Folsom City Council
November 12, 2024

11/12/2024 Item No.1.

AreaNo. 4 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All money in the Costs of Issuance Fund shall be used and withdrawn by the Trustee to pay the Costs of Issuance upon receipt of a Written Request of the Community Facilities District filed with the Trustee, each of which shall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 [June 5], 2025, 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District so determining filed with the Trustee), any balance of money remaining in the Costs of Issuance Fund shall be withdrawn from the Costs of Issuance Fund by the Trustee and transferred to the Acquisition and Construction Fund.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.

ARTICLE III

REDEMPTION OR EXCHANGE OF BONDS
Section 3.01. Redemption Prices and Terms of Bonds. Any Supplemental Indenture may set forth the provisions for redemption of any Additional Bonds. (a) Mandatory Sinking Fund Account Redemption of the 2024 Bonds.

The 2024 Bonds maturing on September 1, 20L1, 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 20ll through 20[ ],both years inclusive; and the 2024Bonds maturing on September 1, 20[ 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 20U 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 2024 Bonds. The 2024 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 1,201 f, 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 2024 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, 20L], through August 31,201 l;
102% if redeemed on any date from September 1,201 1, through August 3l,20ll;
4140-47 54-2355 .4
25 Page 114
11/12/2024 Item No.1.
l0l% if redeemed on any date from September 1,20[ f, through August 31,201 1;
100% if redeemed on September 1, 201 1, and any date thereafter. (c) Extraordinary Redemption of the 2024 Bonds. The 2024Bonds 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 March I,2025, 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 2024 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 interest payment date on or after March 1, 2025, through March 1,201 1;
102% if redeemed on an interest payment date on September 1, 201 l, or March 1,201 l;
101% if redeemed on an interest payment date on September 1, 201 l, or March 1,20[ l; and
I00% if redeemed on September 1, 20[ L 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 arry 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 arry 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 10.14 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; provided, that no notice of redemption need be given to the Authority 4r4o-4754:235s.4
26 Page 115
11/12/2024 Item No.1.
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 ull of utty such maturity, 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.

In the event of an optional redemption of Bonds, the Trustee shall mail a notice of redemption, in the same manner as aforesaid, only after receipt of a Written Request of the Community Facilities District at least 10 days prior to the date on which the Trustee must send notice to the Holders of the Bonds; provided, however, 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 state that such redemption shall be conditioned upon the timely deposit of sufficient funds therefor with the Trustee.

Any notice of 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 roor ui practicable to the same parties and in the same manner as the notice of redemption was given pursuant to this Section.

Section 3.04 Partial of Bonds. Upon surrender of any Bond redeemed in part only, the Community Facilities District shall execute and the Trustee shall authenticate and deliver to the registered owner thereof at the expense of the Community Facilities District a new Bond or Bonds of the same series and maturity date equal in aggtegate principal amount to the unredeemed portion of the Bond surrendered.

Section 3.05. Effect of Redemption of Bonds. If notice of redemption has been duly given and not rescinded as aforesaid and money suffrcient for the payment of the principal of und t"d"*ption premiums, if any, on, together with interest to the redemption date on, the Bonds or portions thereof so called for redemption has been irrevocably deposited with the Trustee, then onlh" redemption date designated in such notice such Bonds or such portions thereof shall become irrevocably due and payable, and from and after the date so designated interest on the Bonds or such portions thereof so called for redemption shall cease to accrue and the Holders of such Bonds shall have no rights in respect thereof except to receive payment of the principal of such Bonds or such portions thereof and the redemption premiums, if any, thereon and the interest accrued thereon to the redemption date; provided, that redemption of Bonds other than from Minimum Sinking Fund Account Payments shall be made only from and to the extent of funds on deposit with the Trustee and available for such purpose on the date of redemption. 4140-47 54-2355 .4
27 Page 116
11/12/2024 Item No.1.

ARTICLE IV
TAX
Section 4.01. the S
Transfer Tax The Community Facilities District agrees and covenants that it will deposit the Special Tax proceeds in the City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 4 Community Facilities Fund (the "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 in the Community Facilities Fund shall be used and withdrawn by the Community Facilities District solely for the benefit of the Community Facilities District in accordance with the Law, including payment of Expenses and Services. 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 DistrictNo. 23 (Folsom Ranch) Improvement AreaNo. 4 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 Soecial 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 pu{poses hereinafter authorized in this Section, namely:
(1) Redemption Account; and
(2) Bond Reserve Fund.
(a) Redemption Account. On or before September 1 and March 1 in each year, beginning on March I,2025, 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 1, as the case may be, and on or before September I in each year, beginning on September 7,2025, 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 -ou"r
utty other payment, and in the event that money in the Special Tax Fund on any March I 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 I is not 4140-47 54-2355 .4
28 Page 117
11/12/2024 Item No.1.
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 paragraph to 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 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 Reserve Fund. On or before March I and September 1 in each year, beginning on March I,2025,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 pu{pose; and for this purpose all investments in each Bond Reserve Account shall (beginning on March I,2025) be valued on March I and September 1 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 redeemable, 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 pu{pose; ploviidgd, 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 dehciency for the 41 40-47 54:2355 .4
29

11/12/2024 Item No.1.
payment of principal and interest on any Bonds other than the specific series of Bonds to which the Bond Reserve Account relates.
(c) Surplus Amounts. On or before March I and September I in each year, beginning on March 1,2025,the Trustee shall, from the then remaining money in the Special Tax Fund, transfer all amounts remaining in the Special Tax Fund after the transfers specified in subsections (a) and (b) above to the City for deposit in the Community Facilities Fund.

ARTICLE V

COVENANTS THE COMMLINITY FACILITIES DISTRICT
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, covenants and terms contained herein and in the Bonds required to be observed and performed by it.

Section 5.02. Asainst Indebtedness and 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; ploviidgd, 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) To the extent a series of Bonds (the "Tax-Exempt Bonds") are acquired by the Authority using the proceeds of a series of Authority Bonds for which the Authority has obtained an opinion of Bond Counsel that interest on such Authority Bonds is excluded from gross income for federal income tax purposes (the "Tax-Exempt Authority Bonds"), 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 Tax-Exempt Authority 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 Tax-Exempt Bonds or any other funds of the Community Facilities District or take or omit to take any action that would cause the Tax-Exempt Authority 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 l4l(a) of the Code or obligations subject to federal income taxation because they are "federally guaranteed" as provided in Section 149(b) of the Code; and to that end the Community Facilities District, with respect to the 4140-47 54-2355 .4
30 Page 119
11/12/2024 Item No.1.
proceeds of the Tax-Exempt 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 the provisions of the Indenture described in this subsection is no longer required, or to the effect that some fuither action is required, to maintain the exclusion from gross income of the interest on the Tax-Exempt Authority Bonds pursuant to Section 103 of the Code, the Community Facilities District may rely conclusively on such opinion in complying with the provisions of the Indenture. In the event that at any time the Community Facilities District is of the opinion that for purposes of the provisions of the Indenture described in this subsection it is necessary to restrict or limit the yield on the investment of any money hetd by the Finance Director, for and on behalf of the Community Facilities District, under the Indenture or otherwise, the Community Facilities District shall so instruct the Finance Director or the Trustee, as the case may be, in writing, and the Finance Director or the Trustee, as the case may be, 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 regulations are, atthe 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. 4 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 Districtwill 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 and Services 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 and Services for the period from such July 1 through the next succeeding June 30; provided, that any budget adopted in accordance with this Section may be amended by the City Council at any time. 41 40-47 54:2355 .4
31 Page 120
11/12/2024 Item No.1.

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 occur, 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 30,2025) a summary report showing in reasonable detail the proceeds of the Special Tax levied and collected and the costs ofthe Expenses and Services 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 in2025) 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 ury;
(4) The number ofparcels 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
4140-4754:2355.4
32 Page 121
11/12/2024 Item No.1.
(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 ifthe 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 Securitv and Rishts of Holders. The Community Facilities District will preserve and protect the security of the Bonds and the rights of the Holders and will warrant and defend their rights against all claims and demands of all persons.

Section 5.08. of and
Governmental Regulations. 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 comply with any such regulations or requirements so long as the application or validity thereof shall be contested in good faith.

Section 5.09. Lew and Collection of the Soecial 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 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 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 and Services 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 1 of each year review the public records of the County of Sacramento relating to the collection ofthe Special Tax in order to determine the amount of the Special Tax collected in the prior Fiscal Year, and if the Community Facilities District 4140-47 54-2355 .4
JJ

11/12/2024 Item No.1.
determines on the basis of such review that (1) 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 or (2) any individual lot or parcel in the Improvement Area is then delinquent on four or more installments of the Special Tax, then in each case the Community Facilities District shall within sixty (60) days thereafter institute foreclosure proceedings as authorized by the Law in order to enforce the lien of the delinquent installments of the Special Tax against (i) in the case of clause (1) above, each delinquent lot or parcel in the Improvement Area or (ii) in the case of clause (2) above, such delinquent lot or parcel, respectively, which it shall diligently prosecute and pursue such foreclosure proceedings to judgment and sale; g9v4!9{, 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 has received one hundred percent (100%) of the amount of such installment from the County of Sacramento pursuant to the so-called ooTeeter Plan." 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 Government Code of the State of California.

Section 5.11. 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 f,rnancing 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 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 (110%) 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 pu{pose 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 purpose 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, California.

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 4140-47 54-2355.4
34 Page 123
11/12/2024 Item No.1.
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; provided, 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 qualifications 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 appointment of a successor Trustee, which court may thereupon, after such notice, if any, as it may diem proper and prescribe and as may be required by law, appoint a successor Trustee having the qualifi cations 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. Liability 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 4140-47 s4-2355.4
35

11/12/2024 Item No.1.
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 error 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, attomey 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 certified to the Trustee in a written instrument, upon which the Trustee shall be entitled to conclusively rely.

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 lrom 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 *" rp."ifi.ally set forth in this Indenture and shall not be liable except for its negligence or willful miscbnduct, 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 Offrce 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 hnancial 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 4140-47 s4-2355.4
36

11/12/2024 Item No.1.
advanced to it hereunder at its prime rate plus two percent (2%),but not greater than twelve percent (12%) per annum.

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 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 permified by law, agrees to indemniff, defend and hold harmless the Trustee against any and all loss, damages, claims, liability or expense incurred without negligence or willful misconduct on the part of the Trustee arising out of 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 omission or alleged omission to state a material fact necessary to make the statements made, in the light 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 perforrnance 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 putti"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. 4140-4754-2355.4
37

11/12/2024 Item No.1.

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 Thstee, be deemed to be conclusively established or proved by a Certificate of the Community Facilities District or an Accountant's Report, which shall be full 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 OF OR SUPPLEMENT TO THE INDENTURE
Section 7.01. Procedure for Amendment of or Supplement to the Indenture. (a) Consent of The
Indenture and the rights and obligations of the Community Facilities District and of the Holders may 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 when the written consents of the Holders of sixty percent (60%) or more in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 7.02, shallhave been filed with the Trustee; plevi,idgd, 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 cuffency 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 jeopardizethe 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 any such amendment or supplement, or (a) modi$ any rights or obligations of the Trustee without its prior written assent thereto. (b) Amendment or Supplement Without Consent of Holders. 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 pu{poses:
4140-47 s4-2355 .4
38

11/12/2024 Item No.1.
(i) 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 (inthe opinion ofthe 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; (iii) To authorize the issuance of Additional Bonds and to provide the conditions and terms under whichthe 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;
(v) To make such additions, deletions or modifications as may be necessary or appropriate to ensure compliance with Section la8(f) of the Code relating to the required 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 exemption of such interest from State of California personal income taxes; or
(vi) To make such additions, deletions or modifications as may be necessary or appropriate 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 pu{pose 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 entitled to consent to or take any other action provided for in this Article or in Article VIII.

Section 7.03. Endorsement or Renlacement of Bonds After Amendment or Supplement. After the effective date of any action taken as hereinabove provided, the Community faiilities 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 pu{pose at the 4140-47 54-2355 .4
39

11/12/2024 Item No.1.

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 Office of the Trustee, without cost to each Holder, for Bonds then Outstanding.

Section 7.04. Amendment or Suoolement bv M Consent. The provisions of this Article shall not prevent any Holder from accepting any amendment or supplement as to any particular Bonds held by him or her; provided, that due notation thereof is made on such Bonds.

ARTICLE VIII
D
Section 8.01. 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 on or principal of or Minimum Sinking Fund Account Payment for any of the Bonds when and as the same shall become due and payable;
(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 if under the provisions of any other law for the relief or aid of debtors 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 4r4o-47s4-23ss.4
40 Page 129
11/12/2024 Item No.1.
the officers or employees of the Community Facilities District, and to compel the City Council or the Community Facilities District or any such officers 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 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 fromtime 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. 4t 40-4'1 54-2355 .4
4l

11/12/2024 Item No.1.

ARTICLE IX

DEFEASANCE
Section 9.01. Discharge 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 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 4140-47 54-2355 .4
42 Page 131
11/12/2024 Item No.1.
become due 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 I0.I4 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 iwo (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 Faciiities Fund and for use in accordance with the Law, and the Trustee shall thereupon te 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; prcvldgd, 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 money then unclaimed will be returned to the Community Facilities District for deposit in the Community Facilities Fund.

ARTICLE X

MISCELLANEOUS
Section 10.01. Liabilit)' of Community Facilities District Limited to Proceeds of 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 p.o"."ds 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 4140-47 54-2355 .4
43

11/12/2024 Item No.1.
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 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.

Section 10.03 Qrroneccnr Te Deemed T-^lttr{orl in All Pefcrenne sto D.o.l anaocnr Whenever either the City Council or the Community Facilities District or any officer 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 attorneys 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 4140-4't 54-2355 .4
44 Page 133
11/12/2024 Item No.1.
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. Deoosit and of Monev in and Funds. 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 -ukittg 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, orthe 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; provided, that in the absence of written instructions from the Community Facilities District regarding such investments, such money shall be held 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 satisfr such time limitation il by its terms and within such time limitation, the Community Facilities District or the Trustee has the right, for any pulpose 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.
4t40-47 54-2355 .4
45

11/12/2024 Item No.1.

Section 10.06. Waiver of Personal Liability. 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 official duty provided hereby or by the Law or by any other applicable provisions of law.

Section 1 0.07. Acquisition of Bonds bv 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 to which is in the possession of the Community Facilities District, upon a representation by an officer or offrcers 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 elToneous.

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 pu{poses 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 Headinss. Gender References. The headings or titles ofthe 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. 4140-47 54-2355.4
46

11/12/2024 Item No.1.

All references herein to ooArticles," o'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 10.1 l. 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 thereofto any person or circumstance may be held to be unconstitutional, unenforceable or invalid.

Section 10.12. Execution in Countemarts 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 purposes. 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 executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

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

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: 916-985-0870
Email: [email protected]
4140-47 s4-2355 .4
47 Page 136
11/12/2024 Item No.1.

If to the Trustee:

U.S. Bank Trust Company, National Association
One California Street, Suite 1000
San Francisco, CA 94lll
Attention: Global 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 *ith th" United States mail postage prepaid, seventy-two (72) hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, twenty-four Q$ 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 ('olnstructions") 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 andlor 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 Community Facilities District to provide such Instructions and containing specimen signatures of such officers, 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 andlor 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 Instruitions 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, 4t40-47 54-2355 .4
48

11/12/2024 Item No.1.
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 ind circumstances; and (iv) to notifu the Trustee in writing immediately upon learning 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 Section326 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, veriff, 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 it may request in order for the Trustee to satisfu the requirements of the U.S.A. Patriot Act.

Section 10.16. Force eure. 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, nucleat 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'
Section 10.17 . Effective Date of the Indenture. The Indenture shall take effect from and after its execution and delivery.
4140-47 54-23s5 .4
49 Page 138
11/12/2024 Item No.1.

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 rulme by its officer thereunto duly authoized, all as of the date and year first above written.

CITY OF FOLSOM COMMUNITY 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
4140-47 54-2355 .4
Signature Page to IndenturePage 139
11/12/2024 Item No.1.

No.

EXHIBIT A
IFORM OF BONDS]
UNITED STATES OF AMEzuCA

STATE OF CALIFORNIA

COUNTY OF SACRAMENTO

CITY OF FOLSOM
COMMUNITY FACILITIES DISTRICT NO. 23
(FOLSOM RANCH) IMPROVEMENT AREA NO. 4
SPECIAL TAX BOND, SERIES 2024
$
Interest
Rate
Maturity
Date
Bond
Date
% September l, _ December | 1,2024
REGISTERED OWNER: U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE FOLSOM RANCH FINANCING AUTHOzuTY
PRINCIPAL AMOUNT: 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 refened 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 a 360-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-on a day during the period from the sixteenth (16th) 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 (15th) 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 [March 1, 2025], and semiannually thereafter on September I and March I in each year. The interest on and principal of and redemption premium, 4140-4754-2355.4
A-1

11/12/2024 Item No.1.
if any, on this Bond are payable in lawful money of the United States of America at the Corporate Trusi Office (as that term is defined in the Indenture hereinafter refened to, and herein the "Corporate Trust Office") 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 in the Indenture hereinafter described, the Trustee of the Community Facilities District foi ttre 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 name appears in the registration booksiequired 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 ofimmediately 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 itris gona 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 ,.rrr.nd., 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 Balance of PrinciPal
Amount Paid Amount UnPaid
Signature
of Holder
This Bond is one of a duly authorized issue of Bonds in the aggregate principal amount of dollars ($ 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. 4 Special Tax Bonds, Series 2024" (the "Bonds"), which Bonds are issued under and pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (being Sections 533 I 1 et seq. of the Government Code of the State of California), and all laws amendatory thereof or supplemental thereto (the "Law") and under and 4t40-47 s4-2355 .4
A-2

11/12/2024 Item No.1.
pursuant to the provisions of an Indenture dated as of December 1,2024 (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 at the office of the City Clerk of the City and at the 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 ofthe 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 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 ievied 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 pioceeds 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, liabilrty or obligation of the Community Facilities District.

The Bonds maturing on September 1,201 ], 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 201--l through 201 1, 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 I in each of the years 20[ I through 201 ], 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, 20[ 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 4140-4',154-2355.4
A-3 Page 142
11/12/2024 Item No.1.
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-f, through August 31,201 l;
l0l% if redeemed on any date from September 1,201 1, through August 31, 20[ l; and
100% if redeemed on September 1,20[ 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 March l, 2025, 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 any interest payment date on or after March 1, 2025,through March 1,201 l;
102% if redeemed on an interest payment date on September 1, 201_1, or March l,20ll;
rcl% if redeemed on an interest payment date on September 1, 20[ ], or March l,2Ilf;and
100% if redeemed on September l, 201 1, 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 4140-47s4-2355.4
A-4

11/12/2024 Item No.1.
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 surender 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 sufftcient, 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 and Services 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 surender 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 attorney 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 4140-47s4A355.4
A-5

11/12/2024 Item No.1.
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 fromthe proceeds of the Special Tax otherthan as provided inthe Indenture, or jeopardizethe 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) modifr 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 purpose until the certificate of authentication and registration hereon endorsed shall have been manually signed by att 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. 4140-47 54-2355 .4
A-6 Page 145
11/12/2024 Item No.1.

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 December | 1,2024.

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
4t40-47 54:2355 .4
A-7

11/12/2024 Item No.1.
[FORM 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 December I l, 2024.

U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION,
as Trustee
By
Authorized Signatory

IFORM OF ASSIGNMENT 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 full power 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 "signature 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:
4t40-47 54-2355 .4
A-8

11/12/2024 Item No.1.

ATTACHMENT 5

11/12/2024 Item No.1.

OH&S DRAFT
10t30/24
PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER I--1, 2024

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 mattefs, 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 specffic preference item for purposes of the federal individual alternative minimum tax. Bond Counsel observes that interest on the Bonds included in adjusted financial statement income of certain corporations is not excludedfrom the federal corporate alternative minimum tax. Bond Counsel expresses no opinion regarding any other to( consequences related to the ownership or disposition of, or the amount, accrual or receipt ofinterest on, the Bonds.

See "TAX MATTERS."
$10,705,000-

FOLSOM RANCH FINANCING AUTHORITY
CITY OF FOLSOM COMMUNITY FACILITIES DISTRICT NO.23
(FOLSOM RANCH) IMPROVEMENT AREA NO. 4

SPECIAL TAX REVENUE BONDS
SERIES 2024
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. 4 Special Tax Revenue Bonds, Series 2024 (the "Bonds") are being issued by the Folsom Ranch Financing Authority (the "Authority") to provide funds to finance the purchase of limited obligation special til 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, and pay certain costs of issuance ofthe Local Obligations and the Bonds.

The Bonds are being issued by the Authority pursuant to a Trust Agreement (the "Trust Agreemenf') 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. 4 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 of 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 C'DTC') and interest thereon is payable on March I and September I of each year, commencing March 1,2025, 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 AFPENDIX 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 HAS NO TAXING POWER, EXCEPT FOR THE TRUST ESTATE, NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE 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 Preliminary, subject to change. Page 149
11/12/2024 Item No.1.

PAYMENT ON THE LOCAL OBLIGATIONS FROM THE PAYMENT OF THE SPECIAL TAXES LEVIED WITHIN THE IMPROVEMENT AREA AS MORE FULLY DESCRIBED HEREIN.

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

This cover page contains information for general reference only and it is not a complete summary 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 if issued, subject to the approval as to their legality by Onick, Henington & 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 Attorney. Certain legal matters will be passed upon for the Underwriter by Stradling, Yocc4 Carlson & Rauth LLP. 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 [December 51,2024.

Piper Sandler & Co.

The date of this Official Statement is 2024.

11/12/2024 Item No.1.
$10,705,000.

FOLSOM RANCH FINAI\CING AUTHORITY
CITY OF FOLSOM COMMUNITY FACILITIES DISTRICT NO. 23
(FOLSOM RANCII) IMPROVEMENT AREA NO.4
SPECIAL TAX REVENUE BOI\IDS
SERIES 2024

MATURITY SCHEDULE, INTEREST RATES, PRICES AND CUSPS
Maturity
(September l)
Principal
Amount
Interest
Rate
CUSIPNo.t
(344414)Price
$%
$__%TermBondmaturing 1,20-Price
-Yo(cusIPNo.t344414J$ % Term Bond maturing 1,20-Price-Yo (CUSP No.t 344414J * Preliminary, subject to change.
t 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@ 2024 CUSIP Global Services.

All rights reserved. CUSIP@ data herein is provided by CUSP Global Services. This data is not intended to create 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.

11/12/2024 Item No.1.

No dealer, broker, salesperson or other person has been authorized by the Authority, the District 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 definitive 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 WITH 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 OTHERV/ISE 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 TNSIDE 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 CONTATNED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED LINDER THE SECURITIES LAWS OF ANY STATE.

Certain statements included or incorporated by reference in this Official Statement constitute forward- looking statements. Such statements are generally identihable by the terminology used such as "plan," "expect," "estimate," "budget" or similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

11/12/2024 Item No.1.

UNSERT REGIONAL AND CITY CONTEXT MAPSI

11/12/2024 Item No.1.

CITY OF F'OLSOM
COMMUNITY FACILITIES DISTRICT NO. 23
(FOLSOM RANCTT)
IMPROVEMENT AREA NO. 4
Photos taken September I 1,2024. The approximate boundaries of the Improvement Area have been outlined.

11/12/2024 Item No.1.

AUTHORITY GOVERNING BOARD/CITY COTN\CIL
Mike Kozlowski, Chair / Mayor
Sarah Aquino, Vice Chair / Vice Mayor
YK Chalamcherla, Member / Councilmember
Rosario Rodriguez, Member / Councilmember
Anna Rohrbough, Member / Councilmember

AUTHORITY/CITY STAFF
Elaine Andersen, Executive Director / City Manager.

Stacey Tamagni, Treasurer / Finance Director
Steven Wang, Esq., General Counsel / City Attorney
Christa Freemantle, Secretary / City Clerk

SPECIAL SERVICES

BOND AND DISCLOSURE COUNSEL MIINICIPAL ADVISOR
Orrick, Herrington & Sutcliffe LLP Fieldman, Rolapp & Associates, Inc.

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

APPRAISER
Integra Realty Resources
Current Executive Director of the Authority and City Manager of the City, Elaine Andersen, is retiring in late December, 2024.The City is coordinating recruitment process for the next City Manager.

11/12/2024 Item No.1.

TABLE OF CONTENTS
Page

INTRODUCTION
General
Authority for Issuance
Purpose......

Security for the Bonds...............

The Improvement Area
Property Ownership and
Development Status.....

Properly Values and Value to Lien
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 FUNDS
DEBT SERVICE SCHEDULE........

SECURITY AND SOURCES OF
PAYMENT FOR TI{E BONDS ...

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

Description of Local Obligations ...

Issuance of Local Obligations ........

Payment of the Local Obligations
Local Obligations Flow of Funds...

Special Tax Authori zation.,.....

Covenant for Foreclosure.........

No Required Advances from
Available Surplus Funds
Terms of the Local Obligations
Special Tax Analysis................

Special Tax Calculation ...........

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

THE AUTHORITY.......

THE CITY.

TI{E IMPROVEMENT AREA.................

General Description and Location........

Page
Property Values........ ................40
Value-to-Lien Analysis ............40
Estimated Tax Burden on Single
Family Home ........43
Overlapping Debt........... ..........44
Historical Special Tax Levy.... .................... 46

PROPOSED PROPERTY
DEVELOPMENT........... .........46
Development Entitlements.............. ............ 46
Property OwnershipError! Bookmark not defi ned.

Development Plan and Status of
Development............... .............54
Development Plan of FinanceError! Bookmark not defin

CERTAIN RISKS TO
BONDHOLDERS........ 62
Levy of the Special Tax ............ .................. 62 Collection of Special Tax............................ 63 Concentration of Ownership ........... ............ 63
Payment of the Special Tax is Not a
Personal Obligation of a Property
Owner........ ............64
Potential Early Redemption of Bonds
from Prepaid Special Taxes ........................ 64
1 I
1 1
2 J
4 5
6 6
7 7
7 8
9 0
... 10
... l0
10 11
T2
16 l7
18 19
19 20
20 2t
22 24
25 Special Tax Delinquencies..

Teeter Plan Termination .....

Land Values .......................,
Appraisal Risks ..................,
Exempt Properties...

Maximum Special Tax........

No Acceleration Provision.,
Loss of Tax Exemption......,
Parity Taxes and Special
Assessments .......................,
Future Private Indebtedness
64 ...............65
...............65
...............65
...............66
...............66
...............67
...............67
.............67
68 Disclosures to Future Purchasers .......

Bankruptcy
FDIC/Federal Government Interests
in Properties
Zoning and Land Use Decisions ................. 70
Ballot Initiatives and Measures................... 7 1
Shapiro v. San Diego ...............7I
Risks of Real Estate Secured
Investments Generally ................... .............7 | Current Challenges to the
Homebuilding Industry ............72
Increasing Mortgage Interest Rates
and Banking Uncertainty .........72
Failure to Develop. ...................73
......68
......68
...................69
26 26
29 35
38 .38
38 39
39

11/12/2024 Item No.1.

TABLE OF CONTENTS
(continued)
Page
....73
NO LITIGATION....

NO RATING............

MUNICIPAL ADVISOR .........

UNDERWRITING...

No Independent Review of Valuation
or Viability of Completed Projects.....

Potential Impact of Global Health
Crises or Concerns
Cybersecurity
Geologic, Topographic and Climatic
Conditions
Endangered Species.......

Hazardous Substances.

Naturally Occurring Asbestos .....

LEGAL MATTERS........

TAX MATTERS

APPENDIX A -APPENDIX B
-

APPENDIX C
-APPENDIX D
-APPENDIX E
-APPENDIX F
-APPENDIX G
-
Page
...........80
...........80
...74
...74
80 8l....75
....76
....76
....77
....78
CONTINUING DISCLOSURE..

The District
Taylor Morrison and Folsom Real
Estate South.........

MISCELLANEOUS
.........8 1
.........8 I
.........82

RATE AND METHOD

ECONOMIC AND DEMOGRAPHIC INFORMATION RELATING TO THE

CITY OF FOLSOM

SUMMARY OF PRINCIPAL DOCUMENTS

FORMS OF CONTINUING DISCLOSURE UNDERTAKINGS
PROPOSED FORM OF OPINION OF BOND COI.INSEL
DTC AND TI# BOOK-ENTRY ONLY SYSTEM

APPRAISAL
ll Page 157
11/12/2024 Item No.1.
s10,705,000
F'OLSOM RANCH FINAI\CING AUTHORITY
CITY OF'F'OLSOM COMMT]NITY FACILITIES DISTRICT NO.23
(FOLSOM RANCTT) TMPROVEMENT AREA NO. 4

SPECIAL TAX REVENUE BONDS
SERIES 2024

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 conditions. All statements herein are qualified in their entirety by reference to each document. All capitalized 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 $10,705,000* aggregate principal amount of Folsom Ranch Financing Authority City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 4 Special Tax Revenue Bonds, Series 2024 (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 Dishict 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 of delivery thereof and bear interest at the rates set forth on the inside front cover page hereof. See "THE 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 reserye account, and pay certain costs of issuance of the Local Obligations and Bonds. See "PLAN OF FINANCE" and "THE IMPROVEMENT AREA."
* Preliminary, subject to change.

11/12/2024 Item No.1.

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 Act"), (ii) a resolution of the City Council of the City of Folsom (the "City") as legislative body of the District adopted on November 12,2024, and (iii) the Local Obligations Indenture. The Local Obligations are payable from the special taxes authorized to be levied and collected annually upon taxable real property within Improvement Area No. 4 of the District (the "Improvement Area"). See "SECUzuTY AND SOURCES OF PAYMENT FOR THE BONDS-General." Security for the Bonds and the Local Obligations
The Bonds are special, limited obligations of the Authority, payable from and secured by the Trust Estate (as defined herein) pledged under the Trust Agreement, 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 1100% annual debt service coverage for the Local Obligations from Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues for Developed Property and Small Lot Final Map Property as of August 31,2024, net of Priority Administrative Expenses (each as defined below), beginning with the levy for Fiscal Year 2025-26. The debt service on the Local Obligations is expected to increase approximately 2% annually through 2044 and then be level through the final maturity. [The Local Obligations are sized so that, beginning with Fiscal Year 2025-26, the Special Tax is expected to only need to be levied on Developed Property to provide sufficient funds to pay the debt service on the Local Obligations. However, if needed, the Special Tax may be levied on other, less-developed categories of property pursuant to the Rate and Method (as defined herein) and, as the Improvement Area continues to develop, the expected Special Tax levy on Developed Property will be allocated across a greater number of parcels.l Although the scheduled payments under the Local Obligations are sufficient, in the aggregate, 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 THE 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 (including both the Facilities Special Tax and the Services Special Tax for the Improvement Area, each as defined herein) 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 for the Local Obligations 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 cornpletion; 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 THE BONDS-Payment of the Local Obligations," "-Special Tax Authorization," "-Covenant for Foreclosure" and c'-fhs Teeter Plan."
The Special Taxes secure only the Local Obligations. For this reason, a delinquency or default in the payment of Special Taxes could cause a default in the payments of principal and interest on the Bonds 2 Page 159
11/12/2024 Item No.1.
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 THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE DISTRICT, THE AUTHORITY, THE STATE OF CALIFORNIA (THE "STATE") OR ANY

OTHER POLITICAL SUBDIVISION TFIEREOF IS PLEDGED TO THE PAYMENT OF TFM BONDS. TFM, AUTHORITY HAS NO TAXING POWER. EXCEPT FOR THE TRUST ESTATE, NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE AUTHORITY, THE 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

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

The Improvement Area
Genera| 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 150 total gross acres (excluding non-parcel areas, such as roadways), of which approximately 95 acres are subject to the Special Tax. Presently, the Improvement Area includes properties in varying stages of development, including unimproved lots, finished lots, homes under construction, and completed homes.

Collectively, these properties are planned to include 648 single family homes.

Formation Proceedings. The District 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 Mello-Roos Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district 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 Dishict. 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 (the "Rate and Method" for the Improvement Area). In addition, the eligible voters in the Improvement Area authorized the issuance of bonds in an amount not to exceed $64,000,000 for the Improvement Area. In December 2021, a seventh improvement area was designated within the District.

Pursuant to the Rate and Method, an Effective Tax Rate Evaluation was conducted in eatly 2023 to determine the Total Effective Tax Rate for Residential Property within the Improvement Area (each as defined in the Rate and Method). In connection with that Effective Tax Rate Evaluation, the Rate and Method was updated to include the Effective Tax Rate Evaluation Maximum Facilities Special Tax Rates and the Effective Tax Rate Evaluation Minimum Facilities Revenue amounts for all Taxable Properly for Fiscal Year 2022-23. The Rate and Method is included as APPENDIX A hereto and summarized herein under "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS - Special Tax Analysis." a
-t

11/12/2024 Item No.1.

Property Ownership and Development Status
The property within the Improvement Area is under development, with homes completed and sold to individual homeowners, homes under construction and being marketed to individual homeowners, finished lots, and unimproved land. As of November l, 2024, the Taxable Property within the Improvement Area was owned by Taylor Morison of California, LLC, a California limited liability company ("Taylor Morrison"); Folsom Real Estate South, LLC, a Delaware limited liability company ("Folsom Real Estate South"); and individual homeowners. As of that date, Taylor Morrison owned 114 single family lots, Folsom Real Estate South owned four large lot parcels that it expects will ultimately be developed by a separate developer to include 388 single family homes, and individuals owned 146 single family homes. See "PROPOSED PROPERTY DEVELOPMENT-Property Ownership." At full buildout, the Improvement Area is expected to include a total of 648 detached single-family homes.

To date, a final map has been approved and recorded for the 260 single family lots that are owned by Taylor Morrison and the individual homeowners. This portion of the Improvement Area contains the lots that have been, and are currently being, developed by Taylor Morrison for home sales to individual homebuyers. Taylor Morrison's lots in the Improvement Area are being developed and sold across three separate product lines: Debut at Folsom Ranch, Encore at Folsom Ranch, and Legends at Folsom Ranch.

Construction and sale of these 260 single family homes is well underway, with 146 having sold and closed to individual homebuyers as of November 1,2024. As of that same date, Taylor Morrison had pulled 217 building permits and expects to complete construction of its final home within the Improvement Area by the first quarter of 2026.

Other than the 260lots owned by Taylor Morrison and the individual homeowners, Folsom Real Estate South owns the remainder of the Taxable Property (as defined herein) within the Improvement Area (the "Four Large Lots"). Currently, the Four Large Lots are unimproved land. There are several remaining discretionary and non-discretionary approvals required before the Four Large Lots can be fully developed, including the approval of tentative and final small lot maps and satisfaction of City requirements relating to inclusionary housing and habitat mitigation. See "PROPOSED PROPERTY DEVELOPMENT-FoIsom Real Estate South Development-Development Status - Folsom Real Estate South." Additionally, a deviation in the development of the Four Large Lots from the current development entitlements may require additional governmental approvals and could delay the expected development timing.

Folsom Real Estate South is in the process of selling the Four Large Lots and has entered into letters of intent with multiple nationally recognized homebuilders to negotiate the sale of the Four Large Lots and other properties within the Folsom Plan Area (but outside of the Improvement Area). Folsom Real Estate South is actively negotiating a purchase and sale agreement with one of these homebuilders for the Four Large Lots, which it expects to ultimately be developed to include 388 single family homes.

Folsom Real Estate South expects that the sale of these lots to the builder would close upon the satisfaction of various conditions, including the buyer's prior payment of one or more non-refundable deposits and City approval of a small lot tentative map. Folsom Real Estate South is in the process of preparing the small lot tentative map for the Four Large Lots, which it anticipates being approved by the City during the second quarter of 2025. The anticipated purchase and sale agreement would obligate the builder to complete the infrastructure improvements and site development required for the construction of the homes on the Four Large Lots, which includes mass grading work, utilities and roadway improvements, and subdivision improvements. Folsom Real Estate South anticipates construction of the required infrastructure relating to the Four Large Lots to commence during the third quarter of 2025 and continue throtgh2026.
4 Page 161
11/12/2024 Item No.1.

As of August 31,2024 (the date of value of the Appraisal), the Improvement Area included 139 completed homes that had closed escrow to individual homeowners, 53 homes under construction, 68 finished lots without vertical home construction, and the unimproved Four Large Lots (which are expected to ultimately be developed into 388 single family homes). Since that date, development within the Improvement Area has continued. As of November 1, 2024, the Improvement Area included 146 completed homes that had closed escrow to individual homeowners, 4 completed model homes, an additional 10 completed homes that had not yet closed escrow to individual homeowners, 47 homes under construction, 53 finished lots without vertical home construction, and the unimproved Four Large Lots.

As of November 7, 2024, Taylor Morrison was under contract for the sale of 8 homes (3 in Encore at Folsom Ranch and 5 in Legends at Folsom Ranch) to individual homeowners. Homes under contract may not result in closed escrows as sales contracts are subject to cancellation.

The following table summarizes, as of November 1, 2024,the ownership and development status of the residential lots and homes proposed to be constructed within the Improvement Area.

City of Folsom
Community Facilities District No.23 (Folsom Ranch)
Improvement Area No.4
[Estimated] Development Status as of November 1, 20240) Owner Product Line
Under
Construction Complete€)
Partially
Improved/ Total
Finished Undeveloped Proposed
Lots(3) Lots Units
Taylor Morrison
Taylor Morrison
Folsom Real Estate South(6)
Individual Homeowners
Individual Homeowners
Individual Homeowners
TOTAL:

Encore at Folsom Ranch
Legends at Folsom Ranch
2222 6(4)
8(5)
0 42
54 50
0 0
388
0 0
0 50
64 42
54 50
Debut at Folsom Ranch
Encore at Folsom Ranch
Legends at Folsom Ranch
47 160 53 388
(1) Reflects the development status within the Improvement Area as of November l, 2024. The Appraisal (defined below) and the value to lien information provided herein reflect an August 31,2024, date of value for the Taxable Property in the Improvement Area. (2) Includes model homes that have not been released for sale as well as homes under contract for sale that have been completed but not closed.
(3) Reflects lots for which all conditions to issuance of a building permit have been completed, consisting generally of paved lots with streets installed and paved with all utilities and utilities stubbed to the pad. (a) Includes 2 complete model homes and 4 complete production homes. (5) Includes 2 complete model homes and 6 complete production homes. (6) Planned for development by a separate homebuilder
Source: Taylor Morrison and Folsom Real Estate South.

Property Values and Value to Lien
As of August 31,2024, ll4 parcels of Taxable Property within the Improvement Area with assessed structural improvements values of $300,000 or more (the "Unappraised Property") had, in aggregate, an assessed land and improvements value of $80,841,034.

Integra Realty Resources, Sacramento, California (the "Appraiser") prepared an appraisal (the "Appraisal") for the remaining portion of the Taxable Property within the Improvement Area (the "Appraised Property"). The purpose of the Appraisal was to estimate the market value, subject to the special tax and based upon a hypothetical condition, for the Appraised Property. Subject to the 3l
0 0
0 0
25 0
0 0
0 388
648
5 Page 162
11/12/2024 Item No.1.
assumptions, hypothetical condition and limiting conditions contained in the Appraisal, the Appraiser estimated that the Appraised Property within the Improvement Area had an estimated not-less-than aggregate market value of $69 ,27 5 ,000 as of August 3l , 2024.

Based on a principal amount of $10,705,000- for the Local Obligations (and the Bonds) and the aggregate appraised and assessed values for Taxable Property within the Improvement Area of $150,116,034 (including both the Unappraised Property and the Appraised Property), the value-to-lien ratio for the Improvement Area is 14.0-:1.0. The overall value to overlapping debt ratio, including certain overlapping general obligation tax and assessment debt and CFD l7 and CFD 18 (each as defined herein) special tax de!t, is 10.5-:1.0. See "THE IMPROVEMENT AREA-Value-to-Lien Analysis" and "THE IMPROVEMENT AREA-Overlapping Debt." The Appraisal is attached to this Official Statement as APPENDIX G.

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 I in each year, commencing April l, 2025 (the "Annual Report"), and to provide notices of the occurrence 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 events is set forth in APPENDIX D-"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.

Taylor Morrison and Folsom Real Estate South will each covenant for the benefit of the Bondholders to provide certain information relating to it and its development within the Improvement Area no later than June 1 and December I in each year, commencing June 1,2025 (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 LINDERTAKfNGS." The obligations of Taylor Morrison and Folsom Real Estate South will terminate upon the occurrence of certain events as set forth in the applicable Continuing Disclosure Certificate, including at such time as Taylor Morrison and Folsom Real Estate South (and each of their Affiliates (as defined in the applicable Continuing Disclosure Agreement)) own property that is (i) entitled to include less than 137 of the residential lots within the Improvement Area subject to the Special Taxes and (ii) obligated to pay less than 20%o of the Special Taxes levied on all of the Taxable Property within the Improvement Area for the then current Fiscal Year. 6 * Preliminary, subject to change.

11/12/2024 Item No.1.

Summaries Not Definitive
Brief descriptions of the Bonds; the Local Obligations; the security for the Bonds and the Local Obligations; the City, the District, the Improvement Area; and the status of development within the Improvement Area are included in this Official 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 bbligations Indenture are qualified in their entirety by reference to such documents, copies of which are available for inspection at the office of Trustee'

FOLSOM PLAN 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 77,461 units of residential development , plus 27 4.5 acres of commercial/industrial development (including mixed use development).

Over ihe build out of the property, the City has used and anticipates continuing to use 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.

Two community facilities districts formed by the City to finance public infrastructure, maintenance and services benefiting the Folsom Plan Area include Community Facilities District No. 17 (Willow Hill Pipeline) ("CFD 17") and Community Facilities District No. 18 (Folsom Plan Area - Area-Wide Improvements and Services) ("CFD 18"). CFD 17 encompasses nearly all of the property within the Folsom Plan Area, excluding approximately 190 acres bordering El Dorado County in the eastern portion of the City south of US Route50. CFD 18 encompasses all of the property within the Folsom Plan Area, overlapping all of CFD 17 and the additional 190 acres bordering El Dorado County.

The City has issued bonds for CFD 17 in the principal amount of $6,675,000, of which $5,415,000 are currently outstanding. CFD 18 is authorized to issue up to $200,000,000 in bonds. In Octobet 2024, CFD 18 issued bonds in the aggregate principal amount of 826,735,000 to help finance the Phase 2 Water Transmission Facilities (as defined herein). See "PROPOSED PROPERTY DEVELOPMENT- Development Entitlements-Water Supply Infrastructure." The Improvement Area represents approximately 4.9% by acres of CFD 17 and approximately 4.6% by acres of CFD 18, however any overlapping debt issued by CFD 17 or CFD 18 will not be allocated to the properties in the Improvement Area based on their acreage, and the amount of overlapping debt allocated may vary over time. Based on the development status within CFD 18 as of August31,2024, the Improvement Area would generate approximately 5.6% of the maximum CFD 18 special tax levy for bonds. This share of the maximum ifp tt special tax levy for bonds is expected to decrease over time as undeveloped properties within CFD 18 b""o*" approved with final maps or developed. The allocable portion of bonds previously issued for CFD 77 and any bonds to be issued for CFD 18 constitute overlapping debt. See "TFIE IMPROVEMENT AREA-Overlapping Debt."
7 Page 164
11/12/2024 Item No.1.

Public Facilities Financing Plan
Measure W, adopted by City 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 14,2074. 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.

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 Unified School District), direct developer financing, and matching state school grants and other school funding (including the school facilities improvement district described under "THE IMPROVEMENT AREA-Overlapping Debt"). Subdivision improvements are not included as part of the PFFP.

On September 8, 2015, the City implemented its Specific Plan Infrastructure Fees (the "SPIF") to be collected for the Specific Plan. The SPIF has been updated from time to time and new nexus studies performed periodically to evaluate the costs of improvements and the appropriate fee rates.

As of the date of the Nexus Study Fiscal Year 2020-21 Update, the estimated remaining cost of the backbone infrastructure and public facilities for the Folsom Plan Area at build-out was $403,482,461.

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 City has used, and intends to continue to use, multiple funding sources for the Folsom Plan Area infrastructure as development progresses and has continued to progress, including SPIF and the issuance ofbonds for the District and other community facilities districts within the Folsom Plan Area.

The SPIF is administered by the City for the purposes of collecting impact fees for plan area wide improvements for the construction of roadways, water, sewer, drainage, dry utilities, recycled water and habitat mitigation in the Folsom Plan Area. The purpose of the SPIF is to require each landowner to pay its fair share of Folsom Plan Area area-wide improvements and to be reimbursed for any amount expended in excess of a landowner's fair share requirement. Under the terms of an Ordinance for the SPIF adopted by the City (the "SPIF Ordinance"), property owners in the Folsom Plan Area will be eligible to enter into an agreement with the City and receive future reimbursements (that are convertible to fee credits for use within the owner's property) in exchange for the construction of eligible SPIF improvements. Based on the amount of improvements eligible for SPIF reimbursement, a number of properties within the District are anticipated to fully cover their SPIF obligations through the conversion of these SPIF reimbursements to SPIF fee credits. After applying the SPIF reimbursements as SPIF fee credits to all properties in the District, amounts expended by landowners in excess of a project's SPIF obligation are expected to be reimbursed from the City as other SPIF fees are collected in the Folsom Plan Area.

Within the Folsom Plan Area, initial development will be required to pay a "SPIF Set-Aside" component to address initial water and sewer facility costs. This is a loan of SPIF collections to help the cash flow for the initial water and sewer costs. It will be repaid or equalized to all properties through the SPIF program as well as through the District. The SPIF Set-Aside will apply to the first 2,500 Folsom Plan Area dwelling units that would be subject to the SPIF. A portion of the SPIF will be required to be paid regardless of whether a developer/property owner has advance-funded eligible SPIF infrastructure 8 Page 165
11/12/2024 Item No.1.
and has executed a Fee Reimbursement Agreement through the City. An exception to this rule is that a property owner who constructs certain water or sewer infrastructure for which the SPIF Set-Aside is being collected may take a credit against the SPIF Set-Aside.

In addition, in August 2020, the City approved an ordinance amending certain provisions of the SPIF Ordinance to include a new SPIF - Offsite Water Set-Aside. This new SPIF - "Offbite Water Set- Aside" will be payable at the building permit stage and will not be eligible to be offset by fee credits.

In connection with the Specific Plan amendments adopted in August 2024, the City will conduct an update to the Public Facilities Financing Plan.

Phasing of Development. For purposes of setting the PFFP costs, the City projected single family units would be sold and occupied 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 ofthe 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 improvements, off-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 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 represents a rate of 1 station per 12,000 population. The City's first fire station within the Folsom Plan Area opened on September 26,2024.

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 "THE IMPROVEMENT AREA-Overlapping Debt."
Folsom Plan Area Development
The Folsom Plan Area is an area of approxim ately 3,520 acres in the southern portion of the City that has been approved for development of approximately 73,343 units of residential development, plus 274.5 acres (equating to 2.5 million square feet) of commercial/industrial development (including mixed use development). 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 propefty planned for development of 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 Page 166
11/12/2024 Item No.1.

Since development began in May 2017, Westland affiliates have invested more than $250 million into backbone infrastructure and subdivision improvements. Westland affiliates' remaining land holdings include land planned for development of nearly 3,500 dwelling units and 1.2 million square feet of commercial and office uses.

Many of the region's largest public and private homebuilders have been actively building in the Folsom Plan Area, including Toll Brothers, Lennar Homes, Tri Pointe Homes, Taylor Morrison, KB HOME Sacramento,Beazer Homes, Woodside Homes and Richmond American in more than ten separate development communities. Multifamily developers undertaking high density projects include Van Daele Homes, A.G. Spanos Company, and St. Anton Communities.

Dignity Health and UC Davis Medical, two of the region's major healthcare providers, own a total of approximately 70 acres within the Folsom Plan Area that are being developed into hospital and medical campus facilities. Development for the Dignity Health campus began in 2021, and significant land development has progressed. The UC Davis Medical property commenced development in August 2023.

The Folsom Plan Area, including Folsom Ranch and Russell Ranch, is widely considered to be the premier master-planned community in the Sacramento region. As of September 30,2024, final maps had been approved and recorded for 4,603 dwelling units. In addition, as of September 30, 2024,building permits for 3,871 residential units and 3,497 certifrcates of occupancy had been issued in the Folsom Plan Area for projects underway. Based on ownership data as of June 30,2024,3,110 homes had been conveyed to individual homeowners.

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 TCS Improvement Company,LLc, a California limited liability company (the "Original Developer") have entered into an acquisition and shortfall agreement (the "Acquisition Agreement") wherein the City has agreed to use a portion of the proceeds of the Local Obligations to finance the acquisition from the Original 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").

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 Plan and Status of Development-Status of Development."

THE BONDS
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 (including both the Facilities Special Tax and the Services Special Tax, each as defined herein), levied against Taxable Property within the l0 Page 167
11/12/2024 Item No.1.

Improvement Area, net of Priority Administrative Expenses. See "DEBT SERVICE SCHEDULE" and "SECURITY AND SOURCES OF PAYMENT FOR THE 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 Local Obligations 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 March 1 and September I of each year, commencing March 1,2025 (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 the name 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 will in tum remit such payments to DTC Participants for subsequent disbursement to the Beneficial Owners. See APPENDIX F-"DTC AND THE 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 $ I ,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.

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 property 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 1l Page 168
11/12/2024 Item No.1.
pay debt service of the Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS- Terms of the Local Obligations-Local 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 TI{E 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-;
101% if redeemed on an Interest Payment Date on
and _,20-; and
20 l02Yoif redeemed on any date from ,20-
through 20-;
101% if redeemed on any date from _,20-
through
100% if redeemed on 20_and any date thereafter
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%o if redeemed on any Interest Payment Date on or after 20_ through 20-;
|02%oifredeemedonanInterestPaymentDateon-,20-
and ,20_;
20 100% if redeemed on _,20-and any Interest Payment
Date thereafter.
* Preliminary, subject to change.
t2 Page 169
11/12/2024 Item No.1.

Prepayments from prepaid Special Taxes could be made by any of the owners of any of the property within the Improvement Area, including Taylor Morrison, Folsom Real Estate South, 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 ofbonds issued by or on behalfofan overlapping special assessment district or community facilities district. 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 Bonds
Minimum Sinking Fund Payment(September l)
$
I
t Maturity
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 Bonds
Minimum Sinking Fund Payment(September 1)
$
t 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 13 Page 170
11/12/2024 Item No.1.
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 Principal 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 speciff 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; prsYidgd, that Bonds, identified by CUSP 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 (speciffing such date) upon surender thereof to the Trustee at its Corporate Trust Office, subject to any conditions to such redemption specified in the Written Order of the Authority, at the redemption price (specifring 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 14 Page 171
11/12/2024 Item No.1.
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 gonds 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 irrevocably 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.

If any Bond or any portion thereof has been duly called for redemption and payment of the redemption price, together with unpaid interest accrued to the date fixed for redemption, has been made or providid foi by 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.
l5 Page 172
11/12/2024 Item No.1.

ESTIMATED SOURCES AI\D USES OF'F'T]I{DS
The proceeds from the sale of the Bonds will be used to purchase the Local Obligations. The proceeds of the 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 of the funds as allocated to the Bonds:

Sources ofFunds
Principal Amount
I P lus/ Le s sJ; [Net] Original Issue fPrem ium/Discount] Total Sources:

Uses of Funds
Acquisition and Construction Fund
Underwriter's Discount
Deposit to Local Obligations Reserve Account(1)
Deposit to Costs of Issuance Fund(2)
Total Uses:
$
$
(1) A portion 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." (2) A portion ofthe purchase price ofthe Local Obligations will be used to pay costs ofissuance 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.
$
$
16 Page 173
11/12/2024 Item No.1.

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 I below. The Local Obligations are sized to provide 100% of the 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 ll}Yo annual debt service coverage for the Local Obligations from the revenues of the Effective Tax Rate Evaluation Maximum Facilities Special Tax (as defined herein) for Developed Property and Small Lot Final Map Property as of August3l,2024, net of Priority Administrative Expenses, beginning with the levy for Fiscal Year 2025-26. The debt service on the Bonds is expected to increase approximately 2% annually through 2044 and then be level through the final maturity. The District expects that Additional Local Obligations will be issued on parity with the Local Obligations as the Improvement Area develops.

See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Terms of the Local Obligations-l dditional Local Obligations."
Table 1
Folsom Ranch X'inancing Authority
City of Folsom Community Facilities District No.23 (Folsom Ranch) fmprovement Area No. 4
Special Tax Revenue Bondso Series 2024
Debt Service Schedule(l)
Period Ending (September 1) Principal Interest Total Debt Service 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
2053
2054
$ $ $
Torar $$
Amounts rounded to the nearest dollar
Source: Piper Sandler & Co.
$
l7 Page 174
11/12/2024 Item No.1.

The following table shows the expected debt service coverage for the Local Obligations for bond year 2026, taking into account the debt service on the Local Obligations for that year, based on the projected Fiscal Year 2025-26 revenues from the Maximum Facilities Special Tax for the Developed Property and Small Lot Final Map Property in the Improvement Area, as of August 31, 2024, net of Priority Administrative Expenses in the amount of $20,400.

Table 2
City of Folsom Community Facilities District No.23 (Folsom Ranch) Improvement Area No. 4
Fiscal Year2025-26
Debt Service and Debt Service Coverage - Local Obligations Fiscal
Year
Maximum
Facilities Special
Tax Revenue(l)
Priority Net Maximum
Administrative Facilities Special
Expense(2) Tax Revenue
Local
Obligations
Debt Service-
CFD Debt
Service
Coverage*
2025-26 $658,860 $20,400 $638,460 $579,250 1t0.2%
* Preliminary, subject to change.
(r) The Maximum Facilities Special Tax Rates escalate annually at 2%o. Based on the development status for Developed Property and Small Lot Final Map Property as of August 31,2024. (2) The Priority Administrative Expense amount was established at $20,000 for Fiscal Year 2024-25 and escalates annually aI 2o/o.

Source: Piper Sandler & Co. for Local Obligations debt service figures; NBS for all other amounts.

SECURITY AND SOI]RCES 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.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE

DISTRICT, THE AUTHORITY, THE STATE OF CALIFORNIA OR ANY OTHER POLITICAL SUBDIVISION TTIEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE AUTHORITY HAS NO TAXING POWER. EXCEPT FOR TI{E TRUST ESTATE, NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARENOT GENERAL

OBLIGATIONS OF THE AUTHORITY, THE DISTRICT OR CITY, BUT ARE LIMITED

OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE TRUST ESTATE, DERIVED PRIMARILY FROM PAYMENTS ON TI{E LOCAL OBLIGATIONS FROM THE

PAYMENT OF THE SPECIAL TAXES LEVIED WITHIN THE 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 "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Terms of the Local Obligations- Additional Local Obligations ;'
l8 Page 175
11/12/2024 Item No.1.

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 return 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 properly for delinquency of such Special Taxes, after payment of Priority Administrative Expenses. The Special Taxes securing the Local Obligations include both the Facilities Special Tax and the Services Special Tax (each as defined herein) levied within the Improvement Area. 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 "SECURITY AND SOURCES OF PAYMENT FOR TI{E BONDS-Payment of the Local Obligations" and "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Terms 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 and CFD 18, each of which has issued 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 portion of the properly 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 Improvement Area, including CFD I 7 and CFD 1 8.

To the extent such debt is payable from other assessments or special taxes levied pursuant 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 premiums, 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 Obligations from Special Tax Prepayments received by the Trustee from the Authority, will be deposited into the 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;
19 Page 176
11/12/2024 Item No.1.

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, see "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Local 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 "TIIE 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 $10,705,000.- The Local Obligations are secured solely by the Special Taxes (net of Priority Administrative Expenses) levied upon certain real property within the Improvement Area and proceeds of foreclosure sales in the Improvement Area. [The Local Obligations are sized so that, beginning with Fiscal Year 2025-26, the Special Tax is expected to only need to be levied on Developed Property to provide sufficient funds to pay the debt service on the Local Obligations. However, if needed, the Special Tax may be levied on other, less- developed categories of properly pursuant to the Rate and Method (as defined herein) and, as the Improvement Area continues to develop, the expected Special Tax levy on Developed Property will be allocated across a greater number of parcels.]
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 parity with the pledge of the Special Taxes (net of Priority Administrative Expenses) within the Improvement 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-ldditional Bonds; Subordinate Bonds." A description of the Improvement Area is set forth under the caption, "THE 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 * Preliminary, subject to change.
20 Page 177
11/12/2024 Item No.1.
financing certain essential public capital facilities and services, especially in developing areas of the State.

Subject to approval by a two-thirds vote of qualified electors and compliance with the provisions of the Mello-Roos Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district 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 Expenses) to be levied by the District on land within the Improvement Area, including proceeds from the sale 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 Year in which the District has received one hundred percent (100%) of the amount of such installment from the County pursuant to the Teeter Plan. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Covenant for Foreclosure" and "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-The 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 District on Taxable Properly 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 2024-25, $20,000, and (b) for any subsequent Fiscal Year, the amount resulting from increasing the Priority Adminishative Expenses on each July 1, from and including the July I immediately following the end of the then current Fiscal Year to and including the July 1 in such Fiscal Year by 2Yo of the amount in effect for the previous Fiscal Year.

THE LOCAL OBLIGATIONS ARE SPECIAL TAX OBLIGATIONS OF THE DISTRICT,

AND THE INTEREST ON AND PRINCIPAL OF AND REDEMPTION PREMIUMS, IF ANY, ON

TTIE LOCAL OBLIGATIONS 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 LOCAL

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

PRIORITY ADMINISTRATIVE EXPENSES, AND AMOLINTS IN CERTAIN FUNDS AND ACCOI.INTS ESTABLISHED IN THE LOCAL OBLIGATIONS INDENTURE, AND TTM DISTRICT IS NOT OBLIGATED TO PAY THE LOCAL OBLIGATIONS EXCEPT FROM SUCH FTINDS. THE

GENERAL FLTND OF THE CITY AND THE FLTNDS OF THE DISTRICT ARE NOT LIABLE, AND NEITIIER THE FULL FAITH AND CREDIT OF THE DISTRICT NOR TI{E CITY ARE PLEDGED FOR THE PAYMENT OF TI{E INTEREST ON OR PRINCIPAL OF OR REDEMPTION PREMIUMS,

IF ANY, ON THE LOCAL OBLIGATIONS, NO TAX OR ASSESSMENT OTHER THAN THE SPECIAL TAX SFIALL EVER BE LEVIED OR COLLECTED TO PAY TI{E INTEREST ON OR PRTNCIPAL OF OR REDEMPTION PREMIUMS, IF ANY, ON THE LOCAL OBLIGATIONS. THE

LOCAL OBLIGATIONS ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF OR

CHARGE, LIEN OR ENCUMBRANCE UPON ANY PROPERTY OF THE DISTRICT OR ANY OF 2t Page 178
11/12/2024 Item No.1.

ITS INCOME OR RECEIPTS EXCEPT THE PROCEEDS OF THE SPECIAL TAX (INCLUDING

ANY PREPAYMENTS THEREOF AND PROCEEDS FROM THE SALE OF PROPERTY

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

PRIORITY ADMINISTRATIVE EXPENSES, AND AMOUNTS IN CERTAIN FLINDS AND

ACCOLTNTS ESTABLISHED IN TTIE LOCAL OBLIGATIONS INDENTURE, AND NEITHER THE

PAYMENT OF THE INTEREST ON OR PRINCIPAL OF OR REDEMPTION PREMIUMS, IF ANY,

ON THE LOCAL OBLIGATIONS IS A GENERAL DEBT, LIABILITY OR OBLIGATION OF THE CITY OR THE DISTzuCT. THE LOCAL OBLIGATIONS DO NOT CONSTITUTE AN

INDEBTEDNESS OF THE CITY OR THE DISTRICT WITHIN THE MEANING OF ANY

CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION, AND NEITHER TI{E CITY COUNCIL NOR THE DISTzuCT 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 LOCAL OBLIGATIONS OTHERWISE THAN

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 LOCAL OBLIGATIONS INDENTURE FOR THE

DELINQUENCY OF THE SPECIAL TAX), NET OF PRIORITY ADMINISTRATIVE EXPENSES, AND AMOLINTS IN CERTAIN FUNDS AND ACCOUNTS ESTABLISHED IN TIfi 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 propeffy 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 District 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 and Services. Pursuant to the Local Obligations Indenture, the District further agrees and covenants that, after payment of Priority Administrative Expenses, it will transfer to the Local Obligations Trustee from the Community Facilities Fund amounts sufficient and in sufficient time for the Local Obligations Trustee to make the transfers required by it, and the Local Obligations Trustee shall deposit such proceeds as and when received in the Special Tax Fund. All money in the Special Tax Fund is required 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:
(l) Redemption Account; and
(2) Local Obligations Reserve Fund.

Redemption Account. On or before March 1 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 equal to the aggregate amount of interest becoming due and payable on all Outstanding Local Obligations and any Additional Local Obligations on such March I or September 1, as 22 Page 179
11/12/2024 Item No.1.
the case may be, and on or before September I 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 the aggregate amount of principal becoming due and payable on all Outstanding serial Local Obligations and any Additional Local Obligations on such September I 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 on any March 1 or September 1 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 I 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 equal 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 purchased or redeemed prior to maturity) plus the principal of and redemption premiums, if any, on the Local Obligations and any Additional Local Obligations as they shall mature or upon the prior redemption thereof, except that any money in the Sinking Fund Subaccount shall be used only to purchase or redeem or retire the term 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 I in each year, the Local Obligations Trustee shall, from the then remaining money in the Special Tax Fund, transfer to and deposit in each 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; and for this purpose all investments in each Local Obligations Reserve Account shall be valued on March 1 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 option, if so redeemable, or if not so redeemable, 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 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 corresponding series of Local Obligations or Additional Local Obligations in the event there is insufficient money in the Redemption Account available for this purpose; ppvidgd, that if as a result of any of the foregoing 23 Page 180
11/12/2024 Item No.1.
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.

Surplus Amounts. 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 all amounts remaining in the Special Tax Fund after the transfers specified in the immediately preceding paragraphs to the City for deposit in the Community Facilities Fund.

Special Tax Authorization
The Special Tax is to be levied and collected against all Taxable Property within the Improvement Area in accordance with the Rate and Method. See APPENDIX A-"RATE AND METHOD." 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 property taxes. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS---Covenant for Foreclosure" and "CERTAIN RISKS TO BONDHOLDERS-Collection of Special Tax."
The Rate and Method, 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, current annual expenses, pay as you go improvement costs and other costs each year among the Taxable Property in the Improvement Area. See APPENDIX A-"RATE AND METHOD."
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 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 Local Obligations and any Additional Local Obligations as they become due and payable, to replenish each reserve account within the Local Obligations Reserve Fund to the Required Bond Reserve and to pay all current Expenses as they become due and payable.

Under the Rate and Method, the Facilities Special Tax (as defined herein) levied in any fiscal year against any Assessor's Parcel (as defined in the Rate and Method) of Developed 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 10oh 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 Rate and Method, 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 24 Page 181
11/12/2024 Item No.1.
apartments, and propefty 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."
Covenant for Foreclosure
The Local Obligations Indenture provides that the Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described below 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 property 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 the lien therefor within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at a judicial 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 (1) 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 or (2) any individual lot or parcel is then delinquent on four or more installments of the Special Tax, then in each case the District agrees to, 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 (i) in the case of clause (1) above, each delinquent lot or parcel in the Improvement Area or (ii) in the case of clause (2) above, such delinquent lot or parcel, respectively, which it agrees to diligently prosecute and pursue such foreclosure proceedings to judgment and sale; provided, that the District is not obligated to enforce the lien of 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 pursuant to the Teeter Plan (described herein). 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 Government Code of the State of California.

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 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 Facilities 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 Rate and Method) 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 Facilities Special Tax rates. See "CERTAIN RISKS TO BONDHOLDERS-Maximum Special Tax."
25 Page 182
11/12/2024 Item No.1.

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 speciff 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 property 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 5%;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; provided, that nothing shall affect the right of the District 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 qualified electors of the District in the Improvement Area authorized the issuance of bonds in an amount not to exceed $64,000,000 for the Improvement Area.

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 $10,705,000* 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 Taxes (net of Priority Administrative Expenses) levied within the Improvement Area. The District may issue Additional Local Obligations on parity with the Local Obligations in accordance with the Local Obligations Indenture.

Based on the expected Special Tax revenues at build-out, the District expects that, following the issuance of the Local Obligations, Additional Local Obligations will be issued to finance the Facilities in the Improvement Area in a total amount of approximately $28,000,000.* This amount may vary depending on the timing of the issuance of the Additional Local Obligations, the size of the homes built and resulting Special Tax revenues, 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 Obligations 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 ofi (a) the Maximum Annual Debt Service, (b) one hundred twenty-five percent (125%) of the Average Annual Debt Service or (c) ten (10%) percent of the original principal amount of the 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 one or more policies of municipal bond insurance or surety bonds issued by a municipal bond insurer or by a letter of credit issued by a bank, the obligations insured by which insurer or issued by * Preliminary, subject to change.
26 Page 183
11/12/2024 Item No.1.
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 amounts 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; provided, 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 Obligations 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:
(i) 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; (ii) 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
(iii) (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 Rate and Method) for Taxable Property not classified as Developed Property less Priority Administrative Expenses is estimated to cover at least one hundred ten percent (110%) 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 Properly, in aggregate, is at least three (3) times the aggregate Lien on such Taxable Property.
27 Page 184
11/12/2024 Item No.1.
"Developed Propeffy" 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 ofthe date ofcalculation. "Effective Tax Rate Evaluation Minimum Facilities Revenue" means the total minimum amount of the 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 occurred, less any Effective Tax Rate Evaluation Maximum Facilities Special Tax amounts prepaid and permanently satisfied pursuant to the provisions of Section K of the Rate and Method. "Maximum Facilities Special Tax" is the total maximum annual Facilities Special Tax, determined in accordance with the provisions of Section C of the Rate and Method, which may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Property (each as defined in the Rate and Method).
"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 aggregate 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 paragraph (iii) above if, after the issuance and delivery of such Refunding Local Obligations, either (i) none of the Local Obligations and Additional Local Obligations theretofore issued under the Local Obligations Indenture will 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 Obligations 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 2024 Bonds."
Selection of Local Obligations for Redemption. If 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. 28 Page 185
11/12/2024 Item No.1.

Special Tax Analysis
The following is a synopsis of the provisions of the Rate and Method, which should be read in conjunction with the complete text of the Rate and Method 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 Rate and Method, and is qualified by more complete and detailed information contained in the entire Rate and Method 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 Rate and Method approved by the landowner electors of the Improvement Area. The total annual levy of the Special Tax is calculated to satisff 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 further classified as Developed Property, Small Lot Final Map Property, Permit Ready Multi- FamilyA.{on-Residential Property, Large Lot Property, or Undeveloped Property and shall be subject to the levy of the annual Special Tax.
"Developed Property" 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 Properly" 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. 'oPermit Ready Multi-Family/Non-Residential Property" means an 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 discretion, based upon available development information, in classifring 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 prior to June -?0 of the previous Fiscal Year, excluding any portion(s) thereof classified as Developed Property, Small Lot Final Map Property or Permit Ready Multi-FamilyA'{on-Residential Property. Large Lot Property 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 Properll)" 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 property 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. 29 Page 186
11/12/2024 Item No.1.
"(Jndeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Small Lot Final Map Property, Permit Ready Multi-FamilyA{on-Residential Property or Large Lot Propeffy.
*Single-Family Detached Property - MLD Zoning" 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 attached 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 28,2011 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/SFHD Zoning shall consist of either single-family property with a permitted density range of 1-4 Residential Units per Acre or single-family high-density property with a permitted density range of 4-7 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. "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 Parcel 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 affached Residential Units per Assessor's Farcel 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 lJse Residential Parcel" 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 of an 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 Property. "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 Rate and Method is used to allocate the amount of the Special Tax required among the Taxable Propefiy, based upon land use categories, subject to the Maximum Facilities Special Tax rate that may be levied against each land use category' The following table shows the Effective Tax Rate Evaluation Maximum Facilities Special Tax rates both with and without applying the Effective Tax Rate Evaluation Minimum Facilities Revenue calculation and the Maximum Services Special Tax rates within the Improvement Area for all allocable land use categories in Fiscal Year 2024-25. If changes are made to development plans for the Improvement Area, the projected Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues may decrease, but in no event will the Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues decrease below the amounts derived from application of the Effective Tax Rate Evaluation Minimum Facilities Revenue.
30 Page 187
11/12/2024 Item No.1.

Table 3
City of Folsom
Communities Facilities District No. 23 (Folsom Ranch)
Improvement Area No.4
Maximum Special Tax Rate Categories - Fiscal Year 2024-25 Rate Derived from
Effective Tax Rate
Evaluation Minimum
Facilities Revenue(2)
Effective Tax Rate Evaluation
Maximum
Facilities Special Tax Rate(3)
Maximum Services
Special Tax Rate(a)
Maximum
Annual Special
Tax(gTax Category
Developed Property (per residential unit)
Detached Residential:

Single-Family Detached Properly - SF/SFHD Zoning
Single-Family Detached Property - SF/SFHD Zoning
Single-Family Detached Property - SF/SFHD Zoning
Single-Family Detached Property - SF/SFHD Zonng
Single-Family Detached Proper{y - SF/SFHD Zonhg
Single-Family Detached Property - SF/SFHD Zoning
Single-Family Detached Property - MLD Zoning
Single-Family Detached Property - MLD Zoning
Developed Property (per acre)
MMD Multi-Family Attached Property
MHD Multi-Family Attached Property
Non-Residential Properly
Small Lot Final Map Property (per residential lot)
Single-Family Detached Property - SF/SFHD Zoning
Single-Family Detached Prope(y - MLD Zoning
Permit Ready Multi-Family/l{on-Residential Property (per acre) Large Lot Property (per acre)
Undeveloped Property (per acre)
Residential Floor Area(l)
> 3,600
3,200 - 3,599
2,800 - 3,199
2,400 - 2,799
2,000 - 2,399
< 2,000
All categories >:2,000
< 2,000
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
$ 2,243
2,243
2,243
2,243
2,243
2,243
2,186
2,186
$32,473
12,664
12,664
N/A
N/A
N/A
N/A
N/A
$ 3,278
3,278
3,029
2,712
2,389
2,243
2,386
2,186
$32,473
12,664
12,664
$ 2,243
2,186
sr2,664
$21,649
$2r,649
$ 234
234
234
234
234
234
160
160
2,946
2,623
2,476
2,545
2,34s
$33,043
13,804
13,804
g 2,476
2,345
$13,804
922,902
$22,902
$3
J
J
,512
,512
,263
$
l,
I,
570
139
139
S 234
160
$1,139
$1,253
$t,2s3
(r) Combines certain residential categories with equal rates. (3) Increases by 2o/o each Fiscal Year. Reflects the Fiscal Year 2024-25 Effective Tax Rate Evaluation Maximum Facilities Special Tax rates in effect.

Obligations and any Additional Local Obligations in the event of a shortfall in the Facilities Special Tax (as dehned in the Local Obligations Indenture). (5) The sum of the Effective Tax Rate Evaluation Maximum Facilities Special Tax and the Maximum Services Special Tax.

Source: NBS and the District.
31 Page 188
11/12/2024 Item No.1.

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 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 (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.

Table 4 under ('-special Tax Calculation" below shows the estimated Effective Tax Rate Evaluation Maximum Facilities Special Tax revenue and the estimated Effective Tax Rate Evaluation Minimum Facilities Revenue for Fiscal Year 2025-26, based on the development status of the properties as of August 31,2024 (unless otherwise noted). If changes are made to development plans for the Improvement Area, the projected Effective Tax Rate Evaluation Maximum Facilities Special 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 under "-special Tax Calculation" below shows the actual total Special Tax levy for Fiscal Year 2024-25 based on the properties' development status as of June 30, 2024, including both the actual Facilities Special Tax levy and the actual Services Special Tax levy for Fiscal Year 2024-25, and the percentage of the actual Special Tax levy allocable to each ofthe projected property owners.

Included below are additional relevant defined terms used in the Rate and Method. "Effective Tax Rate Evaluation Minimum Facilities Reyenue" means, following the Effective Tax Rate Evaluation, the total minimum amount of CFD No. 23 IA4 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 Rate and Method. The Effective Tax Rate Evaluation Minimum Facilities Revenue, based on Planned Development, is set forth in Attachment D of the Rate and Method. "Effective Tax Rate Evaluation Maximum Facilities Special Te)c" means the total maximum annual Facilities 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 Residential 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 Property, 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 reflect the actual property tax rates levied upon Taxable Property in the Fiscal Year that the Effective Tax Rate Evaluation is completed.
32 Page 189
11/12/2024 Item No.1.

Future Assessor's Parcel Changes - After an Effective Tax Rate Evaluation. 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 sum of the 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 Rate and Method.

Method of Apportionment - Facilities Special Tax - After an Effictive Tax Rate Evaluation. The CFD No. 23 IA4 Administrator shall determine the Facilities 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 700%o of the Effective Tax Rate Evaluation Maximum Facilities Special Tax in order to satisfu the Facilities Special Tax Requirement.

Second: If additional monies are needed to satisf' 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 Properly 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 satisff 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 Properly at a rate 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 satisff 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.

Fifth: If additional monies are needed to satisfu 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 arate 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.

IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
JJ Page 190
11/12/2024 Item No.1.

Method of Apportionmenl - Services Special Tax. The CFD No. 23 IA4 Administrator shall determine the Services 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 levied each Fiscal Year as follows:

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

Second: If additional monies are needed to satisfu 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 Prope$ at a rate up to l00Yo of the Maximum Services Special Tax in order to satisff 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 satisf,z 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 Property at a rate up to 100% of the Maximum Services Special Tax in order to satisS the Services Special Tax Requirement. "special Tex" means the annual Facilities Special Tax and Services Special Tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property 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 limited 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 Local Obligations Indenture; (v) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes 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. 23IA4 Administrator pursuant to the Local Obligations Indenture.
"Authorized Services" means the landscape corridor, enhanced open space and street light maintenance, services, and expenses authorized to be financed by the Improvement Area. "services Special Tax" means the annual Special Tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Services Special Tax Requirement. "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 34 Page 191
11/12/2024 Item No.1.
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 insufficient to 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. 23 IA4 Administrator.

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."
Term of Special Tax. Pursuant to the Rate and Method, the Facilities Special Tax is authorized to be levied for a period not to exceed 50 years, commencing with Fiscal Year 2023'24. The Services Special Tax is authorized, pursuant to the Rate and Method, to be levied in perpetuity, unless and until such time the City determines that revenues are no longer needed to pay the Services Special Tax Requirement.

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 l\Yo 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 Rate and Method, 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 revenue and the estimated Effective Tax Rate Evaluation Minimum Facilities Revenue for Fiscal Year 2025-26 (Table 4), based on the development status of the properties as of August 31,2024 (unless otherwise noted), and the actual total Special Tax levy for Fiscal Year 2024-25 (Table 5) based on the development status of the properties as of June 30,2024 (unless otherwise noted).] IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
35 Page 192
11/12/2024 Item No.1.

Table 4
City of Folsom
Community Facilities District No. 23 (Folsom Ranch)
Improvement Area No. 4
Estimated 2025-26 Effective Tax Rate Evaluation Maximum Facilities Special Tax Revenue and Effective Tax Rate Evaluation Minimum Facilities Revenue Development Status as of August 3l'2024 (unless otherwise noted) Planned
Units
Appraised
Value(r) Total Value
Estimated 2025-
26 Effective Tax
Rate Evaluation
Maximum
Facilities
1qgys11s(zxs)
$417,447
97,307
$848,817
525,763
Percentage of
Estimated 2025-
26 Effective Tax
Rate Evaluation
Maximum
Facilities
Revenue
2lo/o
5o/o
42o/o
260/o
680/o
Estimated
2025-26
Effective
Tax Rate
Evaluation
Minimum
Facilities
Revenue(2X3)
Percentage of
Estimated 2025
26 Effective Ta
Rate Evaluatio
Minimum
Facilities Reveni
Assessed
Value
$54,806,326
26,034,708
'opertv
:veloped Property:
ngle-Family Detached Property - SF/SFHD Zoning
ngle-Family Detached Properly - MLD Zoning
Developed Property Total:
nall Lot Final Map Property:
ngle-Family Detached Property - MLD Zoning
Small Lot Final Map Property Total:
rrge Lot Property(a):
ngle-Family Detached Property - SF/SFHD Zoning
ngle-Family Detached Property - MLD Zoning
Individual llomeowners Total:
rtals:
197 $800841,034 $34,649,561 $115,490,595
63 $15,224,439 $15,224,439
63 st5224,439 $15224,439
ls5
42 s34,649,561
$8,300,428
11,100,572
$89,455,887
26,034,708
$8,300,428
11,100,572
$514,753 25o/o
sl44.107 7Yo
$144,107
7o/o
s4l7,447
97,307
s514,753
9144.107
$144,107
s379,710
494,953
$874,663
27o/o
34o/o
9o/o
25o/o
32o/o
57o/o
60/o
9o/o
r66
222
388 $19,401,000 $190401,000 $1p74,580
648 $80,841,034 $69"275,000 $150,116,034 52,033,441 1000 $1,533,523 1000h (1) Appraised value amounts provided by the Appraiser.
(2) Increases by 2%o each Fiscal Year.
for Developed Property.
(4) The Effective Tax Rate Evaluation Minimum Facilities Revenue based upon the number of units planned.

Source: NBS.
36 Page 193
11/12/2024 Item No.1.

Table 5
City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 4
Actual 2024-25 Special Tax LevY
Development Status as of June 3012024 (unless otherwise noted) Planned
Units
2024-25
Facilities Special
Tax Levy
202+25
Services Special
Tax Levy
$ 14,482
14,716
s29,197
s78,022
$78,022
$28,422
2024-25
Total Special
Tax Levy
$ 152,335

14.716
$167,050
878.022
s78,022
$368,913
Percent of
Estimated Total
Special Tax Levy(z)
25Vo
27o/o
t3%
l30h
60%
1000h
Property Owner
Taylor Morrison
Taylor Morrison
Total for Taylor Morrison:

Folsom Real Estate South
Total for Folsom Real Estate South(l):

Individual Homeowners
Totals:

Development Status
Developed Property
Small Lot Final Map Property
62 63
s137,853
2Yo
Large Lot Property
Developed Proper(y
(1) Reflects anticipated lots to be sold by Folsom Real Estate South to a homebuilder. (2) Totals may not sum due to rounding.

Source: NBS.
t2s
388
$137,853
135 $340,491
s478344
IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
388
648 $135,641 $613,984
37 Page 194
11/12/2024 Item No.1.

The Teeter Plan
In July 1993, the Board of Supervisors of the County approved the implementation of the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the "Teeter Plan"), as provided for in Section4T0I et seq. of the California Revenue and Taxation Code. Underthe Teeter Plan, the County apportions secured property taxes on an accrual basis (irrespective of actual collections) to local political subdivisions for which the County acts as the tax-levying or tax-collecting agency.

Under the Teeter Plan, the County distributes tax collections on a cash basis to taxing entities during the fiscal year and shortly after year-end, and also distributes 100% of any taxes delinquent as of June 3Oth to the taxing entities and those special assessment districts and community facilities districts (and individual parcels within each district) that the County determines are eligible to participate in the Teeter Plan by the end of the calendar year. The County may make eligibility determinations on an annual basis and may exclude a district or an individual parcel that had previously been included in the plan. The County has the discretion to determine which delinquent special taxes will be paid through the Teeter Plan on a case-by-case basis.

The County's policy includes the following criteria for delinquent parcels to be excluded from the County's Teeter Plan: (1) tax bills belonging to a governmentaUpublic agency; (2) common area parcels; (3) tax bills on the unitary assessed values or pipeline assessed values; (4) special assessments (subject to judiciary foreclosure) to be stripped from the tax bill; (5) bankruptcy; (6) demolition of the property; (7) vacant buildings (due to a risk of possible demolition); (8) contamination of the property; (9) property that is subjected to the "sealed bid"; (10) the delinquent amount is greater than or equal to assessed value of the property; (11) property that is de-enrolled from the Teeter Plan in previous years under the same owner and (12) the amount of code enforcement liens, other delinquent abatement liens, and delinquent utilities abatement liens, and delinquent utilities levied on the property is equal to or greater than 5o/o of the assessed value of the property. Such policy may be amended by the County at any time and could impact the inclusion of certain delinquent parcels in the Teeter Plan in future years.

The County's policy is that any new taxing entity or special assessment district that includes its levy on the County tax roll is qualified to be under the County's Teeter Plan. The District is included in the County's Teeter Plan. See, however "CERTAIN RISKS TO BONDHOLDERS-Teeter Plan Termination." The District can provide no assurance that the County will continue to include the District in the Teeter Plan.

THE AUTHORITY
The Authority was created by a Joint Exercise of Powers Agreement, effective April 20,2075 (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.
38 Page 195
11/12/2024 Item No.1.

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 conitruction of certain public improvements and the financing of certain services to serve property within the District. The City established the District on May 26,2020, and designated six separate improvement areas therein, including the Improvement Area. 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 authorized the issuance of bonds in an amount not to exceed $64,000,000 for the Improvement Area. Pursuant to the Mello-Roos Act, the qualified electors were the landowners of Taxable Property within each Improvement Area. In connection with the landowner election, all electors delivered customary waivers to iertain matters relating to the conduct of the election. In Decembet 2021, a seventh improvement area was designated within the District.

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 Impiovement Area will be limited by the requirements of the Local Obligations Indenture, including the foliowing requirements relating to any Additional Local Obligations: a 3:1 overlapping value to lien ratio on all land plojected to be subject to the levy of the Special Tax and ll}Yo annual 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 THE BOND S-Term s of the Local Obl i g ations-Addi t i on al L o c al O b I i gat i on s ;' 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 150 total gross acres (excluding non-parcel areas, such as roadways), of which approximately 95 acres are subject to the Special Tax. 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 of development, including unimproved land, finished lots, homes under construction, and completed and sold homes. Collectively, these properties are planned to include 648 single family homes. In the portion of the Improvement Area being developed by Taylor Morrison, home construction and sales are well underway. This portion of the Improvement Area will ultimately contain 260 of the 648 single family homes.

The remainder of the Taxable Property within the Improvement Area (refered to herein as the Four Large Lots) is owned by Folsom Real Estate South, which is actively negotiating with a nationally- 39 Page 196
11/12/2024 Item No.1.
recognized homebuilder that it expects to develop that land to include 388 single family homes.

Currently, the Four Large Lots are in the very early stages of development and do not yet have an approved small lot tentative map. Construction of these additional 388 homes will also require the Uuitaer to complete the necessary infrastructure improvements, including mass grading, utilities and roadway improvements, and subdivision improvements. Construction of the public improvements and backbone infrastructure in the Improvement Area is nearly complete, as more particularly described ,,PROPOSED PROPERTY DEVELOPMENT-Development Plan of Finance." Property Values
Parcels of Taxable Property within the Improvement Area with assessed structural improvements values of $300,000 or more as reported by the County of Sacramento Assessor (the "Unappraised Properly") had, in aggregate, an assessed land and improvements value of $80,841,034 as of January l, 2024, as such value was reported by the County Assessor on July 1,2024. Assessed values are opinions of property value determined by the County Assessor's office for property tax purposes. Such assessed value determinations may be subject to appeal by property owners. The resolution of an appeal may result in a reduction to the County Assessor's original taxable value. Although such a result would not reduce the Special Tax on the property, any reduction in the assessed values of property would have an adverse impact on the value-to-debt ratios discussed herein and could lessen the ability or willingness of the ownerJ of such property to pay their assessments. Moreover, assessed values do not necessarily represent the current market value for any parcel'
An appraisal of the remainder of the Taxable Properly within the Improvement Area has been prepared by the Appraiser in connection with the issuance of the Bonds. The purpose of the appraisal was io estimate the market value, subject to the Special Tax and based upon a hypothetical condition, for each parcel of Taxable Property within the Improvement that, as of July 1,2024, (i) was not reported by the-County of Sacramento Assessor to have any assessed structural improvements value or (ii) was reported by the County of Sacramento Assessor to have an assessed structural improvements value of less than $300,000 (such portion, the "Appraised Property"). The appraisal estimates the market value of the Appraised Properly as of August3l,2024 (the "Appraisal"). The Appraisal is attached to this Official Statement as APPENDIX G.

As of the date of inspection, the Appraiser notes that development of portions of the property is underway. The subject property was valued based on the hypothetical conditions that the public improvements to be financed with the proceeds of the Local Obligations have been paid. The Appraisal is based on property values at the time of inspection.

Subject to the assumptions, hypothetical condition and limiting conditions, the Appraiser estimated that the value of the Appraised Property within the Improvement Area had an estimated not- less-than aggregate land value of $69,275,000 as of August 31, 2024. See APPENDIX G- ..APPRAISAL."
Collectively, the aggregate value of the Taxable Property within the Improvement Area (including both the Unappraised Property and the Appraised Property) is $150,116,034.

Value-to-Lien Analysis
The following table sets forth the ratios of the properly values of the Taxable Property to the total liens on the property in the Improvement Area based on the development status of the property as of August 31,2024. The following table shows the value-to-lien ratios for the Improvement Area based on the development status of the Taxable Property as of August3l,2024, for (i) Developed Properfy, Small Lot Final Map Property, and Large Lot Property and (ii) the owners of the Taxable Property. See 40 Page 197
11/12/2024 Item No.1.
"PROPOSED PROPERTY DEVELOPMENT-Development Entitlements." The following table also shows the estimated Facilities Special Tax levy for Fiscal Year 2025-26 based on the properties' current map status as Developed Property, Small Lot Final Map Property, and Large Lot Properly. The value-to- lien ratio for the Improvement Area based solely on the Local Obligations and the appraised value of the land within the Improvement Area is 14.0*:1.0. The overall value to overlapping debt ratio, including certain overlapping general obligation tax and assessment debt, CFD 17 special tax debt, and CFD 18 special tax debt, is 10.5-:1.0 (see "-Overlapping Debt"). 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 propefty within the Improvement Area.
* Preliminary, subject to change
41 Page 198
11/12/2024 Item No.1.

Table 6
City of Folsom Community Facilities District No.23 (Folsom Ranch) Improvement Area No.4
Value-to-Lien Ratios
Development Status as of August3l,2024
Planned
Units
Estimated
2025-26
Effective Tax
Rate Evaluation
Minimum
Facilities
Revenue(I)
Estimated
2025-26
Facilities
Special
Tax LevJr(z)
Assessed
Value(3)
Share ofLocal
Obligations(a)
Overlapping
Debt(s)
Local
Obligations
Value to
Lien(6)
Overall
Value to
Lien(6)
Appraised
Value(3)
s34,649,561
15,224,439
19,401,000
s6s-27s-000
Total Value
$1 15,490,595
15,224,439
19,401,000
$
197
63 388
$5 14,753
144,107
874,663
$1-533.523
$514,753 $80,841,034
84,897
$599.650 $80.84
By Development Status:

Developed Property
Small Lot Final Map
Large Lot Properly
Total
Bv Ownershin Group:

Taylor Monison
Folsom Real Estate South0)
Individual Homeowners
Total
648 1-034
s3n,559 $252,349 $3,679,129 $33,249,000 936,928,129
874,663 19,401,000 19,401,000
347,307 347,301 77,161,905 16,625,000 93 786,905
1s0.1r6-034 sr0.705.000 $3.570.658 14.0 10.5
$9,189,417
1,51 5,583
$4,504,960
6,200,040
s2,390,473
799,429
380,756
$1,589,042
380,756
r.600.860
t2.6

10.0 N/A

8.2 N/A

15.1 10.0

6.6 5t.0

6.1 5 r.0

12.0 125
388
135
648 $1,533,523 $599,650 $80,841,034 $69,275,000 $150,116,034 $10,705,000 $3,570,658 14.0 10.5 (r) Increases by 2%o each Fiscal Year. The Estimated 2025-26 Effective Tax Rate Evaluation Minimum Facilities Revenue amount is$1,473,649. (2) Based on estimated debt service requirements for the Bonds plus Priority Administrative Expenses of $20,400. (3) Assessed and appraised value amounts provided by the Appraiser. See "-Property Values." (a) Allocated based on the projected Fiscal Year 2025-26 Facilities Special Tax lely. (5) Includes the CFD l8 bonds issued in October 2024 in the aggregate principal amount of $26,735,000. (6) Value to lien ratio is for the Local Obligations. Local Obligations are issued in the same principal amount of the Bonds. for all remaining Large Lot Propeffy.

Source: Except as otherwise noted, NBS.
42

11/12/2024 Item No.1.

Estimated Tax Burden on Single Family Home
The following table sets forth the estimated total tax burden on single-family/single-family high density (SF/SFHD) 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 Yeat 2024'25.

Table 7
City of Folsom
Community Facilities District No.23 (Folsom Ranch)
Improvement Area No. 4
Single Family Residential Property Sample Property Tax Bill Estimated Charges for Fiscal Year 2024-25

SF/SFHD MLD
$ 757,000 $ 635,000Assessed Value(l)
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
SpeciaVl)irect Assessments and Taxes
Folso- Communiry Facilities District No. 23 (Folsom Ranch) - Imp. Area No. 4(3) Folsom Community Facilities District No. 23 (Folsom Ranch) - Imp. Area No. 4 (a) Folsom Community Facilities District No. 17 (Willow Hill Pipeline)ts) Folsom Community Facilities District No. 18 (Folsom Plan Area)(6) Sacramento Area Flood Control(7)
Total SpeciaVDirect Assessments and Taxes
Total Estimated Annual Property Taxes
Effective Tax Rate(8)
(7,000) (7,000)
$ 750,000 $ 628,000
Tax Rate

1.0000%

0.0200o/o

0.0179%

0.1970%

1.2349Vo $9,261.75 $7,755.17
$ 7,500.00
150.00
t34.25
1,477.50
$ 6,280.00
t2s.60
112.41
1,237.16
$ 2,389.14
233.58

80.07 1,180.47

1.50 $ 2,385.52
r 59.51

86.30 865.17

1.50 $ 3,884.76 $ 3,498.00
$13,146.51

1.7367o/o
$11,253.17

1.77220h
(l) Approximate average assessed value for properly within the category presented. (2) Based upon Fiscal Year 2024-25 Sacramento County ad valorem property tax rates for TRA 04-035. (3) Fiscal iear 2024-25 Effective Tax Rate Evaluation Maximum Annual Facilities Special Tax for a residential unit with residential floor area between 2,000 and 2,399 square feet. The Effective Tax Rate Evaluation Maximum Annual Facilities Special Tax escalates anntally at2%o.
(4) Fiscal Yearl. 2024-25 Maximum Annual Services Special Tax for a residential floor area between 2,000 and 2,399 square feet. The Maximum Annual Services Special Tax escalates annually based upon the annual June CPI Change, for the San Francisco-Oakland- San Jose are, notto exceed4%o.
(5) Fiscal Year 2024-25 Maximum Annual Special Tax. The Maximum Annual Special Tax escalates annually at2Yo. (6) Fiscal Year 2024-25 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 at2%o 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 4%o. (D Approximate assessment for residential lots. Based upon lot size.

G) Eitlmate of annual 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 governmental agencies and third-party sources. 43

11/12/2024 Item No.1.

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 agencies at any time. Further, a portion of the overlapping debt shown in the table below is based on the assessed value of the underlying properly, which can be expected to increase over time as development occurs and the assessed value grows. This table (excluding the footnotes) has been prepared by California Municipal Statistics, Inc. as of September 1,2024, and is included for general information purposes only. The overlapping debt table below does not reflect the $26,735,000 aggregate principal amount of CFD 18 bonds that were issued in October 2024. 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.

The City authorized the issuance of up to $8,000,000 of bonds for CFD 17, of which $6,675,000 has been issued. Further, the City authorized the issuance of up to $200,000,000 in bonds for CFD 18. In October 2024, CFD 18 issued bonds in the aggregate principal amount of 526,735,000 to help finance the Phase 2 Water Transmission Facilities (as defined herein). A portion of any bonds issued for CFD 18 constitutes overlapping debt. The Improvement Area constitutes approximately 4.6% by acres of CFD 1 8, however any overlapping debt issued by CFD 17 or CFD 18 will not be allocated to the properties in the Improvement Area based on their acreage, and the amount of overlapping debt allocated may vary over time. Based on the development status within CFD 18 as of August 31,2024, the Improvement Area would generate approximately 5.6% of the maximum CFD l8 special tax levy for bonds. This share of the maximum CFD 18 special tax levy for bonds is expected to decrease over time as undeveloped properties within CFD l8 become approved with final maps or developed. 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 Improvement Area. The lien of the Special Taxes for the Improvement Area is on parity with the lien of the special taxes for CFD l7 and CFD 18.

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 District No.3 of the Folsom Cordova Unified School District ("SFID 3"), approved by voters 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 October 2, 2024, general obligation bonds in the aggregate principal amount of approximately $195.6 million had been issued and approximately $178.7 million were outstanding for SFID 3. At the time of the election approving the SFID 3 general obligation bonds, the ballot summary indicated the average tax rate per $100,000 assessed valuation would be $73.61. For 2023-24, the actual SFID 3 tax rate per $100,000 was approximately $206.30. The following table 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. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
44 Page 201
11/12/2024 Item No.1.

Table 8
City of Folsom
Community Facilities District No. 23 (Folsom Ranch)
Improvement Area No. 4
SFID 3 Ad Valorem Rates
Year Rate(l)
2024-25
2023-24
2022-23
2021-22
2020-21

0.1970%

0.2063%

0.2758%

0.3881%

0.2065%
(1) TRA 04-035
Source: NBS.

Table 9
City of Folsom
Community Facilities District No.23 (Folsom Ranch)
Improvement Area No. 4
Overlapping Debt
2023-24 Local Secured Assessed Valuation: $44,095,382 (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 District No. 17
City of Folsom Community Facilities District No. 23' I.A. 4

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 FTIND DEBT
Less: Sacramento County supported obligations

TOTALNET OVERLAPPING GENERAL FUND DEBT

GROSS COMBINED TOTAL DEBT

NET COMBINED TOTAL DEBT
o/o Applicable

0.017%

0.232

0.953

4.545
100.

0.020o/o

0.020

0.020

0.226
Debt9lll24
$ 58,076
23,481
1,735,981
246,093
0(r)
$2,063,631
$20,832
61,421
327
r.405
$83,98s

2.201
$81,784
$2,r47,616Q)
s2,145,41s
(l) Excludes Mello-Roos Bonds to be sold.
(Zj exctuOes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Ratios to 2023-24 Local Secured Assessed Valuation:

Direct Debt ($0)................ ..........'............0.00% Total Direct and Overlapping Tax and Assessment Debt'....'..'.............'..5.88% GROSS Combined Total Debt ............6.12o/o
Source: Cali fornia Municipal Statistics, Inc.
45 Page 202
11/12/2024 Item No.1.

Historical Special Tax Levy
The Special Tax (including both the Facilities Special Tax and the Services Special Tax) was first levied in the Improvement Area for Fiscal Year 2023-24 in the total amount of $366,462.62. This total Special Tax levy for Fiscal Year2023-24was comprised of $235,077.63 for the Facilities Special Tax and$l31,384.99fortheServicesSpecialTax. TheFiscalYear2023-24SpecialTaxwasleviedupon264 parcels and, as of June 30,2024, no parcels in the Improvement Area were delinquent.

PROPOSED PROPERTY DEVELOPMENT
Development Entitlements
Specific Plan. On June 28,2011, the City Council approved the original Specific Plan for the development of the Folsom Plan Area. Various property owners have submitted and received approvals of Specific Plan amendments since the 201I City Council adoption. Most recently, the City revised its Specific Plan to provide for an increase in housing density in order to provide for more affordable housing options. Such Specific Plan amendments were approved by the City Council on August 27, 2024.

The Specific Plan provides for 13,343 total dwelling units and 2.5 million square feet of commercial, office/industrial and mixed use. The Specific Plan also providesfor275.7 acres of public and quasi-public use (public and private schools, parks and infrastructure);182 acres of major roads and l,ll4.5 acres of open space.

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. To date, final maps have been approved and recorded for the 260 lots within the Improvement Area owned by Taylor Morrison or individual homeowners. No tentative or final maps have been approved or recorded for the remainder of the Taxable Property within the Improvement Area. Design review approval, which provides for City review of the home plans, architecture and conformance to certain development standards, has been completed for all 260 homes constructed by, or being constructed by, Taylor Morrison within the Improvement Area.

Site Access. External access to the project site will be provided via East Bidwell Sheet to the east, Savannah Parkway to the north, and Mangini Parkway to the south. 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.

Design Guidelines. The Folsom Ranch Central District Design Guidelines (of which the Improvement Area is a part) were approved by the City concurrent with certain Tentative Map approvals on June 23,2015. The design guidelines provide for the orderly development of the proposed single family residential subdivision. The primary purpose of these design guidelines is to articulate the general architectural and design expectations for the proposed residential neighborhood, the landscapes, hardscapes, open spaces, fencing, entry features and site lighting. The goal ofthe 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 City's Planning Commission as part of future Design Review applications for each applicable development' 46 Page 203
11/12/2024 Item No.1.

Development Conditions/Building Permit Limitations. Certain provisions of the PFFP for the Folsom Plan Area, as implemented through tentative subdivision map conditions, require certain infrastructure be installed or place other limits on the number of building permits that can be issued before certain facilities and/or backbone infrastructure is in place.

For example, certain tentative maps require a fire station to be operational prior to the occupancy of the 1,500th home in the Folsom Plan Area. The City's first fire station within the Folsom Plan Area opened on September 26, 2024.

Phase 2 Water Infrastructure. The City estimates the Phase 1 Water Facilities (as defined herein) have a sustained maximum day demand of up to 2.0 million gallons. A study prepared by Peterson Brustad, Inc. in April 2019 then estimated that water usage would equal or exceed a sustained maximum day demand of up to 2.0 million gallons when approximately 2,800 to 3,300 dwelling units within the Folsom Plan Area had been occupied.

Certain additional water backbone facilities (collectively, the o'Phase 2 Water Facilities") will be constructed to provide expanded water transmission conveyance capabilities to deliver water from the City's water treatment plant to the Folsom Plan Area.

The Phase 2 Water Facilities include (i) a water transmission pipeline (the "Phase 2 Water Transmission Facilities") to be constructed with the proceeds of CFD 18 bonds issued in Octobet 2024, (ii) the Zone 4 Water Facilities (consisting of a zone-specific water tank and booster pump station), and (iii) the remaining Phase 2 Water Facilities (consisting of another zone-specific water tanks and booster pump station) (the "Remaining Phase 2 Water Facilities"), which will be constructed atalater date. The City expects that the Zone 4 Water Facilities and the Remaining Phase 2 Water Facilities would need to be constructed after the completion of the Phase 2 Water Transmission Facilities to maintain the City's standards for delivering water to its customers.

See "PROPOSED PROPERTY DEVELOPMENT - Development Entitlements - Water Supply Infrastructure" below for a more detailed discussion of the Phase 2 Water Facilities and their expected timing and cost.

Developers within the Folsom Plan Area have requested that the Phase 2 Water Facilities be funded in whole or in partthrough bonds issued for CFD 18 and certain pay-go proceeds from CFD 17 and CFD 18 special taxes. See "FOLSOM PLAN AREA-Folsom Plan Area Developmenf' for a discussion of certain development and investment that has already occurred within the Folsom Plan Area and additional future development and investment that is anticipated as the Folsom Plan Area continues to be developed. The timing of issuance of bonds for CFD 18 is dependent upon market conditions and development within the Folsom Plan Area, and additional development within CFD 18 may be required to generate CFD 18 special tax revenues sufficient for funding all of the Phase 2Water Facilities. There can be no assurance that bond proceeds will be available when needed to construct the Phase 2 Water Facilities or to reimburse the developers for costs expended therefor. See "PROPOSED PROPERTY DEVELOPMENT - Development Entitlements - Water Supply Infrastructure" below for a more detailed discussion of the amount and timing of the issuance of CFD 18 bonds to finance the Phase 2 Water Transmission Facilities.

Based on the current stage of planning for the Phase 2 Water Transmission Facilities, the development stage and planned development timeline for the Improvement Area as described in this Official Statement, and the available water facilities servicing the Improvement Area, Taylor Morrison, Folsom Real Estate South, the City, and the District do not believe that these conditions will materially impede development of the Improvement Area as currently planned. However, multiple other 47 Page 204
11/12/2024 Item No.1.
development projects are underway in the Folsom Plan Area, and if there were an unforeseen and signifiiant 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 completion of the Phase 2 Water Transmission Facilities before all development could be completed within the Improvement Area.

Armlt Corps of Engineers liletland Permitting, Biological Opinion. Streambed Alteration Asreements and Section 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.

To 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 thereafter is required to obtain their own wetland permit for the fill ofjurisdictional wetlands not included in the footprint 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 property owners within the Folsom Plan Area on July 12,2011. The effective date of the ordinance was Augustll,2011. The Tier 1 Development Agieement vests certain rights of the property owners and of the City and commits each party to the agreements to subsequent actions before development may proceed within the Folsom Plan Area.

Separate First Amended and Restated Tier 1 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 properly 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 "PROPOSED PROPERTY DEVELOPMENT-Property Ownership."
Article 2.5 (commencing with Section 65864), of Chapter 4, Division l, 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 project and proposed mitigation measures, be prepared, considered and certified as complete by a public agency prior to its taking discretionary action on any project which may have a significant effect on the environment.

In June 2071, 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 EIWEIS satisfied both CEQA and the National Environmental Policy Act for the entirety of the Folsom Plan Area. In February 2015,the City Council of the City adopted the South of Highway 50 Backbone Infrastructure Project Initial Study/Mitigated Negative Declaration (Backbone 48 Page 205
11/12/2024 Item No.1.

Infrastructure MND), dated December 9, 2014. In addition, in connection with amendments to the Specific Plan, after statutorily required public notice, hearing and comment, the City Council certified as adequate and complete a final subsequent environmental impact report addressing increased density in light of the impact analysis provided in the EIRJEIS for the Specific Plan.

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 construction 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.
l{ater Suppht 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 ihe 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 Suppllt in Folsom Generalht The primary water supply source for the City 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 ("aft') 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 attributes 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 I pre-1914 appropriative water right for 22,000 acre-feet per year (Agreement with Reclamation)
. I pre-1914 appropriative water right for 5,000 acre-feet per year (Co-Tenancy agreement with Golden State Water ComPanY)
. { Central Valley Project ("CVP") repayment contract for 7,000 acre-feet per year The City's 22,000 acre-foot entitlement is based on a pre-1914 appropriative right from the South Fork of the American River established by the Natoma Water Company ("Natoma") in 1851. Natoma's original pre-1914 water right established a maximum diversion rate "to fill a Canal Eight feet wide and Four feei deep with a current running Ten miles per hour." This correlates to a diversion rate of 60 cubic feet per second and a maximum allocation of 32,000 afa. This right is held with Golden State Water Company pursuant to a co-tenancy agreement. The City's 5,000 acre-foot entitlement is also based on Natoma's pre-1914 appropriative right from the South Fork of the American River. In Novembet 1994, the City executed a contract with Southern California Water Company-Folsom Division ("SCWC") under which itt" City acquired the right to lease 5,000 afa (of SCWC's remaining 10,000 afa under the original Natoma purchase) for an indefinite period. This right is held with Golden State Water Company pursuant 49 Page 206
11/12/2024 Item No.1.
to a co-tenancy agreement. This water right was also formally recognized in the settlement agreement between Reclamation and the City. As authorized by Public Law No. 101-514, the City was a subcontractor under Sacramento County Water Agency's (SCWA) CVP water-service contract for 7,000 afa. In 2016,the United States, the City and SCWA completed an assignment of this portion of SCWA's CVP water-service contract from SCWA to the City. In February 2020, the City and Reclamation executed a contract that converted the CVP water-service contract into a CVP repayment contract as authorized under the Water Infrastructure Improvements for the Nation Act.

Under the agreements with Reclamation for 22,000 afa and 5,000 afa, Reclamation delivers this entire water supply without reduction on a perrnanent basis. Under the agreement with Reclamation for 7,000 afa of CVP water, this water supply faces possible reductions pursuant to Reclamation's Municipal and Industrial Water Shortage Policy. In 1994, the City entered into an agreement with Golden State Water Company (f/k/a Southern California Water Company, herein "GSWC") to acquire the right to divert up to 5,000 acre feet of pre-1914 water rights annually (the "GSWC Agreement"), subject to the terms and conditions of that agreement. Under the GSWC Agreement, the City is required to pay for the entire 5,000 acre-feet annual water supply regardless of whether the City is able to divert and use that quantity of water. The City uses the supplies provided in the GSWC Agreement to serve the Folsom Plan Area. The cost of water under the GSWC Agreement is paid for by Folsom Plan Area landowners and water customers.

Source of Water for Folsom PIan Area. The City has determined that its Water Systems Optimization Review Program and implementation of metered rates will provide additional water supplies in an estimated amount of 6,450 acre-feet per year, which is in addition to the present and forecasted demands of the City's existing water users. The City intends to use a portion of this 6,450 acre-feet per year of available water to meet present and future water demand in the East Area in order to make the 5,000 acre-feet per year of GSWC Agreement water supply available for use in the Folsom Plan Area, on the terms and conditions of that Agreement. To meet this intent, the City converted the East Area water supply from the GSWC Agreement to the less expensive CVP repayment contract. The City would meet the additional build-out water demand of the Folsom Plan Area with approximately 600 acre-feet per year of water produced by the Water Systems Optimization Review Program that is in excess of the water demand in the East Area. The water made available under the GSWC Agreement and Water Systems Optimization Review Program will be sufficient to supply the projected water demand in the Folsom Plan Area. Pursuant to the provisions of Sections 860 et seq. of the State Code of Civil Procedure and Government Code Sections 53511 and 53589.5, the City filed a complaint in the Superior Court of the State for the County of Sacramento to validate the agreement. The Superior Court determined that the agreement: (a) is lawful, valid, enforceable and in the best interests of the City and all persons in any way interested therein and (b) is consistent with all applicable laws and obligations, including the Measure W water supply requirement.

The City's Community Facilities District No. 2013-1 (Water Facilities and Supply) (the "Water CFD") was formed by the City in 2014. The cost of the GSWC Agreement water will initially be paid for by the Folsom Plan Area through special taxes collected for the Water CFD on certain property in the Folsom Plan Area, including the Improvement Area. When a building permit has been issued and a customer billing account has been established, the developed parcel is no longer subject to the levy of the special tax for the Water CFD and thereafter pays for water through water rates.

Water Conservation The City maintains a five-stage water conservation program with conservation goals and water use restrictions. The City Manager is authorized to implement and enforce whatever conservation measures are deemed necessary to achieve the water reduction requirements of the declared conservation stage.
50 Page 207
11/12/2024 Item No.1.

Water Supply Infrastructure. For the first phase of development to occur within the Folsom Plan Area, the developers of the Folsom Plan Area constructed improvements to connect water supply from the north of US Route 50 and extend water infrastructure pipelines (the "Phase 1 Water Facilities").

The Phase I Water Facilities were completed in August 2018. The City estimates the Phase I Water Facilities are adequate for a sustained maximum day demand of up to 2.0 million gallons. A study prepared by Peterson Brustad, Inc. in April 2019 then estimated that water usage would equal or exceed a lustained maximum day demand of up to 2 million gallons when approximately 2,800 to 3,300 dwelling units within the Folsom Plan Area had been occupied. During summer 2021 as a result of high levels of construction activity, the maximum day water demand exceeded 2 million gallons for several days with no service interruption to the water system.

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 Phase 2 Water Facilities include (i) the Phase 2 Water Transmission Facilities to be constructed with the proceeds of CFD 18 bonds issued in October 2024, (ii)the Zone 4 Water Facilities (consisting of a zone-specific water tank and booster pump station), and (iii) the Remaining Phase 2 Water Facilities (consisting of another zone-specific water tanks and booster pump station), which will be constructed at a later date.

The City solicited bids for the construction of the Phase 2 Water Transmission Facilities in August 2024 and, in October 2024, approved the award of a construction contract to the contractor submitting the lowest responsive responsible bid based upon a guaranteed maximum price procurement approach. Also in October 2024, CFD 18 issued bonds in the aggregate principal amount of $26,735,000 to help finance the Phase 2 Water Transmission Facilities. The City expects to formally enter into the construction contract for the Phase 2Water Transmission Facilities by the end of Novembet 2024 and that construction of the Phase 2Water Transmission Facilities will commence in the first quarter of 2025 and last approximately 18 months.

The Phase 2 Water Transmission Facilities, when complete, are expected to increase capacity to up a 3.0 million gallon sustained maximum day demand in the Folsom Plan Area (which the City expects will occur when approximately 4,100 dwelling units within the Folsom Plan Area have been occupied)' Following completion of the Phase 2 Water Transmission Facilities, the City anticipates that the Zone 4 Water pacilities will need to be built to provide water to zones 4, 5 and 6 of the Folsom Plan Area when the water facilities for the Folsom Plan Area approach a sustained maximum day demand of 3.0 million gallons. The City expects that an additional series of CFD 18 bonds will be issued to help finance the lone 4 Water Facilities, although the City has not yet determined the timing and amount of this expected issuance.

The timing by which the Remaining Phase 2 Water Facilities will be needed will depend on a variety of factors, including water demand amounts within the Folsom Plan Area, the amount of additional water transmission conveyance capability generated by the Phase 2 Water Transmission Facilities and the Zone 4 Water Facilities, any events impacting the capacity of the existing water infrastructure, and any other factors that increase water demand or decrease water transmission capacity.

As a result, despite the occupancy and water capacity estimates included herein, which are based on water system modeling and analysis conducted by or prepared for the City, the City cannot yet fully predict by when the Remaining Phase 2 Water Facilities will be needed. The City expects to use the proceeds of one or more additional series of CFD 18 bonds to finance all or a portion of the Remaining Phase 2Watet Facilities. However, the timing of issuance of future obligations is dependent upon market conditions and development within the Folsom Plan Area and there can be no assurance that proceeds will be available when needed to timely construct the Remaining Phase 2 Water Facilities. 51 Page 208
11/12/2024 Item No.1.

As of September 30,2024, final maps had been approved and recorded for 4,603 dwelling units within the Folsom Plan Area. Also as of September 30,2024, building permits for 3,871 units and 3,491 certificates of occupancy had been issued in the Folsom Plan Area for projects underway.

The City continues to evaluate water usage and needs within the Folsom Plan Area but there can be no assurance that the construction of the Phase 2Water Facilities will be completed in time to prevent delays to residential and commercial development in the Folsom Plan Area. If the Phase 2 Water Facilities are not constructed in a timely manner, future development in portions of the Folsom Plan Area may be metered, stopped, or the Crty may take other remedial actions, such as implementing water conservation measures to the existing residents, halting discretionary approvals, or taking other actions.

If the Phase 2Water Facilities are not constructed in a timely manner, water pressure to portions of the Folsom Plan Area could be impacted for existing water connections, which could have a negative impact on property values, including within the Improvement Area. Additionally, increased residential water usage approaching the maximum capacity of the current water facilities (including if exacerbated by the Phase 2 Water Facilities not being constructed in a timely fashion) or a reduction in the capacity of the current water facilities could cause the City to consider restricting the continued development of the Folsom Plan Area, including within the Improvement Area. See "CERTAIN RISKS TO BONDHOLDERS-Failure to Develop."
Based on the current stage of planning for the Phase 2 Water Transmission Facilities, the development stage and planned development timeline for the Improvement Area as described in this Official Statement, and the available water facilities servicing the Improvement Area, the City does not expect to impose restrictions on continued 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 the City to take some or all of the actions described in the preceding paragraph.

To help alleviate the demand on the current water facilities, certain developers within the Folsom Plan Area have made alrangements to obtain construction water from the El Dorado Irrigation District ("EID"), an alternative water provider that has existing facilities adjacent to the Folsom Plan Area. For instance, Lennar Homes has previously received construction water from EID for portions of its Russell Ranch project. Such arrangements augment, but do not replace, the need for and the use of City water, which is currently provided through the Phase I Water Facilities. Due to such altemative arrangements for construction water and the amount of development that has already occurred in the Folsom Plan Area, the City does not expect that the demand for construction water will reach 2021 levels in coming years.

Wastewater Treatment. The Sacramento Area Sewer District has an existing wastewater treatment plant with its ongoing and permitted improvement projects projected to accommodate all wastewatei from development in the Folsom Plan Area. Existing sewer transmission mains are capable of conveying wastewater from the Folsom Plan Area and initial development sites (including the Improvement Area) to the existing treatment plant. Developers of property within the Folsom Plan Area will need to extend infrastrucfure to their sites and pay appropriate connection fees for access to the existing wastewater infrastructure.

Flood Zones. According to the Federal Emergency Management Agency flood map, the Improvement Area is in Zone X, which consists of areas determined to be outside of the 500-year flood plain.

Fire Zones. The Improvement Area is located within an area identified as a moderate ftehazatd severity zone. More information regarding Fire Hazard Severity Zones can be found at the California 52 Page 209
11/12/2024 Item No.1.

Department of Forestry and Fire Protection website at https://frap.fire.ca.gov, though such website is not incorporated herein by reference. The development within the Improvement Area is subject to mitigation measures set forth in a fuel modification plan approved by the City Fire Department. The mitigation measures include, among others, limitations on the type of vegetation that may be planted within fuel modification zones established in open space areas along certain portions of the perimeter of the Improvement Area, minimum setback of structures and irrigation requirements of the fuel modification zones. Maintenance of such zones is expected to initially be the responsibility of the property owners but upon build-out of the Improvement Area and dedication of the open space to the City will be maintained by the City from funds provided through CFD 18. Homeowner's insurance is expected to be available to property owners within the Improvement Area, and the coverage provided by such insurance typically insures against fire damage, although there is no assurance that homeowners within the Improvement Area will purchase or maintain such insurance.

Drought Conditions and Construction Water Usage. In response to drought conditions in 2021, the City imposed a state mandated 20o/o red:uction in water use on its water customers. In addition, use of City water for construction purposes required City approval. At the time, the City allowed construction within the Folsom Plan Area to proceed, including the use of City water. The City rescinded this requirement in June 2023. However, if prolonged drought conditions return, this could result in mandatory reductions in water usage that may adversely impact the ability of builders within the Improvement Area to develop the Improvement Area in the timeline described in this Official Statement.

To help alleviate the demand on the current water facilities, certain developers within the Folsom Plan Area have made arrangements to obtain construction water from the El Dorado Irrigation District ("EID"), an alternative water provider that has existing facilities adjacent to the Folsom Plan Area. For instance, Lennar Homes has previously received construction water from EID for portions of its Russell Ranch project. Such arrangements augment, but do not replace, the need for and the use of City water, which is currently provided through the Phase 1 Water Facilities. Due to such alternative arrangements for construction water and the amount of development that has already occurred in the Folsom Plan Area, the City does not expect that the demand for construction water will reach 2021 levels in coming years.

A-ffordable Housing. All residential projects receiving funding assistance from the City or otherwise with ten or more units within the Folsom Plan Area must comply with the City's inclusionary housing ordinance, which requires that ten percent of the units built consist of inclusionary housing units.

Residential project developers may satisff this requirement by the payment of an in-lieu fee. In addition, the City entered into a memorandum of understanding with landowners within the Folsom Plan Area whereby the landowners committed to deed-restrict certain lots for the development of 890 units affordable to lower-income households.

Taylor Morrison is satisffing the City's inclusionary housing requirement for its properties within the Improvement Area by payment of an in-lieu fee to the City concurrent with their pulling of building permits. The remaining portion of the Taxable Property within the Improvement Area owned by Folsom Real Estate South is also subject to the City's inclusionary housing requirement, which has not yet been satisfied.

Utilities. All typical urban utility services for finished lots will be extended to the lots. These utilities include electric power, natural gas, telephone, cable television, water, refuse, and sanitary sewer and storm water facilities. The City provides water, sewer, refuse and storm water facilities, and police and fire services. Pacific Gas & Electric provides natural gas and the Sacramento Municipal Utility District (SMUD) provides electric service. Comcast provides cable service. 53 Page 210
11/12/2024 Item No.1.

Specific Plan Infrastructure Fee Credits and Improvements. The SPIF is administered by the City for the purposes of collecting impact fees for plan area wide improvements for the construction of roadways, water, sewer, drainage, dry utilities, recycled water and habitat mitigation in the Folsom Plan Area. The purpose of the SPIF is to require each landowner to pay its fair share of Folsom Plan Area area-wide improvements and to be reimbursed for any amount expended in excess of a landowner's fair share requirement. Under the terms of the SPIF Ordinance adopted by the City, property owners in the Folsom Plan Area will be eligible to enter into an agreement with the City and receive future reimbursements (that are convertible to fee credits for use within the owner's property) in exchange for the construction of eligible SPIF improvements. Based on the amount of improvements eligible for SPIF reimbursement, all of the properties within the Improvement Area are anticipated to fully cover their SPIF obligations through the conversion of these SPIF reimbursements to SPIF fee credits. After applying the SPIF reimbursements as SPIF fee credits to all properties in the Improvement Area, all amounts expended in excess of the project's SPIF obligation are expected to be reimbursed from the City as other SPIF fees are collected in the Folsom Plan Area.

Within the Folsom Plan Area, initial development will be required to pay a "SPIF Set-Aside" component to address initial water and sewer facility costs. This is a loan of SPIF collections to help the cash flow for the initial water and sewer costs. It will be repaid or equalized to all properties through the SPIF program as well as through CFD 18. The SPIF Set-Aside will apply to the first 2,500 Folsom Plan Area dwelling units that would be subject to the SPIF. A portion of the SPIF will be required to be paid regardless of whether a developer/property owner has advance-funded eligible SPIF infrastructure and has executed a Fee Reimbursement Agreement through the City. An exception to this rule is that a property owner who constructs certain water or sewer infrastructure for which the SPIF Set-Aside is being collected may take a credit against the SPIF Set-Aside.

In addition, in August 2020,the City approved an ordinance amending certain provisions of the SPIF ordinance to include a new SPIF - Offsite Water Set-Aside. This new SPIF - Offsite Water Set- Aside will be payable at the building permit stage and will not be eligible to be offset by fee credits.

Taylor Morrison Development
The information in this section has been provided by Taylor Morrison or other sources that the District believes to be reliable. The District and the (Jnderwriter believe this information to be reliable, but can give no assurances that it is accurate or complete. There may be material adverse changes in this information after the date of this Official Statement.

Information in this section is included because it may be considered relevant to some investors to an informed evaluation and analysis of the taxable property within the Improvement Area and any existing or future improvements thereon as security for the Bonds. The information contained in this section does not guarantee that property ownership will not change or that the current or any subsequent property owners will pay the Special Tax when due. In fact, as described herein, ownership of much of the Taxable Property in the Improvement Area will change prior to, or in connection with, development thereof. The Special Tax will constitute a lien on parcels subject to taxation within the Improvement Area and not a personal indebtedness of the owners of property within the Improvement Area. There is no assurance that Taylor Morrison or any subsequent owners will have the ability to pay the Special Taxes or that, even if they have the ability, they will choose to pay the Special Taxes. An owner may elect to not pay the Special Taxes when due and cannot be legally compelled to do so. Neither the District nor any Bond Owner will have the ability at ony time to seek payment directly from Taylor Morrison or any subsequent owners of property within the Improvement Area of the Special Tax or the principal or interest on the Local Obligations, or the ability to control who becomes a subsequent owner of any property within the Improvement Area.
54 Page 211
11/12/2024 Item No.1.

Propert.v Ownership - Tqvlor Mowison As previously defined, "Taylor Morrison" refers to Taylor Morrison of California,LLC, a California limited liability company. As of November l, 2024, a portion of the Taxable Property within the Improvement Area was owned by Taylor Morrison and individual homeowners. At full buildout, the portion of the Improvement Area that has been, and is being, developed by Taylor Morrison is expected to include 260 single family homes.

Taylor Morrison's sole shareholder is Taylor Morrison Services, Inc., a Delaware corporation qualified in California ("TMSI"). TMSI's ultimate parent is Taylor Morrison Home Corporation, a Delaware corporation ("TMHC"), which is traded on the New York Stock Exchange as "TMHC." TMHC's principal executive offices are located in Scottsdale, Arizona. TMHC was created as a result of the July i007 ^erg"r of two United Kingdom-based, publicly listed homebuilders, Taylor Woodrow plc and George Wimpey plc, the predecessor entities of which commenced homebuilding operations in the United States in 1936. The subsequent integration of Taylor Woodrow, Inc. and Morrison Homes, Inc' in the U.S. formed TMHC and Monarch Corporation in Canada, respectively.

TMHC is a leading national homebuilder and developer and serves a broad range of consumers across 12 states, including first-time, move-up, luxury and resort lifestyle homebuyers and renters.

TMHC operates under various brand names including Taylor Morrison, Esplanade, Darling Homes Collection by Taylor Morrison and Yardly. TMHC's financial services segment provides mortgage financing, title insurance and close services, and homeowners' insurance.

TMHC is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information, including financial statements, with the Securities and Exchange Commission (the "SEC").

Such filings, particularly TMHC's most recent Annual Report on Form 10-K, and TMHC's most recent Quarterly Report on Form 10-Q, each as filed by TMHC with the SEC, set forth certain data relative to the coniolidated results of operations and financial position of TMHC and its subsidiaries, including Taylor Morrison, as of such dates.

The SEC maintains an internet website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, including TMHC. The address of such website is www.sec.gov. All documents subsequently filed by TMHC pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in such manner as the SEC prescribes.

Copies of TMHC's Annual Report and each of its other quarterly and current reports, including any amendments, are available under the investors relations tab at its website at www.taylormorrison.com.

The foregoing website addresses and references to filings with the SEC are included for reference only, and the information on such websites and on file with the SEC is not a part of this Official Statement and is not incorporated by reference into this Official Statement. No representation is made in this Officiat Statement as to the accuracy or adequacy of the information contained on such websites. Taylor Itiorrison and TMHC are not obligated to advance funds for construction or development or to pay ad valorem propelty taxes or the Special Tax, and investors should not rely on the information andfinancial statements contained on such websites in evaluating whether to buy, hold or sell the Bonds. The information on such websites may be incomplete or inaccurate and has not been reviewed by the District or Underwriter.

Development Plan - Taylor Morrison To date, final maps have been approved and recorded for all of the Taxable Property being developed by Taylor Morrison within the Improvement Area. 55 Page 212
11/12/2024 Item No.1.

Development within this portion of the Improvement Area is entitled for a total of 260 single family homes at full buildout.

As of November 1, 2024,Taylor Morrison owned 114 lots within the Improvement Area and had sold and closed 146 completed single family homes within the Improvement Area to individual homebuyers. Taylor Morrison's lots in the Improvement Area are being developed and sold across three separate product lines: Debut at Folsom Ranch ("Debut"), Encore at Folsom Ranch ("Encore"), and Legends at Folsom Ranch ("Legends"). Taylor Morrison has completed the construction and sale of its 42 homes within the Debut product line and is actively constructing and selling the remaining units within the Encore and Legends product lines, which are expected to ultimately include 104 and ll4 total homes, respectively. The following table is a summary of home types within the Encore and Legends product lines currently being constructed and sold by Taylor Morrison within the Improvement Area.

Table 10
City of Folsom
Communities Facilities District No.23 (Folsom Ranch)
Improvement Area No. 4
Summary of Product Types - Taylor Morrison
Product Line Plan
Living Area
(square
feet) Stories Bedrooms Bathrooms
Estimated
Base
Size Price(l)
Expected
Units
Encore at Folsom
Ranch
Legends at
F'olsom Ranch
Cobalt
Indigo
Sapphire
Iris
Skye
Canyon
Forest
Highland
Aspen
Ravine
1,767
2,351
2,392
2,479
2,768
1,891
1,962
2,517
2,678
3,056
1 2
2 2
2 I
I
2 2
2 J
4 3-5
4-5
4-5
J
4 4
3-4
4 1
J

2.5-3
a
J
J
aL
J
a
J

2.5-4.5
-l
2 $673,990
2 $729,990
2 (wi storage) $734,990
2 $744,990
2 $774,990
14 26
l5
J
46 2 (w/ storage)
2 2
3 (tandem)
2 $699,990
$720,990
$775,990
$790,990
$845,990
TOTAL
l2
t2
23 17
50 218
(1) Base sales prices are as of November 1,2024, and are subject to change at any time by Taylor Morrison. Base sales prices are exclusive of any premiums, options, upgrades, incentives, and any selling concessions or price reductions currently being offered.

Source: Taylor Monison.
56 Page 213
11/12/2024 Item No.1.

Taylor Morrison is actively constructing and marketing its homes within the Improvement Area to individual homeowners. Below is a summary of Taylor Morrison's anticipated timing for their sale and delivery of finished homes.

Table 11
City of Folsom
Communities Facitities District No. 23 (Folsom Ranch)
Improvement Area No. 4
Expected Delivery of Finished llomes by Sales Year - Taylor Morrison Developer Product Line 2024 2025 2026
Taylor Morrison
Taylor Morrison
TOTAL
Encore at Folsom Ranch
Legends at Folsom Ranch
63 58
JI
50 4
6 t2t 87 10
Source: Taylor Morrison.

No assurance can be given that home construction and sales will be carried out on the schedule and according to the plans outlined herein, or thst the home construction qnd sale plans or base prices set forth above will not change after the date of this Official Statement. Additionally, homes sold may not reiult in closed escrows as sales contracts are subject to cancellation. See "CERTAIN //SKS TO BONDHOLDERS - Failure to Develop," "- Current Challenges to the Homebuilding Industry" qnd "- Incre asing Mortgage Interest Rate s. "
57 Page 214
11/12/2024 Item No.1.

Development Status - Talior Morrison As of November 1,2024, Taylor Morrison had sold and closed 146 homes within the Improvement Area to individual homeowners. As of that same date, Taylor Morrison owned 114 lots within the Improvement Area, including finished lots, homes under construction, and finished homes. The following table summarizes, as of November l, 2024, the development status of the residential lots and homes within the Improvement Area owned or constructed by Taylor Morrison.

Table 12
City of Folsom
Community Facilities District No.23 (Folsom Ranch)
Improvement Area No. 4
[Estimated] I)evelopment Status as of November 1o 2024o) Taylor Morrison
Debut at
Folsom
Ranch
Encore at
Folsom
Ranch
Legends at
Folsom Ranch Totals
Completed Homes
Sales Closed
Models
For Sale
Under Contract(2)
Subtotals:

Homes Under Construction
Models
For Sale
Under Contract(2)
Subtotals:

Lots Without Vertical Construction
Additional Building Permits Issued(3)
Finished Lots(a)
Partially Improved Lots
Undeveloped Lots
Subtotals:
50 2
I
5 54
2 I
J
42 0
0 0
I46
4 ,,
8 42 60 58 r60
0 19
28 47
10 43
0 0
25 5
26 0
0 ,,,
5 t7
0 0
0 0
0 0
9 l3
0 10
15 0
0 0
0 0
0 22 31 53
TOTAL PROPOSED UNITS: 42 104 tt4 260
(r) Reflects the development status within the Improvement Area as of November 1,2024. The Appraisal and the value to lien information provided elsewhere in this Official Statement reflect an August 31,2024, date of value for the Taxable Property in the Improvement Area.
(2) Homes under contract may not result in closed escrows as sales contracts are subject to cancellation by the homebuyers.
(3) Reflects lots not reflected in prior categories for which a building permit has been obtained. (4) Reflects lots for which all conditions to issuance of a building permit have been completed, consisting generally of paved lots with streets installed and paved with all utilities and utilities stubbed to the pad, but no vertical construction.

Source: Taylor Morrison.

Financing Plan - Tqvlor Morrison To date, Taylor Morrison has financed its land acquisition and home construction costs related to its property in the Improvement Area through internally generated funds (which may include home sales revenues and funding from its parent company). As of November 58 Page 215
11/12/2024 Item No.1.
l, 2024, Taylor Morrison had expended approximately $[121.1] million on land acquisition, homebuilding, marketing and sales costs within the Improvement Area. As of such date, Taylor Morrison expected to incur approximately Spa.2l million on remaining homebuilding, marketing, and sales costs for its property in the Improvement Area.

Taylor Morrison expects to use internally generated funding (which may include home sales revenues and funding from its parent company) to complete its development in the Improvement Area.

Taylor Morrison believes that it will have sufficient funds available to complete its planned development in the Improvement Area in accordance with the development schedule described in this Official Statement.

Notwithstanding the belief of Taylor Morrison that it will have sfficient funds to complete its planned development in the Improvement Area, no assurance can be given that sources of financing available to Taylor Morrison will be sfficient to complete the development and home construction as currently anticipated. Wile Tqtlor Moruison has made such internal financing available in the past, there can be no assurance whatsoever of its willingness or ability to do so in the future. Neither Taylor Morrison nor any of its affitiates has any legal obligation of any kind to make any suchfunds available or to obtain loans. Other than pointing out the willingness of Taylor Monison to provide internal financing in the past, Taylor Motison has not represented in any way that it will do so in the future.

If and to the extent that internal financing and home sales revenues are inadequate to pay the costs to complete Taylor Mowison's planned development and home construction in the Improvement Area as currently anticipated and otherfinancing by Taylor Morrison is not put into place, there could be a shortfall in the funds required to complete the proposed land acquisition, development and home construction by Taylor Morrison and portions of the proiect may not be developed.

Folsom Real Estate South Development
The information in this section has been provided by Folsom Real Estate South or other sources that the District believes to be reliable. The District and the (Jnderwriter believe this information to be reliable, but can give no assurances that it is accurate or complete. There may be material adverse changes in this information after the date of this Official Statement' Information in this section is included because it may be considered relevant to some investors to an informed evaluation and analysis of the taxable property within the Improvement Area and any existing or future improvements thereon as security for the Bonds. The information contained in this section does not guarantee that property ownership will not change or that the current or any subsequent property owners witt pay the Special Tax when due. In fact, as described herein, ownership of much of the Taxable Property in the Improvement Area will change prior to, or in connection with, development thereof. The Special Tax will constitute a lien on parcels subject to taxation within the Improvement Area and not a personal indebtedness of the owners of property within the Improvement Area. There is no assurance that Folsom Real Estate South or any subsequent owners will have the ability to pay the Special Tmes or that, even f they hqve the ability, they will choose to pay the Special Tmes. An owner may elect to not pay the Special Taxes when due and cannot be legally compelled to do so, Neither the District nor any Bond Owner will have the ability at any time to seek payment directlyfrom Folsom Real Estate South or any subsequent owners of property within the Improvement Area of the Special Tax or the principal or interest on the Local Obligations, or the ability to control who becomes a subsequent owner of any property within the Improvement Area.

Pronertv Ownershio - Real Estate South. Other than the 260 lots owned by Taylor Morrison and individual homeowners, Folsom Real Estate South owns the remainder of the 59 Taxable