
covenants and tenns contained herein and in the Bonds required to be observed and performed by it.

Section 5.02 Asainst Indebtednes s and Encumbrances. The Community Facilities District will not issue any evidences of indebtedness payable from the proceeds of the Special Tax except as provided herein, and will not create, nor permit the creation of, any pledge, lien, charge or other encumbrance upon any money in the Special Tax Fund other than as provided herein; prcviided, that the Community Facilities District may at any time, or from time to time, issue evidences of indebtedness for any lawful purpose of the Community Facilities District which are payable from any money in the Community Facilities Fund as may from time to time be deposited therein so long as any payments due thereunder shall be subordinate in all respects to the use of the proceeds of the Special Tax as provided herein' Section 5.03. Against Federal Income Taxation.
(a) Ifthe Community Facilities District has obtained an opinion of Bond Counsel that interest on the Bonds is excluded from gross income for federal income tax purposes, the Community Facilities District will not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of the interest on the Bonds pursuant to Section 103 of the Code, and specifically the Community Facilities District will not directly or indirectly use or make any use of the proceeds of the Bonds or any other funds of the Community Facilities District or take or omit to take any action that would cause the Bonds to be "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the Code or "private activity bonds" subject to federal income taxation by reason of Section 1a1(a) of the Code or obligations subject to federal income taxation because they are "federally guaranteed" as provided in Section la9@) of the Code; and to that end the Community Facilities District, with respect to the proceeds of the Bonds and such other funds, will comply with all requirements of such sections of the Code and all regulations of the United States Department of the Treasury issued thereunder to the extent that such regulations are, at the time, applicable and in effect; provided, that if the Community Facilities District shall obtain an opinion of nationally recognized bond counsel to the effect that any action required under this Section is no longer required, or to the effect that some further action is required, to maintain the exclusion from gross income of the interest on the Bonds pursuant to Section 103 of the Code, the Community Facilities District may rely conclusively on such opinion in complying with the provisions hereof. In the event that at any time the Community Facilities District is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on the investment of any money held by the Finance Director, for and on behalf of the Community Facilities District, hereunder or otherwise the Community Facilities District shall so instruct the Finance Director in writing, and the Finance Director shall take such action as may be necessary in accordance with such instructions.
(b) Without limiting the generality of the foregoing, the Community Facilities District will pay from time to time all amounts required to be rebated to the United States of America pursuant to Section 148(0 of the Code and all regulations of the United States Department of the Treasury issued thereunder to the extent that such 4t4l-6633-1704.3
3l

07/12/2022 Item No.11.
regulations are, at the time, applicable and in effect, which obligation shall survive payment in full or defeasance of the Bonds, and to that end, there is hereby established in the treasury of the City, for and on behalf of the Community Facilities District, a fund to be known as the City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Bonds Rebate Fund to be held in trust and administered by the Finance Director for and on behalf of the Community Facilities District. The Community Facilities District will comply with the provisions of the Tax Certificate with respect to making deposits in the Rebate Fund, and all money held in the Rebate Fund is pledged to provide payments to the United States of America as provided herein and in the Tax Certificate and no other person shall have claim to such money except as provided in the Tax Certificate.

Section 5.04. Payment of Claims. The Community Facilities District will pay and discharge any and all lawful claims which, if unpaid, might become payable from the proceeds of the Special Tax or any part thereof or upon any funds in the hands of the Community Facilities District or the Trustee allocated to the payment of the interest on or principal of or redemption premiums, if any, on the Bonds, or which might impair the security of the Bonds.

Section 5.05. Expense Budgets. The City Council, as legislative body of the Community Facilities District, will, on or before July I in each year, adopt a budget setting forth the costs of the estimated Expenses for the period from such July I through the next succeeding June 30; ppvided, that any budget adopted in accordance with this Section may be amended by the City Council at any time.

Section 5.06. Accounting Records: Financial Statements and Other Reports. (a) The Community Facilities District will keep, or in the case of transactions made by the Trustee it will cause the Trustee to keep, appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the receipt, investment, disbursement, allocation and application of the proceeds of the Special Tax and of the proceeds of the Bonds, which accounting records shall at all times during business hours with reasonable prior written notice be subject to the inspection of any Holder (or his or her representative authorized in writing). The Trustee shall furnish the Community Facilities District periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the Community Facilities District. Upon the Community Facilities District's election, such statements will be delivered via the Trustee's online service and upon electing such service, paper statements will be provided only upon request. The Community Facilities District waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occui, to the extent permitted by law. The Community Facilities District further understands that trade confirmations for securities transactions effected by the Trustee will be available upon written request and at no additional cost and other trade confirmations may be obtained from the applicable broker. (b) The Community Facilities District will prepare annually not more than two hundred seventy (270) days after the close of each Fiscal Year (commencing with the Fiscal Year ending June 30,2022) a sunmary report showing in reasonable detail the 4t4l-6633-1704.3
32

07/12/2022 Item No.11.
proceeds of the Special Tax levied and collected and the costs of the Expenses for the preceding Fiscal Year and containing a general statement of the physical condition of the Facilities. The Community Facilities District will furnish a copy of such summary report without charge to any Holder (or his or her representative authorizedinwriting) and to any investment banker, security dealer or other person interested in the Bonds requesting a copy thereof.
(c) The Community Facilities District will prepare annually not later than October 30 of each year (beginning in 2022) and file with the California Debt and Investment Advisory Commission by mail, postage prepaid, all necessary information required to be filed under the Law, including:
(1) The principal amount of the Bonds Outstanding;
(2) The balance in each Bond Reserve Account;
(3) The balance in the Redemption Account constituting capitalized interest, if arry;
(4) The number of parcels securing the Bonds which are delinquent with respect to their Special Tax payments, the amount that each delinquent parcel is delinquent, the length of time that each delinquent parcel has been delinquent and when foreclosure was commenced for each delinquent parcel; and
(5) The assessed value of all parcels subject to the levy of the Special Tax to repay the Bonds, as shown on the most equalized assessment roll of the County of Sacramento.

Additionally, the Community Facilities District will notifu the California Debt and Investment Advisory Commission by mail, postage prepaid, within ten (10) days if the Community Facilities District or the Trustee fails to pay any interest on or principal of any of the Bonds on any scheduled payment date, or if funds are withdrawn from a Bond Reserve Account to pay any interest on or principal of a series of the Bonds.

Section 5.07. Protection of Securitv and Riehts of Holders. The Community Facilities District will preserve and protect the security of the Bonds and the rights of the Holders and will wanant and defend their rights against all claims and demands of all persons.

Section 5.08. Payment of Governmcntal Charges and Compliance with Governmental Resulations. The Community Facilities District will pay and discharge all taxes or payments in lieu of taxes, assessments and other governmental charges or liens that may be levied, assessed or charged upon the Facilities or any part thereof promptly as and when the same shall become due and payable, except that the Community Facilities District shall not be required to pay any such governmental charges so long as the application or validity thereof shall be contested in good faith and the Community Facilities District shall have set aside reserves to cover such charges. The Community Facilities District will duly observe and conform with all valid regulations and requirements of any governmental authority relative to the operation of the Facilities or any part thereof, except that the Community Facilities District shall not be required to 4r4t-6633-t704.3
JJ

07/12/2022 Item No.11.
comply with any such regulations or requirements so long as the application or validity thereof shall be contested in good faith.

Section 5.09. Levy and Collection of the Special Tax. The Community Facilities District, so long as any Bonds are Outstanding, will annually levy the Special Tax against all Taxable Property in the Improvement Area and make provision for the collection of the Special Tax in amounts which will be sufhcient, together with the money then on deposit in the Redemption Account, after making reasonable allowances for contingencies and errors in the estimates, to yield proceeds equal to the amounts required for compliance with the agreements, conditions, covenants and terms contained herein, and which in any event will be sufficient to pay the interest on and principal of and Minimum Sinking Fund Account Payments for and redemption premiums, if any, on the Bonds as they become due and payable and to replenish each Bond Reserve Account and to pay all current Expenses as they become due and payable in accordance with the provisions and terms hereof. The Special Tax shall be collected in the same manner as ordinary ad valorem property taxes are collected and, except as otherwise provided in Section 5.10 or by the Law, shall be subject to the same penalties and the same collection procedure, sale, and lien priority in case of delinquency as is provided for ad valorem property taxes.

Section 5.10. Foreclosure of Special Tax Liens The Community Facilities District shall annually on or before September I of each year review the public records of the County of Sacramento relating to the collection of the Special Tax in order to determine the amount of the Special Tax collected in the prior Fiscal Year, and if the Community Facilities District determines on the basis of such review that the amount so collected is deficient by more than five percent (5%) of the total amount of the Special Tax levied in such Fiscal Year, it will within sixty (60) days thereafter institute foreclosure proceedings as authorizedby the Law in order to enforce the lien of the delinquent installments of the Special Tax against each lot or parcel of land in the Improvement Area, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale; ploviidgd, that irrespective of the foregoing if the Community Facilities District determines on the basis of such review that property owned by any single property owner in the Improvement Area is delinquent by four missed payments with respect to the Special Tax due and payable by such property owner by such delinquency date, then the Community Facilities District will institute, prosecute and pursue such foreclosure proceedings in the time and manner provided herein against such property owner; provided further, that any actions taken to enforce delinquent Special Tax liens shall be taken only consistent with Sections 53356.1 through 53356.7,both inclusive, of the Govemment Code of the State of California; and provided further, that the Community Facilities District shall not be obligated to enforce the lien of any delinquent installment of the Special Tax for any Fiscal Year in which the Community Facilities District shall have received one hundred percent (I00%) of the amount of such installment from the County of Sacramento pursuant to the so-called "Teeter Plan."
Section 5.1 1. Further Assurances. The Community Facilities District will adopt, deliver, execute, make and file any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming unto the Holders of the rights and benefits provided herein, including without limitation the filing of all financing statements, agreements, instruments or other documents in the forms and in the locations necessary to perfect and protect, and to continue the perfection of, the pledge of the Special Taxes provided herein to the fullest extent 4t4l-6633-1'.|04.3
34

07/12/2022 Item No.11.
possible under applicable law of the State of California. Further, the Community Facilities District covenants to not approve any amendments, changes or modifications relating to development of the property within the Improvement Area that would reduce the amount of the Maximum Facilities Special Tax less Priority Administrative Expenses to equal less than one hundred ten percent (lI0%) of the sum of the Annual Debt Service on the Bonds in any year until the maturity date for the Bonds.

ARTICLE VI

THE TRUSTEE
Section 6.01. The Trustee. U.S. Bank Trust Company, National Association at its Corporate Trust Office in San Francisco, California, is hereby appointed Trustee for the purpose of receiving all money which the Community Facilities District is required to transfer to it hereunder and for applying and using such money as provided herein for the pulpose of paying the interest on and principal of and redemption premiums, if any, on the Bonds. The Community Facilities District agrees that it will at all times maintain a Trustee having a designated corporate trust office in Los Angeles or San Francisco, Califomia.

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

The Community Facilities District may remove the Trustee initially appointed and any successor thereto and may appoint a successor or successors thereto by an instrument in writing; ploviidgd, that any such successor shall be a bank or trust company doing business and having a designated corporate trust office in Los Angeles or San Francisco, California, having a combined capital (exclusive of borrowed capital) and surplus of at least one hundred million dollars ($100,000,000) and subject to supervision or examination by a federal or state banking authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee may at any time resign by giving written notice of such resignation to the Community Facilities District and by giving notice of such resignation by mail pursuant to Section 10.14 to the Holders, and upon receiving such notice of resignation, the Community Facilities District shall promptly appoint a successor Trustee by an instrument in writing having the qualihcations required hereby. Any resignation or removal of a Trustee and appointment of a successor Trustee shall become effective only upon the acceptance of appointment by the successor Trustee. If within thirty (30) days after notice of the removal or resignation of the Trustee no successor Trustee shall have been appointed by the Community Facilities District and shall have accepted such appointment, the removed or resigning Trustee may petition, at the expense of the Community Facilities District, any court of competent jurisdiction for the 4t4t-6633-1704.3
35

07/12/2022 Item No.11.
appointment of a successor Trustee, which court may thereupon, after such notice, if any, as it may deem proper and prescribe and as may be required by law, appoint a successor Trustee having the qualifications required hereby.

Any company into which the Trustee shall be merged or converted or with which it may be consolidated or any company resulting from any merger, conversation or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, so long as such company shall meet the requirements set forth in this Section, shall be the successor to the Trustee and shall be vested with all of the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.

Section 6.02. Liabilitv of the Trustee. The recitals of facts, agreements and covenants contained herein and in the Bonds shall be taken as statements, agreements and covenants of the Community Facilities District, and the Trustee shall not assume any responsibility for the correctness of the same and does not make any representation as to the sufficiency or validity hereof or of the Bonds or of the Special Tax, or as to the financial or technical feasibility of the acquisition and construction of any of the Facilities, and shall not incur any responsibility in respect thereof other than in connection with the rights and obligations expressly assigned to or imposed upon it herein or in the Bonds, and shall not be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct. The Trustee shall not be liable for any error of judgment made in good faith, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, and no provision hereof shall require the Trustee to expend or risk its own funds or otherwise incur any liability for the performance of its duties hereunder, or in the exercise of any of its rights or powers hereunder.

The Trustee shall not be liable for any enor of judgment made in good faith by a Responsible Officer unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, and the Trustee shall be entitled to advice of counsel of its selection concerning all matters of trust and its duties hereunder and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. The Trustee may execute any of the trusts or powers set forth herein and perform the duties required of it hereunder by or through attorneys, agents or attorneys, and the Trustee shall not be liable for the negligence or misconduct of any agent, attorney or certified public accountant selected by it with due care.

The Trustee shall, at all times, perform such duties and only such duties as are specifically set forth herein, and no implied duties or obligations shall be read herein against the Trustee. At no time shall the Trustee be a fiduciary or have fiduciary duties hereunder.

The Trustee shall not be bound to recognize any person as the Holder of a Bond unless and until such Bond is submitted for inspection, if required, and such Holder's title thereto is certihed to the Trustee in a written instrument, upon which the Trustee shall be entitled to conclusively rely.
4r4t-6633-t704.3
36

07/12/2022 Item No.11.

The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority in aggregate principal amount of the Bonds exercising any trust or power conferred upon the Trustee hereunder.

The Trustee has no obligation to the Holders and shall incur no liability for the payment of the interest on, principal of or redemption premiums, if any, with respect to the Bonds from its own funds. The duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall perform such duties and obligations as are specifically set forth in this Indenture and shall not be liable except for its negligence or willful misconduct, and no implied covenants or obligations shall be read into this Indenture against the Trustee.

The Trustee shall not be deemed to have knowledge of any Event of Default hereunder unless and until a Responsible Officer at the Trustee's Corporate Trust Office responsible for the administration of the Trustee's duties and obligations hereunder shall have actual knowledge thereof or the Trustee shall have received written notice thereof at its Corporate Trust Office. The Trustee shall not be bound to ascertain or to inquire as to the performance or observance of any of the agreements, conditions, covenants or terms herein or of any of the documents executed in connection with the Bonds, or as to the existence of an Event of Default hereunder.

No provision hereof shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability inthe performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers. The Trustee shall be entitled to interest on all amounts advanced to it hereunder at its prime rate plus two percent (2%),but not greater than twelve percent (12%) per anmrm.

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

All rights, privileges, immunities, indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, employees, officers and agents thereof.

In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

Section 6.03. Compensation and Indemnification of the Trustee. The Community Facilities District agrees to pay to the Trustee from time to time, and the Trustee shall receive compensation for all services rendered by it in the exercise and performance of any of the duties and obligations of the Trustee hereunder, as mutually and previously agreed upon in writing, and the Community Facilities District will pay or reimburse the Trustee upon its request for all expenses, disbursements and advances incurred or made by the Trustee and its affiliates, directors, employees or agents in accordance with any of the provisions hereof (including the reasonable 4t4t-6633-1704.3
37

07/12/2022 Item No.11.
compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or willful misconduct. The Community Facilities District, to the extent permitted by law, agrees to indemniff, defend and hold harmless the Trustee against any and all loss, damages, claims, liability o. e*pettr. incurred without negligence or willful misconduct on the part of the Trustee arising out oi or in connection with (i) the exercise or perforrnance of any of its duties or obligations hereunder, or (ii) any untrue statement or alleged untrue statement of any material fact or oirission or alleged omission to state a material fact necessary to make the statements made, in the tight of the circumstances under which they were made, not misleading in any official statement or other offering circular utilized in connection with the sale of any of the Bonds, including costs and expenses (including attorneys' fees and expenses) of defending itself against any claim or liability in connection with the exercise or performance of any of its duties and obligations hereunder. The rights of the Trustee and the obligations of the Community Facilities District under this Section shall survive the discharge of the Bonds and the resignation or removal of the Trustee.

Section 6.04. Notice to the Trustee. The Trustee shall be protected in acting upon any Bond, certificate, consent, notice, opinion, report, request, resolution or other document or paper believed by it to be genuine and to have been signed or presented by the proper party or purtl"r. The Trustee may consult with counsel of its selection, including, without limitation, counsel to the Community Facilities District, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection with respect to any action taken or suffered hereunder in good faith and in accordance therewith.

Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be established or proved prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively established or proved by a Certificate of the Community Facilities District or an Accountant's Report, which shall be fuIl warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, and on which the Trustee may conclusively rely, but in its reasonable judgment the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable.

ARTICLE VII

AMENDMENT OFORS TO THE INDENTURE
Section 7.01. Procedure for Amendment of or Supplement to the Indenture. (a) Amendment or Supplement With Consent of Holders. The Indenture and the rights and obligations of the Community Facilities District and of the Holders may be amended or supplemented at arry time by the execution and delivery of a Supplemental Indenture by the Community Facilities District and the Trustee, which Supplemental Indenture shall become binding when the written consents of the Holders of sixty percent (60%) or more in aggregate principal amount of the Bonds then Outstanding, "*"i.trirr"
of Bonds disqualified as provided in Section 7.02, shallhave been filed with the 4t4t-6633-t704.3
38

07/12/2022 Item No.11.

Trustee; ploviidgd, that no such amendment or supplement shall (1) extend the maturity of or reduce the interest rate on or otherwise alter or impair the obligation of the Community Facilities District to pay the interest on or principal of or Minimum Sinking Fund Account Payment for or redemption premium, if any, on any Bond at the time and place and at the rate and in the curency and from the funds provided herein without the express written consent of the Holder of such Bond, or (2) permit the issuance by the Community Facilities District of any obligations payable from the proceeds of the Special Tax other than the Bonds as provided herein, or j eopardi ze the ability of the Community Facilities District to levy and collect the Special Tay,, or (3) reduce the percentage of Bonds required for the written consent to any such amendment or supplement, or (a) modiff any rights or obligations of the Trustee without its prior written assent thereto. (b) Consent of The
Indenture and the rights and obligations of the Community Facilities District and of the Holders may also be amended or supplemented at any time by the execution and delivery of a Supplemental Indenture by the Community Facilities District and the Trustee, which Supplemental Indenture shall become binding upon execution without the prior written consent of any Holders, but only to the extent permitted by law and after receiving an Opinion of Counsel, stating that the Supplemental Indenture is the valid and binding obligation of the Community Facilities District, and only for any one or more of the following purposes:
(D To add to the agreements and covenants required herein to be performed by the Community Facilities District other agreements and covenants thereafter to be performed by the Community Facilities District which shall not (in the opinion of the Community Facilities District) adversely affect the interests of the Holders, or to surrender any right or power reserved herein to or conferred herein upon the Community Facilities District which shall not (in the opinion of the Community Facilities District) adversely affect the interests of the Holders;
(iD To make such provisions for the purpose of curing any ambiguity or of curing, correcting or supplementing any defective provision contained herein or in regard to questions arising hereunder which the Community Facilities District may deem desirable or necessary and not inconsistent herewith and which shall not (in the opinion of the Community Facilities District) adversely affect the interests of the Holders; (iiD To authorize the issuance of Additional Bonds and to provide the conditions and terms under which the Additional Bonds may be issued;
(iv) To authorize the issuance under and subject to the Law of any refunding bonds for any of the Bonds and to provide the conditions and terms under which such refunding bonds may be issued;
4141-6633-1704.3
39

07/12/2022 Item No.11.
(v) To make such additions, deletions or modifications as may be necessary or appropriate to ensufe compliance with section la8(f) of the Code relating to tire iequired rebate of excess investment earnings to the United states of America, or otherwise as may be necessary to ensure the exclusion from gross income for purposes of federal income taxation of the interest on the Bonds or the eiemption of such interest from State of California personal income taxes; or
(vi) To make such additions, deletions or modifications as may be necessary or applopriate to maintain any then current rating on the Bonds.

Section 7.02. Disqualified Bonds. Bonds owned or held for the account of the Community Facilities District shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of outstanding Bonds provided for in this Article or in Article vIII, and shall not be entitred to consent to or tafe *y oih.t action provided for in this Article or in Article VIII.

Section 7.03 of
Supplement. After the effective date of anY action taken as hereinabove provided, the CommunitY Facilities District may determine that the Bonds maY bear a notation by endorsement in form approved by it as to such action, and in that case upon demand of the Holder of anY Bond Outstanding on such effective date and presentation of his or her Bond for such Pulpose at the Corporate Trust Office of the Trustee a suitable notation as to such action shall be made on such Bond. If the CommunitY Facilities District shall so determine, new Bonds so modified as, in the opinion of the CommunitY Facilities District, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Holder of any Bond Outstanding on such effective date such new Bonds shall, uPon surrender of such Outstanding Bonds, be exchanged at the CorPorate Trust
then Outstanding.

Office of the Trustee, without cost to each Holder, for Bonds Section 7.04.
this Article shall not Prevent
particular Bonds held bY him
The provisions of
any Holder from accePting any amendment or suPPlement as to anY or her; ppvtdgd, that due notation thereof is made on such Bonds

ARTICLE VIII
S o
Section g.01. Events of Default and Remedies of Holders. If one or more of the following events (herein "Events of Default") shall happen, that is to say:
(a) if default shall be made by the Community Facilities District in the due and punctual payment of any interest o1 oi principal of or Minimum sinking Fund Account p"V-."if"r any of thl Bonds when and as the same shall become due and payable;
414t-6633-1704.3
40

07/12/2022 Item No.11.
(b) if default shall be made by the Community Facilities District in the observance or performance of any of the other agreements or covenants contained herein required to be observed or performed by it, and such default shall have continued for a period of thirty (30) days after the Community Facilities District shall have been given notice in writing of such default by the Trustee;
(c) if default shall be made by the Community Facilities District in the due and punctual payment of any indebtedness on a parity with or senior to the Bonds; or (d) if the Community Facilities District shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the Community Facilities District seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or ifunder the provisions ofany other law for the reliefor aid ofdebtors any court of competent jurisdiction shall assume custody or control of the Community Facilities District or of the whole or any substantial part of its property; then in each and every such case during the continuance of such Event of Default any Holder shall have the right for the equal benefit and protection of all Holders similarly situated:
(a) by mandamus or other suit or proceeding at law or in equity to enforce his rights against the City Council or the Community Facilities District or any of the officers or employees of the Community Facilities District, and to compel the City Council or the Community Facilities District or any such offtcers or employees to perform and carry out their duties under the Law and the agreements and covenants with the Holders contained herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Holders; or
(c) by suit in equity upon the nonpayment of the Bonds to require the City Council or the Community Facilities District or its officers and employees to account as the trustee of an exPress trust.

Section 8.02. Non-Waiver. Nothing in this Article or in any other provision herein or in the Bonds shall affect or impair the obligation of the Community Facilities District, which is absolute and unconditional, to pay the interest on and principal of and redemption premiums, if any, on the Bonds to the respective Holders of the Bonds at the respective dates of maturity or upon redemption prior to maturity as provided herein from the proceeds of the Special Tax and the other funds as provided herein, or shall affect or impair the right of such Holders, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein and in the Bonds.

A waiver of any Event of Default or breach of duty or contract by any Holder shall not affect any subsequent Event of Default or breach of duty or contract and shall not impair any rights or remedies on any such subsequent Event of Default or breach of duty or contract. No 4r4r-6633-t7o4.t
o'

07/12/2022 Item No.11.
delay or omission by any Holder to exercise any right or remedy accruing upon any Event of Default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such Event of Default or breach of duty or contract or an acquiescence therein, and every right and remedy conferred upon the Holders by the Law or hereby may be enforced and exercised from time to time and as often as shall be deemed expedient by the Holders.

If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to any Holder, the Community Facilities District and such Holder shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.

Section 8.03. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Holders is intended to be exclusive of any other remedy, and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law.

ARTICLE IX

DEFEASANCE
Section 9.01. Discharee of the Bonds.
(a) If the Community Facilities District shall pay or cause to be paid or there shall otherwise be paid to the Holders of all Outstanding Bonds the interest thereon and the principal thereof and the redemption premiums, if any, thereon at the times and in the manner stipulated therein and herein, then all agreements, covenants and other obligations of the Community Facilities District to the Holders of such Bonds hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Community Facilities District all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the Community Facilities District for deposit in the Community Facilities Fund all money or securities held by it pursuant hereto which are not required for the payment of the interest on and principal of and redemption premiums, if any, on such Bonds.
(b) Any Outstanding Bonds shall on the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this Section if there shall have been irrevocably deposited with the Trustee money which is sufficient to pay the interest due on such Bonds on such date and the principal and redemption premiums, if any, due on such Bonds on such date. (c) Any Outstanding Bonds shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning and with the effect expressed in subsection (a) of this Section if (l) in case any of such Bonds are to be redeemed on any date prior to their maturity date, the Community Facilities District shall have agreed to mail a notice of redemption pursuant to Section 10.14 to the respective 4r4r-6633-1704.3
42

07/12/2022 Item No.11.

Holders of all such Outstanding Bonds and to the securities depositories or securities information services selected by it pursuant to Section 3.03, (2) there shall have been filed with the Community Facilities District and the Trustee an Opinion of Counsel to the effect that the payment of such Bonds has been provided for in the manner set forth herein and that all obligations of the Community Facilities District with respect to such Bonds have been discharged and satisfied and there shall have been deposited with an escrow agent meeting the requirements of a successor trustee set forth in Section 6.01 or the Trustee either (i) money in an amount which shall be sufficient to pay when due the interest on and principal of and redemption premiums, if any, due and to become due on such Bonds on and prior to the date scheduled for redemption or maturity date thereof, as the case may be andlor (ii) Federal Securities which are not subject to redemption except by the holder thereof prior to maturity (including any Federal Securities issued or held in book-entry form on the books of the Department of the Treasury of the United States of America), the interest on and principal of which when paid will provide money which, together with the money, if any, deposited with such escrow agent meeting the requirements of a successor trustee set forth in Section 6.01 or the Trustee at the same time, shall be sufficient to pay when due the interest on and principal of and redemption premiums, if any, due and to become dug on such Bonds on and prior to the date scheduled for redemption or maturity date thereof, as the case may be, as evidenced by an Accountant's Report on file with the Community Facilities District and the Trustee, and (3) in the event such Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, the Community Facilities District shall have agreed to mail pursuant to Section 10.14 anotice to the Holders of such Bonds and to the securities depositories and securities information services selected by it pursuant to Section 3.03 that the deposit required by clause (2) above has been made with such escrow agent meeting the requirements of a successor trustee set forth in Section 6.01 or the Trustee and that such Bonds are deemed to have been paid in accordance with this Section and stating the maturity dates or redemption dates, as the case may be, upon which money will be available for the payment of the principal of and redemption premiums, if any, on such Bonds'
Section 9.02. Unclaimed Money. Anything contained herein to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Bonds or any interest thereon which remains unclaimed for two (2) years after the date when such Bonds or interest thereon have become due and payable, either at their stated maturity dates or by call for redemption prior to maturity, if such money was held by the Trustee on such date, or for two (2) years after the date of deposit of such money if deposited with the Trustee after the date when such Bonds or interest thereon became due and payable, shall be repaid by the Trustee to the Community Facilities District as its absolute property free from trust for deposit in the Community Facilities Fund and for use in accordance with the Law, and the Trustee shall thereupon be released and discharged with respect thereto and the Holders shall look only to the Community Facilities District for the payment of such Bonds and interest thereon; plQvldecl, that before the Trustee shall be required to make any such repayment the Community Facilities District shall mail pursuant to Section 10.14 a notice to the Holders of all Outstanding Bonds and to such securities depositories and securities information services selected by it pursuant to Section 3.03 that such money remains unclaimed and that after a date named in such notice, which date shall not be less than thirty (30) days after the date of the mailing of such notice, the balance of such 4t4r-6633-1704.3
43

07/12/2022 Item No.11.
money then unclaimed will be returned to the Community Facilities District for deposit in the Community Facilities Fund.

ARTICLE X

MISCELLANEOUS
Section 10.01 Facilities District Limited to
the Special Tax and Certain Other Funds. Notwithstanding anything contained herein, the Community Facilities District shall not be required to advance any money derived from any source of income other than the proceeds of the Special Tax net of Priority Administrative Expenses and the other funds provided herein for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds.

The Bonds are special tax obligations of the Community Facilities District and the interest on and principal of and redemption premiums, if any, on the Bonds are payable solely from the proceeds of the Special Tax (including any prepayments thereof and proceeds from the sale of property collected pursuant to the foreclosure provisions of the Indenture for the delinquency of the Special Tax), net of Priority Administrative Expenses, and amounts in certain funds and accounts established in the Indenture, and the Community Facilities District is not obligated to pay the Bonds except from such funds. The General Fund of the City and the funds of the Community Facilities District are not liable, and neither the full faith and credit of the Community Facilities District nor the City are pledged for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds, and no tax or assessment other than the Special Tax shall ever be levied or collected to pay the interest on or principal of or redemption premiums, if any, on the Bonds. The Bonds are not secured by a legal or equitable pledge of or charge, lien or encumbrance upon any property of the Community Facilities District or any of its income or receipts except the proceeds of the Special Tax (including any prepayments thereof and proceeds from the sale ofproperty collected pursuant to the foreclosure provisions ofthe Indenture for the delinquency of the Special Tax), net of Priority Administrative Expenses, and amounts in certain funds and accounts established in the Indenture, and neither the payment of the interest on or principal of or redemption premiums, if any, on the Bonds is a general debt, liability or obligation of the Community Facilities District. The Bonds do not constitute an indebtedness of the Community Facilities District within the meaning of any constitutional or statutory debt limitation or restriction, and neither the City Council nor the Community Facilities District nor any officer or employee thereof shall be liable for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds otherwise than from the proceeds of the Special Tax, net of Priority Administrative Expenses, and such other funds as provided in the Indenture.

Section 10.02. Benefits of the Indenture Limited to Certain Parties. Nothing contained herein, express or implied, is intended to give to any entity or person other than the City Council, the Community Facilities District, the Trustee, and the Holders any right, remedy or claim under or by reason hereof, and any agreement or covenant required herein to be performed by or on behalf of the City Council or the Community Facilities District or any officer or employee thereof shall be for the sole and exclusive benefit of the Trustee and the Holders. 4t4t-6633-1704.3
44

07/12/2022 Item No.11.

Section 10.03. Successor Is Deemed Included in All References to Predecessor.

Whenever either the City Council or the Community Facilities District or any offtcer or employee thereof or of the City is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions with respect to the administration, control and management of the Community Facilities District that are presently vested in the City Council or the Community Facilities District or such officer or employee, and all agreements and covenants required herein to be performed by or on behalf of the City Council or the Community Facilities District or any officer or employee thereof shall bind and inure to the benefit of the respective successors thereofwhether so expressed or not.

Section 10.04. Execution of Documents by Holders. Any declaration, request or other instrument which is permitted or required herein to be executed by Holders may be in one or more instruments of similar tenor, and may be executed by Holders in person or by their attomeys duly authorized,inwriting. The fact and date of the execution by any Holder or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he or she purports to act that the person signing such declaration, request or other instrument or writing acknowledged to him or her the execution thereof, or by an affidavit of a witness to such execution duly sworn to before such notary public or other officer. The ownership of Bonds and the amount, maturity, number and date of holding the same shall be provided by the registration books required to be kept by the Trustee pursuant to Section 2.09.

Any declaration, request or other instrument or writing of the Holder of any Bond shall bind all future Holders of such Bond with respect to anything done or suffered to be done by the Community Facilities District in good faith and in accordance therewith.

Section 10.05. ln All
money held by the Trustee in any accounts and funds established herein shall be deposited in time or demand deposits in any state or nationally chartered bank or trust company, including the Trustee, or any state or federal savings and loan association, and shall be secured at all times by such obligations as are required by law and to the fullest extent required by law, except such money that is at the time invested in accordance with this Section. Any money in the Acquisition and Construction Fund and in the Special Tax Fund and in the Redemption Account shall be invested by the Trustee pursuant to a Written Request of the Community Facilities District received by the Trustee at least three (3) days before making any such investment in those Permitted Investments specified in such Written Request of the Community Facilities District that mature not later than the date on which it is estimated that such money will be required to be paid out hereunder, and any money in a Bond Reserve Account shall be invested by the Trustee pursuant to a Written Request of the Community Facilities District received by the Trustee at least three (3) days before making any such investment in those Permitted Investments specified in such Written Request of the Community Facilities District that mature not more than five (5) years from the date of purchase by the Trustee, or the final maturity date of any Outstanding Bonds, whichever is earlier; and the Trustee may conclusively rely and determine that any investment specified in any such Written Request of the Community Facilities District is a Permitted Investment or a Federal Security, as the case may be, hereunder; gqvldgd, that in the absence of written instructions from the Community Facilities District regarding such investments, such money shall be held 4141 -6633-t704.3
45

07/12/2022 Item No.11.
uninvested. The Trustee (or any affiliate thereof) may act as principal or agent in the making of any investment hereunder and may impose its customary charges therefor, and shall not be responsible for any losses, taxes, fees or other charge suffered in connection with any investment, reinvestment or liquidation of investments made in accordance herewith. Notwithstanding anything in the Indenture to the contrary, for purposes of any time limitation on the maturity of an investment of moneys in the funds and accounts held thereunder, such investment shall be deemed to satisff such time limitation if, by its terms and within such time limitation, the Community Facilities District or the Trustee has the right, for any purpose permitted or required under the Indenture, to demand the repurchase, redemption, withdrawal or termination of such investment and to receive at least the outstanding par amount thereof plus accrued interest, without penalty.

All interest received on any such money so deposited or invested which exceeds the requirements of the account or fund from which such money was deposited or invested shall (as specified in a Written Request of the Community Facilities District filed with the Trustee) (subject to the requirements of Section 5.03) be deposited in the Redemption Account, and all losses on any such money so deposited or invested shall be borne by the account or fund from which the deposit or investment was made.

Section 10.06. Waiver of Personal LiabiliW. No member of the City Council or officer or employee of the City, acting for and on behalf of the Community Facilities District, shall be individually or personally liable for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds, but nothing herein contained shall relieve any member of the City Council or officer or employee of the City from the performance of any offrcial duty provided hereby or by the Law or by atty other applicable provisions of law.

Section 10.07. Acquisition of Bonds by Communitv Facilities District. All Bonds acquired by the Community Facilities District, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation and destruction by it, and the Trustee shall send the Community Facilities District a certificate of such destruction Section 10.08. Content of Certificates and Reports. Every certificate or report with respect to compliance with an agreement, condition, covenant or term provided herein shall include (a) a statement that the person or persons making or giving such certificate or report have read such agreement, condition, covenant or term and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the opinion contained in such certificate or report is based; (c) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such agreement, condition, covenant or term has been complied with; and (d) a statement as to whether, in the opinion of the signers, such agreement, condition, covenant or term has been complied with.

Any such certificate made or given by an officer of the City, for and on behalf of the Community Facilities District, may be based, insofar as it relates to legal matters, upon a representation made in an Opinion of Counsel unless such officer knows that the representation with respect to the matters upon which his certificate may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was effoneous. Any such Opinion of Counsel may be based, insofar as it relates to factual matters information with respect 414t-6633-1704.3
46

07/12/2022 Item No.11.
to which is in the possession of the Community Facilities District, upon a representation by an officer or officers of the City unless the counsel giving such Opinion of Counsel knows that the representation with respect to the matters upon which his representation may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erToneous.

Section 10.09. Maintenance of Accounts and Funds. Any account or fund required herein to be established and maintained by the Trustee may be maintained by the Trustee in its accounting records in its customary manner either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any financial reports or statements with respect thereto, be treated either as an account or as a fund; but all such accounting records with respect to all such accounts and funds shall at all times be maintained by the Trustee in accordance with trust industry standards.

Section 10.10. Article and Section Headings. Gender and References. The headings or titles of the several articles and sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the construction, effect or meaning hereof, and words of any gender shall be deemed and construed to include all genders.

All references herein to o'Articles," "sections" and other subdivisions are to the corresponding articles, sections or subdivisions hereof; and the words "hereby," "herein," "hereof," "hereto," "herewith" and "hereunder" and other words of similar import refer to the Indenture as a whole and not to any particular article, section or subdivision hereof.

Section 10.11 Partial Invaliditv. If any one or more of the agreements, conditions, covenants or terms or portions thereof required hereby to be observed or performed by the Community Facilities District or the Trustee should be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or terms or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements, conditions, covenants or terms or portions thereof and shall in no way affect the validity hereof or of the Bonds; and the Holders shall retain all the rights and benefits accorded to them under the Law or any other applicable provisions of law. The Community Facilities District hereby declares that it would have executed the Indenture and each and every other article, section, paragraph,subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more of the articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.

Section 10.12. Execution in Counterparts and Electronic Execution. The Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. The exchange of copies of the Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of the Indenture as to the parties hereto and may be used in lieu of the original Indenture and signature pages for all pu{poses. Each party agrees that the electronic signatures, whether digital or encrypted, of the parties included in this Indenture are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and 4141-6633-1704.3
47

07/12/2022 Item No.11.
executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

Section 10.13. Governing Law. The Indenture shall be governed by and construed and interpreted in accordance with the laws of the State of California.

Section 10.14. Notices. All written notices to be given hereunder shall be given by mail or electronic means to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:

If to the Community Facilities District:

City of Folsom
50 Natoma Street
Folsom, California 95630
Attention: Finance Director
Fax: 9 1 6-985-0870
Email : [email protected]
If to the Trustee:

U.S. Bank Trust Company, National Association
One California Street, Suite 1000
San Francisco, CA 94111
Attention: Corporate Trust
Fax: (415) 677-3596
Email : [email protected]
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, @) if given by electronic communication, upon the sender's receipt of an appropriate answer back or other written acknowledgment or confirmation of receipt of the entire notice, approval, demand, report or other communication, (c) if given by first class mail deposited with the United States mail postage prepaid, seventy-two (72) hours after such notice is deposited with the United States mail, (d) if given by ovemight courier, with courier charges prepaid, twenty-four (24) hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section.

The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions ("Instructions") given pursuant to this Indenture and delivered using Electronic Means ("Electronic Means" shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords andior authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the Community Facilities District shall provide to the Trustee an incumbency certificate listing officers with the 414t-6633-t704.3
48

07/12/2022 Item No.11.

Community Facilities District to provide such Instructions and containing specimen signatures of such offrcers, which incumbency certificate shall be amended by the Community Facilities District whenever a person is to be added or deleted from the listing.

If the Community Facilities District elects to give the Trustee Instructions using Electronic Means and the Trustee in its reasonable judgment elects to act upon such Instructions, the Trustee's understanding of such Instructions shall be deemed controlling. The Community Facilities District understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall be entitled to conclusively presume without liability that directions that purport to have been sent by an officer listed on the incumbency certificate provided to the Trustee have been sent by such officer. The Community Facilities District shall be responsible for ensuring that only officers transmit such Instructions to the Trustee and that the Community Facilities District and all officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Community Facilities District. The Trustee shall not be liable for any losses, costs claims, or expenses arising directly or indirectly from the Trustee's reliance upon and compliance with such Instructions notwithstanding the fact that such directions conflict or are inconsistent with a subsequent written instruction. The Community Facilities District agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Community Facilities District; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notifi'the Trustee in writing immediately upon leaming of any compromise or unauthorized use of the security procedures.

Section 10.15. U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verifi, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as itmay request in order for the Trustee to satisff the requirements of the U.S.A. Patriot Act.

Section 10.16. Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, pandemics, epidemics, quarantine restrictions, recognized public emergencies, civil or military disturbances, nuclear or natural catastrophes or acts of God, and intemrptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
4r4r-6633-t704.3
49

07/12/2022 Item No.11.

Section 10.17. Effective Date of the Indenture. The Indenture shall take effect from and after its execution and delivery.
4t4t-6633-t704.3
50

07/12/2022 Item No.11.

IN WITNESS WHEREOF, the City of Folsom Community Facilities District No. 23 (Folsom Ranch) has caused the Indenture to be signed in its name by the Finance Director of the City of Folsom and U.S. Bank Trust Company, National Association, as Trustee, in token of its acceptance of the trusts created hereunder, has caused the Indenture to be signed in its corporate name by its officer thereunto duly authoized, all as of the date and year first above written.

CITY OF FOLSOM COMMLTNITY FACILITIES
DrsTzucT NO. 23 (FOLSOM RANCH)
Finance Director of the City of Folsom
U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION,
as Trustee
Authorized Officer
By
4t4t-6633-t704.3
Signature Page to Indenture

07/12/2022 Item No.11.

No

EXHIBIT A

IFORM OF BONDSI
UNITED STATES OF AMEzuCA

STATE OF CALIFORNIA

COUNTY OF SACRAMENTO

CITY OF FOLSOM
COMMUNITY FACILITIES DISTzuCT NO. 23
(FOLSOM RANCH) IMPROVEMENT AREA NO. 3
SPECIAL TAX BOND, SERIES 2022
$
Interest
% September l, _ August _,2022
REGISTERED OWNER: U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, AS

TRUSTEE FOR THE FOLSOM RANCH FINANCING AUTHORITY
PRINCIPAL AMOI.INT: DOLLARS
The City of Folsom Community Facilities District No. 23 (Folsom Ranch), organized and existing under and pursuant to the laws of the State of California (the "Community Facilities District"), for value received hereby promises to pay (but only out of the proceeds of the Special Tax hereinafter referred to, net of Priority Administrative Expenses (as defined in the Indenture hereinafter referred to), and certain other funds as described herein) to the registered owner set forth above on the maturity date set forth above (subject to any right of prior redemption hereinafter provided for) the principal amount set forth above, together with interest thereon computed on the basis of a360-day year of twelve (12) 30-day calendar months from the interest payment date next preceding the date of registration of this Bond (unless this Bond is registered bna day during the period from the sixteenth (l6th) day of the month next preceding an interest payment date to such interest payment date, both inclusive, in which event it shall bear interest from such interest payment date, or unless this Bond is registered on a day on or before the fifteenth (15tn) day of the month next preceding the first interest payment date, in which event it shall bear interest from its dated date) until the principal hereof shall have been paid, at the interest rate per annum set forth above, payable on [September 1,2022} and semiannually thereafter on September I and March 1 in each year. The interest on and principal of and redemption premium, Rate
Maturity
Date
Bond
Date
4141-6633-t704.3
A-1

07/12/2022 Item No.11.
if any, on this Bond are payable in lawful money of the United States of America at the Corporate Trust Office (as that term is defined in the Indenture hereinafter referred to, and herein the "Corporate Trust Offrce") of U.S. Bank Trust Company, National Association, or any other bank or trust company at its Corporate Trust Office, which may at any time be substituted in its place as provided inthe Indenture hereinafter described, the Trustee of the Community Facilities District for the Bonds (the "Trustee"). The interest on this Bond due on or before the maturity or prior redemption hereof shall be payable only to the person whose rulme appears in the registration books required to be kept by the Trustee as the registered owner hereof at the close of business as of the fifteenth (15th) day of the month next preceding each interest payment date, such interest to be paid by check mailed by first class mail on each such interest payment date to such registered owner at his or her address as it appears on such books, except that in the case of a registered owner of one million dollars ($1,000,000) or more in principal amount of Bonds then Outstanding, payment shall be made at such owner's option by wire transfer on each such interest payment date of immediately available funds to an account in a bank or trust company or savings bank that is a member of the Federal Reserve System and that is located in the continental United States of America according to written instructions provided by such owner to the Trustee at least fifteen (15) days before such interest payment date. The principal of and redemption premium, if any, on this Bond shall be payable only to the person whose name appears in such registration books as the registered owner hereof, such principal and redemption premium, if any, to be paid only on the surrender of this Bond at the Corporate Trust Office of the Trustee at maturity or on redemption prior to maturity.

Notwithstanding the foregoing, the Trustee may agree with the Holder of this Bond that such Holder may, in lieu of surrendering the same for a new Bond, endorse on this Bond a record of partial payment of the principal of this Bond as follows:

PAYMENTS ON ACCOUNT OF PRINCIPAL
Payment Date
Principal
Amount Paid
Balance of Principal
Amount Unpaid
Signature
of Holder
This Bond is one of a duly authorized issue of Bonds in the aggregate principal amount of dollars ($[PAR AMOUNT]) issued by the Community Facilities District located in the City of Folsom (the "City"), designated the *City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Bonds, Series 2022'(the "Bonds"), which Bonds are issued under and pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (being Sections 533 1 1 et seq. of the Government Code of the State of California) , and all laws amendatory thereof or supplemental thereto (the "Law") and 4141-6633-1704.3
A-2

07/12/2022 Item No.11.
under and pursuant to the provisions of an Indenture dated as of August 1,2022 (the "Indenture") between the Community Facilities District and U.S. Bank Trust Company, National Association, as Trustee, all of like tenor and date (except for such variations, if any, as may be required to designate varying numbers, maturities, interest rates or redemption provisions), and all capitalized terms used herein not otherwise defined shall have the meanings contained in the Indenture. All the Bonds are equally and ratably secured in accordance with the terms and conditions of the Indenture (copies of which are on file atthe office of the City Clerk of the City and atthe Corporate Trust Office of the Trustee), and reference is hereby made to the Law and to the Indenture and any and all amendments thereof and supplements thereto for a description of the terms on which the Bonds are issued and for the rights of the registered owners of the Bonds; and all the terms of the Law and the Indenture are hereby incorporated herein and constitute a contract between the Community Facilities District and the registered owner from time to time of this Bond, to all the provisions of which the registered owner of this Bond, by his or her acceptance hereof, agrees and consents; and each taker and subsequent registered owner hereof shall have recourse to all the provisions of the Law and the Indenture and shall be bound by all the terms and conditions thereof.

The Bonds are issued to provide funds to pay costs of the acquisition and construction of the Facilities. The Bonds are special tax obligations of the Community Facilities District and the interest on and principal of and redemption premiums, if any, on the Bonds are payable solely from the proceeds of the Special Tax, net of Priority Administrative Expenses, and certain other funds, as provided in the Indenture, and the Community Facilities District is not obligated to pay them except from the proceeds of the Special Tax, net of Priority Administrative Expenses, and such other funds. The General Fund of the Clty and the funds of the Community Facilities District are not liabte and neither the full faith and credit of the Community Facilities District nor the City are pledged for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds, and no tax or assessment other than the Special Tax shall ever be levied or collected to pay the interest on or principal of or redemption premiums, if any, on the Bonds. The Bonds are not secured by a legal or equitable pledge of or charge, lien or encumbrance upon any property of the Community Facilities District or any of its income or receipts except the proceeds of the Special Tax, net of Priority Administrative Expenses, and such other funds, and neither the payment of the interest on or principal of or redemption premiums, if any, on the Bonds is a general debt, liability or obligation of the Community Facilities District.

The Bonds maturing on September 1, 20[ ], are subject to mandatory redemption by the Community Facilities District prior to their maturity date in part on September I in each of the years 201--l through 201 l, both years inclusive; and the Bonds maturing on September 1, 201 l, are subject to mandatory redemption by the Community Facilities District prior to their maturity date in part on September 1 in each of the years 20f I through 201 l, both years inclusive, in each case solely from Minimum Sinking Fund Account Payments deposited in the Sinking Fund Subaccount, upon mailed notice as hereinafter provided, at a redemption price of one hundred percent (100%) of the principal amount thereof called for redemption together with accrued interest thereon to the date of redemption'
The Bonds are subject to optional redemption by the Community Facilities District prior to their respective maturity dates as a whole or in part on any date on or after September 1, 1Ol l, from funds derived by the Community Facilities District from any source other than such Minimum Sinking Fund Account Payments deposited in the Sinking Fund Subaccount or such 4141-6633-1704.3
A-3

07/12/2022 Item No.11.
prepayments of the Special Tax, upon mailed notice as hereinafter provided, at the following redemption prices (computed upon the principal amount of the Bonds or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemption, to wit:
103% if redeemed on any date on or after September l, 201 1 through August 31,201 l;
102% if redeemed on any date from September l,201 I through August 31,201 l;
l0l% if redeemed on any date from September 1,201 I through August 31,201 l; and
100% if redeemed on September 1, 20I__l and any date thereafter.

The Bonds are subject to extraordinary redemption by the Community Facilities District prior to their respective maturity dates, as a whole or in part on any interest payment date on and after fSeptember 1,2022f, from funds derived by the Community Facilities District from prepayments of the Special Tax, upon mailed notice as hereinafter provided, at the following redemption prices (computed upon the principal amount of the Bonds or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemption, to wit:
103% if redeemed on an interest payment date on or after September 1,201 I through March l,20ll;
102% if redeemed on an interest payment date on September 1, 20Ll or March l,20ll;
rcl% if redeemed on an interest payment date on September l, 20L) or March l,20ll; and
100% if redeemed on September 1, 20L_l or any interest payment date thereafter.

If less than all the Outstanding Bonds are to be redeemed as a result of prepayments of the Special Tax at any one time, the Bonds shall be redeemed pro rata by maturity. If less than all the Outstanding Bonds are to be redeemed at the option of the Community Facilities District at any one time, the Bonds of the latest maturity date or dates shall be redeemed prior to or simultaneously with the redemption of the Bonds maturing prior thereto, and if less than all the Outstanding Bonds of any one maturity date are to be redeemed at any one time, the Trustee shall select the Bonds or the portions thereof of such maturity date to be redeemed in integral multiples of five thousand dollars ($5,000) in a manner that it deems appropriate and fair.

Notice of redemption of this Bond or any portion hereof shall be mailed by the Trustee to the registered owner hereof and to those securities depositories and securities information services selected by the Community Facilities District in accordance with the Indenture, but neither failure to receive any such mailed notice nor any immaterial defect contained therein shall affect the sufficiency or validity of such proceedings for redemption. Any notice of 4t4r-6633-1704.3
A-4

07/12/2022 Item No.11.
optional redemption may be rescinded by written notice given by the Community Facilities District to the Trustee no later than three (3) Business Days prior to the date specified for redemption. The Trustee shall give notice of rescission of the notice of optional redemption or non-satisfaction of any conditions specified in the notice of optional redemption as soon as practicable to the same parties and in the same manner as the notice of redemption was given pursuant to the Indenture.

If notice of redemption has been duly given and not rescinded as aforesaid and money sufficient for the payment of the principal of and redemption premiums, if any, on, together with interest to the redemption date on, this Bond or portion thereof so called for redemption has been irrevocably deposited with the Trustee, then this Bond or the portion thereof to be redeemed shall, on the redemption date designated in such notice, become due and payable at the above- described redemption price; and from and after the date so designated interest on this Bond or the portion thereof to be redeemed shall cease to accrue and the registered owner of this Bond shall have no rights in respect hereof except to receive payment of the redemption price of this Bond or the portion thereof to be redeemed, and upon srilrender of this Bond if redeemed in part only, the Community Facilities District shall execute and the Trustee shall authenticate and deliver to the registered owner hereof at the expense of the Community Facilities District a new Bond or Bonds equal in aggregate principal amount to the unredeemed portion of this Bond so surrendered.

The Community Facilities District has covenanted that, so long as any Bonds are Outstanding, it will annually levy the Special Tax against all Taxable Property in the Improvement Area and make provision for the collection of the Special Tax in amounts which will be sufficient, together with the money then on deposit in the Redemption Account, after making reasonable allowances for contingencies and errors in the estimates, to yield proceeds equal to the amounts required for compliance with the agreements, conditions, covenants and terms contained in the Indenture, and which in any event will be sufficient to pay the interest on and principal of and Minimum Sinking Fund Account Payments for and redemption premiums, if any, on the Bonds as they become due and payable and to replenish each Bond Reserve Account established under the Indenture and to pay all current Expenses as they become due and payable in accordance with the provisions and terms of the Indenture.

The Bonds are issuable in the form of fully registered bonds. The registered owner of any Bond or Bonds may swrender the same (together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his or her duly authorized attorney) in exchange for an equal aggregate principal amount of Bonds of the same series and maturity date in the manner, subject to the conditions and upon payment of the charges provided in the Indenture.

The registration of this Bond is transferable on the registration books kept by the Trustee by the registered owner hereof or by his or her duly authorized altorney upon surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his or her duly authorized attorney, and thereupon a new Bond or Bonds of the same series and maturity date in the same aggregate principal amount will be issued to the transferee in exchange therefor in the manner, subject to the conditions and terms and upon payment of the charges provided in the Indenture. The Community Facilities District and the Trustee shall be entitled to conclusively treat the person in whose name this Bond is registered as 4t4l-6633-1704.3
A-5

07/12/2022 Item No.11.
the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal hereof and redemption premium, if any, hereon and for all other purposes.

The rights and obligations ofthe Community Facilities District and of the registered owners of the Bonds may be amended at arry time in the manner, to the extent and upon the terms provided in the Indenture, and in certain circumstances without the consent of such registered owners, but no such amendment shall (1) extend the maturity of this Bond or reduce the interest rate hereon or otherwise alter or impair the obligation of the Community Facilities District to pay the interest hereon or principal hereof or Minimum Sinking Fund Account Payment herefor or redemption premium, if any, hereon at the time and place and at the rate and in the currency and from the funds provided herein without the express written consent of the registered owner of this Bond, or (2) permit the issuance by the Community Facilities District of any obligations payable from the proceeds of the Special Tax other than as provided in the Indenture, or jeopardize the ability of the Community Facilities District to levy and collect the Special Tax, or (3) reduce the percentage of Bonds required for the written consent to an amendment of the Indenture, or (4) modifu any rights or obligations of the Trustee without its prior written assent thereto; all as more fully set forth in the Indenture.

The Bonds do not constitute an indebtedness of the Community Facilities District within the meaning of any constitutional or statutory debt limitation or restriction, and neither the City Council of the City nor the Community Facilities District nor any officer or employee thereof or of the City shall be liable for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds otherwise than from the proceeds of the Special Tax, net of Priority Administrative Expenses, and such other funds, as provided in the Indenture.

This Bond shall not be entitled to any benefits under the Indenture or become valid or obligatory for any pu{pose until the certificate of authentication and registration hereon endorsed shall have been manually signed by an authorized signatory of the Trustee.

It is hereby certified that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law and that the amount of this Bond, together with all other obligations of the Community Facilities District, does not exceed any limit prescribed by the laws of the State of California and is not in excess of the principal amount of the Bonds permitted to be issued under the Indenture. 4141-6633-1704.3
A-6

07/12/2022 Item No.11.

IN WITNESS WHEREOF, the City of Folsom Community Facilities District No. 23 (Folsom Ranch) has caused this Bond to be executed in its name and on its behalf by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Clerk of the City, and has caused this Bond to be dated ICLOSING DATEI.

CITY OF FOLSOM COMMUNITY FACILITIES
DrsTRrcT NO. 23 (FOLSOM RANCH)
Mayor of the City of Folsom
Countersigned:

City Clerk of the City of Folsom
By
4t4l-6633-t704.3
A-7

07/12/2022 Item No.11.

IFORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION

TO APPEAR ON BONDSI
This is one of the Bonds described in the within-mentioned Indenture which has been authenticated on [CLOSING DATE].

U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION,
as Trustee
Authorized Signatory
IFORM OF ASSTGNMENT TO AppEAR ON BONDSI
For value received the undersigned do(es) hereby sell, assign and transfer unto the within Bond and do(es) hereby irrevocably constitute and appoint attorney to transfer the same on the bond register of the Trustee, with fulIpower of substitution in the premises.

Dated
SIGNATURE GUARANTEED BY:

Note: Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other'osignature guarantee program" as may be determined in substitution for STAMP, all in accordance withthe Securities Exchange Act of 1934, as amended.

Social Security Number, Taxpayer Identification Number or other identiffing number of Assignee:
4t4t-6633-1704.3
A-8

07/12/2022 Item No.11.

ATTACHMENT 5

07/12/2022 Item No.11.

OH&S DRAFT
7t6n2
NEW ISSUE-BOOK.ENTRY ONLY NOT RATED
In the opinion of Onick, Herrington & Sutclffi LLP, Bond Counsel to the Authority, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amounL accrual or receipt ofinterest on, the Bonds. See "TAX MATTERS." $9,100,000*

FOLSOM RANCH FINANCING AUTHORITY
CITY OF FOLSOM COMMUNITY FACILITIES DISTRICT NO.23
(FOLSOM RANCH) IMPROVEMENT AREA NO. 3

SPECIAL TAX REVENUE BONDS
SERIES 2022
Dated: Date of Delivery Due: September 1, as shown on inside front cover The Folsom Ranch Financing Authority City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Revenue Bonds, Series 2022 (the "Bonds") are being issued by the Folsom Ranch Financing Authority (the "Authority") to provide funds to finance the purchase of limited obligation special tax bonds (the "Local Obligations"), issued by the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Districf'). The purchase price of the Local Obligations will be used to finance the acquisition of certain public facilities, fund a debt service reserve account, fund capitalized interest to September 1,2022, and pay certain costs ofissuance ofthe Local Obligations and Bonds.

The Bonds are being issued by the Authority pursuant to a Trust Agreement (the "Trust Agreement") among the District, the Authority and U.S. Bank Trust Company, National Association, as trustee (the "Trustee") and will be secured by a pledge of the Trust Estate, as defined herein. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS." The Bonds are special, limited obligations of the Authority. The Bonds are payable solely from and secured by the Trust Estate of the Authority pledged under the Trust Agreement, consisting primarily of payments received by the Authority from the District under the Local Obligations, which payments are secured by a lien of the Special Taxes (defined herein) levied upon property within Improvement Area No. 3 of the District (the "Improvement Area"), as more fully described herein. Payments under the Local Obligations are calculated to be sufficient to permit the Authority to pay the principal of, and interest on, the Bonds when due.

The Local Obligations Indenture (defined herein) for the Local Obligations establishes a debt service reserve fund (the "Local Obligations Reserve Fund") with a debt service reserve account therein for the Local Obligations (the "Local Obligations Reserve Accounf'). Pursuant to the Local Obligations Indenture, a deposit is being made to the Local Obligations Reserve Account for the Local Obligations. Amounts available from the Local Obligations Reserve Account are not available to make up a deficiency for the payment of principal and interest on the Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Terms of the Local Obligations-Local Obligations Reserve Account." The Bonds are being issued only as fully registered bonds registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (.'DTC) and interest thereon is payable on September I and March I of each year, commencing September 1,2022, by the Trustee to DTC. DTC will in turn remit principal or redemption price and interest to the DTC participants, which will in tum remit such principal or redemption price and interest to the Beneficial Owners of the Bonds, as described herein. DTC will act as securities depository for the Bonds. Individual purchases will be made in book-entry only form in the principal amount of $5,000 or integral multiple thereof. Purchasers of the Bonds will not receive instruments representing their interest in the Bonds purchased. See APPENDIX F-"DTC AND THE BOOK-ENTRY ONLY SYSTEM." The Bonds are subject to optional, extraordinary and mandatory redemption as described herein. See "THE BONDS- Redemption Provisions."
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY OF FOLSOM (THE "CITY'),

THE AUTHORITY, THE STATE OF CALIFORNIA OR ANY OTHER POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE AUTHORITY IIAS NO TAXING POWER. EXCEPT FOR THE TRUST ESTATE, NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF TIIE BONDS. THE BONDS ARE

NOT GENERAL OBLIGATIONS OF THE AUTHORITY, THE DISTRICT OR THE CITY, BUT ARE LIMITED

OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE TRUST ESTATE, DERIVED PRIMARILY FROM

PAYMENT ON THE LOCAL OBLIGATIONS FROM THE PAYMENT OF THE SPECIAL TAXES LEVIED WITHIN THE IMPROVEMENT AREAAS MORE FULLY DESCRIBED HEREIN.
* Preliminary, subject to change. Page 325
07/12/2022 Item No.11.

The Bonds are not rated by any rating agency. Investment in the Bonds involves a substantial degree ofrisk that may not be appropriate for some investors. See "CERTAIN RISKS TO BONDHOLDERS" for a discussion of special risk factors that strouta Ue considered, in addition to the other matters set forth herein, in evaluating the investment quality of the Bonds.

This cover page contains information for general reference only and it is not a complete sirmmary of the Bonds. Investors should read the entire Official Statement to obtain information essential to the making of an informed investment decision.

Maturity Schedule, Interest Rates, Prices and CUSIPS
(See inside front cover)
The Bonds are offered when, as and ifissued, subject to the approval as to their legality by Orick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority, and certain other conditions. Certain legal matters will be passed on for the Authority and the District by the City Attomey. Certain legal matters will be passed upon for the Underwriter by Stradling, Yocc4 Carlson & Rauth, a Professi,onal Corporation. It is anticipated that the Bonds in book-entry form will be available for delivery through the facilities of The Depository Trust Company in New York, New York on or about [August 10,20227- Piper Sandler & Co.

The date of this Official Statement is 2022

07/12/2022 Item No.11.
s9,100,000"
F'OLSOM RANCII FINAI\CING AUTHORITY
CITY OF F'OLSOM COMMTJNITY FACILITIES DISTRICT NO.23
(FOLSOM RANCTT) TMPROVEMENT AREA NO. 3

SPECIAL TAX REVENUE BONDS
SERIES 2022

MATURITY SCFIEDULE, INTEREST RATES, PRICES AND CUSIPS
Maturity
(September l)
Principal
Amount
Interest
Rate
CUSIPNo.I
(344414)Price
%
$_ % Term Bond maturing September 1,20_Price _ (CUSIP No.t 344414_-J $ X Term Bond maturing September 1,20_Price _ (CUSIP No.r 344414_J * Preliminary, subject to change.

I CUSPO is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright@ 2022 CUSIP Global Services.

All rights reserved. CUSIP@ data herein is provided by CUSIP Global Services. This data is not intended to creats a database and does not serve in any way as a substitute for the CGS database. CUSIP numbers are provided for convenience of reference only. The Authority, the District, the Underwriter and the City take no responsibility for the accuracy of such numbers.
$

07/12/2022 Item No.11.

No dealer, broker, salesperson or other person has been authorized by the Authority, the Dishict or the Underwriter to give any information or to make any representations other than as 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 any of the foregoing. 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 any person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.

The information set forth herein has been obtained from sources which are believed to be reliable, but such information is neither guaranteed as to accuracy or completeness, nor is it to be construed as a representation of such by the Authority, the District or the Underwriter. The information and expressions of opinion stated herein 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 Authority, the District or the property owners in the Improvement Area, or in the condition of the property in the Improvement Area, since the date hereof.

The summaries and references to the Trust Agreement, the Mello-Roos Act, the Local Obligations Indenture and to other statutes and documents referred to herein do not purport to be comprehensive or defmitive and are qualified in their entireties by reference to each such statute and document. This Official Statement including any amendment or supplement hereto is intended to be deposited with one or more depositories.

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 part of, their 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.

IN CONNECTION W]TH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT

TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 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 UNDERWRITER MAY OFFER AND SELL

THE BONDS TO CERTAIN DEALERS AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING

PRICES SET FORTH ON THE INSIDE FRONT COVER PAGE HEREOF AND SUCH PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECUzuTIES LAWS OF ANY STATE.

Certain statements included or incorporated by reference in this Official Statement constitute forward- looking statements. Such statements are generally identifiable by the terminology used such as "plan," "expect," "estimate," "budgef' or similar words. The achievement of certaih 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.

07/12/2022 Item No.11.

IINSERT REGIONAL AND CITY CONTEXT MAPSI

07/12/2022 Item No.11.

CITY OF'FOLSOM
COMMUNITY F'ACILITIES DISTRICT NO. 23
(FOLSOM RANCII)
AMEI\DED BOTINDARY MAP

07/12/2022 Item No.11.

CITY OF F'OLSOM
COMMTJNITY FACILITIES DISTRICT NO. 23
(FOLSOM RANCTT)
IMPROVEMENT AREA NO.3

ITNSERT AERIAL PHOTO(S)I

07/12/2022 Item No.11.

AUTHORITY GOVERNING BOARD/CITY COT]NCIL
Kerri Howell, Chair / Mayor
Rosario Rodriguez, Vice Chair / Vice Mayor
Sarah Aquino, Member / Councilmember
YK Chalamcherla, Member / Councilmember
Mike Kozlowski, Member / Councilmember

AUTHORITY/CITY STAFF
Elaine Andersen, Executive Director / City Manager
Stacey Tamagni, Treasurer / Finance Director
Steven W*g, Esq., General Counsel / City Attorney
Christa Freemantle, Secretary / City Clerk

SPECIAL SERVICES
BOI\D AND DISCLOSURE COI]NSEL MIINICIPAL ADVISOR
Orrick, Herrington & Sutcliffe LLP Fieldman, Rolapp & Associates, Inc.

TRUSTEE SPECIAL TAX CONSULTANT
U.S. Bank Trust Company, National Association NBS

APPRAISER
Inte gra Realty Resources

07/12/2022 Item No.11.

TABLE OF CONTENTS
Page
INTRODUCTION.........

General
Authority for Issuance ..

Purpose
Security for the Bonds..

The Improvement Area.

Properly Ownership and
Development Status.....

Property Values
Bondholders Risks........

Continuing Disclosure ..

Summaries Not Definitive.'...........'."..

FOLSOM PLAN AREA........

General Folsom Plan Area Plan
of Finance..

Public Facilities Financing Plan..........

Folsom Plan Area Development....'.'.'.

PLAN OF FINANCE ................

Facilities to be Financed.......... ".....'...

THE BONDS.................

General
Description of the Bonds ....................

Redemption Provisions..

ESTIMATED SOURCES AND USES
OF FI.INDS

DEBT SERVICE SCHEDULE

SECURITY AND SOURCES OF
PAYMENT FOR THE BONDS .........

General
Flow of Funds...............

Description of Local
Obligations
Property Values .......... ..................

Value-to-Lien Analysis
Estimated Tax Burden on Single
Family Home.........

Overlapping Debt...........

PROPOSED PROPERTY
DEVELOPMENT......

Development Entitlements .............

Property Ownership
Development Plan and Status of
Development...............

COVID-19Impact.

Development Plan of Finance

CERTAIN RISKS TO
BONDHOLDERS ...........

Levy of the Special Tax....................

Collection of Special Tax..................

Concentration of Ownership ...

Payment of the Special Tax is
Not a Personal Obligation of a
Property Owner........

Potential Early Redemption of
Bonds from Prepaid Special
Taxes
Special Tax Delinquencies.................

Teeter Plan Termination...........

Land Values ...............

Appraisal Risks ..........

Exempt Properties
Maximum Special Tax .............

No Acceleration Provision .................

Loss of Tax Exemption
Panty Taxes and Special
Assessments .................

Future Private Indebtedness ...............

Disclosures to Future
Purchasers
Bankruptcy
FDIClFederal Government
Interests in Properties .........................

Zoningand Land Use Decisions ......

Ballot Initiatives and Measures........

Shapiro v. San Diego..........

Recent Changes to Federal
Income Tax Law
Risks of Real Estate Secured
Investments Generally....

Current Challenges to the
Homebuilding Industry
Failure to Develop.
. . ... ... ... .. 1
... .. ... .. ... 1
... .. .. ... ... 1
. ... ......... 1
..','.'.''.'.2
.............3
Page
...40
...41
...43
...44
45 45
54 55
60 6l
63 63
64 65
70 7l
7t
72 J
6 6
6 6
7 7
7 I
t6
17 65
65 65
66 66
66 67
67 68
68 68
69 69
69 18
18 19
..t9
Issuance of Local Obligations
Payment of the Local
Obligations
Local Obligations Flow of
Funds
Special Tax Authorization........

Covenant for Foreclosure .........'.....'..'
No Required Advances from
Available Surplus Funds
Terms of the Local Obligations
Special Tax Analysis ................ "..'.....

Special Tax CalcuIation.................'....

The Teeter Plan ...........

THE AUTHORITY.......

TI{E CITY....

THE IMPROVEMENT AREA
General Description and
Location.....
72 72
t5
73

07/12/2022 Item No.11.

TABLE OF CONTENTS
(continued)
Page Page
No Independent Review of
Valuation or Viability of
Completed Projects...............

Potential Impact of Global
Health Crises or Concerns....

Geologic, Topographic and
Climatic Conditions..

Endangered Species..............

LEGAL MATTERS.......

TAX MATTERS............

NO LITIGATION
NO RATING.........

MUNICIPAL ADVISOR..........

TINDERWRITING.........

CONTINUING DISCLOSURE
The District
The Developer..............

MISCELLANEOUS .................
78 78
............74 .. 81
.. 81
..81
.. 81
Hazardous Substances
Naturally Occurring Asbestos ........
75 75
77 77
78 81
81 82
83 APPENDIX A - AMENDED RATE, METHOD OF APPORTIONMENT AND MANNER OF

COLLECTION OF SPECIAL TAX

APPENDX B - ECONOMIC AND DEMOGRAPHIC INFORMATION RELATING TO TTIE CITY

OF FOLSOM

APPENDX C
- SUMMARY OF PRINCIPAL DOCUMENTS

APPENDIX D
-

FORMS OF CONTINUING DISCLOSURE LINDERTAKINGS

APPENDX E
-

PROPOSED FORM OF OPINION OF BOND COUNSEL

APPENDIX F
-
DTC AND TI{E BOOK-ENTRY ONLY SYSTEM

APPENDIX G
- APPRAISAL
ll Page 334
07/12/2022 Item No.11.
$9,100,000.

X'OLSOM RANCH FINAI{CING AUTHORITY
CITY OF'F'OLSOM COMMUNITY F'ACILITIES DISTRICT NO.23
(F',OLSOM RANCTD IMPROVEMENT AREA NO.3

SPECIAL TAX REVENUE BONDS
SERIES 2022

INTRODUCTION
The description and summaries of various documents hereinafter set forth do not purport to be comprehensive or definitive, and reference is made to each document for the complete details of all terms and ionditions. All statements herein are qualified in their entirety by reference to each document. All caprtalized terms used in this Official Statement and not otherwise defined herein have the same meaning as in the Trust Agreement (defined below) or the Local Obligations Indenture (defined below), as applicable.

General
This Official Statement, including the cover page, the inside cover page and the Appendices hereto, is provided to furnish certain information in connection with the issuance and sale by the Folsom Ranch Financing Authority (the "Authority") of $9,100,000- aggregate principal amount of Folsom Ranch Financing Authority City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Revenue Bonds, Series 2022 (the "Bonds").

Authority for Issuance
The Bonds will be issued pursuant to the provisions of the Trust Agreement (the "Trust Agreement") among the Authority, the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "District"), and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), as authorized pursuant to a resolution of the Authority. The Bonds will be issued pursuant to the Marks- Roos Local Bond Pooling Act of 1985, as amended, constituting Article 4 of Chapter 5, Division 7, Title I of the Government Code of the State of California. The Bonds will be issued as fully registered bonds in book-entry form, in denominations of $5,000 each or any integral multiple thereof and will be dated the date ofdelivery thereofand bear interest at the rates set forth on the inside front cover page hereof. See "TIfi BoNDs-Description of the Bonds."
Purpose
The Bonds are being issued to finance the purchase of the limited obligation special tax bonds (the "Local Obligations"), issued by the District pursuant to an Indenture (the "Local Obligations Indenture") between the District and U.S. Bank Trust Company, National Association, as trustee (the "Local Obligations Trustee"). The purchase price of the Local Obligations will be used to finance the acquisition of certain public facilities, fund a debt service reserve account, fund capitalized interest to September 1,2022, and pay certain costs of issuance of the Local Obligations and Bonds. See "PLAN OF FINANCE" and o'Tm IMPROVEMENT AREA."
The Local Obligations are authorized pursuant to (i) the provisions of the Mello-Roos Community Facilities Act of 1982, as amended, constituting Section 53311, et seq. of the California Government Code (the "Mello-Roos Acf'), (ii) a resolution of the City Council of the City of Folsom (the 1 * Preliminary, subject to change.

07/12/2022 Item No.11.
"City") as legislative body of the District adopted on July 12, 2022, and (iii) the Local Obligations Indenture. Thi Local Obligations are payable from the special taxes authorized to be levied and collected annually upon taxable real property within Improvement Area No. 3 of the District (the "Improvement Area"). See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-General." Security for the Bonds
The Bonds are special, limited obligations of the Authority, payable from and secured by the Trust Estate (as defined herein) received by the Authority consisting primarily of payments received from the District as debt service payments on the Local Obligations.

The Local Obligations will be issued with an annual scheduled debt service that results in at least lI1Yo annual debt service coverage for the Local Obligations from Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues for Developed Property as of June 16,2022, and Effective Tax Rate Evaluation Minimum Facilities Revenues for the remaining Taxable Property expected to be generated in the Improvement Area, net of Priority Administrative Expenses (each as defined below).

Although the scheduled payments under the Local Obligations are sufficient, in the aggtegate, to provide the Authority with moneys to pay the principal of, premium, if any, and interest on the Bonds when due (see "SECURITY AND SOURCES OF PAYMENT FOR TIfi BONDS"), investment in the Bonds involves a substantial degree of risk that may not be appropriate for some investors. See "CERTAIN RISKS TO BONDHOLDERS" below.

The Local Obligations are secured by a pledge of special taxes received by the District (the "special Tax" or the "special Taxes," as the context requires) (including any prepayment thereof and proceeds from foreclosure sales pursuant to the Local Obligations Indenture), net of Priority Administrative Expenses, and the Local Obligations Reserve Account established under the Local Obligations Indenture. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS." The Special Taxes are included on the regular property tax bill sent to the record owners of taxable properties within the Improvement Area. The District has covenanted in the Local Obligations Indenture to commence judicial foreclosure proceedings against property with delinquent Special Taxes and to diligently pursue such proceedings to completion; provided, however, that the District is not obligated under the Local Obligations Indenture to commence such judicial foreclosure proceedings on any delinquent installment of the Special Tax for any Fiscal Year in which the District has received one hundred percent (100%) of the amount of such installment from the County of Sacramento (the "County") pursuant to the Teeter Plan (described below). See "SECURITY AND SOURCES OF PAYMENT FOR ftn, gONnS-Payment of the Local Obligations," "-special Tax Authorization," "-{ovenant for Foreclosure" and ('-The Teeter Plan."
The Special Taxes secure only the Local Obligations. For this reason, a delinquency or default in the payment oi Special Taxes could cause a default in the payments of principal and interest on the Bonds if moneys in the Local Obligations Reserve Account are insufficient to make up the deficit in debt service for the Local Obligations caused by such delinquency or nonpayment' NEITHER TTM FULL FAITH AND CREDIT NOR THE TAXING POWER OF TI{E CITY, TI{E DISTRICT, THE AUTHORITY, THE STATE OF CALIFORNIA (THE "STATE") OR ANY OTI{ER POLITICAL SUBDIVISION THEREOF IS PLEDGED TO TI{E PAYMENT OF T}IE BONDS. THE AUTHORITY HAS NO TAXING POWER. EXCEPT FOR THE TRUST ESTATE, NO OTFM,R REVENUES OR TAXES ARE PLEDGED TO TTM PAYMENT OF TI{E BONDS. T}M BONDS ARE NOT GENERAL OBLIGATIONS OF THE AUTHORITY, TI{E DISTzuCT OR THE

CITY, BUT ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE

TRUST ESTATE, DERIVED PRIMARILY FROM DEBT SERVICE PAYMENTS ON THE LOCAL 2

07/12/2022 Item No.11.

OBLIGATIONS FROM TI{E PAYMENT OF TFIE SPECIAL TAXES LEVIED WITHIN THE IMPROVEMENT AREA AS MORE FULLY DESCRIBED HEREIN.

The Improvement Area
General. The Improvement Area is located in the southern portion of the City, west of East Bidwell Street, north of Mangini Parkway and south of U.S. Highway 50 and consists of over 272 total gross acres, of which approximately 178 acres are subject to the Special Tax. Presently, the Improvement Area includes properties in varying stages of development, including partially-improved lots, improved lots, homes under construction and completed homes. Collectively, these properties are planned to include 751 single-family/single-family high density units and 168 multi-family low density units, all of which are expected to be constructed as age-restricted (55+) residential homes' Formation Proceedings. The Dishict was formed by the City pursuant to the Mello-Roos Act.

The Mello-Roos 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. Any local agency (as defined in the Mello-Roos Act) may establish a community facilities district to provide for and finance the cost of eligible public facilities, development-related fees, and services. Subject to approval by two-thirds of the votes cast at an election and compliance with the other provisions of the Millo-Roos Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness.

Pursuant to the Mello-Roos Act, the City Council undertook proceedings to form the District, initially designating six separate improvement areas therein, including the Improvement Area, and called an election to authorize the incurring of bonded indebtedness and authorize the levy of special taxes within the District. On May 26,2020, elections were held within the District for each improvement area therein at which the eligible voters in each improvement area approved the levy of special taxes in accordance with the respective Rate and Method of Apportionment of Special Tax for such improvement area. In addition, the eligible voters in the Improvement Area initially authorized the issuance of bonds in an amount not to exceed $124,000,000 for the Improvement Area. In December 2027, a seventh improvement area was designated within the District and change proceedings for the Improvement Area were held, whereby the eligible voters in the Improvement Area approved amended boundaries for the Improvement Area, an Amended and Restated Rate and Method of Apportionment for Community Faiilities District No. 23 (Folsom Ranch) Improvement Area No. 3 (the "Amended Rate and Method of Apportionment") and a reduction in the maximum principal amount of bonded indebtedness that may be isiued for and paid by Improvement Area to $15,750,000. The amended boundary map for the Improvement Area is included above immediately following the regional, statewide and City context ffi&ps, and the Amended Rate and Method of Apportionment is included as APPENDIX A hereto and summarized herein under 'SECURITY AND SOURCES OF PAYMENT FOR THE BONDS - Special Tax Analysis."
Property Ownership and Development Status
The planned development within the Improvement Area includes a gated residential adult active community for residents age 55+ years known as Regency at Folsom Ranch, which is expected to contain 919 residential units at completion, including 751 single-story/single-family detached units and 168 single-story/multi-family paired units otherwise known as duets. Regency at Folsom Ranch is expected to include five separate product lines of homes known as Sequoia, Redwood, Mendocino, Shasta, and Tahoe, on lots ranging from approximately 3,440 square feet to approximately 6,175 square feet, with homes ranging from approximately 1,400 square feet to approximately 2,450 square feet, and with three separate floor plans for each product line. Planned amenities include an 18,000 square foot clubhouse J

07/12/2022 Item No.11.
with access to onsite food and beverage services, an indoor pool, an outdoor pool and spa, fitness center, barbeque pavilion, event lawns, pickleball and bocce ball courts, gathering areas, two dog parks, and access to miles of outdoor trails and biking paths. See "PROPOSED PROPERTY DEVELOPMENT'" As of June 16,2022, the entirety of the taxable residential property within the Improvement Area was owned by Toll West Inc., d/b/a Toll Brothers West Inc., a Delaware corporation (the "Developer"), and was in varying stages of development, including partially-improved lots, improved lots, homes under construction and completed model homes. As of June 16, 2022, the Developer had completed the construction of 15 model homes (three for each product line) that were open to the public and had sold (but not closed) 155 production homes. Homes under contract may not result in closed escrows as sales contracts are subject to cancellation. As of June 16, 2022, final maps authorizing the subdivision of a portion of the property within the Improvement Area into 443 residential lots had been recorded, and tentative maps had been approved for the remaining 476 proposed residential lots. The Developer expects to receive final map approval for an additional 100 residential lots by December 2022 and final map approval for the remaining 376 residential lots between 2023 and mid-2025. See "PROPOSED PROPERTY DEVELOPMENT-Development Entitlements-Tentative and Final Mapping" for a discussion of these zoningentitlements within the Improvement Area.

As of June 16, 2022,the amenities being constructed by the Developer within the Improvement Area were approximately 30% complete and anticipated to be complete by March 2023. The Developer is also in the process of completing the required backbone improvements for the Improvement Area, which it anticipates completingby fall2023.

The following table summarizes, as of June 16, 2022, the development status of the residential lots and homes proposed to be constructed within each of the five product lines within the Improvement Area.

IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4

07/12/2022 Item No.11.

Product Line Land Use
Typical Lot Size
(square feet)
3,440
4,200
4,750
< 11\
6,175
IIomes
Under
Construction
177
Homes
Completed
But Not
Closed(l)
Homes
Under
Contract(2)
Building
Permits
Issued
Finished Lots
(Without
Vertical
Home
Construction)
42 19
36 26
26 Partially
Improved
Lots
104
100
122
t4l
lt0
577
Undeveloped
Lots
0 Total
Proposed
Units(3)
168
172
198
209
t72
9t9
Homes
Closed
Sequoia
Redwood
Mendocino
Shasta
Tahoe
TOTAL
MLD

SF/SFHD

SF/SFHD

SF/SFHD

SF/SFHD
l8
50 37
39 JJ
20 39
3l
3l
34 0
0 0
0 0
4 J
J
J
3 22
6l
40 42
36 0
0 0
0 0
0 20r 149
(l) Includes 15 model homes and one production home, none ofwhich have been released for sale. (2) Homes under contract may not result in closed escrows as sales contracts are subject to cancellation by the homebuyers.

Home Construction)," (v) "Partially Improved Lots" and (vi) "Undeveloped Lots." Source: The Developer
t6 155
5 Page 339
07/12/2022 Item No.11.

Property Values
An appraisal of the taxable property within the Improvement Area dated June 15, 2022 (the "Appraisal") was prepared by Integra Realty Resources, Sacramento, California (the "Appraiser"). The purpose of the appraisal was to estimate the aggregate value of the fee simple interest, subject to the rp..iut tax and based upon a hypothetical condition, for all of the taxable property within the Improvement Area. Subject to the assumptions, hypothetical condition and limiting conditions contained in ihe Appraisal, the Appraiser estimated that the taxable property within the Improvement Area had an estimated aggregate value of $110,464,000 as of }une 1,2022. See "TFIE IMPROVEMENT AREA- Property Values."
Bondholders Risks
Investment in the Bonds involves a substantial degree of risk that may not be appropriate for some investors. For a discussion of certain considerations relevant to an investment in the Bonds, in addition to the other matters set forth herein, see "CERTAIN RISKS TO BONDHOLDERS'" Investors should read the entire Official Statement to obtain information essential to the making of an informed investment decision.

Continuing Disclosure
The District will agree to provide certain annual financial information and operating data by not later than April 1 in each year, commencing April 1, 2023 (the 'oAnnual Report"), and to provide notices of the o""urren"" of certain enumerated events. The Annual Report and notices will be filed with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access database ("EMMA").

The specific nature of the information to be contained in the Annual Report or the notices of enumerated eventi is set forth in APPENDIXD-"FORMS OF CONTINUING DISCLOSURE LINDERTAKINGS." These covenants have been made in order to assist the Underwriter in complying with S.E.C' Rule 15c2-12.

The Developer will covenant for the benefit of the Bondholders to provide certain information relating to the Deveioper and its development within the Improvement Area no later than March 31 and September 30 in each year, commencing March 31,2023 (collectively, the "Disclosure Reports"), and to provide notices of the occurrence of certain enumerated events. The Disclosure Reports and notices will be filed with EMMA. The specific nature of the information to be contained in the Disclosure Reports or the notices of enumerated events is set forth in APPENDIX D-"FORMS OF CONTINUING DISCLOSURE TINDERTAKINGS." The obligation of the Developer will terminate upon the occurrence of certain events as set forth in the Developer's Continuing Disclosure Certificate, including at such time as the Developer and its Affiliates (as defined in the Continuing Disclosure Agreement), in the aggregate, own less tha;U441of the residential lots (or land planned to be subdivided into [44] residential lots) within the Improvement Area.

Summaries Not Definitive
Brief descriptions of the Bonds; the Local Obligations; the security for the Bonds, the City, the Improvement Area and the status of development within the Improvement Area are included in this Offrcial Statement together with summaries of certain provisions of the Bonds, the Trust Agreement and the Local Obligations Indenture. Such descriptions do not purport to be comprehensive or definitive. All references herein to the Trust Agreement and the Local Obligations Indenture are qualified in their entirety by reference to such documents, copies of which are available for inspection at the office of Trustee.
6 Page 340
07/12/2022 Item No.11.

FOLSOM PLAII AREA
General Folsom Plan Area Plan of Finance
In 2001, the City commenced plans to expand its sphere of influence area to include an area south of US Route 50. The area, known as the Folsom Plan Area is bordered to the west by Prairie City Road, the east by the Sacramento/El Dorado County boundary line, the north by US Route 50, and the south by White Rock Road. In November 2004, the citizens of the City adopted Measure W ("Measure W'), which specified certain requirements for annexing the Folsom Plan Area into the City. In June 2011, the City adopted its Folsom Plan Area Specific Plan (the "Specific Plan"). The Local Agency Formation Commission approved the City's plan to annex the Folsom Plan Area on January 18,2012.

As described below, the Folsom Plan Area is an area of approximately 3,500 acres in the southern portion of the City that has been approved for development of approximately 17,461 units of residential development , plus 27 4.5 acres of commercial/industrial development (including mixed use development).

Over the build out of the property, the City anticipates using community facilities districts under the Mello-Roos Act to finance a large portion of the public infrastructure required for the development, plus certain maintenance obligations of public improvements and facilities.

The City has previously issued a series of bonds for its Community Facilities District No. 17 (Willow Hill Pipeline) ("CFD 17") to finance certain public capital improvements for the benefit of the Folsom Plan Area in the principal amount of $6,675,000, of which $5,870,000 are currently outstanding.

The City has also formed its Community Facilities District No. 18 (Folsom Plan Area - Area-Wide Improvements and Services) ("CFD 18") to finance certain water and sewer improvements and a regional aquatic center along with maintenance and certain services. CFD 18 encompasses all of the properly within the Folsom Plan Area, which is the CFD 17 property plus approximately 190 acres bordering El Dorado County in the eastern portion of the City south of US Route 50. The City has authorized the issuance of up to $200,000,000 in bonds for CFD 18. The timing of issuance of bonds for CFD 18 is dependent upon market conditions and development within the Folsom Plan Area. The City currently anticipates that an initial series of CFD 18 bonds in an estimated amount between $25 million to $30 million will be issued in the fourth quarter of 2022 to help finance at least a portion of the required Phase 2 Water Facilities (as defined herein). See "PROPOSED PROPERTY DEVELOPMENT-Development Entitlements-Water Supply Infrastructure." The boundaries of CFD I7 and CFD 18 encompass nearly all of the property in the Folsom Plan Area, including the property in the Improvement Area. The Improvement Area represents approximately 8.1% by acres of CFD 77 and approximately 7 .8% by acres of CFD 18. The allocable portion of bonds previously issued for CFD l7 and any bonds to be issued for CFD 18 constitute overlapping debt. See "THE IMPROVEMENT AREA-Overlapping Debt." Public Facilities Financing Plan
Measure W, adopted by City of Folsom residents in November 2004, required, among other things, that residents north of US Route 50 not bear the cost for infrastructure and public facilities serving the Folsom Plan Area. The City adopted a Public Facilities Financing Plan ("PFFP") for the Folsom Plan Area on January 14, 2014. The PFFP provides an overview of how the infrastructure required for the development of the Folsom Plan Area will be financed and constructed and how various public facilities will be financed and maintained to ensure that public facilities and infrastructure will be available for the orderly development of the Folsom Plan Area without cost to the residents of the City north of US Route 50 and without an adverse impact on the service levels provided to future residents of the Folsom Plan Area.
7

07/12/2022 Item No.11.

The PFFP contemplates that the primary sources of funding for the construction of the public infrastructure and facilities in the Folsom Plan Area are community facilities districts, development impact fees collected upon permit issuance (including development impact fees of the Folsom Cordova Unined School District), diiect developer financing, and matching state school grants and other school funding (including the school facilities improvement district described under "TFIE IMPROVEMENT AREA-Overlapping Debt"). Subdivision improvements are not included as part of the PFFP' On September 8, 2015, the City approved Resolution No. 9641, in which the City Council adopted a Nexus Study to collect certain impact fees for the Specific Plan to be collected in accordance witfr City Ordinance lio. 1234. In addition, on the same date, the City approved Resolution No. 9642, in which the City Council adopted a Nexus Study for the Specific Plan Infrastructure Fees (the "SPIF") to be collected forihe Specific Flan and in accordance with Ordinance No. 1235 and Chapter 3.130 of the Folsom Municipal
-Code. Most recently, on January 9,2018, the City of Folsom approved Resolution No. 10040, amending Resolution No. 9641, to adjust the initial Folsom Plan Area Development Impact Fees. On the same date, the City approved Resolution No. 10059, adopting the Nexus Study Fiscal year 2017-18 Update for the SPIF, and setting the updated infrastructure fees. On July 28, 2020,the City approved Resolution No. 10491, in which the City adopted the Nexus Study Fiscal Year 2020-21Update foi ttre Folsom plan Area SpIF. On this date, the City also introduced and had the first reading for City Ordinance No. i307, in which the City amended sections 3.130.010(JJ) and 3.130.030(EXl)(c) of the Folsom Municipal Code pertaining to the SPIF Set-Aside Component of the SPIF. The SPIF Set-Aside was amended to include a new SPIF Off-Site Water Set-Aside Component to repay the City for water treatment plant costs the City had previously incurred. On August 25, 2020, the City conducted the second reading and approved Ordinance No' 1307.
phasing of Development. For purposes of setting the PFFP costs, the City projected single family units would be sold and oicupied within 13 years, multi-family low density units within 15 years, and multi-family medium and high density units within 18 years.

Backbone Infrastructure. The PFFP provides for the financing or collection of impact fees for and the construction of the backbone infrastructure required before construction in the Folsom Plan Area can proceed. Specifically, the PFFP recognizes the need for roadway improvements, on-site water system impiovements, bff-site water system improvements, recycled water system improvements, sanitary sewer system improvements, storm drainage system improvements, habitat mitigation, and construction of two freeway interchanges and improvements to an existing freeway interchange. public Facilities - the Folsom Plan Area. The PFFP describes plans for the financing of public schools, parks, transit services, trails, police and fire facilities and equipment, municipal service center, a corporation yard, solid waste facilities, a library, general capital improvements, transportation, and a community and aquatic center. The PFFP anticipates that the land for the public facilities will be dedicated to the City without cost to the City.

The Folsom Plan Area is currently being served by the existing fire resources of the City as well as other Sacramento County, El Dorado County and Placer County fire agencies through mutual aid agreements with the City. As noted in the PFFP, the City's goal is to maintain a level of service that rJpresents a rate of 1 station per 12,000 population, which the City expects to resolve by commencing construction on the first fire station servicing the Folsom Plan Area during the third quarter of 2022' The City currently expects construction of this first fire station to last approximately 18 months and to be completed during the first quarter of 2024.
8

07/12/2022 Item No.11.

The estimated total cost of the backbone infrastructure and public facilities for the Folsom Plan Area at build-out is $876,669,484 (in 2017 dollars), of which the City anticipates that a portion will be financed through the Folsom Plan Area SPIF and the issuance of bonds for CFD 18, the Improvement Area or other community facilities districts and improvement areas. This estimate is subject to a variety of construction and market risks. The City and the District can provide no assurances that the overall costs will not increase, even significantly, in the future. The following table shows the breakdown of overall estimated costs for each category of improvement within the Folsom Plan Area as a whole.

Table 1
City of Folsom
Folsom Plan Area Public Facilities Financing Plan
Estimated Budget (2017$)
Infrastructure Estimated Cost Public Improvements Estimated Cost Roadways
Dry Utility
On-Site Water
Off-Site Potable Water
Recycled Water
Wastewater (Sewer)
Storm Drainage
Habitat Mitigation
Total:
$270,335,001
32,476,778
54,966,951
41,655,691
10,931,440
21,434,14',7
65,467,614
Public schooh(l)(2)
Parks
Transit Services
Housing Trust(2)
Trails
Fire Facilities and Equipment
Police Facilities and Equipment
Municipal Service Center
Corporation Yard
Solid Waste
Branch Library
Community and Aquatic Center(3)
General Capital
Transportation(2)
Total:
$134,250,000
74,116,000
17,129,000
39,680,000
14,420,000
12,736,582
5,843,000
5,434,000
8,02o,ooo
5,542,000
2,833,000
37,860,000
13,800,000
760,000
6,97 8.281
$504,245,902
$372,423,582
(r) Assumed no active-adult units in calculation of estimated school fee revenue. Certain developments within the Folsom Plan Area are expected to include active-adult units.
@ Based on estimated fee revenue generated from existing fee programs. (3) Community and Aquatic Center was not included in the Nexus Study Update. Estimated cost based on original PFFP costs in2013 dollars increasedby 3.02%o, similar to the cost increases for the Folsom Plan Area Specific Plan Stand Alone Fee facilities included in the Nexus Study Update.

Source: Folsom Specific Plan In&astructure Fee Nexus Study Fiscal Year 2017-2018 Update ('Nexus Study Update"); City of Folsom; EPS.

Development within the Folsom Plan Area, including within the Improvement Area, is dependent upon completion of certain of the above described infrastructure. For more information on status of construction of improvements and development necessary for development to occur within the Improvement Area, see "PROPOSED PROPERTY DEVELOPMENT." See also "TIfi IMPROVEMENT AREA-Overlapping Debt."
Folsom PIan Area Development
The Folsom Plan Area is comprised of approximately 3,500 acres zoned for 11,460 residential units and 2.8 million square feet of commercial, office and industrial space. Through multiple acquisitions beginning in 2012, affiliates of Westland Capital Partners, L.P. ("Westland") acquired nearly 2,400 acres within the Folsom Plan Area, including approximately 8,350 dwelling units, 1.2 million square feet of commercial, office and industrial space, as well as several sites for elementary, middle and high schools.
9

07/12/2022 Item No.11.

Since development began in May 2017, Westland affiliates have invested more than $250 million into backbone infrastructure and subdivision improvements to support the development of nearly 3,000 single-family dwelling units, as well as three separate sites for multifamily development. Many of the region's largest public and private homebuilders have been actively building in the Folsom Plan Area, including the Developer, Lennar Homes of California ("Lennar"), Taylor Morrison, Tri Pointe Homes Holdings, KB HOME Sacramento,Beazer Homes Holdings, Meritage Homes, Richmond American, The New Home Company, Signature Homes, Van Daele Homes, A.G. Spanos Company, and St. Anton Communities. The Developer began developing the Improvement Area in 2020 and, as of May 3I, 2022, had invested over $7i million to develop the Improvement Area to be able to construct homes for sale to individual homeowners.

Other community developments in the Folsom Plan Area include, but are not limited to, Russell Ranch and White Rock Springs Ranch, which consist of an additional 1,500 units of single-family housing. Infrastructure investment in these two communities, as of April 2022, was estimated by East Carpenter Improvement Company ("ECIC"), one of the master developers responsible for the initial improvement of a portion of the District, to have exceeded $200 million since development began in 2017.

Affiliates of Pacific Coast Capital Partners ("PCCP"), known as the Eagle group of companies ("Eagle"), own a majority of the non-residential land uses in the Folsom Plan Area. In two separate transactions, Eagle sold 4O-acre development parcels to Dignity Health and UC Davis Health, two of the region's major healthcare providers, for hospital and medical campus facilities. Development for the Dignity Health campus began in202l, and significant investments in land development have been made there. The UC Davis Health property is planned to commence developmentin2023.

Westland affiliates' remaining land holdings include nearly 3,500 dwelling units and 1.2 million square feet of commercial and office uses. Lennar, PCCP, UC Davis Health, Dignity Health, Elliott Homes and other landowners control an additional2,500 residential lots and 1.5 million square feet of commercial development space. Infrastructure planning, design and engineering is underway to support the development of these remaining properties and, as of April 2022, was anticipated by ECIC to exceed $200 million over the next three to five years.

The Folsom Plan Area, including Folsom Ranch and Russell Ranch, is widely considered to be the premier master-planned community in the Sacramento region. In 2021 alone, over 900 building permits were issued in the Folsom Plan Area, and homebuilders have enjoyed sustained demand and pricing power as they continue to build out some of the most attractive housing in Northern California.

PLAN OF FINANCE
Facilities to be Financed
The Bonds are issued for the purpose of providing funds to purchase the Local Obligations. The Local Obligations are being issued to finance the acquisition of certain public capital improvements more particularly described in the Resolution of Formation adopted by the City Council of the City on May 26, 2020. The City and the Developer anticipate entering into an acquisition agreement wherein the City will agree to use a portion of the proceeds of the Local Obligations to finance the acquisition from the Developer of those facilities set forth in the acquisition agreement. Such facilities are expected to consist of certain transportation improvements, water system improvements, recycled water system improvements, drainage system improvements, wastewater system improvements, park, parkway and open space improvements, Specific Plan Infrastructure Fee program improvements and certain Specific Plan Infrastructure Fee obligations (collectively, the "Facilities"). Construction of the Facilities is required for development within the Improvement Area and the District to be completed. l0

07/12/2022 Item No.11.

Proceeds from the Local Obligations are expected to finance some, but not all, of the Facilities eligible to be financed within the District, and the District expects to issue one or more series of bonds to finance the acquisition of additional facilities in the future. See "PROPOSED PROPERTY DEVELOPMENT - Development Plans of Finance."
THE BOI\DS
General
The Bonds are secured by a pledge of amounts paid with respect to the Local Obligations. The Local Obligations are secured by a pledge of Special Taxes (net of Priority Administrative Expenses) levied against taxable property within the Improvement Area. See "DEBT SERVICE SCF{EDULE" and ,,SECURITy AND SOURCES OF PAYMENT FOR Tm BONDS." The Local Obligations are secured by a pledge of Special Taxes (net of Priority Administrative Expenses) on parity with any Additional Local Obligations (defined below).

The Local Obligations Indenture establishes a Local Obligation Reserve Fund and a Local Obligations Reserve Account therein with respect to the Local Obligations. Amounts available from the f-ocA Obngations Reserve Account are available to pay debt service on the Local Obligations. The Local Obligations Indenture requires the funding of separate debt service reserve accounts for the Local Obligations and any Additional Local Obligations, each of which may be used only to pay the principal of and interest on the related series of special tax bonds issued under the Local Obligations Indenture. There is no reserve fund with respect to the Bonds, Amounts available from the Local Obligations Reserve Account are not available to cure a deficiency generally in the Trust Estate to make debt service payments on the Bonds.

Description of the Bonds
General. The Bonds will be dated their date of delivery and mature on September 1, as set forth on the inside front cover page hereof (each, a "Principal Payment Date"). Interest is payable semiannually on September 1 and March 1 of each year, commencing September l, 2022 (each, an "Interest Payment Date").

The Bonds will be issued as fully registered bonds, without coupons, in denominations of $5,000, or any integral multiple thereof. The Bonds will be issued in book-entry only form and will be registered in th! nami of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository for the Bonds. So long as the Bonds are in book-entry only form, principal of and redemption premium, if any, on the Bonds will be payable to DTC or its nominee, who wiil in turn remit such payments to DTC Participants for subsequent disbursement to the Beneficial Owners. See APPENDIX F-"DTC AND Tt{E BOOK-ENTRY ONLY SYSTEM'" Principal of, and redemption premium, if any, on the Bonds is payable at the corporate trust office of the Trustee. Interest on the Bonds will be paid only to the registered owners as shown on the Trustee's books as of the fifteenth day of the calendar month next preceding each Interest Payment Date (the "Record Date"), except that in the case of an owner of $1,000,000 or more in aggregate principal amount of Bonds outstanding, payment will be made at the owner's option by wire transfer of immediately available funds to an account in a bank or trust company or savings bank that is a member of the Federal Reserve System and that is located in the continental United States of America according to instructions provided by such owner to the Trustee and received no later than the Record Date for such Interest Payment Date.
11

07/12/2022 Item No.11.

The Bonds are special, limited obligations of the Authority. The Bonds are payable solely from and secured by the Trust Estate of the Authority pledged under the Trust Agreement, consisting primarily of payments received by the Authority from the District under the Local Obligations, which payments are secured by a lien of the Special Taxes (defined herein) (net of Priority Administrative Expenses) levied upon propefiy within the Improvement Area, as more fully described herein. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS."
Payments under the Local Obligations are calculated to be sufficient to permit the Authority to pay the principal of, and interest on, the Bonds when due. Pursuant to the Local Obligations Indenture, a Local Obligations Reserve Account is established for the Local Obligations. Amounts available from the Local Obligations Reserve Account are not available to cure a deficiency in the Trust Estate available to pay debt service of the Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR TI# BONDS- Terms of the Local Obligations-Zocal Obligations Reserve Account." No Additional Bonds under the Trust Agreement. The Trust Agreement does not permit the Authority to issue any additional bonds on parity with the Bonds. However, subject to certain conditions contained in the Local Obligations Indenture, the District may at any time issue bonds (the "Additional Local Obligations") payable from the net proceeds of the Special Tax (after payment of Priority Administrative Expenses) on parity with the Local Obligations. See "SECURITY AND SOURCES OF PAYMENT FOR TIIE BONDS - Terms of the Local Obligations -Additional Local Obligations;' Redemption Provisions
Optional Redemption The Bonds are subject to optional redemption by the Authority prior to their respective maturity dates as a whole or in part on any date on or after 20_, from any source of available funds other than Minimum Sinking Fund Payments and Special Tax Prepayments, at the following redemption prices (computed upon the principal amount of the Bonds or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemption:
103% if redeemed on any date on or after
through _,20-;
I02% if redeemed on any date from
through 20-;
l0l% if redeemed on any date from
through 20-; and
1 00% if redeemed on _ , 20 _ and any date thereafter
IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
20-
20-
20 T2

07/12/2022 Item No.11.

Extraordinary Redemption from Prepayment of Special Taxes. The Bonds are subject to extraordinary redemption by the Authority prior to their respective maturity dates, as a whole or in part on any Interest Payment Date on or after 20_, solely from funds derived from the extraordinary redemption of Local Obligations from Special Tax Prepayments, at the following redemption prices (computed upon the principal amount of the Bonds or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemption:
103% if redeemed on any Interest Payment Date on or after through _,20-;
20 102% if redeemed on any Interest Payment Date on _, 20- and 20-;
l0l% if redeemed on any Interest Payment Date on
and _,20-; and
20 100% if redeemed on 20_and any Interest Payment Date thereafter Prepayments from prepaid Special Taxes could be made by any of the owners of any of the property within the Improvement Area, including the Developer, any other developers or homebuilders owning Taxable Property in the Improvement Area or any individual owner; and they could also be made from the proceeds of bonds issued by or on behalf of an overlapping special assessment district or community facilities dishict. The resulting redemption of Bonds that were purchased at a price greater than the applicable redemption price could reduce the otherwise expected yield on such Bonds. See "CERTAIN RISKS TO BONDHOLDERS-Potential Early Redemption of Bonds from Prepaid Special Taxes."
Mandatory Sinking Fund Redemption of Bonds. The Bonds maturing on September 1,20_are subject to mandatory redemption in part on September 1 of each year commencing September 1,20 . at a redemption price equal to one hundred percent (100%) of the principal amount thereof called for redemption together with accrued interest thereon to the date fixed for redemption:

Minimum Sinking Fund
Payment Date
(September 1)
Bonds
Minimum Sinking Fund Payment
$
Maturity
IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
13 Page 347
07/12/2022 Item No.11.

The Bonds maturing on September l, 20- are subject to mandatory redemption in part on September I of each year commencing September 1, 20-, at a redemption price equal to one hundred percent (100%) of the principal amount thereof called for redemption together with accrued interest thereon to the date fixed for redemption:

Minimum Sinking Fund
Payment Date
(September 1)
Bonds
Minimum Sinking Fund Payment
$
t
i Maturity
If the Bonds subject to mandatory redemption are redeemed in part prior to their stated maturity date other than from Minimum Sinking Fund Payments, the Minimum Sinking Fund Payments for such Bonds shall be reduced proportionately by the principal amount of such Bonds so redeemed.

Redemption Instructions. Upon any prepayment of a Local Obligation, the Authority shall deliver to the Trustee a Written Order of the Authority designating the amounts and maturities of the Bonds to be redeemed, which shall be in the manner necessary to enable the Authority to deliver a Cash Flow Certificate satisfuing the requirements described below. In the event only a portion of the Outstanding Bonds of any maturity are to be redeemed at any one time, the Trustee shall select the particular Bonds of each maturity date to be redeemed in accordance with DTC procedures (which , at the time of the issuance of the Bonds, would be a redemption by lot) or, if the Bonds are not then in book- entry, in a manner that it deems appropriate and fair. The Trustee shall redeem Bonds in Authorized Denominations.

Upon any redemption of a portion but not all of the Outstanding Bonds, the Authority shall deliver to the Trustee a Cash Flow Certificate to the effect that, assuming all payments are made with respect to the Local Obligations, (i) the Revenues, together with moneys on deposit in other funds and accounts held under the Trust Agreement, will be sufficient to pay all Pfincipal Installments, Minimum Sinking Fund Payments and interest payments on the Bonds when due; and (ii) the redemption premiums, if any, on the Local Obligations, together with other Revenues available to the Trustee for such purpose, are sufficient to offset any difference between the interest to accrue on the Bonds to be paid or redeemed with the proceeds of prepayment of such Local Obligations (plus any redemption premium payable upon redemption of such Bonds) and the income to be earned on any investment of such proceeds (assured as of the date of payment thereof), in each case until the date of payment or redemption of Bonds, such that in no event will the prepayment of Local Obligations cause the Trustee to have insufficient funds to pay debt service on the Bonds when due.

In no event shall Bonds be redeemed if upon such redemption the principal amount of the Local Obligations remaining outstanding will be less than the total principal amount of Outstanding Bonds.

Such Written Order of the Authority may specift that optional redemption of the Bonds will be conditioned upon receipt offunds or other events.

Notice of Redemption. Subject to receipt of the Written Order of the Authority described under '(-Redemption Instructions", the Trustee shall give notice of redemption; provided, that Bonds, t4 Page 348
07/12/2022 Item No.11.
identified by CUSIP numbers, serial numbers and maturity date, have been called for redemption and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof that has been called for redemption (or if all the Outstanding Bonds are to be redeemed, so stating, in which event such serial numbers may be omitted), that they will be due and payable on the date fixed for redemption (specitring such date) upon surrenderthereof to the Trustee at its Corporate Trust Office, subjectto any conditions to such redemption specified in the Written Order of the Authority, at the redemption price (speciflring such price), together with any accrued interest to such date, and that all interest on the Bonds (or portions thereof) so to be redeemed will cease to accrue on and after such date and that from and after such date such Bond (or such portion thereof) shall no longer be entitled to any lien, benefit or security under the Trust Agreement, and the Owner thereof shall have no rights in respect of such redeemed Bond or such portion except to receive payment from such money of such redemption price plus accrued interest to the date fixed for redemption. If sufficient monies for the payment of the redemption price of all Bonds to be redeemed are not then on deposit with the Trustee, such notice shall also state that redemption is conditioned upon the timely deposit of sufficient funds therefor with the Trustee.

Such notice shall be mailed by first class mail, in a sealed envelope, postage prepaid, at least thirty (30) but not more than sixty (60) days before the date fixed for redemption, to the Owners of such Bonds (or portions thereof) so called for redemption, at their respective addresses as the same shall last appear on the Bond Register; provided, that neither the failure of an Owner to receive notice of redemption of Bonds nor any error in such notice shall affect the validity of the proceedings for the redemption of Bonds.

Any notice of optional redemption may be rescinded by written notice given by the Authority to the Trustee no later than three Business Days prior to the date specified for redemption. The Trustee shall give notice of rescission of the notice of optional redemption or non-satisfaction of any conditions specified in the notice of optional redemption as soon as practicable to the same parties and in the same manner as the notice of redemption was given.

So long as the Bonds are in book-entry only form, notices of redemption will be given directly by the Trustee to DTC and not to the Beneficial Owners of the Bonds. See APPENDIX F-"DTC AND THE BOOK-ENTRY ONLY SYSTEM."
Purchase in Lieu of Redemption. ln lieu of redemption of any Bond, amounts on deposit in the Proceeds Fund, the Principal Fund or in the Redemption Fund may be used and withdrawn by the Trustee at any time prior to a notice of redemption having been delivered, upon a Written Order for the purchase of such Bonds at public or private sale as and when and at such prices as the Authority may in its discretion determine, but not in excess of the lower of the highest or then current redemption price thereof plus accrued interest to the purchase date; and all Bonds so purchased shall be delivered to the Trustee for cancellation.

Payment of Redeemed Bonds. If notice of redemption has been given and not rescinded and if the conditions to such redemption specified therein, if any, have been satisfied, each as provided in the Trust Agreement, the Bonds or portions thereof called for redemption will become inevocably due and payable on the date fixed for redemption at the redemption price thereof, together with accrued interest to the date fixed for redemption, upon presentation and surrender of the Bonds to be redeemed at the office specified in the notice of redemption. If less than the full principal amount of a Bond is called for redemption, the Authority is required to execute and deliver and the Trustee is required to authenticate, upon surrender of such Bond, and without charge to the Owner thereof, Bonds of like interest rate and maturity in an aggregate principal amount equal to the unredeemed portion of the principal amount of the Bonds so surrendered in such Authorized Denominations as specified by the Owner' 15

07/12/2022 Item No.11.

If any Bond or any portion thereof has been duly called for redemption and payment of the redemption piice, together with unpaid interest accrued to the date fixed for redemption, has been made or provided foi Uy the Authority, then interest on such Bond or such portion will cease to accrue from such date, and from and after such date such Bond or such portion will no longer be entitled to any lien, benefit or security under the Trust Agreement, and the Owner thereof will have no rights in respect of such Bond or such portion except to receive payment of such redemption price, and unpaid interest accrued to the date fixed for redemption.

ESTIMATED SOURCES AND USES OF FUI\DS
The proceeds from the sale of the Bonds will be used to purchase the Local Obligations. The proceeds of ihe Local Obligations in turn will be used to finance construction and acquisition of the Facilities and pay costs of issuance of the Local Obligations and Bonds. The following table sets forth the sources and uses ofthe funds as allocated to the Bonds:

Sources ofFunds
Principal Amount
[P lus/LessJ. tNet] Original Issue fPremium/Discount]
Total Sources
Uses of Funds
Acquisition and Construction Fund
Underwriter's Discount
Deposit to Local Obligations Reserve Account(l)
Deposit to Local Obligations Capitalized Interest Account(2) Deposit to Costs of Issuance Fund(3)
Total Uses
(D A portilon of the purchase price of the Local Obligations will be deposited into the Local Obligations Reserve Account for the Local Obligations. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS." @ To pay interest on the Local Obligations and, in turn, the Bonds, to September 1,2022. (3) a portion of the purchase price of the Local Obligations will be used to pay costs of issuance including fees of Bond Counsel and the Municipal Advisor, the initial fees of the Trustee, noncontingent fees of the Appraiser, printing costs and other miscellaneous expenses.

IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
$
$
$
$
16

07/12/2022 Item No.11.

DEBT SERVICE SCHEDULE
The annual scheduled debt service for the Bonds, assuming no early redemption other than from mandatory sinking fund installments, is set forth in Table 2 below. The Local Obligations are sized to provide tbOoZ of ttre debt service on the Bonds when due and have the same principal amortization as the bonds. The Local Obligations will be issued with an annual scheduled debt service that results in at least ll0o/o annual debt re*i"" coverage from the revenues of the Effective Tax Rate Evaluation Maximum Facilities Special Tax (as defined herein) for Developed Property as of June 16,2022, and the Effective Tax Rate Evaluation Minimum Facilities Revenues for the remaining Taxable Property expected to be generated in the Improvement Area, net of Priority Administrative Expenses (defined below). The birt i.t expects that Additional Local Obligations will be issued on parity with the Local Obligations as the Improviment Area develops. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS - Terms of the Local Obligations - Additional Local Obligations." Table 2
Folsom Ranch Financing AuthoritY
City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Revenue Bondso Series 2022
Debt Service Schedule
Period Ending
(September 1)
2922Q)
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
Principal Interest
Total Debt
Service
$ $ $
ToTAL
(r) Local Obligations debt service capitalized through September 1,2022. $$
Source: Piper Sandler & Co.
17 $

07/12/2022 Item No.11.

SECURITY AI\D SOURCES OF PAYMENT FOR THE BONDS
The Bonds are secured by a lien on and pledge of the Trust Estate, consisting primarily of payments received by the Authority from the District under the Local Obligations, which payments are secured by Special Taxes (net of Priority Administrative Expenses) levied upon property within the Improvement Area and received by the District.

NEITI{ER TTIE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, TIfi DISTRICT, THE AUTHORITY, THE STATE OF CALIFORNIA OR ANY OT}IER POLITICAL SUBDIVISION TI{EREOF IS PLEDGED TO THE PAYMENT OF TIfi BONDS. TI{E AUTHORITY HAS NO TAXING POWER. EXCEPT FOR THE TRUST ESTATE, NO OTHER REVENUES OR TAXES ARE PLEDGED TO TI{E PAYMENT OF TIM BONDS. TTM BONDS ARE NOT GENERAL

OBLIGATIONS OF THE AUTHORITY, THE DISTRICT OR CITY, BUT ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM TI{E TRUST ESTATE,

DERIVED PRIMARILY FROM PAYMENTS ON THE LOCAL OBLIGATIONS FROM THE

PAYMENT OF THE SPECIAL TAXES LEVIED WITHIN TTM IMPROVEMENT AREA AS MORE FULLY DESCRIBED HEREIN.

The Trust Agreement does not permit the Authority to issue any additional bonds on parity with the Bonds. However, subject to certain conditions contained in the Local Obligations Indenture, the District may at any time issue Additional Local Obligations payable from the net proceeds of the Special Tax (after payment of Priority Administrative Expenses) on parity with the Local Obligations. See "SECUzuTY AND SOURCES OF PAYMENT FOR THE BONDS - Terms of the Local Obligations - Additional Lo c al Ob I i gat i ons ;'
General
The Trust Estate consists of the Revenues, the amounts in certain of the funds established and held under the Trust Agreement, and the Local Obligations. The Revenues consist of amounts received by the Trustee as the payment of interest on, or the equivalent thereof, and the payment or refurn of principal of, or redemption premiums, if any, on, or the equivalent thereof, the Local Obligations, whether as a result of scheduled payments, or redemption premiums, Special Tax Prepayments or remedial proceedings taken in the event of a default thereon, and all investment earnings on any money held in the Funds held under the Trust Agreement (except the Rebate Fund).

The principal of and the interest on the Local Obligations are payable from the annual Special Taxes levied and to be collected on all real property within the Improvement Area subject to the Special Taxes and the proceeds, if any, from the sale of such property for delinquency of such Special Taxes, after payment of Priority Administrative Expenses. The Local Obligations are secured by a pledge on the Special Taxes (net of Priority Administrative Expenses) on parity with the pledge of such Special Taxes for any Additional Local Obligations issued under the Local Obligations Indenture. See (6-Payment of the Local Obligations" 6d "-fsrms of the Local Obligations." The District may not issue indebtedness payable from the Special Taxes except as provided in the Local Obligations Indenture. See APPENDIX C-"SUMMARY OF PRINCIPAL DOCUMENTS- SUMMARY OF THE LOCAL OBLIGATIONS INDENTURE-Authorization and Issuance of Bonds- Additional Bonds; Subordinate Bonds." The City has, however, formed CFD 17, which has issued bonds secured by special taxes with a co-equal lien on property within the Improvement Area and has formed CFD 18, which is authorized to issue bonds secured by special taxes with a co-equal lien on property within the Improvement Area. See "FOLSOM PLAN AREA." The Authority, the District and the City have no control over the amount of additional debt payable from taxes or assessments on all or any 18

07/12/2022 Item No.11.
portion of the property within the Improvement Area that may be issued in the future by other governmental entities or districts having jurisdiction over all or a portion of the land within the i-prou"-"nt Area. To the extent such debt is payable from other assessments or special taxes levied puisuant to the applicable law, such assessments or special taxes may have a lien on the property within the Improvement Area on parity with the lien of the Special Taxes.

Flow of Funds
Receipt and Deposit of Revenues. As noted above, Revenues consist of amounts received by the Trustee as the payment of interest on, or the equivalent thereof, and the payment or return of principal of, or redemption primiums, if any, on, or the equivalent thereof, all Local Obligations, whether as a result of scheduled payments, or redemption premiums, Special Tax Prepayments or remedial proceedings taken in the event of a default thereon, and all investment earnings on any money held under the Trust Agreement (except the Rebate Fund). All Revenues, other than Revenues derived from the early redemption of Local Obtigutionr from Special Tax Prepayments received by the Trustee from the Authority, will be deposited into ihe Revenue Fund. On each Interest Payment Date and each Principal Payment Date, the Trustee will transfer Revenues from the Revenue Fund, in the amounts required in the order of priority as set forth below, with the requirements of each fund being fully satisfied, leaving no deficiencies therein, prior to any deposit into any fund later in priority:

First: To the Interest Fund, an amount of Revenues which together with amounts on deposit therein, is equal to the interest due and payable on the Bonds due on such Interest Payment Date;
Second.. To the Principal Fund (i) on each Principal Payment Date from the Revenue Fund an amount of Revenues which, together with any amounts then on deposit in the Principal Fund (other than amounts previously deposited on account of any Bonds which have matured but which have not been presented for payment) is sufficient to pay the Principal Installments on the Bonds due on such Principal Payment Date and (ii) on each September I on which a Minimum Sinking Fund Payment is required to be made (for deposit in the Sinking Fund Account) from the Revenue Fund an amount of Revenues which is equal to the Minimum Sinking Fund Payment due and payable on such date. On each Principal Payment Date, the Trustee shall pay the principal or redemption price due and payable on the Bonds on such date from the Principal Fund.

Following such deposits, any remaining money in the Revenue Fund is required to be transferred to the Local Obligations Trustee for application under the Local Obligations Indenture. For additional information regarding the Flow of Funds, 5ss ('-l6s4l Obligations Flow of Funds." Revenues Derived from Special Tax Prepayments. All Revenues derived from early redemption of Local Obligations from Special Tax Prepayments received by the Trustee will be immediately deposited into the Redemption Fund to be applied to the extraordinary redemption of Bonds. See "THE BoNDs-Redemption Provisions-Extraordinary Redemptionfrom Prepayment of Special Taxes." Description of Local Obligations
The District will issue the Local Obligations in the principal amount of $9,100,000*. The Local Obligations are secured solely by the Special Taxes (net of Priority Administrative Expenses) levied upon * Preliminary, subject to change.
t9

07/12/2022 Item No.11.
certain real propefty within the Improvement Area and proceeds of foreclosure sales in the Improvement Area.

The pledge of Special Taxes (net of Priority Administrative Expenses) levied within the Improvement Area is on parity with the pledge thereof securing any Additional Local Obligations issued under the Local Obligations Indenture. The District may issue Additional Local Obligations secured on palty with the pledge of the Special Taxes (net of Priority Administrative Expenses) within the i-piou"-.nt Area only in accordance with the Local Obligations Indenture. See APPENDIX C- ..SUMMARY OF PRINCIPAL DOCUMENTS-SUMMARY OF THE LOCAL OBLIGATIONS INDENTURE-Authorization and Issuance of Bonds-l dditional Bonds; Subordinate Bonds." A description of the Improvement Area is set forth under the caption, "TIfi IMPROVEMENT AREA."
Issuance of Local Obligations
The Local Obligations are authorized pursuant to the Mello-Roos Act and are issued under a resolution of the City Council of the City, as legislative body of the District and the Local Obligations Indenture. The Mello-Roos Act was enacted by the State Legislature to provide an alternate method of financing certain essential public capital facilities and services, especially in developing areas of the State' Subject io approval by a two-thirds vote of qualified electors and compliance with the provisions of the Mefio-Roos-Act,alegislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness' The Local Obligations constitute special tax obligations of the District payable as to both principal and interest from the annual Special Tax (after payment of the District's Priority Administrative h,*penses) to be levied by the District on land within the Improvement Area, including proceeds from the sall of property within the Improvement Area collected as a result of foreclosure of the lien of the Special Taxes and-certain funds and accounts held under the Local Obligations Indenture. The District's sole recourse in the event of a delinquency or failure to pay Special Taxes on a particular parcel is to institute foreclosure proceedings with respect to that parcel. However, the District is not obligated under the Local Obligations Indenture to enforce the lien of any delinquent installment of the Special Tax for any Fiscal Yeaiin which the District has received one hundred percent (100%) of the amount of such installment from the County pursuant to the Teeter Plan. See "-{ovenant for Foreclosure" 6nd (6-f[e Teeter Plan" herein.

Payment of the Local Obligations
The Local Obligations constitute the limited obligations of the District payable as to both principal and interest from the annual Special Tax (net of Priority Administrative Expenses) levied by the birt iit on Taxable Property within the Improvement Area, including proceeds from the sale of property within the Improvement Area collected as a result of foreclosure of the lien on the Special Taxes and certain funds and accounts held under the Local Obligations Indenture. The District's sole recourse in the event of a delinquency or failure to pay Special Taxes on a particular parcel is to institute foreclosure proceedings with respect to that parcel'
The term "Priority Administrative Expenses" means an amount equal to (a) for Fiscal Year 2022-23, $20,000, and (b) for any subsequent Fiscal Year, the amount resulting from increasing the Priority Administrative Expenses on each July 1, from and including the July 1 immediately following the end olthe then current Fiscal Year to and including the July I in such Fiscal Year by 2o/o of the amount in effect for the previous Fiscal Year.
20

07/12/2022 Item No.11.

THE LOCAL OBLIGATIONS ARE SPECIAL TAX OBLIGATIONS OF TIfi DISTRICT, AND TI{E INTEREST ON AND PRINCIPAL OF AND REDEMPTION PREMruMS, IF ANY, ON TT{E LOCAL OBLIGATIONS ARE PAYABLE SOLELY FROM TFIE PROCEEDS OF TI{E SPECIAL

TAX (INCLUDING ANY PREPAYMENTS THEREOF AND PROCEEDS FROM THE SALE OF PROPERTY COLLECTED PURSUANT TO T}M FORECLOSURE PROVISIONS OF THE LOCAL

OBLIGATIONS INDENTURE FOR THE DELINQUENCY OF TTM, SPECIAL TAX), NET OF PRIORITY ADMINISTRATIVE EXPENSES, AND AMOLTNTS IN CERTAIN FI.INDS AND ACCOI.INTS ESTABLISHED IN TI{E LOCAL OBLIGATIONS INDENTURE, AND TF{E DISTRICT IS NOT OBLIGATED TO PAY THE LOCAL OBLIGATIONS EXCEPT FROM SUCH FI.INDS. THE GENERAL FLIND OF THE CITY AND TI{E FLTNDS OF THE DISTRICT ARE NOT LIABLE, AND NEITHER THE FULL FAITH AND CREDIT OF TI{E DISTRICT NOR THE CITY ARE PLEDGED FOR THE PAYMENT OF TFM,INTEREST ON OR PRINCIPAL OF OR REDEMPTION PREMruMS, IF ANY, ON THE LOCAL OBLIGATIONS. NO TAX OR ASSESSMENT OTHER TIIAN TTIE

SPECIAL TAX SHALL EVER BE LEVIED OR COLLECTED TO PAY THE INTEREST ON OR PRINCIPAL OF OR REDEMPTION PREMruMS, IF ANY, ON TI{E LOCAL OBLIGATIONS. TFIE

LOCAL OBLIGATIONS ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF OR CHARGE, LIEN OR ENCUMBRANCE UPON ANY PROPERTY OF TFM, DISTRICT OR A}[Y OF ITS INCOME OR RECEIPTS EXCEPT TFIE PROCEEDS OF T}IE SPECIAL TAX (INCLUDING

ANY PREPAYMENTS TFMREOF AND PROCEEDS FROM THE SALE OF PROPERTY

COLLECTED PURSUANT TO THE FORECLOSURE PROVISIONS OF TFIE LOCAL

OBLIGATIONS INDENTURE FOR THE DELINQUENCY OF THE SPECIAL TAX), NET OF

PRIORITY ADMINISTRATTVE EXPENSES, AND AMOUNTS IN CERTAIN FUNDS AND

ACCOTINTS ESTABLISHED IN TFM, LOCAL OBLIGATIONS INDENTURE, AND NEITHER THE PAYMENT OF TI{E INTEREST ON OR PRINCIPAL OF OR REDEMPTION PREMIUMS, IF ANY,

ON THE LOCAL OBLIGATIONS IS A GENERAL DEBT, LIABILITY OR OBLIGATION OF TFM, DISTRICT. THE LOCAL OBLIGATIONS DO NOT CONSTITUTE AN INDEBTEDNESS OF THE

DISTRICT WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT

LIMITATION OR RESTRICTION, AND NEITHER THE CITY COUNCIL NOR THE DISTRICT NOR ANY OFFICER OR EMPLOYEE TI{EREOF SHALL BE LIABLE FOR THE PAYMENT OF THE INTEREST ON OR PRINCIPAL OF OR REDEMPTION PREMruMS, IF ANY, ON TI{E LOCAL OBLIGATIONS OT}IERWISE THAN FROM TIIE PROCEEDS OF THE SPECIAL TAX (INCLUDING ANY PREPAYMENTS TI{EREOF AND PROCEEDS FROM THE SALE OF

PROPERTY COLLECTED PURSUANT TO TFIE FORECLOSURE PROVISIONS OF TFIE LOCAL OBLIGATIONS INDENTURE FOR TI{E DELINQUENCY OF THE SPECIAL TAX), NET OF

PRIORITY ADMINISTRATIVE EXPENSES, AND AMOLINTS IN CERTAIN FLINDS AND ACCOUNTS ESTABLISHED IN THE LOCAL OBLIGATIONS INDENTURE.

Although the Special Tax will constitute a lien on property subject to taxation in the Improvement Area, it will not constitute a personal indebtedness of the owners of such property. There is no assurance that the owners will be financially able to pay the annual Special Tax or that they will pay such tax even if financially able to do so. The risk of nonpayment by property owners is more fully described in "CERTAIN RISKS TO BONDHOLDERS-Collection of Special Tax'" Local Obligations Flow of Funds
Application of Special Tax Fund. Pursuant to the Local Obligations Indenture, the Dishict agrees and covenants that it will deposit the Special Tax proceeds in the Community Facilities Fund, which fund is established in the treasury of the City. All money in the Community Facilities Fund shall be used and withdrawn by the District solely for the benefit of the District in accordance with the Mello-Roos Act, including payment of Expenses. Pursuant to the Local Obligations Indenture, the District further agrees and covinants that, after payment of Priority Administrative Expenses, it will transfer to the Local 2I

07/12/2022 Item No.11.

Obligations Trustee from the Community Facilities Fund amounts sufficient and in sufficient time for the mcal obligations Trustee to make the transfers required by it, and the Local Obligations Trustee shall deposit ,u"f, pror""ds as and when received in the Special Tax Fund. All money in the Special Tax Fund is iequired to be set aside by the Local Obligations Trustee in the following respective special account and fund within the Special Tax Fund in the following order of priority, and all money in each such account and fund shall be applied, used and withdrawn only for the purposes specified in the Local Obligations Indenture:
(1) Redemption Account; and
(2) Local Obligations Reserve Fund.

Redemption Account. On or before March I and September 1 in each year, the Local Obligations Trustee shall, from the money in the Special Tax Fund, transfer to and deposit in the Redemption Account an amount of money equui to the aggregate amount of interest becoming due and payable on all Outstanding Local Obligations and any Additional Local Obligations on such March 1 or September 1, as the case miy be, and on or before September 1 in each year, the Local Obligations Trustee shall, from the then remaining money in the Special Tax Fund, transfer to and deposit in the Redemption Account an amount of money equal to tlie aggregate amount of principal becoming due and payable on all outstanding seriai LoCal obligations and any Additional Local Obligations on such September 1 plus all Minimum Sinking Fund Account Payments required to be made on such September 1 into the Sinking Fund Subaccounq provided, that all of the aforesaid payments shall be made without priority of any payment over any other payment, and in the event that money in the Special Tax Fund on any March 1 or ^September
I is not equal to the amount of interest becoming due on all Local Obligations and any Additional Local Obligations on such date, or in the event that the money in the Special Tax Fund on any September 1 is not equal to the amount of principal of the Local Obligations and Additional Local Obligations becoming due on such date, as the case may be, then such money shall be applied pro rata in such proportion as such interest and principal and Minimum Sinking Fund Account Payments bear to each other.

No deposit need be made into the Redemption Account if the amount of money contained therein is at least
"quul
to the amount required by the terms of the preceding paragraph to be deposited therein at the times and in the amounts provided in the Local Obligations Indenture.

All money in the Redemption Account shall be used and withdrawn by the Local Obligations Trustee to pay the interest on the Local Obligations and any Additional Local Obligations as it shall become due and payable (including accrued interest on any Local Obligations or any Additional Local Obligations purchasld or redeemed prior to maturity) plus the principal of and redemption premiums, if uny,-on the Local Obligations and any Additional Local Obligations as they shall mature or upon the prior redemption thereof; exiept that any money in the Sinking Fund Subaccount shall be used only to purchase or rediem or retire the tirm Local Obligations and any Additional Local Obligations as provided in the Local Obligations Indenture.

Local Obligations Reserve Fund. On or before March 1 and September 1 in each year, the Local Obligations Trustee shall, from the then remaining money in the Special Tax Fund, transfer to and deposit in eJch Local Obligations Reserve Account within the Local Obligations Reserve Fund such amount of money as shall be required to restore each such Local Obligations Reserve Account to a sum equal to the Required Bond Reserve (as defined herein) for the applicable series of Local Obligations or Additional Local Obligations, pro rata, to the extent that amounts are available in the Special Tax Fund for such purpose; und fot this purpose all investments in each Local Obligations Reserve Account shall be valued ^on
March 1 and Septim6er 1 of each year at the face value thereof if such investments mature within 22

07/12/2022 Item No.11.
twelve (12) months from the date of valuation, or if such investments mature more than twelve (12) months after the date of valuation, atthe price at which such investments are redeemable by the holder at his option, if so redeemable, or if not so redeemable, at the lesser of (i) the cost of such investments plus the imortization of any premium or minus the amortization of any discount, or (ii) the market value of such investments. For purposes of allocating remaining money in the Special Tax Fund between more than one Local Obligations Reserve Account, any such transfers to and deposits in each Local Obligations Reserve Account shall be made equally and ratably.

No deposit need be made into a Local Obligations Reserve Account if the value of the investments contained therein is at least equal to the Required Bond Reserve for the applicable series of Local Obligations or Additional Local Obligations.

All money in each Local Obligations Reserve Account shall be used and withdrawn by the Local Obligations Trustee solely for the purpose of paying the interest on or principal of the conesponding series of Local Obligations or Additional Local Obligations in the event there is insufficient money in the Redemption Account available for this purpose; pley-idgd, that if as a result of any of the foregoing valuations or due to redemption as a result of property owner prepayments it is determined that the amount of money in a Local Obligations Reserve Account exceeds or will exceed the Required Bond Reserve for the applicable series of Local Obligations or Additional Local Obligations, the Local Obligations Trustee shall withdraw the amount of money representing such excess from such fund and shall deposit such amount of money in the Redemption Account. For the avoidance of doubt, amounts in a Local Obligations Reserve Account are not available to make up a deficiency for the payment of principal and interest on any series of Local Obligations or Additional Local Obligations, other than the specific series of Local Obligations or Additional Local Obligations to which that Local Obligations Reserve Account relates.

Special Tax Autho rization
The Special Tax is to be levied and collected against all Taxable Property within the Improvement Area in accordance with the Amended Rate and Method of Apportionment. See APPENDIX A-"AMENDED RATE, METHOD OF APPORTIONMENT AND MANNER OF COLLECTION OF SPECIAL TAX." The Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected, and, except as otherwise provided in the covenant for foreclosure and in the Mello-Roos Act, is to be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem properly taxes. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Covenant for Foreclosure" and "CERTAIN RISKS TO BONDHOLDERS-Collection of Special Tax."
The Amended Rate and Method of Apportionment of the Special Tax, subject to the maximum rates set forth therein, apportions the total debt service requirement (principal, interest, and mandatory sinking fund payments), restoration of the Required Bond Reserve, cunent annual expenses, pay as you go improvement costs and other costs each year among the taxable land in the Improvement Area. See APPENDIX A-"AMENDED RATE, METHOD OF APPORTIONMENT AND MANNER OF COLLECTION OF SPECIAL TAX."
Pursuant to the Local Obligations Indenture, so long as any Local Obligations or Additional Local Obligations are Outstanding, the District is required annually to levy the Special Tax against all Taxable Property in the Improvement Area and make provision for the collection of such Special Tax in amounts which will be sufficient, after making reasonable allowances for contingencies and errors in the estimates, to yield proceeds equal to the amounts required for compliance with the agreements, conditions, covenants and terms contained in the Local Obligations Indenture, and which in any event 23

07/12/2022 Item No.11.
will be sufficient to pay the interest on and principal of and Minimum Sinking Fund Account Payments for and redemption prerniums, if any, on the Local Obligations and any Additional Local Obligations as they becom" du" und payable, to replenish each reserve account within the Local Obligations Reserve f'und to the Required Bond Reserve and to pay all current Expenses as they become due and payable.

Under the Amended Rate and Method of Apportionment, the Facilities Special Tax (as defined herein) levied in any fiscal year against any Assessor's Parcel (as defined in the Amended Rate and Method of Apportionment) oiDevel,oped Property classified as Residential Property may not be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the Improvement Area by^more than l0o/o above the amount that would have been levied against such Assessor,s parcel in that fiscal year had there never been any such delinquencies or defaults. Pursuant to the Amended Rate and Method of Apportionment, property is considered "Residential Property" once a building permit could be issued for the purposes of constructing one or more Residential Units, including either single family detached homes or multi-family attached properties, such as apartments, and property is consideied ,.Developed property" if a building permit for new construction was issued prior to June 30 of the previous fiscal year. See "CERTAINRISKS TO BONDHOLDERS-Maximum Special Tax'" Covenant for X'oreclosure
The Local Obligations Indenture provides that the Special Tax is to be collected in the same manner as ordinary aivalorem property taxes are collected and, except as provided in the special covenant for foreclosure describedbelow and in the Mello-Roos Act, is subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem propefty taxes.
pursuant to Section 53356.1 of the Mello-Roos Act, in the event of any delinquency in the payment of the Special Tax, the District may order the institution of a Superior Court action to foreclose itt" ti.n therefor within specified time limits. In such an action, the real properly subject to the unpaid amount may be sold at u 3.rAi"iat foreclosure sale. Such judicial foreclosure action is not mandatory' However, the District has covenanted in the Local Obligations Indenture that it will annually on or before September 1 of each year review the public records of the County relating to the collection of the Special Tax in order to determine the amount of the Special Tax collected in the prior Fiscal Year, and if it determines on the basis of such review that the amount so collected is deficient by more than five percent (5%) of the total amount of the Special Tax levied in such Fiscal Year within the Improvement Area, it will-within sixty (60) days thereafter institute foreclosure proceedings as authorized by the Mello-Roos Act in order to enforce the lien of the delinquent installments of the Special Tax against each lot or parcel of land in the Improvement Area, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale; p1qvidgd, that irrespective of the foregoing if the District determines on the basis of ,u"h ,"ui"* that property owned by any single property owner in the Improvement Area is delinquent by four missed payments with respect to the Special Tax due and payable by such propeffy owner by such delinquency iaL, then the District will institute, prosecute and pursue such foreclosure proceedings in the time and manner provided in the Local Obligations Indenture against such property owner; provided further, that any actions taken to enforce delinquent Special Tax liens shall be taken only consistent with Sections 53356.1through 53356.7,both inclusive, of the Government Code of the State of California; and provided further, that the District is not obligated under the Local Obligations Indenture to enforce the ii"" of unv O"tinquent installment of the Special Tax for any Fiscal Year in which the District has received one hundied percent (100%) of the amount of such installment from the County pursuant to the Teeter Plan (described herein).

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 Local Obligations Reserve Account has been depleted) pending 24

07/12/2022 Item No.11.
such sales or the prosecution of such foreclosure proceedings and receipt by the District ofthe proceeds of sale. However, within the limits of the Special Tax, the District may adjust the Special Tax levied on Taxable Property in the Improvement Area (subject to the limitation on the Maximum Special Tax, defined herein), to provide an amount required to pay interest on and principal of the Local Obligations and any additional obligations payable from the Special Tax, and the amount, if any, necessary to replenish each subaccount of the Local Obligations Reserve Fund to an amount equal to the Required Bond Reserve and to pay all current Expenses for the Improvement Area. There is, however, no assurance that the total amount of the Special Tax that could be levied and collected against Taxable Property (as defined in the Amended Rate and Method of Apportionment) in the Improvement Area will be at all times sufficient to pay the amounts required to be paid by the Local Obligations Indenture, even if the Special Tax is levied at the Maximum Special Tax rates. See "CERTAIN RISKS TO BONDHOLDERS-Maximum Special Tax,"
No assurance can be given that the real property subject to sale or foreclosure will be sold, or if sold, that the proceeds of sale will be sufficient to pay any delinquent installments of the Special Tax.

The Mello-Roos Act does not require the District to purchase or otherwise acquire any lot or parcel of property to be sold if there is no other purchaser at such sale. The Mello-Roos Act and the Local Obligations Indenture do specifr that the Special Tax will have the same lien priority as for ad valorem property taxes in the case of delinquency. Section 53356.6 of the Mello-Roos Act requires that propeffy within the Improvement Area that is sold pursuant to foreclosure under the Mello-Roos Act be sold for not less than the amount ofjudgment in the foreclosure action, plus post judgment interest and authorized costs, unless the consent of the owners of at least 7 5o/o of the Local Obligations and any Additional Local Obligations issued under the Local Obligations Indenture is obtained.

No Required Advances from Available Surplus Funds
Neither the City nor the District is obligated to advance available surplus funds available from the City treasury to pay debt service on the Local Obligations or to replenish the Local Obligations Reserve Account; ppyldgd, that nothing shall affect the right of the Dishict under the Mello-Roos Act to make advances to cure any deficiencies.

Terms of the Local Obligations
General. The City Council of the City established the District and designated the Improvement Area therein on May 26,2020. On that same date, the eligible voters of the District in the Improvement Area authorized the issuance of bonds in an amount not to exceed $124,000,000 for the Improvement Area. However, in December 2021, change proceedings for the Improvement Area were held, whereby the eligible voters in the Improvement Area approved a reduction in the maximum principal amount of bonded indebtedness that may be issued for and paid by'Improvement Area to $15,750,000.

The Local Obligations will be the first issuance of bonds for the Improvement Area. The Local Obligations will be issued in the aggregate principal amount of $9,100,000* pursuant to the Mello-Roos Act and the Local Obligations Indenture. The Local Obligations will be dated the date of delivery of the Bonds. The Local Obligations are secured by a pledge of the Special Tax (net of Priority Administrative Expenses) levied within the Improvement Area. The District may issue Additional Local Obligations on panty with the Local Obligations in accordance with the Local Obligations Indenture. Based on the expected Special Tax revenues, the District expects that obligations issued to finance the Facilities in the Improvement Area will be issued for the Improvement Area in a total amount of approximately * Preliminary, subjectto change.
25

07/12/2022 Item No.11.
$10,900,000*. This amount may vary depending on the timing of the issuance of the Additional Local Obligations and the applicable interest rates at the time of any such issuance.

Local Obligations Reserve Account. The Local Obligations Indenture establishes, for this series of the Local Obligutionr specifically, a Local Obligations Reserve Account within the Local Obligations Reserve Fund to be held by the Local Obligations Trustee. The Local Obligations Indenture requires that there be maintained in the Local Obligations Reserve Account an amount equal to the Required Bond Reserve. "Required Bond Reserve" is defined to mean, for the Local Obligations specifically, as of any date of calculation, the least of: (a) the Maximum Annual Debt Service, (b) one hundred twenty-five percent (I25%) of the Average Annual Debt Service or (c) ten (10%) percent of the original proceeds of ihe Local Obligations; provided that the Required Bond Reserve shall be calculated on the date of issuance of the Local Obligations issued under the Local Obligations Indenture and shall not increase thereafter; and provided further that such requirement (or any portion thereof) may be satisfied by the provision of oni or more policies of municipal bond insurance or surety bonds issued by a municipal tond insurer or by a letter of credit issued by a bank, the obligations insured by which insurer or issued by which bank, as the case may be, have ratings at the time of issuance of such policy or surety bond or letter of credit equal to "AA" or higher (without regard to qualifier) assigned by Fitch or "Aa" or higher (without regard to qualifier) assigned by Moody's or "AA" or higher (without regard to qualifier) assigned by S&P.

The Local Obligations Reserve Account is established specifically for the Local Obligations, and a-o,rnts in the Local Obligations Reserve Account are not available to make up a deficiency for the payment of principal and interest on any Additional Local Obligations. Pursuant to the Local Obligations indenture, each reserve account within the Local Obligations Reserve Fund is only available for paying the interest on or principal of the corresponding series of Local Obligations or any Additional Local Obligations for which it was created.

The Required Bond Reserve with respect to the Local Obligations upon their date of issuance will be$
All money in the Local Obligations Reserve Account will be used and withdrawn by the Local Obligations Trustee solely for the purpose of paying the interest on and principal of the Local Obligations in the event there is insufficient money available for the purpose; ppvidgd, that if as a result of any of the valuation of a Required Bond Reserve or as a result of any property owner prepayment it is determined that the amount of money in the Local Obligations Reserve Account exceeds the Required Bond Reserve, the Local Obligations Trustee shall withdraw the amount of money representing such excess from such fund and shall deposit such amount of money in the Redemption Account. Amounts on deposit in the Local ObligationJ Reserve Account are not available to cure a deficiency in Revenues available to pay debt service on the Bonds.

Additional Local Obligations. The District may at any time, by a supplement to the Local Obligations Indenture, issue Additional Local Obligations that are payable from the proceeds of the Special Tax (after payment of Priority Administrative Expenses) on parity with the Local Obligations, subject to the following conditions, which conditions are precedent to the issuance of such Additional Local Obligations:
(D The District shall be in compliance with all agreements, conditions, covenants and terms contained in the Local Obligations Indenture and in all Supplemental Indentures required to be observed or performed by it, and no Event of Default under the Local Obligations Indenture or under any Supplemental Indenture shall have occurred and shall be then continuing; 26

07/12/2022 Item No.11.
(iD The District shall establish a separate subaccount of the Local Obligations Reserve Fund for the payment of such Additional Local Obligations in an amount equal to the Required Bond Reserve; and
(iiD (a) In each year until the maturity date for the Additional Local Obligations, the Maximum Facilities Special Tax for Taxable Property classified as Developed Property, plus the Effective Tax Rate Evaluation Minimum Facilities Revenue (as defined in the Amended Rate and Method of Apportionment) for Taxable Property not classified as Developed Property less Priority Administrative n*penses is estimated to cover at least one hundred ten percent (Lrc%) of the sum of the Annual Debt Service for each year on the Local Obligations and all Additional Local Obligations, including such Additional Local Obligations to be issued, and (b) the Value of all Taxable Property, in aggregate, is at least three (3) times the aggregate Lien on such Taxable Property. "Facilities Special Tax" is the annual Special Tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Facilities Special Tax Requirement in accordance with the Amended Rate and Method of Apportionment (each as defined in the Amended Rate and Method of Apportionment).
"Developed Property" means, for purposes of the requirement described above relating to the issuance of Additional Local Obligations, Taxable Property for which a building permit for new construction has been issued as of the date of calculation. "Maximum Facilities Special Tax" is the total maximum annual Facilities Special Tax, determined in accordance with the provisions of Section C of the Arnended Rate and Method of Apportionment, which may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Propefty (each as defined in the Amended Rate and Method of Apportionment). "Value" is defined as the current assessed valuation of the Taxable Property and/or the appraised value of the Taxable Property determined by a MAI appraiser. "Lien" is defined in the Local Obligations Indenture as the aggt"gut" principal amount of all overlapping debt and bonds (including the Local Obligations and any-Additional Local Obligations) outstanding that are secured by a special tax levied pursuant to the Mello-Roos Act or a special assessment levied on property within the Improvement Area, including any overlapping debt or bonds for community facilities districts or special assessment districts that is reasonably allocated to property within the Improvement Area.

Notwithstanding the foregoing, the District may issue one or more series of Additional Local Obligations (the "Refunding Local Obligations") without meeting the requirements summarized in parugraph (iii) above if, after the issuance and delivery of such Refunding Local Obligations, either (i) non" oi the Local Obligations and Additional Local Obligations theretofore issued under the Local Obligations Indenture wiil be Outstanding or (ii) the Debt Service in each Bond Year that begins after the issuance of such Refunding Local Obligations is not increased by reason of the issuance of such Refunding Local Obligations.

Redemption of the Local Obligations. The Local Obligations are subject to extraordinary redemption by the District from funds derived by the District from prepayments of the Special Tax. The Local bbliguiionr are also subject to optional and mandatory redemption by the District. A description of the redemption prices and terms of the Local Obligations is set forth under APPENDIX C-"SUMMARY

OF PRINCIPAL DOCUMENTS-SUMMARY OF THE LOCAL OBLIGATIONS INDENTURE- Redemption of Bonds."
27

07/12/2022 Item No.11.

Selection of Local Obligations for Redemption. lf less than all the outstanding Local Obligations and any Additional Local Obligations are to be redeemed as a result of prepayments of the Special Tax at any one time, the Local Obligations and any Additional Local Obligations shall be redeemed pro rata by maturity. If less than all the outstanding Local Obligations and any Additional Local Obligations are to be redeemed at the option of the District at any one time, the Local Obligations and any Additional Local Obligations of the latest maturity date or dates shall be redeemed prior to or simultaneously with the redemption of the Local Obligations and any Additional Local Obligations maturing prior thereto, and if less than all the outstanding Local Obligations and any Additional Local Obligations of any one maturity date are to be redeem ed at any one time, the Trustee shall select the Local Obligations and any Additional Local Obligations or the portions thereof of such maturity date to be redeemed in integral multiples of five thousand dollars ($5,000) in a manner that it deems appropriate and fair.

Special Tax Analysis
The following is a synopsis of the provisions of the Amended Rate and Method of Apportionment, which should be read in conjunction with the complete text of the Amended Rate and Method of Apportionment which is attached as APPENDIX A. The definitions of the capitalized terms used under this caption "-special Tax Analysis" are as set forth in APPENDIX A. This section provides only a summary of the Amended Rate and Method of Apportionment, and is qualified by more complete and detailed information contained in the entire Amended Rate and Method of Apportionment attached as APPENDIX A.

The Special Tax is to be levied and collected against all Taxable Property within the Improvement Area in accordance with the Amended Rate and Method of Apportionment approved by the landowner electors of the Improvement Area. The total annual levy of the Special Tax is calculated to satisfu the annual debt service during the ensuing Fiscal Year, to replenish the reserve fund for the Local Obligations, the allocable portion of administrative expenses, the amount necessary to cure any delinquencies or to fund any deficiency of the amount to be available for the payment of principal or interest on bonds which are expected to occur in the ensuing Fiscal Year, to fund authorized facilities funded on a pay-as-you-go basis, to fund authorized services expenses and to pay amounts required to establish or replenish certain funds related to authorized services, less any available capitalized interest and earnings on the funds that may be used to fund the aforementioned costs.

Assignment to Land (Jse Categories. Each Fiscal Year, all Assessor's Parcels within the Improvement Area will be classified as either Taxable Property or Exempt Property. Taxable Property will be fuither classified as Developed Property, Small Lot Final Map Property, Permit Ready Multi- FamilyAtron-Residential Property, Large Lot Property, or Undeveloped Property and shall be subject to the levy ofthe annual Special Tax.
"Developed Propertf'means, for each Fiscal Year, all Taxable Property for which a building permit for new construction was issued prior to June 30 of the previous Fiscal Year. "Small Lot Final Map Property" means, for each Fiscal Year, all Taxable Property for which a Small Lot Final Subdivision Map was recorded prior to June 30 of the previous Fiscal Year. "Permit Ready Multi-Family/Non-Residential Property" meansan Assessor's Parcel of Taxable Property zoned for multi-family or non-residential land use for which all discretionary entitlements have been obtained, including without limitation, development plan review and improvement plan approval, such that building permits may be issued without further approvals for the construction of multi-family Residential Units or non-residential buildings within such Assessor's Parcel. The City shall have sole 28

07/12/2022 Item No.11.
discretion, based upon available development information, in classifuing an Assessor's Parcel as Permit Ready Multi-FamilyA'{on-Residential Property.
"Large Lot Property" means, for each Fiscal Year, all Taxable Property for which aLargeLot Map was recorded prioito June 30 of the previous Fiscal Year, excluding any portion(s) thereof classified as beveloped Propirty, Small Lot Final Map Properly or Permit Ready Multi-FamilyA'{on-Residential Property. Large tot Properly also means, for each Fiscal Year, all Taxable Property classified as Small Lot Final Map Remainder Property as of June 30 of the previous Fiscal Year. "Small Lot Final Map Remainder Propertll' means an Assessor's Parcel that is created from the subdivision of Large Lot Property by the recordation of a Small Lot Final Subdivision Map that has not yet been mapped for final development approval. Small Lot Final Map Remainder Property is that portion of priperty for which the Small Lot Final Subdivision Map definition does not apply (i.e., does not contain individual lots for which building permits may be issued for Residential Units without further subdivision of such property). Each Fiscal Year, all Taxable Property classified as Small Lot Final Map Remainder Property, as of June 30 of the previous Fiscal Year, will be considered Large Lot Property' "(Jndeveloped Property" means, for each Fiscal Year, all Taxable Properly not classified as Developed Property, Smalt tot Final Map Property, Permit Ready Multi-FamilyA'{on-Residential Property or Large Lot ProPeffY.
"single-Family Detached Property - MLD Zoningl'means, for each Fiscal Year, all Taxable Property for which a building permit could be issued for purposes of constructing one or more detached or attac-hed Residential Units with a permitted density range of 7-12 Residential Units per Acre, which is more fully described in the Folsom Plan Area Specific Plan adopted on June 28,2071 and as amended by the City Council.
"single-Family Detached Property - SF/SFHD Zoningl'means, for each Fiscal Year, all Taxable Property for which a building permit could be issued for purposes of constructing one or more Residential Units. Single-Family Detached Property - SF/SFFID Zoning shall consist of either single-family propeffy with a permitted density range of 1-4 Residential Units per Acre or single-family high density propeffy with a permitted density range of 4-7 Residential Units per Acre, which is more fully described in the FolsomPlan Area Specific Plan adopted on June 28,2011 and as amended by the City Council. "MMD Multi-Family Attached Property" means all Assessor's Parcels for which a building permit could be issued for purposes of constructing one or more attached Residential Units per Assessor's irarcel with a permitted density range of 12-20 Residential Units per Acre, which is more fully described in the Folsom Plan Area Specific Plan adopted on June 28,2011 and as amended by the City Council. "MHD Multi-Family Attached Property" means all Assessor's Parcels for which a building permit could be issued for purposes of constructing one or more attached Residential Units per Assessor's iarcel with a permitted density range of greater than 20 Residential Units per Acre, which is more fully described in the Folsom Plan Area Specific Plan adopted on June 28,2011 and as amended by the City Council. MHD Multi-Family Attached Property shall also include an Assessor's Parcel or that portion of an Assessor's Parcel designated as a Mixed Use Residential Parcel. "Mixed (Jse Residential Pqrcel" means a mixed use Assessor's Parcel that is designated for residential land use. If the mixed use Assessor's Parcel contains a combination of residential land use and non-residential land use, only that portion ofan Assessor's Parcel designated for residential land use shall be classified as a Mixed Use Residential Parcel and the remaining non-residential land use of the Assessor's Parcel shall be classified as Non-Residential Properly. 29

07/12/2022 Item No.11.
"Non-Residential Property" means, for each Fiscal Year, all Taxable Property for which a building permit could be issued for purposes of constructing non-residential buildings.

Maximum Special Tax. The Amended Rate and Method of Apportionment is used to allocate the amount of the Special Tax required among the Taxable Property, based upon land use categories, subject to the Maximum Special Tax rate thatmay be levied against each land use category.

The following table shows the Effective Tax Rate Evaluation Minimum Facilities Special Tax rates and the Maximum Special Tax rates within the Improvement Area for all anticipated allocable land use categories in Fiscal Year 2022-23. The Effective Tax Rate Evaluation Minimum Facilities Special Tax rates are the minimum rates for the Effective Tax Rate Evaluation Maximum Facilities Special Tax.

IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
30

07/12/2022 Item No.11.

Table 3
City of Fotsom
Communities Facilities District No.23 (Folsom Ranch)
Improvement Area No.3
Maximum Special Tax Rate Categories
tr'iscal Year 2022-23
Tax Category
Residential
Floor Area
Effective
Tax Rate
Evaluation
Minimum
Facilities
Special
Tax Rate(l)
Effective Tax
Rate
Evaluation
Maximum
F'acilities
Special Tax
Rate(l)
Maximum
Services
Special
Tax Rate(2)
Maximum
Annual
Special
Tax(3)
Developed Property ($ amounts per residential unit)
Detached Residential:

Single-Family Detached Property - SF/SFHD Zoning
Single-Family Detached Property - SF/SFHD Zontng
Single-Family Detached Property - SF/SFHD Zontng
Single-Family Detached Property - SF/SFHD Zoning
Single-Family Detached Property - MLD Zonng
Developed Property ($ amounts per acre)
MMD Multi-Family Attached Property
MHD Multi-Family Attached Property
Non-Residential Property
Small Lot Final Map Property
($ amounts per residential lot)
Single-Family Detached Property - SF/SFHD Zonng
Single-Family Detached Property - MLD Zontng
Permit Ready Multi-Family/It{on-Residential
Property ($ amounts per acre)
Large Lot Property ($ amounts per acre)
Undeveloped Property ($ amounts per acre)
$102
t02
t02
102
102
$30,600
11,934
1r,934
$3 1,1 10
12,954
12,954
> 2,200
2,000 - 2,199
1,800 - 1,999
< 1,799
N/A
s908
806
704
602
500
$602
602
602
602
500
$sl0
1,020
1,020
$1,010
908
806
704
602
s19,380
$19,380
N/A
N/A
N/A
N/A
N/A
N/A
$30,600
11,934
11,934
N/A
N/A
$102
102
N/A $602
500
$704
N/A
N/A $11,934 $1,020 $12,954
602
N/A
N/A
$18,360
$18,360
$1,020
$1,020
(r) Increases by 2%oeachFiscal Year.
(2) Increases by the annual June consumer price index change for the San Francisco-Oakland-San Jose are4 not to exceed 4o/o each Fiscal Year.

Available to pay debt service on the Local Obligations and any Additional Local Obligations in the event of a shortfall in the Facilities Special Tax (as defined in the Local Obligations Indenture). Estimated to increase by 2o/ofot Fiscal Year 2022-23. (3) The sum of the Effective Tax Rate Evaluation Maximum Facilities Special Tax and the Maximum Services Special Tax.

Source: NBS and the District.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3l Page 365
07/12/2022 Item No.11.

The total Special Tax generated by the Improvement Area may change from time to time if there are amendments or modifications to the development plan. The District covenants in the Local Obligations Indenture to not approve any amendments, changes or modifications relating to development of thi property within the Improvement Area that would reduce the amount of the Maximum Facilities Speciai Tax less Priority Administrative Expenses to equal less than one hundred ten percent (110%) of the sum of the Annual Debt Service on the Local Obligations and any Additional Local Obligations in any year until the maturity date for the Local Obligations and any Additional Local Obligations.

Tables 4 and 5 under '6-special Tax Calculation" collectively show the estimated maximum and projected actual amounts of Special Tax revenue for Fiscal Year 2022-23 using the development status of the properties as of June 16, 2022 (unless otherwise noted). Table 4 shows the Fiscal Year 2022-23 estimated Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues, based on the development status of the properties as of June 16,2022 (unless otherwise noted). If changes are made to development plans for the Improvement Area, the projected Effective Tax Rate Evaluation Maximum Facilities Speciat Tax revenues may decrease from the amounts shown in that table, but in no event will the Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues decrease below the Effective Tax Rate Evaluation Minimum Facilities Revenue. Table 5 shows the estimated total Special Tax levy for Fiscal Year 2022-23 based on the properties' development status as of June 16,2022 (unless otherwise noted), including both the estimated Facilities Special Tax levy and the estimated Services Special Tax levy for Fiscal iear 2022-23, and the percentage of the estimated Special Tax levy allocable to each of the projected property owners.

Included below are additional relevant defined terms used in the Amended Rate and Method of Apportionment.
"Effective Tax Rate Evaluation Minimum Facilities Revenue" means, following the Effective Tax Rate Evaluation, the total minimum amount of CFD No. 23 IA3 Effective Tax Rate Evaluation Maximum Facilities Special Tax, as adjusted annually by the Facilities Special Tax Escalation Factor after the Fiscal Year in which the Effective Tax Rate Evaluation occurs, less any Effective Tax Rate Evaluation Maximum Facilities Special Tax amounts prepaid and permanently satisfied pursuant to Section K of the Amended Rate and Method of Apportionment. The Effective Tax Rate Evaluation Minimum Facilities Revenue, based on Planned Development, is set forth in Attachment D of the Amended Rate and Method of Apportionment.
"Effective Tax Rate Evaluation Maximum Facilities Special Tmc" means the total maximum annual paiitities Special Tax, as determined during the Effective Tax Rate Evaluation, which may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Property. "Effective Tax Rate Evaluation" means an evaluation of the Total Effective Tax Rate of Residentiai Property at the time of such evaluation. The Effective Tax Rate Evaluation will be based upon a prepared Price Point Study to determine the Total Effective Tax Rate for Residential Properly, based upon the calculated Total Estimated Tax Burden.
"Total Effective Tax Rate" means the percentage of the Total Estimated Tax Burden as compared to the estimated average sales price identified in the Price Point Study for each land use category of Residential Property.
"Total Estimated Tax Burden" means the total amount of overlapping property taxes anticipated to be levied upon a Residential Unit, based upon the estimated average sales price identified in the Price Point Study and existing property tax rates for the current Fiscal Year. Existing property tax rates shall 32 Page 366
07/12/2022 Item No.11.
reflect the actual property tax rates levied upon Taxable Property in the Fiscal Year that the Effective Tax Rate Evaluation is completed.

Future Assessor's Parcel Changes. The Effective Tax Rate Evaluation Maximum Facilities Special Tax shall be assigned to all future Assessor's Parcel(s) created from a subdivision, lot line adjustment, or merger of one or more Assessor's Parcels so that the revised total Effective Tax Rate Evaluation Maximum Facilities Special Tax revenue is not less than the total Effective Tax Rate Evaluation Minimum Facilities Revenue amount described in the Amended Rate and Method of Apportionment.

Method of Apportionment - Facilities Special Tax. The CFD No. 23 lA3 Administrator shall determine the Facilitiei Special Tax Requirement and levy the Facilities Special Tax until the amount of Facilities Special Taxes equals the Facilities Special Tax Requirement. The Facilities Special Tax shall be levied each Fiscal Year as follows:

First: The Facilities Special Tax shall be levied Proportionately on all Developed Property at a rate up to 100%o of the Effective Tax Rate Evaluation Maximum Facilities Special Tax in order to satisff the Facilities Special Tax Requirement.

Second: If additional monies are needed to satisff the Facilities Special Tax Requirement after the first step has been completed, the Facilities Special Tax shall be levied Proportionately on all Small Lot Final Map Property at a rate up to 100% of the Effective Tax Rate Evaluation Maximum Facilities Special Tax. The Facilities Special Tax shall be levied on Small Lot Final Map Property for the entire portion of the Facilities Special Tax Requirement, excluding only Pay As You Go Costs.

Third: If additional monies are needed to satis$ the Facilities Special Tax Requirement after the first two steps have been completed, the Facilities Special Tax shall be levied Proportionately on all Permit Ready Multi-FamilyA.{on-Residential Propeffy at a tate up to 100% of the Effective Tax Rate Evaluation Maximum Facilities Special Tax.

The Facilities Special Tax shall be levied on Permit Ready Multi-FamilyA{on- Residential Property for the entire portion of the Facilities Special Tax Requirement, excluding onlY PaY As You Go Costs.

Fourth: If additional monies are needed to satisfu the Facilities Special Tax Requirement after the first three steps have been completed, the Facilities Special Tax shall be levied Proportionately on all Large Lot Property at a rate up to 100% of the Effective Tax Rate Evaluation Maximum Facilities Special Tax. The Facilities Special Tax shall be levied on Large Lot Property for the entire portion of the Facilities Special Tax Requirement, excluding only Pay As You Go Costs.

Ffth If additional monies are needed to satis$u the Facilities Special Tax Requirement after the first four steps have been completed, the Facilities Special Tax shall be levied Proportionately on all Undeveloped Property at a rate up to 100% of the Effective Tax Rate Evaluation Maximum Facilities Special Tax. The Facilities Special Tax shall be levied on Undeveloped Property for the entire portion of the Facilities Special Tax Requirement, excluding only Pay As You Go Costs.

Method of Apportionment - Services Special Tax. The CFD No. 23 IA3 Administrator shall determine the Servicei Special Tax Requirement and levy the Services Special Tax until the amount of Services Special Taxes equals the Services Special Tax Requirement. The Services Special Tax shall be JJ

07/12/2022 Item No.11.
levied each Fiscal Year as follows:

First: The Services Special Tax shall be levied Proportionately on all Developed Property at a rate up to 100% of the Maximum Services Special Tax in order to satisfr the Services Special Tax Requirement.

Second: If additional monies are needed to satisfii the Services Special Tax Requirement after the first step has been completed, the Services Special Tax shall be levied Proportionately on all Small Lot Final Map Property at a rate up to 100% of the Maximum Services Special Tax in order to satisfu the Services Special Tax Requirement.

Third: If additional monies are needed to satisfu the Services Special Tax Requirement after the first two steps have been completed, the Services Special Tax shall be levied Proportionately on all Permit Ready Multi-FamilyA.{on-Residential Property at a rate up to 100% of the Maximum Services Special Tax in order to satisff the Services Special Tax Requirement.

Fourth: If additional monies are needed to satisfu the Services Special Tax Requirement after the first three steps have been completed, the Services Special Tax shall be levied Proportionately on all Large Lot Properly at a rate up to 100% of the Maximum Services Special Tax in order to satisff the Services Special Tax Requirement, "special Tax" means the annual Facilities Special Tax and Services Special Tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Properly to fund the Facilities Special Tax Requirement and the Services Special Tax Requirement.
"Facilities Special Tax Requirement" means that amount of Special Tax revenue required in any Fiscal Year for the Improvement Area to: (i) Pay Facilities Administrative Expenses in an amount designated by the City; (ii) pay annual debt service on all Outstanding Bonds due in the Bond Year beginning in such Fiscal Year; (iii) pay other periodic costs on Outstanding Bonds, including but not nmitea to, credit enhancement and rebate payments on Outstanding Bonds; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds in accordance with the Indenture; (v) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special tu*"r levied in the previous Fiscal Year and known upcoming delinquencies; and (vi) pay for Pay As You Go Costs; less (vii) a credit for funds available to reduce the annual Facilities Special Tax levy as determined by the CFD No. 23IA3 Administrator pursuant to the Indenture. "services Special Tax Requirement" means the amount of Services Special Tax revenue required in any Fiscal Year for the Improvement Area to: (i) Pay Services Administrative Expenses in an amount designated by the City; (ii) pay Authorized Services expenses; (iii) pay any amounts required to establish or replenish any repair and contingency funds, capital improvement funds, or reserve funds related to the Authorized Services expenses; (iv) cover any shortfalls that exist if, in any Fiscal Year, the levy of the Facilities Special Tax on each Assessor's Parcel of Taxable Property is insufficientto pay the Facilities Special Tax Requirement in that Fiscal Year (Facilities Special Tax Requirement shortfalls shall not include Pay As You Go Costs), and (v) pay for reasonably anticipated delinquent Services Special Taxes based on the delinquency rate for Services Special Taxes levied in the previous Fiscal Year; less (vi) a credit for funds available to reduce the annual Services Special Tax levy as determined by the CFD No. 23IA3 Administrator.
34

07/12/2022 Item No.11.

In accordance with the flow of Special Tax proceeds under the Local Obligations Indenture, in the event of a shortfall in the Facilities Special Tax to pay the Facilities Special Tax Requirement, the proceeds of the Services Special Tax will be applied to help cover the Facilities Special Tax shortfall before being applied to fund Authorized Services. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Local Obligations Flow of Funds'"
Residential Property Limitation. Under no circumstances will the Facilities Special Tax levied in any fiscal year against any Assessor's Parcel of Developed Property classified as Residential Property be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the Improvement Area by more than 10Yo above the amount that would have been levied against such Assessor's Parcel in that fiscal year had there never been any such delinquencies or defaults.

Pursuant to the Amended Rate and Method of Apportionment, property is considered "Residential Property" once a building permit could be issued for the purposes of constructing one or more Residential Units, including either single family detached homes or multi-family attached properties, such as apartments, and property is considered "Developed Property" if a building permit for new construction was issued prior to June 30 of the previous fiscal year. See "CERTAIN RISKS TO BONDHOLDERS- Maximum Special Tax."
Special Tax Calculation
The following tables reflect the estimated Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues for Fiscal Year 2022-23 and the estimated Effective Tax Rate Evaluation Minimum Facilities Revenues for Fiscal Year 2022-23 (Table 4) and the estimated total Special Tax levy for Fiscal Year 2022-23 (Table 5), each based on the development status of the properties as of June 16,2022 (unless otherwise noted). For Table 4, the estimated Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues for Small Lot Final Map Properly are equal to the Effective Tax Rate Evaluation Minimum Facilities Revenues until a building permit is issued for such property. The following tables do not necessarily reflect the Special Tax that will be actually levied in any year. See "PROPOSED PROPERTY DEVELOPMENT-Development Entitlements" for a discussion of the anticipated timing of the final map approval for the remaining 476 units that had not received such approval as of June 16, 2022.

IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
35

07/12/2022 Item No.11.

Table 4
City of Folsom
Community Facilities District No. 23 (Folsom Ranch)
Improvement Area No. 3
Estimated 2022-23 Effective Tax Rate Evaluation Maximum Facilities Revenue and Minimum Facilities Revenue Development Status as of June 16,2022 (unless otherwise noted) Planned
Units
Estimated 2022-23
Effective Tax Rate
Evaluation
Maximum
Facilities
psysaus(z)(3)
Percentage of
Estimated 2022-23
Effective Tax
Rate Evaluation
Maximum
Facilities Revenue
Estimated 2022-23
Effective Tax
Rate Evaluation
Minimum
Facilities
ftsysnqs(z)(3)
Percentage of
Estimated 2022-23
Effective Tax
Rate Evaluation
Minimum
Facilities Revenue
Appraised
Value(l)
$ 18,995,376
7,886,969
Propertv
Developed Property:

Single-Family Detached Property - SF/SFHD Zontng
Single-Family Detached Proper{y - MLD Zonng
Developed Property Total:

Smatt Lot Final Map Property(a);
Single-Family Detached Property - SF/SFHD Zonng
Single-Family Detached Propeny - MLD Zonng
Small Lot Final Map Property Total:

Large Lot ProPertY(a);
Large Lot Propefty(s)
Large Lot Property Total:

Totals:
$ 30,150,217
2,332,765
217 532,482,982 $ 155,275
196
2l
l7l
7l
8 144,779
10,496
$ 102,908
35,486

5.4%

0.4%

5.8o/o

3.8%
13%

5.to

89.lYo

89.1o/o
l00o/o
g 1M,779
10,496
$ 155,275
$ 102,908
35,486
$ 138,394
$ 269,076
$ 269,076
s 562,744

25.7%
l.9o/o

27.6Vo
t8.3%

6.3%

24.60/o

47.8%

47.80h
1000h
242
460
$26,882,345 $ 138,394
$ 51,098,673 I 2,398,367
460 $51,098,673 82,398,367
919 $110,464,000 $2,692,035
(l) Appraised value amounts provided by the Appraiser.
(2) Increases by 2%o each Fiscal Year.
is shown for Developed Property.
revenues of $496,108 at full buildout.
(5) The Effective Tax Rate Evaluation Minimum Facilities Revenue based upon the number of units planned.

Source: NBS.
36

07/12/2022 Item No.11.

Table 5
City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3
Estimated 2022-23 Special Tax Levy
Development Status as of June 1612022 (unless otherwise noted) Planned
Units
Estimated
Facilities Special
Tax Levfr)
sr55,275
t38,394
218,317
Percent of
Estimated Total
Facilities Special
Tax Levy
3UVo
27Yo
43o/"
lo00
Estimated
Services
Special
Tax Levy
$22,134
24,684
133,243
$1E0,061
Estimated
Total Special
Tax Levy
$t77,409
163,078
351,559
8692,046
Percent of
Estimated
Total Special
Tax Levy
26%
24%
5lYo
l0Oo/"
Development Status
Developed Property
Small Lot Final Map Property
Large Lot Property
2t7
242
460
Totals: 919 $511,985
(1) Based on estimated debt service requirements for the Bonds plus Priority Administrative Expenses of $20,000 Source: NBS.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
37 Page 371
07/12/2022 Item No.11.

The Teeter Plan
In 1949, the State Legislature enacted an alternative method for the distribution of secured property taxes to local agencles. This method, known as the Teeter Plan, is now set forth in 3""tiotri 470r-4:-17 of the Califomia Revenue and raxation code. upon adoption and implementation of the Teeter Plan by a county board of supervisors, local agencies for which the county acts as o'bank" and certain other pubiic ug"n"i"r and taxing areas located in the county receive annually the full amount of their share of properry taxes on the secured roll, including delinquent property taxes which have yet to be collected. While a county benefits from the penalties associated with these delinquent taxes when they are paid, the Teeter plan provides participating local agencies with stable cash flow and the elimination of collection risk.

To implement a Teeter Plan, the board of supervisors of a county generally must elect to do so by July 15 of the fiscal year in which it is to apply. The Sacramento County Board of Supervisors has adopted the Teeter Plan. Once adopted, a county's Teeter Plan will remain in effect in perpetuity unless the
^board
of supervisors orders its discontinuance or unless prior to the commencement of a fiscal year a petition for disiontinuance is received and joined in by resolutions of the governing bodies of not less ihan two-thirds of the participating districts in the county. An electing county may, however, opt to discontinue the Teeter Plan with respect to any levying agency in the county if the board of supervisors, by action taken not later than July 15 of a fiscal year, elects to discontinue the procedure with respect to such levying agency and the rate- of secured tax delinquencies in that agency in any year exceeds 3o/o of the total of all taxes and assessments levied on the secured roll by that agency. See "CERTAIN RISKS TO BONDHOLDERS-Teeter Plan Termination."
Upon making a Teeter Plan election, a county must initially provide a participating local agency with 95%o of the estimated amount of the then accumulated tax delinquencies (excluding penalties) for that agency. In the case of the initial year distribution of special taxes and assessments (if a county has elected to include assessments), 700oA of the special tax delinquencies (excluding penalties) are to be apportioned to the participating local agency which levied the special tax. After the initial distribution, each participating lbcal agency receives annually 100% of the secured properly tax levies to which it is otherwise "tttitled,
regardless of whether the county has actually collected the levies.

If any tax or assessment which was distributed to a Teeter Plan participant is subsequently changed by correction, cancellation or refund, a pro rata adjustment for the amount of the change is made on th. records of the treasurer and auditor of the county. Such adjustment for a decrease in the tax or assessment is treated by the County as an interest-free offset against future advances of tax levies under the Teeter Plan.

The Special Tax for the District will be submitted to the County for direct levy. By submitting the Special Tax to the County, the District has agreed to allow the District to participate in the County's Teetei Plan. The County annually determines whether to include a particular direct levy and may make that determination on a district by district basis or a parcel by parcel basis. In addition, the County may not decide to include a particular parcel or district that had been included in its Teeter Plan in the previous year. The District can provide no assurance that the County will continue to include the District or any improvement area therein, including the Improvement Area, in the Teeter Plan.

To the extent that the County's Teeter Plan continues in existence and is carried out as adopted' the County's Teeter Plan may help protect the Owners of the Bonds from the risk of delinquencies in Special Taxes.
38 Page 372
07/12/2022 Item No.11.

THE AUTHORITY
The Authority was created by a Joint Exercise of Powers Agreement, effective April20,2015 (the "JPA Agreement"), between the City and the City of Folsom South of 50 Parking Authority. The JPA Agreement was entered into pursuant to the Joint Exercise of Powers Act, Chapter 5 of Division 7 of Title 1 of the Government Code of the State. The Authority was created for the purpose of facilitating financing of public improvement facilities within the City south of US Route 50.

THE CITY
The Improvement Area is located in the City, which is located in the easterly section of the Sacramento metropolitan area approximately 22 miles east of the central business district of the City of Sacramento.

Certain economic and demographic information with respect to the City is contained in APPENDIX B. This information is presented solely as background information. The Local Obligations are not general obligations of the City but, rather, are special tax obligations of the District secured solely by the Special Taxes to be paid by the owners of property in the Improvement Area and funds held pursuant to the Local Obligations Indenture.

THE IMPROVEMENT AREA
General Description and Location
The District is a community facilities district organized by the City Council as the legislative body of the District under the Mello-Roos Act for the purpose of providing for the acquisition and construction of certain public improvements and the financing of certain services to serve property within the District. The City established the Dishict on May 26,2020, and designated six separate improvement areas therein, including the Improvement Area. On May 26, 2020, elections were held within the Improvement Area and the other improvement areas within the District at which the eligible voters in each improvement area approved the levy of special taxes in accordance with the respective Rate and Method of Apportionment of Special Tax for such improvement area. In addition, the eligible voters in the Improvement Area initially authorized the issuance of bonds in an amount not to exceed $124,000,000 for the Improvement Area. In December 2021, a seventh improvement area was designated within the District and change proceedings for the Improvement Area were held, whereby the eligible voters in the Improvement Area approved amended boundaries for the Improvement Area, the Amended Rate and Method of Apportionment and a reduction in the maximum principal amount of bonded indebtedness that may be issued for and paid by Improvement Area to $15,750,000.

The District expects that such bonds and any bonds issued for the other improvement areas within the District from time to time will be issued to finance the authorized public facilities for the benefit of the District. With respect to the Improvement Area, such bonds will be issued only in accordance with the provisions of the Local Obligations Indenture. The total bonded indebtedness authorized in the Improvement Area will be limited by the requirements of the Local Obligations Indenture, including the following requirements relating to any Additional Local Obligations: a 3:l overlapping value to lien ratio on all land projected to be subject to the levy of the Special Tax and ll0o/o anntal coverage from the Maximum Facilities Special Tax for Taxable Property classified as Developed Property (as defined in the Local Obligations Indenture), plus the Effective Tax Rate Evaluation Minimum Facilities Revenue for Taxable Property not classified as Developed Property (as defined in the Local Obligations Indenture) less Priority Administrative Expenses. See "SECURITY AND SOURCES OF PAYMENT FOR TFIE BONDS- Terms of the Local Obligations-ldditional Local Obligations;' 39

07/12/2022 Item No.11.

The Improvement Area is located in the southern portion of the City, west of East Bidwell Street, north of Mangini Parkway and south of U.S. Highway 50 and consists of over 272 total gross acres, of which approximately 178 acres are expected to constitute Taxable Property subject to the Special Tax.

The remainder of the properly will include an approximately 18,000 square foot clubhouse that includes an indoor swimming pool, a fitness center with men's and women's locker rooms, social areas, exercise rooms, two multipgrpose areas, a social hall, a self-serve store, offices, restrooms, storage rooms, and outdoor patios and seating areas; an outdoor pool and spa; a barbeque pavilion; event lawns; bocce ball courts; pickle ball courts; two dog parks; walking trails; a parking lot; and approximately 80 acres of open space. bevelopment within the Improvement Area is planned to include, at the time of full build-out, 919 age-restrictea (SS+; residential homes, comprised of 751 single-family/single-family high density units unO tOS multi-family low density units. The maps appearing on the inside cover pages show the general location of the District and the Improvement Area.

Presently, the Improvement Area includes properties in varying stages development, including partially-improved lots, improved lots, homes under construction and completed homes. The I-p.ou"-"ttt Ar"u is expected to include 5 separate product lines of homes, ranging from typical lot sizes of 3,440 square feet to 6,175 square feet, with three separate floor plans for each product line' Construction of the public improvements and backbone infrastructure in the Improvement Area is currently underway and has been completed for some properties, as more particularly described ,,PROPOSED PROPERTY DEVELOPMENT-Development Plans of Finance." The Improvement Area is located southwest of a residential community under current development known as Russell Ranch that is expected to include over 1,000 single family dwellings at full build-out, is immediately west of Mangini Ranch, apartially developed residential community that is also expected to include over i,000 single family dwelling units at full build-out, and is west of an additional residential community known as White Rock Springs that is also under development and expected to include over 420 single family dwellings'
Property Values
An appraisal of the land within the Improvement Area has been prepared by the Appraiser in connection with the issuance of the Bonds. The appraisal estimates the land value as of June 1,2022 (the "Appraisal"). The Appraisal is attached to this Offrcial Statement as APPENDIX G.

As of the date of inspection, the Appraiser notes that development of the property is underway.

The subject property was valued based on the hypothetical conditions that proceeds from the Bonds will be used to r"imb.,r." infrastructure improvements completed. The Appraisal is based on land values at the time of inspection.

Subject to the assumptions, hypothetical condition and limiting conditions, the Appraiser estimated that the value of the land within the Improvement Area, as of June l, 2022, in aggregate, is $110,464,000. See "PROPOSED PROPERTY DEVELOPMENT-Development Plan and Status of Development" below and APPENDIX G - "APPRAISAL."
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
40

07/12/2022 Item No.11.

Value-to-Lien Analysis
The following table sets forth the ratios of the appraised bulk value of the land to the total liens on the property in the Improvement Area based on the development status of the property as of June 16, 2022. See "PROPOSED PROPERTY DEVELOPMENT-Development Entitlements." The following table also shows the estimated Facilities Special Tax levy for Fiscal Yeat 2022-23 based on the properties' current map status as Developed Property, Small Lot Final Map Properly and Large Lot Froperty. The value-to-lien ratio for the Improvement Area based solely on the Local Obligations and the appiaised aggregate value of the land within the Improvement Area is 12.1-:1.0. The overall value to overlapping debt ratio, including certain overlapping general obligation tax and assessment debt and CFD 17 special tax debt, is 8.2-:1.0 (see "-Overlapping Debf'). Any bonds secured by special assessments or special taxes issued from time to time may have the effect of reducing the value to lien ratio on properly within the Improvement Area.

IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
* Preliminary, subject to change.
4l

07/12/2022 Item No.11.

Table 6
City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3
Appraised Value-to-Lien Ratios
Development Status as of June 1612022 (unless otherwise noted) Estimated 2022-23
Effective Tax Rate
Evaluation
Maximum Facilities
Revenue(2)
9155,275
138,394
2,398,367
$2,692,035
Estimated
2022-23
Facilities
Special Tax
Levy(s)
$15s,27s
138,394
218,3t'.|
Share ofLocal
Obligations(9
$2,759,844
Appraised
Value To Lien
from Local
Obligations(6).

I 1.8

10.9 13.2
Appraised
Value To Lien
from Local
Obligations
Overlapping
Debt(6).

Appraised
Value(a)
932,482,982
26,882,345
s1,098,673
Overlapping
Debt
$973,969
1,351,482
2,1 19,888
and
Development Status(l)
Developed Property
Small Lot Final Map Property
Large Lot Property0)
Total
Planned
Units
2t7
242
460
919
2,459,802

3.880,354
$511,985 $110,464,000 $9,100,000 $4,445,339 l2.l

8.7 7.1

8.5 8.2
*
Preliminary, subject to change.
(1) As of June 16,2022, unless otherwise noted.
(2) Increases by 2%o eachFiscal Year. The2022-23 Effective Tax Rate Evaluation Minimum Facilities Revenue amowrt is $535,918. (3) Based on estimated debt service requirements for the Bonds plus Priority Administrative Expenses of $20,000. (a) Appraised value amounts provided by the Appraiser. See "-Property Values." (s) Allocated based on the projected Fiscal Year 2022-23 Special Tax levy. (6) Value to lien ratio is for the Local Obligations. Local Obligations are issued in the same principal amount of the Bonds. (?) Based on the number of units planned for all remaining Large Lot Property, the Effective Tax Rate Evaluation Minimum Facilities Revenue is$269,076.

Source: Except as otherwise noted, NBS
42 Page 376
07/12/2022 Item No.11.

Estimated Tax Burden on Single Family Home
The following table sets forth the estimated total tax burden on single-family high density residential property (Sefn) and multi-family low density residential property (MLD) within the Improvement Area, presented as an estimate of the majority of proposed homes to be constructed in the Improvement Area, based on estimated tax rates for Fiscal Year 2021-22.

Table 7
City of Folsom
Community F''acilities District No.23 (Folsom Ranch)
Improvement Area No.3
Residential Property Sample Property Tax Bill
Estimated Charges for Fiscal Year 2021-22

SFHD MLD
Assessed Value(I)
Less: Homeowner Exemption
Net Assessed Value
Ad Valorem(2)
General Purpose Ad Valorem Tax (Proposition 13)
Los Rios College General Obligation
Folsom-Cordova Unified School District Improvement Dist. 2 Folsom-Cordova Unified School District Improvement Dist. 3 Total Ad Valorem Taxes
SpeciaVDirect Assessments and Taxes
Folsom Community Facilities District No. 23 (Folsom Ranch) - Facilities(3) Folsom Community Facilities District No. 23 (Folsom Ranch) - Services(a) Folsom Community Facilities District No. 17 (Willow Hill Pipeline)ts) Folsom Community Facilities District No. 18 (Folsom Plan Area)(s) Sacramento Area Flood Control(6)
Totat SpeciaVDirect Assessments and Taxes
Total Estimated Annual Property Taxes
Effective Tax Rate(?)
$ 751,100
(7,000)
$ 600,300
(7,000)
$ 744,100 $ 593,300
Tax Rate

1.0000%

0.0249o/o

0.0247%

0.3881%

1.43770 $10,697.93 $8,529.87
$ 7,441.00
185.28
183.79
2,887.85
$ 5,933.00
147.73
146.55
2,302,60
s 690.00
100.00

75.45 1,016.80

1.50 $ 1,883.75 S 1,389.67
$ 490.00
100.00

46.78 751.39

1.50 $12,581.68
l.675lo/o
$9,919.54

1.65240
(1) Estimated based upon the minimum appraisal value for a sample single-family high density unit and a sample multi-family low density unit per the Developer.
(2) Based upon 2021-22 Sacramento County ad valorem property tax rates for TRA 04-035 and 04-036. (3) 2021-2; Effective Tax Rate Evaluation Maximum Annual Facilities Special Tax for a single-family high density unit with residential floor area between 1,800 and 1,999 square feet and a multi-family low density unit. The Effective Tax Rate Evaluation Maximum Annual Facilities Special Tax escalates annually at2%o' (4) 2021-22 Maximum Annual Services Special Tax for a single-family high density unit with residential floor area between 1,800 and 1,999 square feet and a multi-family low density unit. The Maximum Annual Services Special Tax escalates annually based upon the annual June CPI Change, for the San Francisco-Oakland-San Jose are, not to exceed 47o. (5) 20zl-22 Maximum Annual Special Tax. The Maximum Annual Special Tax excludes the Willow Hill Pipeline Special Tax, which is currently reflected under Folsom Community Facilities District No. 17 (Willow Hill Pipeline). The Area-Wide Special Tax escalates annually at 2yo and the Maintenance Special Tax and TDM Services Special Tax escalate annually based upon the annual June CPI Change, for the San Francisco-Oakland-San Jose are, not to exceed 4o/o. (6) Approximate assessment for residential lots, based on lot size. (7) Estimate ofannual property taxes does not include any new special financing district fees, assessments, and/or special taxes imposed by the state, county, or local agencies that are yet to be established or any future annexation into existing special financing districts required by conditions for approval-of development or any other imposed requirement. Information contained within is based upon records and official documents provided by various govemmental agencies and third-party sources. 43 Page 377
07/12/2022 Item No.11.

Overlapping Debt
Set forth below is an overlapping debt table showing the existing authorized indebtedness payable with respect to property within the Improvement Area. Additional indebtedness could be authorized by other public agenciis at any time. Further, a portion of the overlapping debt shown in the table below is based on the assessed value of the underlying property, which can be expected to increase over time as development occurs and the assessed value grows. This table has been prepared by California Municipal Statistics, Inc. as of July 1,2022, and is included for general information purposes only. Other than with respect to CFD 17 , the table below allocates overlapping debt based on the assessed value of property and not on taxes paid. The District and the Authority have not reviewed the data for completeness or accuracy and make no representations in connection therewith.

CFD 17 authorized up to $8,000,000 of bonds. In additionto CFD l7 and the District, the City has formed CFD 18, which the District overlaps, and the City Council of the City has authorized the issuance of $200,000,000 in bonds to be secured by a special tax on properly within CFD 18 on parity with the Special Tax in the Improvement Area. The timing of issuance of bonds for CFD 18 is dependent upon market conditions and development within the Folsom Plan Area. The City currently anticipates that aninitial series of CFD 18 bonds in an estimated amount between $25 million to $30 million will be issued in the fourth quarter of 2022 to help finance at least a portion of the required Phase 2 Water Facilities (as defined herein). A portion of any bonds issued for CFD 18 will constitute overlapping debt.

Other community facilities districts formed in the Folsom Ranch area will overlap CFD 18 and potentially CFD 17 but are not expected to overlap the District.

Direct assessments and levies payable with respect to property within the Improvement Area could potentially include up to $750 million of general obligation bonds for the School Facilities Improvement Dishict No. 3 of the Folsom Cordova Unified School District ("SFID 3"), approved by uoi"r, on March 27,2007. SFID 3 encompasses approximately 52.6 square miles of land including the District and additional territory outside of the District, including territory in the City of Rancho Cordova and unincorporated Sacramento County. As of lune 27,2022, general obligation bonds in the aggregate principal amount of approximately $195.6 million had been issued and approximately $188.4 million were outstanding for SFIO :. At the time of the election approving the SFID 3 general obligation bonds, the ballot ru.rnury indicated the average taxrate per $100,000 assessed valuation would be $73.61. For 2021-22,the actual SFID 3 taxrate per $100,000 was approximately $388.10. The followingtable sets forth the ad valorem tax rates for SFID 3 over the past five years. The future tax levy per property owner in SFID 3 may vary depending on future bond issuance and/or changes in assessed value.

Table 8
City of Folsom
Community Facilities District No. 23 (Folsom Ranch)
Improvement Area No. 3
SFID 3 Ad Valorem Rates
Year Rate(l)
2021-22
2020-21
2019-20
2018-19
2017-18

0.3881%

0.2065%

0.1366%

0.r4sl%

0.1878%
(t) 1P,45 04-035 and o4-036
Source: NBS.
44

07/12/2022 Item No.11.
"nffll'"n*"-Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3
OverlaPPing Debt
2021-22 Local secured Assessed valuation s59,420,743 (Land and Improvements) DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT:

Los Rios Community College District
Folsom-Cordova Unified School District School Facilities Improvement District No. 2 Folsom-Cordova Unified School District School Facilities Improvement District No' 3 City of Folsom Community Facilities DistrictNo. 17
City of Folsom Community Facilities District No. 23, I.A. 3

TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT
OVERLAPPING GENERAL FUND DEBT:

Sacramento County General Fund Obligations
Sacramento County Pension Obligation Bonds
Sacramento County Board of Education Certificates of Participation City of Folsom General Fund Obligations

TOTAL GROSS OVERLAPPING GENERAL FUND DEBT
Less: Sacramento County supported obligations

TOTAL NET OVERLAPPING GENERAL FLIND DEBT

GROSS COMBINED TOTAL DEBT

NET COMBINED TOTAL DEBT
% Apnlicable

0.026%

0.370

2.075

6.085
100.

0.031%

0.031

0.03 r

0.358
DebtTlll22
$ 128,395
51,706
3,908,047
357,l9t
_$r)
$4,445,339
$ 39,830
194,123
818

3.587
$238,358

4.265
9234,093
$4,683,69'.7Q)
$4,679,432
(l) Excludes Mello-Roos Bonds to be sold.
iZj fxctuOes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Ratios to 2021-22 Local Secured Assessed Valuation:

Direct Debt ($0)................

Total Direct and Overlapping Tax and Assessment Debt
.0.00%
GROSS Combined Total Debt.

7.48%

7.88o/o

7.88%Net Combined Total Debt......

Source: California Municipal Statistics, Inc.

PROPOSED PROPERTY DEVELOPMENT
Development Entitlements
Specific Plan. On June 28, 2011, the City Council approved the Specific Plan for the development of 10,210 residential homes along with commercial, industriaVoffice park, open space, publicichools, parks, infrastructure and other land uses on the 3,513.4 acre site of the Folsom Plan Area.

At build out, projected to occur over a 2}-year time frame, the Folsom Plan Area is projected to have a population of approximately 24,362 persons. Along with the 1.,455.6 acres of residential development, the adopted Specific Plan called for 511.3 acres of commercial, office/industrial and mixed-use,309'5 u.r", of public and quasi-public use (public and private schools, parks and infrastructure);173.6 acres of major roads and 1,063 acres of open space'
Various property owners have submitted and received approvals of Specific Plan Amendments ("SPA's") since the 2011 City Council adoption. These approved SPA's have resulted in various land use changes compared to the Specific Plan that was originally approved in20l1, including an increase in the 45

07/12/2022 Item No.11.
total entitled unit count to 11,461dwelling units and reduction to approximately 2.8 million square feet of commercial, office/indushial and mixed use.

Through a Minor Administrative Modification for the Improvement Area, the Specific Plan was modified to allow for the adjustment of a common lot line between an elementary school site and seven residential lots in order to accommodate a wider street path that provides improved emergency access.

The minor modification was approved by the City's Community Development Director and confirmed through a letter dated April 20,2020.

The Specific Plan is designed to guide and regulate the development for the area within the City south of US Route 50.

Tentative and Final Mapping. As of June 16, 2022, final maps authorizing the subdivision of a portion of the property within the Improvement Area into 443 residential lots had been recorded, and tentative maps had been approved for the remaining 476 proposed residential lots. The Developer expects to receive final map approval for an additional 100 residential lots by December 2022 and final map approval for the remaining 376 residential lots between 2023 and mid-2025. Design review approval, which provides for City review of the home plans, architecture and conformance to certain development standards, has been completed for all 919 units. The Developer believes that the only remaining discretionary entitlement within the Improvement Area is the recordation of small lot final maps for the remaining 4T6tentative map units.

Based on the current tentative and final subdivision maps and zoning entitlements, the properly within the Improvement Area is entitled to be developed into 751 single-family/single-family high density units and 168 multi-family low density units. The single-family high density zoned properties can include 4 to 7 dwelling units per gross acre and can include either single-family dwellings or two-family dwellings. The multi-family low density zoned properties can include 7 to 12 dwelling units per gross acre.

The following table describes the status of final maps within the Improvement Area as of June 16, 2022
Table 10
City of Folsom
Communities F'acilities District No. 23 (Folsom Ranch)
Improvement Area No.3
Final Map Status as of June 1612022
Number of Number of
Typical Lot Units With Units With
Sizes Final Map Only Tentative Total Number of
Product Line Zoning (square feet) Approval Map Approval 76 t07
105
106
82 476
Proposed Units
Expected Date of
Last Final Map
Sequoia
Redwood
Mendocino
Shasta
Tahoe
TOTAL
MLD

SF/SFHD

SF/SFHD

SF/SFHD

SF/SFHD
168
172
198
209
172
9t9
January 2025
January 2025
Ianuary 2025
January 2025
Jantary 2025
3,440
4,200
4,750
\ ))5
6,175
92 65
93 103
90 443
Source: The Developer.
46

07/12/2022 Item No.11.

Development Conditions/Building Permit Limitations. Certain provisions of the PFFP for the Folsom Plan Area, as implemented through the tentative subdivision map conditions, place limits on the number of building permits that can be issued before certain facilities and/or backbone infrastructure is in place. These provisions/conditions could, but are not expected to, affect build-out of the Improvement Area.

For example, tentative map conditions require a fire station to be operational prior to the occupancy of the 1,5006 home in the Folsom Plan Area. See "FOLSOM PLAN AREA-Public Facilities Financing Plan-Public Facilities-the Folsom Plan Area" for details on the CrW's plans for construction of the fire station. The City is responsible for building and operating this fire station and would expect to waive or modiS, this condition as it deems necessary to balance development within the Folsom Plan Area and the increasing fire service needs of the Folsom Plan Area as development progresses.

During initial planning of water infrastructure needs, the City estimated that the Phase 1 Water Facilities (as defined herein) would have capacity to serye approximately 2,800 dwelling units in the Folsom Plan Area. The City currently estimates that the Phase 1 Water Facilities have the capacity to deliver a sustained maximum day demand of up to 2 million gallons of water and, based on actual water usage within the Folsom Plan Area and a study prepared by Peterson Brustad, Inc. in Aprll 2019, that water usage within the Folsom Plan Area will exceed the Phase 1 Water Facility capacity when approximately 2,800 to 3,300 dwelling units within the Folsom Plan Area have been occupied. The Phase 2 watq backbone facilities, which include a water pipeline, booster pump and storage tank (collectively, the "Phase 2 Water Facilities"), are required to be constructed to provide expanded water transmission conveyance capabilities to deliver water from the water treatment plant to the Folsom Plan Area. The City continues to evaluate water usage and needs within the Folsom Plan Area. The City reserves the right to restrict new building permits within the Folsom Plan Area if the City determines that the new construction would cause residential water usage to exceed the capacity of the Phase 1 Water Facilities.

See "-Development Entitlements-Water Supply Infrastructure" below for details on the status of the Phase 2Water Facilities and the current plan for their construction and financing.

As of May 31,2022,fina1maps had been approved and recorded for 3,056 dwelling units. There is an additional final map that has been approved by the City and recorded for 174 additional dwelling units. There are also currently nine additional final maps submitted to the City for review with approximately 993 dwelling units. It is anticipated that five of these final maps will be recorded by September 2022, with the four remaining final maps expected to be recorded by the first quarter of 2023.

Also as of May 31,2022,2,262 bullding permits and 1,435 certificates of occupancy had been issued in the Folsom Plan Area for projects underway, which include, but are not limited to, the City of Folsom Community Facilities District No. 19 (Mangini Ranch) ("CFD 19"), the City of Folsom Community Facilities District No. 20 (Russell Ranch) ("CFD 20"), the City of Folsom Community Facilities District No. 21 (White Rock Springs Ranch) ("CFD 21") and the City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 1 ("CFD 23IAl"). Collectively, CFD 19, CFD 20, CFD 21, CFD 23 IA1 and the Improvement Area are expected to include 4,269 dwelling units, approximately 2,156 of which had been issued building permits and approximately 2,769 of which had received final map approval as of May 31,2022.

The Developer and the District do not believe that these conditions will materially impede development of the Improvement Area. However, multiple other development projects are underway in the Folsom Plan Area, and if there were an unforeseen and significant delay in construction in the Improvement Area it is possible that other development within the Folsom Plan Area will overtake development of the Improvement Area, resulting in the need for construction of the fire station and Phase 2 Water Facilities before all building permits could be issued for the Improvement Area. 47

07/12/2022 Item No.11.

External access to the project site will be provided via East Bidwell Street to the east and Mangini Parkway to the north, Pedestrian circulation is provided by a combination of street separated sidewalks, open space trails, park trails and pathway connections. Proposed on-site improvements include:
underground utilities, drainage improvements, retaining walls, driveways, on-street parking, curbs/gutters, sidewalks, pathways, trails, fencing, site lighting, site landscaping, and park enhancements.

The Folsom Ranch Central District Design Guidelines (of which the Improvement Area is a part) were approved by the City concurrent with the Tentative Map approvals on June 23,2015' The design guidelines provide for the orderly development of the proposed single family residential subdivision. The primary purpos" of these design guidelines is to articulate the general architectural and design ixpectationslor the proposed residential neighborhood, the landscapes, hardscapes, open spaces, fencing, eniry features and siie lighting. The goal of the design guidelines is to establish a regulatory framework for the design of individual homes on the residential lots. The final design details of the homes are subject to review and approval by the Crty's Planning Commission as part of a future Design Review application.

Army Corps of Engineers Wetland Permitting, Biological Opinion, Streambed Alteration Agreements and Siction 106 Compliance. On May 22,2014, the U.S. Army Corps of Engineers (the "USACOE") issued a Record of Decision ("ROD") for the Folsom South of U.S. Highway 50 Specific Plan Project - City of Folsom Backbone Infrastructure. This wetland permit covered the wetland permitting requirements for the entire backbone infrastructure necessary to serve the Folsom Plan Area' 1o the extent backbone infrastructure was required within a property owner's land, the backbone wetland permit authorized the filling of waters of the U.S. necessary for such construction. Each landowner ihereafter is required to obtain their own wetland permit for the fill ofjurisdictional wetlands not included in the footprinf of the backbone wetland permit. As discussed in greater detail below, the Folsom Plan Area has received all required environmental permits.

Development Agreement. Through City Ordinance No. 1149, the City approved a Tier 1 Development Agreement between the City and the propefty owners within the Folsom Plan Area on July 12, 2011. The effective date of the ordinance was August 1I, 2011, The Tier 1 Development Agieement vests certain rights of the property owners and of the City, commits each party to the agieements to subsequent actions before development may proceed within the Folsom Plan Area.

Siparate First Amended and Restated Tier I Development Agreements (the "ARDAs") were entered into among certain property owners and the City for their applicable properties, as approved by the City through City Ordinance No. 1211. The ARDAs for the property owners comprising the property within the Improvement Area were recorded in the official records of the County of Sacramento in July 2014.

The City entered into Amendment No. 1 to the ARDA with Carpenter East, which was recorded in the official records of the County of Sacramento in January 2016. The City also entered into Amendment Nos. 1 and 2 to the ARDA with Folsom Real Estate South, which were each recorded in the official records of the County of Sacramento in January 2016. See "-Properly Ownership." Article 2.5 (commencing with Section 65864), of Chapter 4, Division 1, Title 7 of the State Government Code, pertaining to development agreements, has the general effect of authorizing development to continue in accordance with then existing General Plan, Specific Plan, zoning and subdivision regulations notwithstanding any subsequently enacted conflicting regulations, except for regulations the failure of which to enact would place the residents in a condition which is dangerous to their health or safety or both.

Environmental Permits and Approvals. The California Environmental Quality Act ("CEQA"), constituting Division 13 of the State Public Resources Code (commencing with Section 21000) requires that an Environmental Impact Report (an "EIR"), detailing the significant environmental effects of the 48

07/12/2022 Item No.11.
project and proposed mitigation measures, be prepared, considered and certified as complete by a public ug"n"y prioi to its taking discretionary action on any project which may have a significant effect on the environment.

In June 2011, after statutorily required public notice, hearing and comment, the City Council certified as adequate and complete a final EIR/EIS for the Specific Plan for the development of the Folsom Plan Area. The EIR/EIS satisfied both CEQA and the National Environmental Policy Act for the entirety of the Folsom Plan Area. In February 2015,the City Council adopted the South of Highway 50 Backbone Infrastructure Project Initial Study/Mitigated Negative Declaration (Backbone Infrastructure MND), dated December 9,2014. This CEQA project level document satisfied the required environmental review for the construction of backbone infrastructure for the entire Folsom Plan Area, including the Improvement Area.

The Folsom Plan Area has received all required environmental permits, including a Section 404 Permit for the entire Folsom Plan Area pursuant to Section 404 of the federal Clean Water Act' This permit allows for any necessary fill of jurisdictional wetlands and streambed alterations for the ionstruction of backbone infrastructure to serve the entire Folsom Plan Area at build-out. In addition, a Biological Opinion has been obtained from the US Fish and Wildlife Service for the entire Folsom Plan Area, together with a California Department of Fish and Wildlife Master Streambed Alteration Permit with conditions for the whole of the Folsom Plan Area. All of the property in the Improvement Area subject to the Special Tax has received its Section 404 Permit and a subnotification approval from the California Department of Fish and Wildlife.

Water Supply. The City entered into an agreement (the "Water Supply Agreement") with the property owners in the Folsom Plan Area providing for a water supply for new development south of US Route 50. The Water Supply Agreement was supported by an addendum to the EIR. The Water Supply Agreement provides adequate water supply for full build out of the Improvement Area and the rest of ilie Folsom Plan Area (except the portion of the Folsom Plan Area serviced by the El Dorado Irrigation District). The amount of water provided in the Water Supply Agreement to meet the build-out demands of the Folsom Plan Area project is projected to be 5,600 acre-feet annually.

Water Supply in Folsom Generally. The primary water supply source for the City of Folsom is Folsom Reservoir, which provides the water supply for all of the City south of the American River. The City has water rights and contracts for up to 34,000 acre-feet annually ("afa") through three different contracts with the United States Bureau of Reclamation ("Reclamation"). The surface water supplies were developed through different circumstances and, as such, are subject to unique conditions and limitations. These athibutes and issues affect the volume of water available under certain conditions.

Surface water supply for the portions of the City north of the American River is obtained through a contract with the San Juan Water District, and therefore is not a directly owned City supply. The surface water supplies for the City's water service area are listed below. r { pre-1914 appropriative water right for 22,000 acre-feet per year (Agreement with Reclamation)
. d pre-7914 appropriative water right for 5,000 acre-feet per year (Co-Tenancy agreement with Golden State Water ComPanY)
o { Central Valley Project ("CVP") water service contract for 7,000 acre-feet per year (Partial Assignment from Sacramento County Water Agency to the City of Folsom and used in the CitY's East Area)
49