Folsom City Council
November 12, 2024

11/12/2024 Item No.1.

Property within the Improvement Area, which is referred to herein as the Four Large Lots. 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 with one of these homebuilders to acquire and develop its Taxable Property within the Improvement Area. In addition to the Four Large Lots, Folsom Real Estate South also owns an 1l-acre elementary school site within the Improvement Area, which it anticipates selling to the Folsom Cordova Unified School District.

As previously defined, "Folsom Real Estate South" refers to Folsom Real Estate South, LLC, a Delaware limited liability company. Folsom Real Estate South is a land investment company that expects to transfer its Taxable Property within the Improvement Area to an affiliate that will then sell the property to a nationally recognized homebuilder that will develop the land and construct and sell homes to individual homebuyers.

HBT Mangini, LLC ("HBT Mangini"), a Delaware limited liability company, is the managing member of Folsom Real Estate South and an affiliate of Westland. All decisions of HBT Mangini are made by the three officers and directors who are William Bunce, John Hagenbuch and John Telischak, whom are also principals in projects adjacent to the Improvement Area where they (through Westland and its affiliated entities) control land holdings that are planned for the development of nearly 3,500 dwelling units and 1.2 million square feet of commercial and office uses. Messrs. Bunce, Hagenbuch and Telischak also serve as the President, Chairman and Managing Director of Westland, respectively' The three officers are supported by other staff of Westland, including Rick Jordan and Rob Aragon, and Kim Harms, the CFO and a CPA. Mr. Bunce, as President, is responsible for all operating decisions but consults regularly with the Board on most operating decisions and all strategic decisions.

PIan - Fol,som Real South. Folsom Real Estate South is actively negotiating with a builder to acquire and develop its Taxable Property within the Improvement Area. Folsom Real Estate South expects the Four Large Lots to ultimately include 388 detached single-family homes at full development and is in the process of preparing the small lot tentative maps for these units, which it anticipates being approved by the City during the second quarter of 2025. Folsom Real Estate South intends to sell the Four Large Lots in an o'as-is" condition to a nationally recognized homebuilder. If the currently anticipated sale of the Four Large Lots should not close, Folsom Real Estate South expects that it would seek one or more separate additional buyers to develop the Four Large Lots.

Pursuant to the expected purchase and sale agreement, Folsom Real Estate South anticipates the sale of the Four Large Lots to the anticipated homebuilder closing 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.

There are several conditions in the purchase and sale agreement that must be met before the Four Large Lots may close escrow to the buyer, and no assurance can be given that the sale of the Four Large Lots to the buyer will close at the time anticipated and described in this Official Statement, or at all. See "CERTAIN RISKS TO BONDHOLDERS - Failure to Develop," "- Current Challenges to the Homebuilding Industry" and"- Increasing Mortgage Interest Rates." Status - Folsom Real South. Folsom Real Estate South's Taxable Propedy within the Improvement Area, referred to herein as the Four Large Lots, is entitled to include up to 388 residential units at full development but is currently unimproved land that will require significant additional infrastructure and site development work to become fully developed. Additionally, as described more below, there are several remaining discretionary and non-discretionary approvals required 60 Page 217
11/12/2024 Item No.1.
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. The actual number of lots ultimately included on the approved tentative and final small lot maps may change from the 388 lots current anticipated by Folsom Real Estate South. A deviation from the expected 388 lots would require City approval of a minor administrative modification and could delay the expected timing of development of the Four Large Lots.

The Four Large Lots have received all required environmental permits and approvals for the development of up to 388 residential units. However, additional habitat mitigation credits will be required for the planned development within the Four Large Lots.. Also, the Four Large Lots are subject to the City's inclusionary housing requirement. In conjunction with the process of obtaining tentative small lot map approval, Folsom Real Estate South anticipates confirming with the City the specific manner in which the requirements relating to additional habitat mitigation and inclusionary housing will be satisfied. Additionally, any changes to the development plans for the Four Large Lots by Folsom Real Estate South or any subsequent owner may require additional governmental review and approval. See "PROPOSED PROPERTY DEVELOPMENT - Folsom Real Estate South Development - Backbone and Offsite Infrastructure and Subdivision Improvements" herein for additional information relating to the required infrastructure and site development work for the Four Large Lots.

Backbone and Offsite Infrastructure and Subdivision Improvements. The Original Developer has completed all required backbone infrastructure, offsite improvements, and subdivision improvements serving the portion of the Improvement Area owned by Taylor Morrison and individual owners (totaling 260 lots). As of August 31,2024,the Original Developer had expended approximately $35 million for the various infrastructure and site development costs within that portion of the Improvement Area.

The remaining portion of the Taxable Property within the Improvement Area (totaling an expected 388 lots) will require significant additional infrastructure and site development work to become fully developed. This work includes, but is not limited to, mass grading (including implementation of an asbestos dust control plan), utilities and roadway improvements, and subdivision improvements. Pursuant to the expected purchase and sale agreement, Folsom Real Estate South anticipates selling the Four Large Lots in an "as-is" condition, and the buyer of that property would be required to complete the necessary infrastructure and site development. As of September 2024, Folsom Real Estate South estimated the required infrastructure and site development costs of the Four Large Lots to be approximately $60 million.
[The Original Developer undertook an asbestos dust control plan with respect to the grading of the 260lots owned by Taylor Morrison and individual homeowners. Folsom Real Estate South expects that the buyer and developer of the Four Large Lots will need to implement a similar asbestos dust control plan for the grading of that property.l
The Original Developer, an affiliate of Westland, completed the infrastructure and subdivision improvements relating to the 260 lots owned by Taylor Morrison and individual owners. The Original Developer anticipates seeking reimbursement from the proceeds of the sale of the Local Obligations for these completed Facilities, which generally include improvements relating to the undergrounding of utilities designed to meet the needs of development within the District. Specifically, to the extent there are available proceeds, the Original Developer anticipates these Facilities including: (i) various internal subdivision streets and related underground utilities, and (ii) roadway improvements relating to East Bidwell Street, Savannah Parkway, and Mangini Parkway. The Facilities for which the Original Developer anticipates seeking reimbursement from the proceeds of the sale of the Local Obligations have all been completed and accepted by the City.
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11/12/2024 Item No.1.

CERTAIN RISKS TO BONDHOLDERS
This section provides a general overview of certain risk factors which should be considered, in addition to the other matters set forth in this Official Statement, in evaluating an investment in the Bonds.

This section is not meant to be a comprehensive or definitive discussion of the risks associated with an investment in the Bonds, and the order in which this information is presented does not necessarily reflect the relative importance of various risks. Potential investors in the Bonds are advised to consider the following factors, among others, and to review this entire Official Statement to obtain information essential to the making of an informed investment decision. Any one or more of the risk factors discussed below, among others, could lead to a decrease in the market value and/or in the marketability of the Bonds. There can be no assurance that other risk factors not discussed herein will not become material in the future.

Levy of the Special Tax
The principal source of payment of debt service on the Local Obligations, from which funds for the payment of the Bonds are derived, is the proceeds of the annual levy and collection of the Special Tax against property in the Improvement Area. The annual levy of the Special Tax is subject to the Maximum Facilities Special Tax rates authorized within the Improvement Area. The levies cannot be made at higher rates even if the failure to do so means that the estimated proceeds of the levy and collection of the Spicial Tax, together with other available moneys, will not be sufficient to pay debt service on the Local Obligations. Other funds which might be available include funds derived from the payment of delinquent Special Tax and funds derived from the tax sale or foreclosure and sale of related Taxable Property on which levies of the Special Tax are delinquent.

The levy of the Special Tax will rarely, if ever, result in a uniform relationship between the value of particular Taxable Property and the amount of the levy of the Special Tax against such parcels. Thus, there will rarely, if ever, be a uniform relationship between the value of such parcels and the proportionate share of debt service on the Local Obligations, and certainly not a direct relationship.

The Special Tax levied in any particular tax year on a Taxable Property is based upon the revenue needs and application of the Rate and Method. Application of the Rate and Method will, in turn, be dependent upon certain development factors with respect to each parcel of Taxable Property by comparison with similar development factors with respect to the other Taxable Property in the Improvement Area. Thus, in addition to annual variations of the revenue needs from the Special Tax, the foliowing are some of the factors which might cause the levy of the Special Tax on any particular Taxable Property to vary from the Special Tax that might otherwise be expected:
. Reduction in the amount of Taxable Property for such reasons as acquisition of Taxable Property by the federal government or an agency thereof, asserting immunity (however, see "Exempt Properties" below) from taxation, thereby resulting in an increased tax burden on the remaining Taxable Propefty.
o Failure of the related owners of Taxable Properly to pay the Special Tax and delays in the collection of or inability to collect the Special Tax by tax sale or foreclosure and sale of the delinquent parcels, thereby resulting in an increased tax burden on the remaining parcels, subject to the related Maximum Facilities Special Tax. 62 Page 219
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Collection of Special Tax
In order for the Dishict to pay debt service on the Local Obligations, from which funds for the payment of the Bonds are derived, it is necessary that the Special Tax levied against land in the l-p.ou"ment Area be paid in a timely manner. The District has established the Local Obligations Reierve Account under the Local Obligations Indenture in the amount of the Required Bond Reserve to pay debt service on the Local Obligations, in the event that a portion of the Special Taxes for the Local Obligations are not paid on time.

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 to be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided fot ad valorem property taxes. Pursuant to these procedures, iftaxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the County.

Pursuant to 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 luAiciat foreclosure sale. Such judicial foreclosure action is not mandatory. However, the District has -covenanted
that it will conduct foreclosure proceedings against delinquent installment payments when there is a greater than 5Yo deficiency in the amount of the Special Tax levied or any single property owner is then deiinquent on four or more installments of the Special Tax, except where the District has received 100% of such installment from the County pursuant to the Teeter Plan. See "SECURITY AND SOURCES OF PAYMENT FOR TTIE BONDS-COVENANt fOT FOTECIOSUTE.'' In the event that sales or foreclosures of properly are necessary, there could be a delay in payments to Owners of the Bonds pending such sales or the prosecution of foreclosure proceedings and receipt by the District of the proceeds of sale if the Local Obligations Reserve Account with respect to the Local Obligations is depleted.

The District may be unable to make full or timely payment of debt service on the Local Obligations if property owners in the Improvement Area fail to pay installments of the Special Tax when due,lf the Lobal Obligations Reserve Account is depleted, or if the District is unable to sell related foreclosed parcels for amounts sufficient to cover the delinquent installments of the Special Tax.

Concentration of Ownership
Currently, a large portion of the Taxable Property in the Improvement Area is owned by Taylor Morrison and Folsom Real Estate South, and consequently, a large portion of the Special Tax within the Improvement Area will be paid by Taylor Morrison (and Folsom Real Estate South to the extent that the Special Tax is levied on Undeveloped Property or Folsom Real Estate South retains ownership of its Taxable Property as it becomes developed) until the homes are completed and sold. See "PROPOSED PROPERTY DEVELOPMENT-Property Ownership."
Taylor Morrison is in the process of building and selling completed homes to individual homeowners, and Folsom Real Estate South is actively negotiating with a buyer for its Taxable Property within the Improvement Area. No assurance can be given that the property sales will close when anticipated. Sie "PROPOSED PROPERTY DEVELOPMENT-Property Ownership." Generally, the risk of delinquency or nonpayment of Special Taxes at levels which do not permit the timely payment of principal of and interest on the Bonds is inversely correlated to the diversity of ownership of Taxable 63 Page 220
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Property within the Improvement Area. The fact that a substantial portion of the property providing the ultimate security for tlie payment of Local Obligations is controlled by only a few owners means that timely puy-.nt of the respective Special Tax and, therefore, the Bonds, will depend initially upon the willingneis and ability of these few owners to pay the Special Tax when due. The only assets of Taylor Monison and Folsom Real Estate South that constitute security for the Local Obligations are their real property holdings located within the Improvement Area.

There can be no assurance that the remaining partially developed property within the Improvement Area will be fully developed and that property ownership will be further diversified as a result. see ,,GERTAIN RISKS TO BONDHOLDERS-Failure to Develop." Payment of the Speciat Tax is Not a Personal Obligation of a Property Owner A PROPERTY OWNER IS NOT PERSONALLY OBLIGATED TO PAY THE SPECIAL TAX.

RATHER, THE SPECIAL TAXES ARE OBLIGATIONS ONLY AGAINST THE PROPERTY. IF THE

VALUE OF THE PARCELS OF PROPERTY IS NOT SUFFICIENT, TAKING INTO ACCOUNT

OTFIER OBLIGATIONS ALSO PAYABLE THEREBY, TO FULLY DISCHARGE TTIE SPECIAL TAX, TI{E DISTRICT WILL HAVE NO RECOURSE AGAINST THE PROPERTY OWNER.

Potential Early Redemption of Bonds from Prepaid Special Taxes Property owners within the Improvement Area are permitted to prepay their Special Taxes at any time. Such prepayments could also be made from the proceeds of bonds issued by or on behalf of an overlapping ipecial assessment district or community facilities district. Such payments will result in a reOempiion oi the Bonds on the Interest Payment Date for which timely notice may be given under the Trust Agreement following the receipt of the prepayment. The resulting redemption of Bonds purchased at a price greater than par could reduce the otherwise expected yield on such Bonds' See "THE BONDS-Redemption Provisions-Extraordinary Redemptionfrom Prepayment of Special Taxes." Special Tax Delinquencies
The Special Taxes are billed to the properties within the Improvement Area on the ad valorem property tax bills sent to owners of such properties. Such Special Tax installments are due and payable, andbear the same penalties and interest for non-payment, as do ad valorem property tax installments. In each year the County includes the Improvement Area in the Teeter Plan, the County will be obligated to pay the District 100% of the amount of the Special Taxes actually levied in the Improvement Area, iegardless of any delinquencies. However, the County is required to terminate the Teeter Plan if two- thirds of the participants so petition the Board of Supervisors and may discontinue the Teeter Plan as to the Improvement Area if the delinquency rate in the Improvement Area exceeds 3o%. Moreover, the County determines annually whether to include a particular district in the Teeter Plan. $gs '(-fes1e1 Plan Termination" and "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-The Teeter Plan." Significant delinquencies in the payment of annual Special Tax installments, or delays in the prosecution of foreclosure proceedings to collect such Special Taxes, could result in a default in the payment of the debt service on the Bonds. $ss ('-B,4nkruptcy" and "-FDIC/Federal Government inie.ests in Properties" below, for a discussion of the limitations on the District's ability to foreclose on the lien of the Special Taxes in certain circumstances and the policy of the Federal Deposit Insurance Corporation regarding the payment of special taxes.
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Teeter Plan Termination
The County has implemented its Teeter Plan as an alternate procedure for the distribution of certain property tax and assessment levies on the secured roll. The County determines annually which special taxes and assessment levies to include in the Teeter Plan. Pursuant to its Teeter Plan, once the County determines to include special taxes and assessment levies in the Teeter Plan, the County provides the local agency and taxing area with full tax and assessment levies instead of actual tax and assessment collections. In return, the County is entitled to retain all delinquent tax and assessment payments, penalties and interest. Thus, the County's Teeter Plan may help protect Owners from the risk of delinquencies in the payment of Special Taxes. However, the County is entitled, and under certain circumstances could be required, to terminate its Teeter Plan with respect to all or part of the local agencies and taxing areas covered thereby. In addition, the County may decide not to include certain special taxes and assessment levies, including the Improvement Area, in the Teeter Plan in any fiscal year. Any termination of the Teeter Plan with respect to the Improvement Area would eliminate such protection from delinquent Special Taxes. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-The Teeter Plan."
Land Values
If a property owner defaults in the payment of the Special Tax, from which funds for the payment of the Bonds are derived, the District's only remedy is to foreclose on the delinquent properly in an attempt to obtain funds with which to pay the delinquent Special Tax. The value of taxable property in the Improvement Area is therefore an important consideration in evaluating the security for the Bonds.

Land values could be adversely affected by economic factors beyond the District's control, such as relocation of employers out of the area, stricter land use regulations, the absence of water, or destruction of property caused by, among other eventualities, earthquake, flood or other natural disaster, or by environmental pollution or contamination.

Appraisal Risks
The Appraiser has estimated the market value of the property in the Improvement Area on the basis of certain assumptions which the Appraiser believes to be reasonable under the circumstances. See the Appraisal included in APPENDIX G hereto. However, certain of the assumptions made by the Appraiser may prove to be untrue.

Although the District believes that the Appraiser's methodology and assumptions are reasonable under the circumstances, the Appraiser's aggregate value conclusions are expressions of professional opinion only. No assurance can be given that the aggregate values of property in the Improvement Area aie equal to or greater than the Appraiser's estimated values, nor can any assurance be given that such aggregate values will not decline during the period of time the Bonds are Outstanding. The values of the property in the Improvement Area can be adversely affected by a variety of factors, including, but not limited to, the occuffence of one or more of the special risk events discussed herein. A decline in the value of a parcel in the Improvement Area could lower the ability or willingness of the owner of such parcel to pay Special Taxes when due and would decrease the amount recoverable at a foreclosure sale of such parcel.

See "THE IMPROVEMENT AREA-Property Values" for a further discussion of estimated property values in the Improvement Area.
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Exempt Properties
Certain properties within the Improvement Area are or may become exempt from the Special Tax in accordance with the Rate and Method. In addition, the Mello-Roos Act provides that properties or entities of the state, federal or local government are exempt from Special Ta4 provided, however, that property acquired by a public entity through a negotiated transaction or by gift or devise, which is not Lttt"r*ir" exempt from the Special Tax, will continue to be subject to the Special Tax. In addition, the Mello-Roos Aci provides that if property subject to Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay Special Tax with respect to that property is to be treated as if it were a special assessment. Further, properties receiving a welfare exemption under subsection (g) of Section 214 of the California Revenue and Taxation Code are exempt from the Special Tax unless debt is outstanding and the property was subject to the Special Tax prior to receiving the exemption. Currently, the Improvement Area includes approximately 5.8 acres that are expected to be developed into a 152-unit affordable housing site that will receive a welfare exemption and be exempt from the Special Tax. The constitutionality and operation of these provisions of the Mello-Roos Act have not been tested.

In particular, insofar as the Mello-Roos Act requires payment of a special tax by a federal entity acquiring property within the community facilities district, it may be unconstitutional. If for any reason property within ihe Improvement Area becomes exempt from taxation, then, subject to the Rate and M"ittod, including the fimitation on the maximum special tax rates set out in the Rate and Method, the special tax will bi reallocated to the remaining taxable properties within the Improvement Area' This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon the timely payment of the Special Tax. Moreover, if a substantial portion of land within the improvement Area becomes exempt from the Special Tax because of public ownership, or otherwise, the maximum rate that could be levied upon the remaining property might not be sufficient to pay principal of and interest on the related Local Obligations and could adversely affect the ability of the District to pay principal of and interest on the Bonds when due.

Maximum Special Tax
Within the limits of the Special Tax, the District may adjust the Special Tax on all property in the Improvement Area to provide an amount required to pay interest on, principal of, Minimum Sinking Fund Payments for and redemption premiums, if any, on the Local Obligations, and the amount, if any, ,r"""rrury to cure delinquencies and replenish the Local Obligations Reserve Account to an amount equal to the Required Bond Reserve, and to pay all current Expenses.

Although the Maximum Facilities Special Tax is designed to provide Special Tax revenues on an annual basis, there is no assurance that the Maximum Facilities Special Tax on the property in the Improvement Area will be sufficient to pay the amounts required to be paid by the Local Obligations Indenture at all times, from which funds for the payment of the Bonds are derived. See "SECURITY AND SOURCES OF PAYMENT FOR TI{E BONDS-special Tax Authorization" and APPENDIX A- ..RATE AND METHOD.''
Under the Rate and Method, the Facilities Special Tax 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 l\Yo above the amount that would have Leen 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 Propetrty" once a building permit could be issued for the purposes of constructing one or more Residential 66 Page 223
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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.

No Acceleration Provision
The Local Obligations Indenture does not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the terms thereof.

Loss of Tax Exemption
As discussed under "TAX MATTERS," interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of issuance, as a result of acts or omissions of the Dishict subsequent to the issuance of the Bonds in violation of the District's covenants with respect to the Bonds. Should interest become includable in gross income, the Bonds are not subject to redemption by reason thereof and will remain outstanding until maturity or unless earlier redeemed pursuant to optional or mandatory redemption.

Parity Taxes and Special Assessments
The ability or willingness of a property owner in the Improvement Area to pay the Special Tax, from which funds for the payment of the Bonds are derived, could be affected by the existence of other taxes and assessments imposed upon the property either currently existing or imposed in the future. The assessments and any penalties thereon constitute a lien against the lots and parcels of land on which they have been levied until they are paid. Such lien is on parity with all special taxes and special assessments levied by other agencies and is co-equal to and independent of the lien for general property taxes and other special asseisments regardless of when they are imposed upon the same property. The Special Tax has priority over all existing and future private liens imposed on the properfy. In addition, other public agencies whose boundaries overlap those of the Improvement Area could, with or in some circumstances without the consent of the owners of the land in the Improvement Area, impose additional taxes or assessment liens on the properly in the Improvement Area in order to finance public improvements to be located inside or outside of the Improvement Area'
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Although the District has covenanted not to impose additional special taxes or assessments on property within the Improvement Area except in accordance with the Local Obligations Indenture, the Authority and the District have no control over the ability of other entities and districts to issue indebtedness secured by special taxes or assessments payable from all or a portion ofthe property in the Improvement Area. The imposition of additional liens on panty with the assessments could reduce the ability or willingness of the owners of parcels in the Improvement Area to pay the Special Tax and increases the possibility that foreclosure proceeds will not be adequate to pay delinquent Special Taxes or the principal of and interest on the Local Obligations when due. As described under "FOLSOM PLAN AREA-Public Facilities Financing Plan," and "THE IMPROVEMENT AREA---Overlapping Debt" the City plans to issue additional obligations secured by special taxes from time to time to finance backbone infraitructure and public improvements within the Folsom Plan Area and the boundaries of the Improvement Area. For example, CFD 18 authorized the issuance of up to $200,000,000 in obligations.

The special taxes securing such additional obligations would be payable on parity with the Special Taxes.

In addition, property owners may choose to participate in a residential PACE program (a mechanism for financing energy efficiency and renewable energy improvements on private property), consenting to assessments on their parcels that would be on a parity with the Special Taxes.

Future Private Indebtedness
At the present time, the Improvement Area includes properties that are undergoing development or are developed. In order to develop any improvements on that undeveloped land, the property owners will need to construct private improvements, the cost of which may increase the private debt for which the land in the Improvement Area or other land or collateral owned by the property owners is security over that contemplated by the Local Obligations, and such increased debt could reduce the ability or desire of the property owners to pay the Special Tax secured by the land in the Improvement Area. It should be noted however, that the lien of any private financing secured by the land within the Improvement Area would be subordinate to the lien of the Special Tax.

Disclosures to Future Purchasers
The District has recorded notice of the Special Tax Lien in the Office of the County Recorder of the County of Sacramento. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Special Tax obligation in the purchase of a parcel of land, a home or a commercial or industrial facility in the Improvement Area or the lending of money thereon. The Mello-Roos Act requires the subdivider (or its agent or representative) ofa subdivision to notifu a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form. State Civil Code Section I102.6b requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notifu the prospective purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with the above requirements, or failure by a purchaser or lessor to consider or understand the nafure and existence of the Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax, from which funds for the payment of the Bonds are derived, when due.

Bankruptcy
The payment of the Special Tax and the ability of the District to foreclose the lien of a delinquent unpaid tax, as discussed in "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS," may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State relating tojudicial foreclosure. In addition, the prosecution ofa foreclosure action could be delayed 68 Page 225
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due to crowded local court calendars or delays in the legal process. The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorginization, moratorium and other similar laws affecting creditors' rights, by the application of equitable principles and by the exercise ofjudicial discretion in appropriate cases.

Although bankruptcy proceedings would not cause the lien of the Special Tax to become extinguished, bankruptcy of a property owner could result in a delay in prosecuting superior court foreJosure proceedings. fn" federal bankruptcy laws provide for an automatic stay of foreclosure and sale oftax rul" pro"""dings, thereby delaying such proceedings perhaps for an extended period' Any such delays would increase the likelihood of a delay or default in payment of the principal of and interest on the bonds and the possibility of delinquent tax installments not being paid in full. To the extent that property in the Improvement Area continues to be owned by a limited number of property owners, the "hu-n""i
are increased that the Local obligations Reserve Fund could be fully depleted during any such delay in obtaining payment of delinquent Special Taxes. As a result, sufficient moneys would not be avaiiable in the Local Obligations Reserve Account to make up shortfalls resulting from delinquent payments of the Special Tax and thereby to pay principal of and interest on the Local Obligations on a iimely basis. The payment of the Special Tax and the ability of the District to foreclose the lien of a delinquent unpaid tax could be delayed by bankruptcy, reorganization, insolvency' moratorium or other similar laws affecting rights of creditors generally or by the laws of the State relating to judicial foreclosure. Further,ihould remedies be exercised underthe federal bankruptcy laws againstparcels in the Improvement Area, payment of the Special Tax may be subordinated to bankruptcy law priorities.

Thus, cenain claims may have priority over the Special Tax in a bankruptcy proceeding even though they would not outside of a bankruptcy proceeding.

FDIC/Federal Government Interests in Properties
The ability of the District to foreclose the lien of delinquent unpaid Special Tax installments may be limited with regard to properties in which the Federal Deposit Insurance Corporation (the "FDIC"), the Drug Enfor""."nt Agency, the Internal Revenue Service, or other federal agency has or obtains an interest.

Under the Supremacy Clause of the United States Constitution, unless Congress has otherwise provided, if a federai governmental entity owns a parcel that is subject to Special Taxes within the i*prou.-"nt Area but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and aJsessments. Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the District wishes to foreclose on the parcel as a result of delinquent SpeciaiTa*es, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay aeiinquent taxes and assessments on parity with the Special Taxes and preserve the federal government's mortgage interest. In Rust v. Johnson,597 F.2d 174 (1979), the United States Court of AppJal, Ninth Circuit held that the Federal National Mortgage Association ("FNMA") is a federal instrumeniality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of state power over a mortgage interest held by FNMA constitutes an exercise of state power over property of the United States.

Neither the Authority nor the District have undertaken to determine whether any federal governmental entity currently has, or is likely to acquire, any interest (including a mortgage interest) in any of the parcels subject to the Special Taxes within the Improvement Area, and therefore expresses no l,'iew concerning the likelihood that the risks described above will materialize while the Bonds are outstanding.
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In the event that any financial institution making any loan which is secured by real property within the Improvement Area is taken over by the FDIC, and prior thereto or thereafter the loan or loans go into default, then the ability of the Authority to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited.

The FDIC's policy statement regarding the payment of state and local real properly taxes (the "Policy Statement") provides that property owned by the FDIC is subject to state and local real properly taxes only if those taxes are assessed according to the property's value, and that the FDIC is immune from real property taxes assessed on any basis other than property value. According to the Policy Statement, the FDIC will pay its property tax obligations when they become due and payable and will pay claims for delinquent property taxes as promptly as is consistent with sound business practice and the orderly administration of the institution's affairs, unless abandonment of the FDIC's interest in the property is appropriate. The FDIC will pay claims for interest on delinquent property taxes owed at the rate provided under state law, to the extent the interest payment obligation is secured by a valid lien. The FDIC will not pay any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts.

If any property taxes (including interest) on FDIC-owned propefi are secured by a valid lien (in effect before the property became owned by the FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC's consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC's consent' The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes, including special assessments, on propefty in which it has a fee interest unless the amount of tax is fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Special taxes imposed under the Mello- Roos Act and a special tax formula which determines the special tax due each year are specifically identified in the Policy Statement as being imposed each year and therefore covered by the FDIC's federal immunity. The Ninth Circuit has issued a ruling on August 28,2001, in which it determined that the FDIC, as a federal agency, is exempt from Mello-Roos special taxes. According to information available from the Sacramento County assessment roll, the FDIC does not currently own any of the property in the Improvement Area.

The Authority and the District are unable to predict what effect the application of the Policy Statement would have in the event of a delinquency in the payment of Special Taxes on a parcel within the Improvement Area in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at foreclosure sale. Such an outcome could cause a draw on the reserve account for the Local Obligations and perhaps, ultimately, if enough property were to become owned by the FDIC, a default in payment on the Local Obligations and the Bonds.

Zoning and Land Use I)ecisions
The Special Taxes, from which funds for the payment of the Bonds are derived, are to be levied annually based upon the land use categories in effect for the property. Decisions made by the City Council, which has control over zoning and land use decisions for property in the City, will affect the prospective use of the property and, therefore, the tax base for the Special Tax. The Rate and Method does not permit land use changes to reduce the tax base to below the Special Tax Requirement. 70 Page 227
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Ballot Initiatives and Measures
From time to time constitutional initiatives or other initiative measures may be adopted by State voters or voters of the City, such as Measure W adopted by City residents in November 2004 described herein. The adoption of any such initiative in the future might place limitations on the ability of the State or any political subdivisions thereof, including the Authority or the City, to increase revenues or to increase appropriations, the ability of the landowners to complete their developments, or the ability of the District to collect the Special Tax.

Shapiro v. San Diego
On August 1,2014, the California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in Shapiro v. San Diego City Council, ll7 Cal. Rptr. 2d 631, 96 Cal. App' 4th 904 (2002). The case involved a Convention Center Facilities District (the "CCFD") established by the City of San Diego, much like a community facilities district established under the provisions of the Mello- Roos Act. The CCFD is comprised of all of the real property in all of the City of San Diego. However, the special tax to be levied within the CCFD was to be levied only on hotel properties.

At the election to authorize such special tax, the electorate was limited to owners of hotel properties and lessees of certain of such hotel properties. Thus, the election was a landowner election ii*it"O to owners and lessees of properties on which the special tax would be levied, and not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was based on Section 53326(c) of the Mello-Roos Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed district whose property would be subject to the special tax.

The Court held that the CCFD special tax election was invalid under the California Constitution because Article XIII A, Section 4 thereof and Article XIII C, Section 2 thereof require that the electors in such an election be the registered voters within the district.

In the case of the CCFD, at the time of the election there were many, many registered voters within the CCFD (viz., all of the registered voters in the City of San Diego). There were no registered voters within the Improvement Area at the time of the election to authorize the Special Tax' In City of San Diego, the Court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Mello-Roos Act in situations where there are fewer than 12 registeied voters. Thus, by its terms, the Court's holding does not apply to the Special Tax election in the Improvement Area. Moreover, Section 53341 of the Mello-Roos Act provides that any "action or p.o"""dittg to attack, review, set aside, void or annul the levy of a special tax shall be commenced within 30 days after the special tax is approved by the voters." The Special Tax with respect to the Improvement Area was approved by the voters on March 28, 2023 . Based on Section 53341 of the Mello-Roos Act and its analysis of existing laws, regulations, rulings and court decisions, the District does not believe that a challenge to the Special Tax may now be brought.

Risks of Real Estate Secured Investments Generally
The owners of the Bonds will be subject to the risks generally incident to an investment secured by real estate, including, without limitation, (i) adverse changes in national and local market conditions, such as changes in the market value of real property in the vicinity of the Improvement Area, the supply of or demand for competitive properties in such area, and the market value of residential properly or buildings and/or sites in the event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, governmental rules (including, without limitation, zoning laws and laws relating to endangeied ipecies, and hazardous materials and seismic safety) and fiscal policies; (iii) increased 71 Page 228
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construction costs, workforce shortages, supply chain disruptions or other similar factors affecting the development, financing or marketing capabilities of Taylor Morrison or any other additional homebuilder within the Improvement Area; (iv) natural disasters (including but not limited to severe weather, earthquakes, *ildfir"r, and floods) or other calamities, which may result in uninsured losses; (v) costs of r.-"diution and liabilities associated with unknown environmental conditions affecting properties; and (vi) increased delinquency or reduced demand due to high rate of inflation, rising interest rates, increased cost of insurance, and other economic trends that adversely affects consumers, whether cyclical or resulting from geopolitical events.

No assurance can be given that Taylor Morrison, Folsom Real Estate South, or any other current or future homeowners within the Improvement Area will pay the Special Tax in the future or that they will be able to pay such Special Tax on a timely basis. $es6(-Bsnkruptcy" above, for a discussion.of certain limitations on the District's ability to pursue judicial proceedings with respect to delinquent parcels. Further, many homes within the Improvement Area will have a higher-than-average price point as compared to other homes in the region, which may impact the absorption of the residential units within the Improvement Area.

Current Challenges to the Homebuilding Industry
The pace of homebuilding in the Improvement Area may be adversely affected by a variety of factors, including changes in economic conditions, interest rates, water shortages, and other similar factors, and recently including workforce shortages and supply chain disruptions. For example, obtaining garuge doors and windows have recently been challenging for home builders generally. Additionally, ro*" Cutifornia municipalities have experienced supply chain disruptions for the electrical transformers and water meters needed for new development, having been advised in some cases of up to al-year delay for new electrical transformer orders. The lots in the Improvement Area being developed by Taylor Morrison are fully energized. Neither Taylor Morrison or Folsom Real Estate South are currently aware of any anticipated supply chain disruptions for the development within the Improvement Area' Additi,onally, the City has taken steps to prevent a water meter supply chain disruption. The City has made arrangements with a supplier to have approximately 500 new water meters set aside for its future use. Also, City staff have obtained authorization from the City Council to purchase additional new water meters as needed for new development in the City so that such purchases can be made expeditiously and without the need for further City Council action. However, no assurance can be given that supply chain disruptions for the materials needed to complete development within the Improvement Area will not occur.

Increasing Mortgage Interest Rates and Banking Uncertainty Most of the expected purchasers of homes within the Improvement Area will finance their acquisitions with mortgage financing. As such, rising interest rates, decreased availability of mortgage financing or of certain mortgage programs, higher down payment requirements, or increased monthly mortgag- costs could have a negative impact on the estimated absorption rates of planned for-sale homes in thi I-p.ou"-.nt Area. Further, a combination of higher mortgage rates, delays in construction stemming from delays in the supply chain, homebuyers' inability to sell their existing homes and adverse changes in local, regional or national economic conditions, among other factors, could contribute to an increase in the rate of home order cancellations, which could similarly have a negative impact on the estimated absorption rates of for-sale homes in the Improvement Area. 72 Page 229
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Failure to Develop
Land development operations are subject to comprehensive federal, State and local regulations.

Approval is required from various agencies in connection with the layout and design of developments, the ttatu." and extent of improvements, construction activity, land use, zoning, school and health requirements, as well as numerous other matters. It is possible that the approvals necessary to complete development of all taxable property within the Improvement Area are not obtained on a timely basis or that litigation could be filed regarding approvals. Failure to obtain any such agency approval or satisf, any such government requirement or any litigation concerning such agency approval or government requirement could adversely affect land development operations. In addition, current and future governmental restrictions, including, but not limited to, governmental policies restricting or controlling development within the Improvement Area, could be enacted, and future land use initiatives approved by the voiers in the City could add more restrictions and requirements on development within the Improvement Area, which restrictions may increase the cost to develop the Improvement Area. One such governmental restriction is the requirement to install rooftop photovoltaic solar systems for residential buildings under three stories constructed starting in2020. Costs associated with the installation of solar to the homebuilders may reduce the willingness of homebuilders to construct homes and increased costs of those homes may decrease the willingness of homeowners to buy such homes.

Moreover, there can be no assurance that the means and incentive to conduct land development operations within the Improvement Area will not be adversely affected by a deterioration of the real estate market or economic conditions generally, future local, State and federal governmental policies relating to real estate development, the income tax treatment of real property ownership, acts of war or terrorism, or other factors.

A portion of the Taxable Properly in the Improvement Area is presently being developed.

Undeveloped property is less valuable per acre than developed property, especially if there are no plans to develop such property or if there are severe restrictions on the development of such property, and therefore provides less security to the owners of the Bonds should it be necessary for the District to foreclose due to the nonpayment of the Special Taxes. Delays in any properly owner's ability to obtain discretionary approvals (including any delays caused by litigation) would in turn delay the construction of improvements and development of the Taxable Property within the Improvement Area. Furthermore, an inability to develop the land within the Improvement Area as currently proposed would result in slower rates of diversification of propefty ownership within the Improvement Area. Concentration of ownership increases the risk ofa failure to collect sufficient Special Taxes to pay debt service on the Bonds, all other things being equal. The timely payment of Special Taxes levied on undeveloped property depends primarily upon the ability and willingness of owners of such property to pay such taxes when due'-Certain infrastructure improvements are required before development in the Improvement Area is complete. Also, the Phase 2 Water Facilities described under the heading "PROPOSED PROPERTY DEVELOPMENT-Development Entitlements-Water Supply" are expected to be needed before the full development of the Folsom Plan Area. A slowdown in or cessation of the development of land within the Improvement Area could reduce the ability and willingness of such owners to make Special Tax payments, and could greatly reduce the value of such property in the event it has to be foreclosed upon to ioilect delinquent special taxes. See 6'-Bankruptcy" above for a discussion of certain limitations on the ability of the District to pursue judicial foreclosure proceedings with respect to taxpayers with delinquent Special Taxes.

No Independent Review of valuation or viability of completed Projects Property within the Improvement Area is comprised of separate and distinct projects as described above. Payment of Special Taxes are inherently dependent upon the development within the 73 Page 230
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Improvement Area, and, with respect to residential properties, the ability of the buyers of completed homes to pay. The Authority, the District, and the Underwriter have not reviewed any business plan for continued ownership, development and/or operation of the property within the Improvement Area' Similarly, the Authority, the District and the Underwriter have not conducted any independent evaluation of the existing or projected economic viability or profitability of any of the plans for development, including reviiw and/or evaluation of financial statements of any owner or developer of any parcel subject to the Special Tax. The information contained herein regarding the proposed development and the o*n"rr of the parcels within the Improvement Area has been supplied by such owners and the Underwriter has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of such information.

In the event an owner or developer experiences financial difficulties, including difficulties resulting from construction or operation of the development within the Improvement Area, the value of the affected parcel within the Improvement Area may decline and/or such owner or developer may elect to refrain from payment of future Special Taxes for such parcel. See also "-Failure to Develop." Potential Impact of Global Health Crises or Concerns
The COVID-l9 global pandemic had a severe and continuing effect on the nation and the State, with ongoing concerns relating to health and safety, preventive protocols, fiscal and economic issues, business opeiations, and global trade. Although at present there are no restrictions on operations within the State relating to the COVID-19 pandemic, the response to COVID-l9 had a profound effect on housing construction and the housing market. Pandemic-related shutdowns severely disrupted global supplyihains, resulting in difficulty for homebuilders to access necessary materials for home completion, inciuding wood, windows, electrical transformers, water meters, and appliances. Supply chains have substantially recovered, but many goods still experience a backlog, which has resulted in, or may in the future result in, development delays within the District, and which has further resulted in increased construction costs. Lingering supply chain issues, labor shortages, increased interest rates, and an uncertain economy can increase costs to individual homeowners and therefore slow demand. Further, the pandemic saw changing trends in where people choose to live and the types of homes people choose to iive in, which may impact demand for the types of homes being constructed by Taylor Morrison and any other homebuilder within the Improvement Area. The impacts of the COVID-l9 pandemic continue to have a lasting effect, and the Authority, the City and the District cannot predict the effect of any potential future outbreak of COVID-19 or any other infectious disease.

Cybersecurity
The City, like other public and private entities, relies on a large and complex technology environment to conduct its operations, and consequently faces the threat of cybersecurity incidents. The City and its departments could face cybersecurity threats including, but not limited to, hacking, viruses, -ui*ur" and other attacks on computers and other sensitive digital networks and systems. Such cybersecurity incidents could result from unintentional events, or from deliberate attacks by unauthorized entities or individuals attempting to gain access to the City's information technology systems to misappropriate assets and/or information or to cause operational disruption and damage. The City maintains insurance to cover cybersecurity incidents, has cybersecurity risk management policies and procedures and periodically trains its employees on cybersecurity risks. The City, in addition to ionducting regular internal reviews, also hires external auditors to perform quarterly and annual reviews of its cybersecurity program.

While the City conducts periodic tests and reviews of its networks, no assurances can be given that such security and operational control measures will be successful in guarding against all cyber threats 74 Page 231
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and attacks. New technical cyber vulnerabilities are frequently discovered in the United States. In addition, cyber attacks have become more sophisticated and increasingly are capable of impacting municipal control systems and components. The techniques used to obtain unauthorized access to, or to disabloor degrade, electronic networks, computers, systems and solutions are rapidly evolving and have become increasingly complex and sophisticated. The results of any attack on the computer and information technology systems could have a material adverse impact on the operations of the City and damage the digital networks and systems. The City cannot predict the outcome of any such attack, nor the effect on the operations and finances of the City.

Geologic, Topographic and Climatic Conditions
The value of the property in the Improvement Area in the future can be adversely affected by a variety of additional factors, particularly those which may affect infrastructure and other public improvements and private improvements on property and the continued habitability and enjoyment of suih private improvements. Such additional factors include, without limitation, geologic conditions such as earthquakes, topographic conditions such as earth movements, landslides and floods and climatic conditions such as droughts and wildfire'
The occurrence of seismic activity in the Improvement Area could result in substantial damage to properties in the Improvement Area which, in turn, could substantially reduce the value of such properties and could affect the ability or willingness of the property owners to pay the Special Tax on their propefty.

The Improvement Area is not located in any existing special study zone delineated by the Chief of the Division of Mines and Geology of the State of California as an area of known active faults and is not otherwise known to be located within an area of any significant seismic activity. However, it may be expected that one or more of such conditions may occur and may result in damage to improvements of varying seriousness, that the damage may entail significant repair or replacement costs and that repair or repiacernent may never occur either because of the cost or because repair or replacement will not facilitate traUitaUitity or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances, the value of the property may decline' In recent years, wildfires have caused extensive damage throughout the State. In some instances, entire neighborhoods have been destroyed. Several ofthe fires that occurred in recent years damaged or destroyed property in areas that were not previously considered to be at risk from such events. Some commentators believe that climate change will lead to even more frequent and more damaging wildfires in the future. In general, property damage due to wildfire could result in a significant decrease in the market value of property in the Improvement Area and in the ability or willingness of property owners to pay Special Taxes.

The Improvement Area is located within an area identified as a moderate fire hazatd severity zone. More information regarding Fire Hazard Severity Zones can be found at the California 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 ih" I1npro1ement Area, and the coverage provided by such insurance typically insures against fire 75 Page 232
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damage, although there is no assurance that homeowners within the Improvement Area will purchase or maintain such insurance.

In the event of a wildfire, flood or other natural disaster, there may be significant damage to both property and infrastructure in the Improvement Area. As a result, a substantial portion of the properly o*tr".r may be unable or unwilling to pay the Special Taxes when due. In addition, the value of land in the Improvement Area could be diminished in the aftermath of such a natural disaster, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Special Taxes.

Folsom Dam, located on the American River within the jurisdictional boundaries of the City, was built in 1955 by the United States Army Corps of Engineers and is owned by the United States Bureau of Reclamation. An auxiliary spillway to enable the dam to more easily release water as it nears capacity was completed by the Army Corps of Engineers in October 2017. The City, together with the County and other local agencies, have established a hazard mitigation plan in the event of a dam failure. Geologic, topographic and climatic conditions, if severe, could result in damage to the dam which could further cause damage to the surrounding region and may limit water supply for the City and the Improvement Area.

Endangered Species
During recent years, there has been an increase in activity at the State of California and federal level related to the possible listing of certain plant and animal species found in California as endangered species. An increase in the number of endangered species is expected to curtail development in a number of areas. The property within the Improvement Area contains protected habitat and species, including but not limited to Swainson's hawk and tri-colored blackbird foraging habitats and wetlands regulated by state and federal agencies. [Foraging habitat mitigation credits have been satisfied by the Original Developer for the portion of the Improvement Area owned by Taylor Morrison and individual homeowners. Additional habitat mitigation credits will be required for the planned development within the Four Large Lots.] At present, the property within the Improvement Area is not known to be inhabited by any other plant or animal species listed as threatened or endangered under either the State or federal endangered species acts or which either the California Fish and Game Commission or the United States Fish and Wildlife Service has proposed for addition to the respective endangered species list.

Notwithstanding this fact, new species are proposed to be added to the State and federal protected lists on a regular basis. Any action by the State or federal governments to protect species located on or adjacent to undeveloped properly could negatively affect the developer's ability to complete development as planned. This, in tum, could reduce the likelihood of timely payment of the Special Tax, from which lunds for the payment of the Bonds is derived, and would likely reduce the value of the land and the potential revenues available at a foreclosure sale for delinquent Special Taxes. See "CERTAIN RISKS TO BONDHOLDERS-Land Values."
Ilazardous Substances
While governmental taxes, assessments, and charges are a common claim against the value of a parcel, other less common claims may be relevant. One of the most serious in terms of the potential ieduction in the value of a parcel in the Improvement Area is a claim with regard to a hazardous substance. In general, the owners and operators of a parcel may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to ut "CERCLA" or the "superfund Act," is the most well-known and widely applicable of these laws, but laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of property whether or not the 76 Page 233
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owner (or operator) has anything to do with creating or handlingthehazardous substance. The effect, therefore, should any of the parcels in the Improvement Area be affected by ahazardous substance is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.

Fufther, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the financial and legal liability of a property owner to develop the affected parcel or other parcels, as well as the value of the property that is realizable upon a delinquency and foreclosure.

The appraised value of property in the Improvement Area does not take into account the possible reduction in marketability and value of any of the parcels by reason of the possible liability of the owner (or operator) for the remedy of a hazardous substance condition of the parcel. While the District is not aware that the owner (or operator) of any of parcels has such a current liability with respect to any of the parcels, it is possible that such liabilities do currently exist and that the District is not aware of them.

Further, it is possible that liabilities may arise in the future with respect to any of the parcels resulting from the existence, currently, on the parcel ofa substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently, on the parcel of a substance not presently classified as hazardous but which may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of a parcel within the Improvement Area that is realizable upon a delinquency.

Naturally Occurring Asbestos
California Air Resource Board ("CARB") adopted the Airborne Toxic Control Measure ("ATCM") for Construction, Grading, Quarrying and Surface Mining Operations. This statewide regulation is applicable to grading or any other projects disturbing soil in areas of the State where asbestos may exist, as determined by the Califomia Geological Survey ("CGS"). The ATCM applies to any size construction project although there are additional notification requirements for projects that exceed one acre. Areas and parcels moderately likely to contain naturally occurring asbestos are located in the eastern parts of the County, including in the City.

Natural weathering or human disturbance can break the asbestiform minerals down to microscopic fibers, which are easily suspended in air. There is no health threat if asbestos fibers in soil remain undisturbed and do not become airborne. When inhaled, these thin fibers irritate tissues and resist the body's natural defenses. Asbestos causes cancers of the lung (such as mesothelioma) and the lining of internal organs, asbestosis, and other diseases that inhibit lung function. Scientists consider certain types of asbestos fibers (i.e., tremolite fibers and similarly structured amphibole asbestos particles) that are frequently identified in the City to be more potent than other types in causing mesothelioma.

The EIR for the Folsom Plan Area required all new development to undertake a site investigation to determine the presence of naturally occurring asbestos and, if necessary, prepare and implement an asbestos dust control plan. [The Original Developer undertook an asbestos dust control plan with respect to the grading of the 260 lots owned by Taylor Morrison and individual homeowners. Folsom Real Estate South expects that the developer of the Four Large Lots will need to implement a similar asbestos dust control plan for the grading of that property.l
The health concerns associated with the presence of naturally occurring asbestos in the Improvement Area may adversely affect the marketability of property in the area. 77 Page 234
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LEGAL MATTERS
The validity of the Bonds, the Local Obligations and certain other legal matters are subject to the approving legal opinion of Orick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority ("Bond Counsel'). Bond Counsel has not undertaken any responsibility for the accuracy, completeness or fairness of this Official Statement and expresses no opinion as to the matters set forth herein. Certain legal matters will be passed upon for the District and the Authority by the City Attorney. Certain legal matters relating to the Local Obligations will be passed upon by Onick, Henington & Sutcliffe LLP, as bond counsel to the District. Certain legal matters will be passed upon for the Underwriter by its counsel, Stradling, Yocca, Carlson & Rauth LLP. The fees of Bond Counsel, Disclosure Counsel, and counsel to the Underwriter are contingent upon the issuance of the Bonds.

TAX MATTERS
In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (theooCode") and is exempt from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the Bonds is not a specific 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 excluded from the federal corporate alternative minimum tax. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual, or receipt of interest on, the Bonds. A complete copy of the proposed form of opinion of Bond Counsel is set forth as APPENDIX E hereto.

To the extent the issue price of any maturity of the Bonds is less than the amount to be paid at maturity of such Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Bonds), the difference constitutes "original issue discount," the accrual of which, to the extent properly allocable to each Beneficial Owner thereof, is treated as interest on the Bonds which is excluded fro- grorr income for federal income tax purposes and exempt from State of California personal income taxes. For this purpose, the issue price of a particular maturity of the Bonds is the first price at which a substantial amount of such maturity of the Bonds is sold to the public (excluding bond hour"r, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Bonds accrues daily over the term to maturity of such Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Bonds. Beneficial Owners of the Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of Beneficial Owners who do not purchase such Bonds in the original offering to the public at the first price at which a substantial amount of such Bonds is sold to the public.

Bonds purchased, whether at original issuance or otherwise, for an amount higher than their principal u-ount payable at maturity (or, in some cases, at their earlier call date) ("Premium Bonds") will Le ffeated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross in"o-" for federal income tax purposes. However, the amount of tax-exempt interest received, and a Beneficial Owner's basis in a Premium Bond, will be reduced by the amount of amortizable bond premium properly allocable to such Beneficial Owner. Beneficial Owners of Premium Bonds should 78 Page 235
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consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances.

The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. The Authority, the City and the District have made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Bonds. The opinion of Bond Counsel a.ru-"s the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel's attention after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds.

Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters.

Although Bond Counsel is of the opinion that interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the Bonds may otherwise affect a Beneficial Owner's federal, state or local tax liability. The nature and extent of these other tax consequences depends upon the particular tax status of the Beneficial Owner or the Beneficial Owner's other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences.

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

The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel's judgment as to the proper treatment of the Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service ("IRS") or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the Authority, the City or the District, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The Authority, tfte City and the District have covenanted, however, to comply with the requirements of the Code.

Bond Counsel's engagement with respect to the Bonds ends with the issuance of the Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Authority, the City, the District or the Beneficial Owners regarding the tax-exempt status of the Bonds in the event of an audit examination by the IRS. Under current procedures, Beneficial Owners would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the Authority, the City or the District legitimately disagrees, may not be practicable. Any action of 79

11/12/2024 Item No.1.
the IRS, including but not limited to selection of the Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues may affect the market price for, or the marketability of, the Bonds, and may cause the Authority, the City, the District or the Beneficial Owners to incur significant expense.

Payments on the Bonds generally will be subject to U.S. information reporting and possibly to "backup withholding." IJnder Section 3406 of the Code and applicable U.S. Treasury Regulations issued thereunder, a non-corporate Beneficial Owner of Bonds may be subject to backup withholding with respect to "reportable payments," which include interest paid on the Bonds and the gross proceeds of a sale, exchange, redemption, retirement or other disposition of the Bonds. The payor will be required to deduct and withhold the prescribed amounts if (i) the payee fails to furnish a U.S. taxpayer identification number (*TIN") to the payor in the manner required, (ii) the IRS notifies the payor that the TIN furnished by the payee is incorrect, (iii) there has been a "notified payee underreporting" described in Section 3406(c) of the Code or (iv) the payee fails to certiff under penalty of perjury that the payee is not subject to withholding under Section 3a06(aX1)(C) of the Code. Amounts withheld under the backup withhotding rules may be refunded or credited against a Beneficial Owner's federal income tax liability, if any, provided that the required information is timely furnished to the IRS. Certain Beneficial Owners (including among others, corporations and certain tax-exempt organizations) are not subject to backup withholding. The failure to comply with the backup withholding rules may result in the imposition of penalties by the IRS.

NO LITIGATION
At the time of delivery of and payment for the Bonds and the Local Obligations, the Authority and/or the District, as applicable, will certifu that there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or regulatory agency, public board or body pending or threatened against the Authority or the District affecting their existence, or the titles of their iespective officers, or seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds or the Local Obligations, the application of the proceeds thereof in accordance with the Trust Agreement, or the collection or levy of the Special Taxes to pay the principal of and interest on the Local Obligations, or in any way contesting or affecting the validity or enforceability of the Local Obligations and the Bonds, the Trust Agreement, the Local Obligations Indenture, the Bond Purchase Contract entered into among the Authority, the District and the Underwriter or any other applicable agreements or any action of the Authority or the District contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement or any amendment or supplement thereto, or contisting the powers of the Authority or the District or their authority with respect to the Bonds or the Local Obligations or any action of the Authority or the District contemplated by any of said documents, nor, to the knowledge of the Authority, is there any basis therefor.

NO RATING
The Authority has not made, and does not contemplate making, application to any rating agency for the assignment of a rating to the Bonds. The absence of a rating may significantly adversely affect the ability of the owner of Bonds to sell such Bonds.

MTINICIPAL ADVISOR
Fieldman, Rolapp & Associates, Inc. has acted as Municipal Advisor (the "Municipal Advisor") to the District in conjunction with the issuance of the Bonds. The Municipal Advisor has assisted in matters related to the planning, structuring, execution, and delivery of the Bonds. The Municipal Advisor will receive compensation contingent upon the sale and delivery of the Bonds. The Municipal Advisor 80 Page 237
11/12/2024 Item No.1.
has not audited, authenticated, or otherwise independently verified the information set forth in this Official Statement, or any other related information available, with respect to accuracy and completeness of disclosure of such information. Because of this limited participation, the Municipal Advisor makes no guaranty, warranty, or other representation with respect to the accuracy or completeness of this Official Statement, or any other matter related to this Official Statement.

UNDERWRITING
The Bonds are being purchased by Piper Sandler & Co. (the "Underwriter") pursuant to a Bond Purchase Contract (the "Purchase Contract"), by and among the Authority, the District and the Underwriter. pursuant to the Purchase Contract, the Underwriter has agreed to purchase all of the Bonds from the Authority at a purchase price of $ being the aggregate principal amount of the Bonds of$ Iplus/less] a [net] original ISSUe [premiumidiscount] of $- and less Underwriter's discount of $ The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public offering prices set forth on the inside front cover page hereof.

CONTIIUING DISCLOSI]RE
The District
The District has covenanted for the benefit of the Owners to provide certain financial information and operatin g datarelating to the Bonds by not later than nine months following the end of the District's fiscal year lwtrictr fiscal yiar currently ends June 30) commencing with the report for the 2023-24 Fiscal year (the "Annual Repon';, which is due April 1, 2025, and to provide notices of the occurrence of certain enumerated events. The Annual Report and the notices of enumerated events will be filed with EMMA, and the first Annual Report may include the filing of or reference to this Official Statement. The specific nature of the informati-on to be contained in the Annual Report or the notices of enumerated events is contained within APPENDIX D-"FORMS OF CONTINUING DISCLOSURE UNDERTAKINGS." These covenants have been made in order to assist the Underwriter in complying with S.E.C. Rule 15c2-12(bX5).

The District is committed to complete and accurate continuing disclosure in accordance with its continuing disclosure obligations under the federal securities laws, including rules and regulations promulgaLd by the SEC and the MSRB, as those rules may be amended from time to time. Further, the bity 6ur policies and procedures in place in order to achieve compliance with its continuing disclosure undertakings and those of its related entities.

Taylor Morrison and Folsom Real Estate South
Pursuant to Continuing Disclosure Certificates to be executed by each of Taylor Morrison and Folsom Real Estate South in connection with the issuance of the Bonds, 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 I and December I in each y6ar, commencing June 1,2025 (the "Disclosure Reports"), and to provide notices of the occurrence of certain enumerated events until the obligation to so provide such information, data and notices is otherwise terminated in accordance with the provisions of such Continuing Disclosure Certificate. A form of the Continuing Disclosure Certificate for Taylor Morison and Folsom Real Estate South is iNCIUdEd iN APPENDIX D-"FORMS OF CONTINUING DISCLOSURE LTNDERTAKTNGS'" ThE Disclosure Reports are to be filed with EMMA.
8l Page 238
11/12/2024 Item No.1.

The Authority and the District have not considered, or reached any conclusion as to, whether or not either Taylor Morrison or Folsom Real Estate South is an obligated person under the Rule. The Authority takes no responsibility for the form or content or for the adequacy of the applicable Continuing Disclosure Certificate for each of Taylor Morrison and Folsom Real Estate South for its intended purpose' 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, as applicable, and each of their Affiliates (as defined in the Continuing Disclosure Agreement), in the aggregate, own or have the option to purchase 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. Additionally, the Continuing Disclosure Certificates provide that the obligations thereunder shall be assumed by any purchaser that acquires a sufficient amount of Taxable Property within the Improvement Area to be considered a Major Developer (as defined therein).

Prior Continuing Disclosure Compliance - Taylor Morrison To the actual knowledge of Taylor Morrison, other than as disclosed in this paragraph, in the last five years, Taylor Morrison has not failed to comply in any material respect with any previous undertaking by it to provide periodic continuing disclosure reports or notices of material events with respect to community facilities districts or assessment districts in California. However, in connection with a continuing disclosure obligation dated December l, 2021, exeatted in connection with Improvement Area No. 1 of the City of Dixon Community Facilities District No. 2019-1 (Homestead), Special Tax Bonds, Series 202l,Taylor Morrison was late in filing its annual report that was due by June 15, 2022. Taylor Morrison filed the annual report on June 30,2022.

Prior Continuing Disclosure Compliance - Folsom Real Estate South. Folsom Real Estate South represents that, to its actual knowledge, Folsom Real Estate South has not failed in any material respect to comply with any previous undertaking by it to provide periodic continuing disclosure reports or notices of material events with respect to community facilities districts or assessment districts within the past five years.

MISCELLANEOUS
This Official Statement is not to be construed as a contract or agreement among the Authority, the District and the purchasers of the Bonds. Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. The iniormation and expressions of opinion herein are subject to change without notice and neither the delivery of the Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority, the City or the District since the date hereof.

References are made herein to certain documents and reports which are brief summaries thereof which do not purport to be complete or definitive and reference is made to such documents and reports for full and complete statements of the contents thereof. Copies of such documents and reports are available for inspection at the office of the Finance Director, City of Folsom, City Hall, 50 Natoma Street, Folsom, California 95630.
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82 Page 239
11/12/2024 Item No.1.

The execution and delivery of the Official Statement by the Authority and the District has been duly authorized by the Board of Directors of the Authority and the City Council, respectively.

F'OLSOM RANCII FINANCING AUTHORITY
Treasurer
CITY OF F'OLSOM COMMT]NITY FACILITIES
DrsrRrcT No. 23 (FOLSOM RANCTT)
City of Folsom Finance Director
By
83 Page 240
11/12/2024 Item No.1.

APPEI\DIX A

RATE AND METHOD
A-l Page 241
11/12/2024 Item No.1.

APPENDIX B

ECONOMIC AND DEMOGRAPHIC INFORMATION RELATING TO THE CITY OF'F'OLSOM This Appendix contains certain economic and demographic information relating to the City.

Neither the falti and credit nor the taxing power of the City, the Authority, the State of California or any political ,ubdinition thereof is pledged to the payment of the Bonds. Except for the Trust Estate, no other revenues ol ta)ces are pledgedlo the payment ofthe Bonds. The Bonds are not general obligations ofthe Authority, the Districi oriht City but are limited obligations of the Authority payable solely from the Trust Eitate, derived primarily from payments on the Local Obligations from the payment of the Special Taxes levied within tie District, as more fully described in the Official Statement to which this Appendix is appended. The information set forth herein that has been obtained from sources other than the City is beliived to be reliable, but such information is not guaranteed as to accuracy or completeness.

Statements contained herein that 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 oj1o"tt.' Information contained in this Appendix B is presented as general background data. The taxing pi*r, oy ihe City, the State of California, or any political subdivision thereof is not pledged to the payment of the Bonds.

General
The City is located in the eastern portion of the County, approximately 110 miles northeast of San Francisco and,20 miles east of Sacramento. The City is located along the eastern end of the Highway 50 corridor in an area of the Sacramento Valley that has experienced considerable growth over the past 30 years.

City Government
The City was incorporated in 1946 and chartered in 1990. The City's primary governing body is the City Councii, "ornpot"d
of five members who are elected at large and who serve four-year terms. The councii members chotse a mayor and vice mayor from among their members. Current City Council members are:

Member Term ExPires
1112026
llt2026
1112024
1112024
tU2026
The City operates under a Council-Manager form of government. The City Manager is responsible for daily administration of City affairs. Elaine Andersen has served as City Manager since ZOit. fne City Ma-nager is appointed by and seryes at the will of the City Council. The City Manager is responsible for implementation of City Council policy, enforcement of City laws and ordinances, appointment and discipline of City officers and employees, oversight of City departments, preparation and submission of the City budget to the City Council, and other related functions. In August 2024,the City announced Ms. Andersen'splan to retire from her role as the City Manager in late December 2024.

By the time of her expected retiiement, Ms. Andersen would have served in the City Manager role for approximately six and a half years and served the City for approximately 20 years. Ms. Andersen has Mike Kozlowski (Mayor)
Sarah Aquino (Vice Mayor)
YK Chalamcherla
Rosario Rodriguez
Anna Rohrbough
B-l Page 242
11/12/2024 Item No.1.
indicated that she will facilitate the recruitment process for the next City Manager to ensure a smooth transition.

City Budget Process
The City's annual budget is adopted by the City Council on or before the last working day of June. If the City Council fails to adopt a budget by such date, the budget proposed by the City Manager shall be deemed adopted. The City Manager may transfer moneys between departments and divisions, and programs and accounts within departments and divisions, but only the City Council may by resolution transfer moneys between funds and from un-appropriated balances or fund balances to any fund or appropriation account. The City Council adopted the Fiscal Year 2024-25 budget on June 25, 2024.

Budget information is adopted on an annual basis for the General Fund, special revenue funds and debt service funds. The budget is adopted on a project length basis for capital projects funds. The following procedures are followed in establishing the budgetary data reflected in the financial statements:

A. Department heads prepare a budget request based upon the previous year's expenditures.

B. Meetings are held between the department heads, the Chief Financial Officer and City Manager for the purpose of reviewing and prioritizing budget requests.

C. The City Manager submits the proposed crty budget to the City Council, who makes decisions regarding department budgets.

D. Transfers between funds and changes in the total budget must be approved by the City Council.

Budget information is presented for the General Fund, Successor to the Redevelopment Agency, Special Revenue Funds, Capital Projects Funds, Proprietary Funds and Internal Service Fund as required supplementary information. The budget information is presented on a basis consistent with generally aciipted accounting principles. Appropriations, except open project appropriations and unexpended grant appropriations, lapse at the end ofeach fiscal year.

Revenues and expenditures relating to the City's general governmental operations are budgeted and accounted for in the City's General Fund, including public safety, highways and streets, and culture and recreation. General taxes and fees support most of these activities. The CrW's Fiscal Year 2024'25 adopted budget includes over $247.2 million in expenditures across all funds. Of this amount, approximately $117.1 million was allocated to the General Fund of the city.

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B-2 Page 243
11/12/2024 Item No.1.

Population
The historic population of the City, the County and the State is shown in the following table City of Folsom, Sacramento County and State of California Population Estimates
(As of January 1)
Year
lgg0 (t)
2000 (1)
2010 (1)
2017
2018
2019
2020
2021
2022
2023
2024
Cin of Folsom
29,798
51,884
72,203
7',7,050
77,598
78,666
82,943
83,076
84,365
85,698
88,023
Sacramento Countv
1,066,789
1,223,499
1,418,788
l,5l 1,390
7,525,099
I,538,054
1,585,055
1,580,120
7,572,254
1,576,639
l,57g,g3g
State of California
29,811,427
33,871,648
37,253,956
39,352,398
39,519,535
39,605,361
39,538,223
39,327,868
39,714,785
39,061,058
39,128,162
(t) Based on United States Census Bureau data as of April I in such year.

Source: State of Californi4 Department of Finance, E-4 Population Estimates for Cities, Counties and the State, Sacramento, Califomia May 2024.

Building Activity
Residential building activity for calendar years 2020 through the second quarter of 2024 for the City is shown in the following table.

BUILDING PERMITS AI\D VALUATIONS
City of Folsom
2020-2024
2020 2021 2022 2023 2024Q)
Permit Valuation
New Single-Family
New Multi-Family
Res. Alterations/Additions
Res. Other
Total Residential (r)
New Commercial
New Industrial
Comm./Ind.

Alterations/Additions
Other Comm./Ind.

Total Non-Residential (1)
$ 181,53 1, 127
t7,039,625
17,214,031
34,630,673
s238,415,456
$230,698
t0,tt7,261
2,071,887
$3s1,482,2s2
6,621,585
13,200,936
43,832,114
$322,220,400
57,741,491
38,529,947
s6,766,582
$390,097,685
1 5 l,128,135
26,225,478
133,897,573
$210,938,921
13,401,342
13,401,342
36,681,',l81
$415,136,887
$570,954
11,622,910
$475,258,421
$9,1 13,559
33,258,978
16,602,300
$701,348,871
$5,586,481
27,778,927
20,807,067
$289,687,568
s12,452,497
218,721
20,835,880
(t) Totals may not add to sum because of rounding.
(2) Data through June 30, 2024.

Source: City of Folsom.
9 ll 894 20,711,514
$12,359,g46 $21,805,758 $58,974,836 s48,172,475 s54,218,61I B-3

11/12/2024 Item No.1.

Employment
The table below reflects recent employment information for the City's largest employers for the fiscal year ended June30,2024.

PRINCIPAL EMPLOYERS
City of Folsom
Fiscal Year2023-24
Percent of Total
Business Name
Intel Corporation
California State Prison
Folsom Cordova Unified School District (1)
Folsom State Prison
Mercy Hospital of Folsom
California Independent System Operator
City of Folsom
SAFE Credit Union (2)
Costco Wholesale
Folsom Lake College
Number of Employees Em ent
4,300
1,657
l,l9l
9',74
853
716
463
371
368
310

10.75%

4.14 2.98

2.44 2.13
t.79

1.16 0.93

0.92 0.78
Total Top Employers
Total Labor Force (3)
tL,203
40,000

28.0106
100.00%
(1) Includes both certified and classihed employees in Folsom only (2) Includes both the corporate and Folsom branch.
(l) Total Folsom labor force provided by EDD Labor Force Data.

Source: MuniServices, LLC/ Avenu Insights & Analytics
The unemployment rate in the Sacramento-Roseville-Arden-Arcade, CA Metropolitan Statistical Area ("sacramento MSA"), which includes Sacramento, Placer, El Dorado, and Yolo Counties, was approximately 4.3Yo in2023,up from the 2022 estimate of approximately 3.8%. This compares with an unadjusted unemployment rate of 4.8o/o for California and 3.6Yo for the nation during the same period' The unemployment rate was 4.0%o in El Dorado County, 3.7o/o in Placer County, 4.4%o in Sacramento County, and 4.7Yo in Yolo County fot 2023.
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B-4 Page 245
11/12/2024 Item No.1.

The table below provides information about employment rates and employment by industry type for the Sacramento MSA for calendar years 2019 through 2023 and for Septembet 1,2024.

Sacramento-Roseville-Arden-Arcade, CA Metropolitan Statistical Area Labor Force, Employment and Unemployment Yearly Average(D 2019 2020 2021 2022 2023 2024Q)
Civilian Labor Force (3)
Employment
Unemployment
Unemployment Rate
Wase and Salary Employment (a)
Total Farm
Mining and Logging
Construction
Manufacturing
Wholesale Trade
Retail Trade
Transportation, Warehousing and Utilities
Information
Finance and Insurance
Real Estate and Rental and Leasing
Professional and Business Services
Private Education and Health Services
Leisure and Hospitality
Other Services
Federal Government
State Government
Local Govemment
Total, All Industries (5)
1,099,300
1,059,200
40,100

3.7%
1,093,500
996,600
96,900

8.9Yo
1,105,400
1,034,400
71,000

6.4%
1,1 12,100
1,069,700
42,400

3.8Yo
1,129,200
1,080,500
48,600

4.3%
1,142,700
1,088,900
53,700

4.7%
8,700
500
69,400
36,800
28,600
100,500
32,200
I1,900
35,200
17,300
137,200
166,600
109,600
35,400
14,200
121,900
105,300
1,031,200
8,300
500
70,200
36,100
26,600
95,100
34,300
10,200
34,800
16,900
132,600
164,000
83,900
31,000
14,800
121,700
98,900
979,800
9,000
500
74,900
37,700
26,900
100,600
37,500
10,100
34, I 00
17,700
137,200
168,800
93,600
33,300
14,500
127,300
98,400
1,021,900
8,600
500
77,100
40,600
28,300
100,300
40,800
10,500
33,000
18,800
139,700
175,600
108,700
36,100
14,400
129,800
102,700
1,065,400
9,1 00
500
74,700
40,500
28,500
99,000
41,600
9,900
30,500
18,400
134,400
188,700
112,500
38,300
14,500
134,400
10,100
600
76,000
40,300
28,700
100,000
39,500
8,700
29,500
18,700
136,300
207,300
I I1,000
38,100
14,500
137,100
I10,400
1,106,800
10"1 400
1,083,000
(r) Data not adjusted for seasonality.
(2) Estimates as of September 1,2024.
(3) Labor force data ii by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(4) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(s) Datamay not add due to rounding.

Source: State of California Employment Development Department.

Retirement Programs
General. The City contributes to two plans in the California Public Employees' Retirement System ("CaIPERS"). The safety plan covers all of the City's full-time sworn uniformed fire employees, sworn uniformed police employees, and all chiefs in both departments. The miscellaneous plan covers all remaining eligible employees.

As of June 30, 2022, the date of the most recent actuarial study report, the safety plan and the miscellaneous plan werc 67.3Yo funded and 63.6Yo funded, respectively. For the safety plan, the actuarial accrued liability was approximately $258 million and the market value of assets was approximately $158 million, resulting in an unfunded actuarial accrued liability ("UAAL") of $100 million. For the miscellaneous plan, the actuarial accrued liability was approximately $286 million and the market value of assets was approximately $182 million, resulting in a UAAL of approximately $104 million.

B-5 Page 246
11/12/2024 Item No.1.

For the year ended June 30, 2024, the City's unaudited annual pension cost of $ 10,7 54,191 for the safety plan and $10,828,318 for the miscellaneous plan were equal to the City's required contributions.

The three-year trend information for the safety and miscellaneous plans combined is as follows:

Fiscal Year
Ended
Annual
Pension
Percentage
ofAPC
Contributed
Net
Pension
ObligationCost ("APC")
613012022
6t30t2023
613012024
$18,902,039
20,675,705
21,582,509
100%
100%
100010
Other Post-Employment Benejits. ln 2004. the Government Accounting Standards Board ("GASB") issued Statement No. 45, Accounting and Financial Reporting by Employers for Post- Employment Benefits Other Than Pensions ("GASB 45"). GASB 45 requires goverrrmental agencies to change their accounting for Other Post-Employment Benefits ("OPEB") from a pay-as-you-go to an accrual basis. The City has implemented the requirements of GASB 45, including financial statement reporting and disclosure requirements. Among other things, employers that participate in single-employer oi agent -ultiple-employer defined benefit OPEB plans are required to measure and disclose an amount for annual OPEB cost on the accrual basis of accounting. Annual OPEB cost is equal to the employer's annual required contribution to the plan, with certain adjustments. The annual required contribution represents a level offunding that, ifpaid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years.

An employer's net OPEB obligation is defined as the cumulative difference between annual OPEB cost and the employer's contributions to a plan.

The City sponsors and administers a single-employer defined benefit post-employment healthcare plan (the "Healthcare Plan") to provide healthcare insurance benefits to eligible retired employees and iheir dependents. The City pre-funds the Healthcare Plan though a Futuris Public Entity Investment Trust and a Retirement Board of Authority made up of the Mayor, one at large City Council member, the City Manager, the Finance Director, and the Human Resources Director. The Retirement Board of Authority delegated authority of the trust to the Benefit Trust Company. The required contribution is based on projected pay-as-you-go financing requirements, with an additional amount to prefund benefits as determined annually by the City Council. For Fiscal Year 2024-25, the City contributed $500,000 to the plan for current premiums.

For more information regarding the City's OPEB liabilities, see note 13 to the City's Annual Comprehensive Financial Report for the fiscal year ended June 30,2023.

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11/12/2024 Item No.1.

Capital Improvement Program
The City's Capital Improvement Program ("CIP") is a multi-year plan that forecasts spending for all anticipated capital projecfs and is considered to be the link between the City's development and financing planning ptoir.i. CIP funding comes mainly from impact fees and a number of other special .eu"nuelrrnds, as well as grants and loans. Within each program category, the City identifies resources that it will commit to prioiity capital projects. CIP costs include both one-time expenses and recurring expenses related to capital rehabilitation. The City's CIP for Fiscal Yeat 2025 is approved at $47.8 million.

Investment Policy
The City's Investment Policy is codified in Section 3.30.030 of the City of Folsom Municipal Code and is set forth below:

It is the primary duty of the city officers having responsibility for investing city moneys to protect, preserve and maintain cash and investments placed in their trust on behalf of the citizens of the city. to-that end, those investment officers shall comply with the following guidelines and procedures:

A. Interest yield on investments shall be secondary to the basic requirements of safety and liquidity of moneYs.

B. The city investment portfolio shall be designed to equal or exceed the rate of return of the state's iocal agency investment fund (LAIF) throughout budgetary and economic cycles, taking into account the city's risk constraints, cash flow characteristics of the investment portfolio, this chapter, this code and state law.

C. The city investment portfolio shall be diversified to minimize risks regarding specific security types or individual financial institutions.

D. All city investment officers shall adhere to the guidance provided by the "prudent investor standard" as set out in the California Government Code Section 53600.3.

E. All participants in the investment process shall act as custodians of the public trust' Investmenf officers shall recognize that the investment portfolio is subject to public review and evaluation.

F The city's chief investment officer shall quarterly submit an investment report to the city council, which report shall include all required elements as prescribed by California Government Code Section 53646. The city's chief investment officer shall monthly submit a report of transactions to the city council as prescribed in California Government Code Section 53607. In both instances the city chief investment officer may include such other information as deemed appropriate.

The finance director shall develop a system of internal controls over investments, which control system shall be documented in writing according to California Debt and Investment Advisory Commission guidelines. The system shall be designed to prevent losses of public moneys arising from fraud, employee error, misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions by city employees or officers.

G
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11/12/2024 Item No.1.

H. Financial institutions in which the city has investments shall be monitored as to financial condition throughout the period in which the city has moneys deposited or invested, to assure that the condition of the institution does not materially deteriorate so as to risk the city's investments.

L A statement of investment policy shall be developed, and changes to the policy submitted to the city council as needed.

J. Security purchases and holdings shall be maintained within the limits permitted by the City Charter, this chapter and the California Government Code, whichever is the most restrictive both as to percentages of the total investment portfolio which might be invested in the various types of securities and as to the maximum length of maturity.

The following table shows the type of investments and other information on the portfolio as of June30,2023.

CITY OF F'OLSOM

PORTF'OLIO SUMMARY
As ofJune 30,2023
Investments by Fair Value Level Balance
City Pooled Investments
Certificate of Deposit
Commercial Paper
Corporate Notes
Municipal Obligations (City)
Municipal Obligations (FRFA)
Municipal Obligations (FPFA)
Federal Farm Credit Bank (FFCB)
Federal Home Loan Bank (FHLB)
Federal Home Loan Mortgage (FHLMC)
Federal National Mortgage (FNMA)
US Treasury Note
Investments Not Measured at Fair Value or Subject
to Fair Value Hierarchy
Local Agency Investment Funds
Califomia Class
Money Market Mutual Funds
Total Investments Not Measured at Fair Value or
Subject to Fair Value HierarchY
Total City's Pooled Investments
Investments Held with Fiscal Agent Not Measured at
Fair Value

JPA (CAMP)
Money Market Mutual Funds
Investments Hetd with Fiscal Agent by Fair Value Level
OPEB Plan Investments - Mutual Funds
Total Investments Held with Fiscal Agents
Total Investments
s 16,132,816
31,965,025
23,371,457
63,781,608
127,379,928
31,409,025
18,603,010
35,952,856
14,822,650
5,802,620
3,907,740
19,'728,039
28,217,642

7.966.324

55.912.005
429.040.741
211,975

35.424.087
8,998,498

44.634.560
Source: City of Folsom.

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$473.67s.301

11/12/2024 Item No.1.

Insurance, Risk Pooling and Joint Powers Arrangements
The City participates in pooled insurance programs offered by the Northern California Cities Self Insurance Fund ('NCCSIF";, a joint powers agency that provides the City with a shared risk layer of coverage above iis self-insured $100,000 retention for liability and workers' compensation' NCCSIF also provides claims servicing to the City for its banking layer, which represents the City's self-insurance. ir.tCCSm consists of 18 member cities, all located within California, and is governed by a board of directors appointed by the member cities. It provides pooled claims processing administrative services, risk management services, and actuarial studies. The City's deposit for the fiscal year ended June 30, 2023, was $3,177,001, and for the fiscal year ended June 30, 2022, was $2,942,482. For the Fiscal Year ended June 30, 2023, NCCSIF had net assets of $25,877j02 and a net income of $1,475,442.

Sales Taxes
The following table shows taxable transactions in the City during calendar years 2016 through the secondquarter of2024.

TAXABLE SALES
City of Folsom
2016-2024
(in Thousands)
Year
Retail
Permits
Retail and Food
Taxable
Transactions Total Permits
Total Outlets
Taxable
Transactions
20t6
20t7
201 8
2019
2020
2021
2022
2023
2024{1)
$1,595,641
1,663,432
r,721,452
1,741,755
1,579,786
1,917,045
2,009,992
1,986,848
961,244
$1,828,059
1,944,041
1,983,797
2,093,411
1,795,390
2,134,222
2,253,326
2,229,309
1,078,848
1,588
1,614
1,593
1,616
1,652
1,457
1,523
1,492
1,466
2,404
2,459
2,501
2,602
2,74r
2,418
2,546
2,537
2,526
(1) Datathrough Iune30,2024.

Source: City of Folsom.

Community Facilities
The four-county Sacramento Metropolitan Area offers multiple parks, playgrounds, theaters and golf courses. Recreational activities offered along the American and Sacramento Rivers include fishing, Jwimming, boating, biking, horseback riding and hiking. Varied cultural opportunities include art galleries und -r6"u-s, two major symphonies, three ballet companies, scores of movie theaters showing hrst run films and many theatbr groups offering live stage plays. In February 2011, the $50 million performing arts complex Harris Center - Three Stages at Folsom Lake College opened. The state of the urtfu"itity is one of ihe largestcollege performing arts centers inthe state andhoststheatre, symphonies, and ballets.

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11/12/2024 Item No.1.

Media outlets in the four-county area consist of more than 30 newspapers, nine television stations (four network, four independent, one public) and 30 radio stations.

Education
The Folsom-Cordova Unified School District operates schools both in the Cify and in the Sacramento suburb of Rancho Cordova, which borders the City to the west. In the City, the school district now has three high schools, two middle schools, and ten elementary schools.

Institutions of higher leaming situated in the Sacramento area include California State University, Sacramento, and the University of California at Davis, which includes a medical school and law school' Private universities, such as William Jessup University, the University of Sacramento, and National University also have campuses in the Sacramento region. Other institutions include the McGeorge School of Law (University of the Pacific), and extensions and satellites of schools such as the University of Southern California, University of San Francisco, Golden Gate University, and Drexel University among others. There are a number of Community Colleges in the region, including Folsom Lake College.

In addition to the main campus located within the City, the Folsom Lake College operates the El Dorado and Rancho Cordova centers and enrolls more than 8,000 students.

Utilities
The City's water treatment plant produces and delivers high-quality drinking water, supplying water to the portion of the City south of the American River. The Water Division of the City's Environmental and Water Resources Department inspects and maintains, as of June 30,2024, the 418 miles of water mains, 25,07 1 service connections and 3 ,921 fire hydrants. The City also provides sewage collection services for the entire City. The Sewer Division of the City's Environmental and Water Resources Department inspects and maintains, as of June 30, 2024,the 304 miles of sanitary sewers, 18 pump stations, and 26,228 service connections. Sewage treatment is provided by the Sacramento Regional County Sanitation District.

The City also provides solid waste collection services. The Solid Waste Division of the City's Public Works Department operates a fleet of solid waste vehicles for collection, as well as providing recycling, household hazardous waste pickup and disposal, and neighborhood clean-up services for the entire City.

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

APPENDIX C

SUMMARY OF PRINCIPAL DOCUMENTS
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11/12/2024 Item No.1.

APPEI\DIX D
FORMS OF CONTINUING DISCLOSI]RE IINDERTAKINGS
DISTRICT CONTII\UING DISCLOSURE CERTIFICATE
THIS DISTRICT CONTINUING DISCLOSURE CERTIFICATE (this "Disclosure Certificate"), 2024, is executed and delivered by the City of Folsom Community Facilitiesdated as of District No 23 (Folsom Ranch) (the "District") relative to the Folsom Ranch Financing Authority (the "Authority") in connection with the issuance by the Authority of 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"). The Bonds are being issued pursuant to a Trust Agreement (the "Trust Agreement"), among the District, the Authority and U.S. Bank Trust Company, National Association (the "Trustee"). The District covenants and agrees as follows.

SECTION 1. Purpose of the Disclosure Certificate. The Disclosure Certificate is being executed and delivered by the District for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule l5c2-12(bX5).

SECTION 2. Definitions. In addition to the definitions set forth in the Trust Agreement, which apply to any capitalizedterm used in this Disclosure Certificate unless otherwise defined in this Section, the followin g capitalized terms shall have the following meanings:
"Annual Report" means any Annual Report provided by the District pursuant to, and as described in, Sections 3 and4 hereof.
"Annual Report Date" means the date in each year that is nine months after the end of the District's fiscal year, which date, as of the date of this Disclosure Certificate, is April 1' "Dissemination Agent" shall mean NBS, or any successor Dissemination Agent designated in writing by the District and which has filed with the District a written acceptance of such designation. ..EMMA System" means the MSRB's Electronic Municipal Market Access system, or such other electronic system designated by the MSRB'
"Financial Obligation" means, for purposes of the Listed Events set out in Section 5(a)(10) and Section 5(bX7), a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The ierm "Financial Obligation" shall not include Municipal Securities (as defined in the Securities ixchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule.
"Listed Events" means any of the events listed in subsection (a) of Section 5 hereof. "MSRB" means the Municipal Securities Rulemaking Board, or any successor thereto. "Official Statement" means the Official Statement, dated 2024, relating to the Bonds.
"Participating Underwriter" means the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds.

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11/12/2024 Item No.1.
o'Rule" means Rule 15c2-12(bX5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, asthe same may be amended from time to time.

SECTION 3. Provision of Annual Reports.
(a) The District shall, or shall cause the Dissemination Agent to, provide to the MSRB through the EMMA System, in an electronic format and accompanied by identiffing information all as pr"r"iib"d by the MSRB, an Annual Report which is consistent with the requirements of Section 4 hereof, not later than the Annual Report Date, commencing with the report for the 2023-24 Fiscal Year. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 hereof; provided, however, that the audited financial statements of the District may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if not available by that date. If the District's fiscal year changes, it shall, or shall instruct the Dissemination Agent to, give notice of such change in the same manner as for a Listed Event under subsection (e) of Section 5 hereof. The first Annual Report may include the filing of or reference to the Official Statement. (b) Not later than 15 business days prior to the date specified in subsection (a) of this Section for the providing of the Annual Report to the MSRB, the Dishict shall provide the Annual Report to the Dissemination Agent.
(c) If the Dissemination Agent is other than the District, then not later than fifteen (15) Business Days prior to said date, the District shall provide the Annual Report to the Dissemination Agent.

If the District is unable to provide the Annual Report to the MSRB by the Annual Report Date, the District shall send a notice to the MSRB in substantially the form attached as Exhibit A to the Disclosure Certificate.
(d) The Dissemination Agent shall:
(i) provide any Annual Report received by it to the MSRB, as provided herein; and (iD file a report with the District certiffing that the Annual Report has been provided pursuant to this Disclosure Certificate and stating the date it was so provided.

SECTION 4. Content of Annual Reports. The District's Annual Report shall contain or incorporate by reference the following:
(a) The District's audited financial statements, if any, prepared in accordance with generally accepted accounting principles'as promulgated to apply to governmental entities ftom time to time by the Govirnmental Accounting Standards Board. If the District's audited financial statements, if any, are not available by the time the Annual Report is required to be filed pursuant to subsection (a) of Section 3 hereof, the Annual Report shall contain unaudited financial statements, and the audited financial statements, if any, shall be filed in the same manner as the Annual Report when they become available. If the District's financial statement is included or cqnsolidated with the financial statement for the City of Folsom (the "Crty"), then the District shall file the City's audited financial statements as its own. (b) The following information:
(i) The principal amount of Bonds and any bonds secured by Additional Local Obligations (as defined in the Official Statement) Outstanding as of the December 31 next pr.""ding the Annual Report Date along with debt service schedules for the Bonds and any bonds D-2 Page 254
11/12/2024 Item No.1.
secured by Additional Local Obligations (as defined in the Official Statement) Outstanding as of such date;
(ii) The balance in each reserve account for the Local Obligations, and a statement of the required bond reserve amount, as of the December 31 next preceding the Annual Report Date; (iii) The total assessed value of all parcels within the Improvement Area on which the Special Taxes are levied, as shown on the assessment roll of the Sacramento County Assessor last equalized prior to the December 31 next preceding the Annual Report Date, and a statement of assessed value-to-lien ratios therefor based on special tax and assessment debt, either by individual parcel or by categories (e.g., "below 3:7," "3:l to 4:1" etc.); (iv) The Special Tax delinquency rate for the Improvement Area as of the December 31 next preceding the Annual Report Date; the number of parcels within the Improvement Area d-elinquent in payment of special taxes as of the December 31 next preceding the Annual Report Date; the amount of each delinquency; the length of time delinquent and the date on which foreclosure was commenced, or similar information pertaining to delinquencies deemed appropriate by the District; provided, however, that parcels with aggregate delinquencies of $1,000 or less (exciuding penalties and interest) may be grouped together and such information may be provided by category;
(v) The status of foreclosure proceedings and a summary of the results of any foreclosure sales in the Improvement Area as of the December 31 next preceding the Annual Report Date;
(vi) The identity of any property owner, representing more than 5Yo of the Special Tax levy, delinquent in payment of special taxes as of the December 31 next preceding the Annual Report Date;
(vii) All tentative and final maps approved and/or recorded within the Improvement Area, describing the gross acres, the planned commercial acres and the number and type of planned residential dwelling units;
(viii) The number of new building permits issued and a description of the purpose of such permits (e.g., new single-family, new multi-family, new commercial, new industrial); (ix) A land ownership summary listing the top ten Special Taxpayers for the Improvement Area (excluding any individual homeowner responsible for 5o/o or less of the Special Tax for the current Fiscal Year), as shown on the assessment roll of the Sacramento Ctunty Assessor last equalized prior to the December 3l next preceding the Annual Report Date; and
(x) For the current Fiscal Year, the amount of the Effective Tax Rate Evaluation Maximum Facilities Special Tax, the Maximum Facilities Special Tax, the actual Facilities Special Tax levied within the Improvement Area and the actual Special Tax levied within the Improvement Area, with such amounts reported separately for Developed Properly, Small Lot Final Map Property and Large Lot Property; provided, however, that once all Taxable Property within the Impiovernent Area is Developed Property, the Maximum Facilities Special Tax and the actual Facilities Special Tax and the actual Special Tax levied may each be shown on an aggregate basis in ihe Annual Report. Forthe purposes of this subparagraph (x), all capitalized D-3 Page 255
11/12/2024 Item No.1.
terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Rate and Method for the Improvement Area'
In addition to any of the information expressly required to be provided under this Section, as set forth above, the Districtihall provide such fuither information,if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.

Any or all of the items listed above may be included by specific reference to other documents, including offi.iut statements of debt issues of the District or related public entities, which have been submitted to the MSRB through the EMMA System. The District shall clearly identiff each such other document so included by reference.

SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section, the District shall give notice, or cause notice to be given, not less than ten Business Days after the occurrence of any of the following events with respect to the Bonds:
(i) Principal and interest payment delinquencies.
(ii) Unscheduled draws on debt service reserves reflecting financial difficulties. (iii) Unscheduled draws on credit enhancements reflecting financial difficulties. (iv) Substitution of credit or liquidity providers, or their failure to perform. (v) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax-exempt status of the security. (vi) Defeasances.
(vii) Tender offers.
(viii) Bankruptcy, insolvency, receivership or similar event of the obligated person' Note: For the purposes of the event identified in subparagraph (ix), the event is considered to occur when any of the following occur: the appointment of a receiver, trustee or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and bffi"iulr or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision orjurisdiction over substantially all ofthe assets or business of the obligated Person.

D-4

11/12/2024 Item No.1.
(ix) Rating changes.
(x) Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a financial Obligation of the District, any of which reflect fi nancial difficulties.
(b) The District shall give notice, or cause notice to be given, not less than ten Business Days after the occuffence of any of the following events with respect to the Bonds, if material:
(D Modifications to rights of Bond holders.
(ii) Bond calls.
(iiD Release, substitution or sale of property securing repayment of the Bonds. (iv) Non-paymentrelateddefaults'
(v) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms.
(vi) Appointment of a successor or additional trustee or the change of name of a trustee.
(vii) Incurrence of a Financial Obligation of the District, or agreement to covenants, events of default, remedies, priority rights, or similar terms of a Financial Obligation of the District, any of which affect Bondholders.
(c) Whenever the District obtains knowledge of the occuffence of a Listed Event described in subsection (b) above, the District shall determine if such event would be material under applicable federal securities laws.
(d) If the District learns of the occunence of a Listed Event described in subsection (a) of this Section, or determines that knowledge of a Listed Event described in subsection (b) of this Section would be material under applicable federal securities laws, the District shall notifu the Dissemination Agent thereof in writing and instruct the Dissemination Agent to report the occurrence pursuant to subsection (e) of this Section. If in response to a request under subsection (b) of this Section, the District determines that the Listed Event would not be material under applicable Federal securities law, the District shall so notifu the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection (e) ofthis Section. (e) If the Dissemination Agent has been instructed by the District to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occuffence with the MSRB through the EMMA System. Notwithstanding the foregoing, notice of Listed Events described in paragraph (vii) of subsection (a) ofthis Section and paragraph (ii) ofsubsection (b) ofthis Section need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds pursuant to the Trust Agreement.

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SECTION 6. Termination of Reporting Obligation. The District's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the District shall give notice of such termination in the same manner as for a Listed Event under subsection (e) of Section 5 hereof.

SECTION 7. Dissemination Agent. The District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent.

The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the District pursuant to the Disclosure Certificate.

SECTION 8 Waiver Notwithstanding any other provision this Disclosure this DisclosureCertificate, the District may amend this Disclosure Certificate, and any provision Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of subsection (a) of Section 3 hereof, Section 4 hereof or subsections (a) and (b) of Section 5 hereof, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver (i) is approved by Owners of the Bonds in the manner provided in the Trust Agreement for amendments to the Trust Agreement with the consent of Owners, or (ii; ao.r not, in the opinion of nationally recognized bond counsel, materially impair the interests of Owners or Beneficial Owners of the Bonds.

If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the annual financial information containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment utrd th" impact of the change in the type of operatingdata or financial information being provided.

If an amendment is made to the undertaking speciSing the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is -ud" rhull present a comparison between the financial statements or information prepared on the basis of the new aciounting principles and those prepared on the basis of the former accounting principles. The comparison shall inClude a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial statements or infbrmation, in order to provide information to investors to enable them to evaluate the ability of the District to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be given in the same manner as for a Listed Event under subsection (e) ofSection 5 hereof.

SECTION 9. Additional Information. Nothing in this DiscloSure Certificate shall be deemed to prevent the District from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this of
of
D-6 Page 258
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Disclosure Certificate. If the District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the District shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

SECTION 10. Default. Inthe event of afailure of the District orthe Dissemination Agentto comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of outstanding nonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District to comply with its obligations under the Disclosure bertificate. A default under the Disclosure Certificate shall not be deemed an Event of Default under the Trust Agreement, and the sole remedy under the Disclosure Certificate in the event of any failure of the District to comply with the Disclosure Certificate shall be an action to compel performance' SECTION 11. Duties" Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee under the Trust Agreement. The Dissemination Agent shall not be responsible for the form or content of any Annual Report or notice of Listed Event. The Dissemination Agent shall receive reasonable compensation for its services provided under this Disclosure Certificate. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the District agrees to indemnifu and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performanie of its powers and duties hereunder, including the costs and expenses (including attorneys' iees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's n"giig"n"" or *itfut misconduct. The obligations of the District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds' SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the District, the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

SECTION 13. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the District has executed this Disclosure Certificate as of the date first above written.

CITY OF FOLSOM COMMUNITY FACILITIES
DrsTRrcT NO. 23 G'OLSOM RANCTT)
By
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11/12/2024 Item No.1.

EXHIBIT A

NOTICE OF FAILIJRE TO FILE ANIIUAL REPORT
Name of Issuer:

Name of Issue:

Folsom Ranch Financing Authority
Folsom Ranch Financing Authority City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 4 Special Tax Revenue Bonds, Series 2024
Date of Issuance: 2024
NOTICE IS I#REBY GIVEN that the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Districf') has not provided an Annual Report with respect Bonds as required by Section 3 of the Continuing Disclosure Certificate, dated executed by the District for the benefit of the Holders and Beneficial Owners of bonds. [The Dishict anticipates that the Annual Report will be filed by Dated:
to the above-named
2024,
the above-referenced
l

CITY OF' FOLSOM COMMUNITY FACILITIES
DrsrRrcT No. 23 (FOLSOM RANCTT)
Finance Director of the City of Folsom
D-8 Page 260
11/12/2024 Item No.1.

CONTII\UING DISCLOSI]RE CERTIFICATE - HOME BUILDER
This Continuing Disclosure Certificate - Home Builder (the "Disclosure Certificate") dated as of 2024, is executed and delivered by [Taylor Morrison of California, LLC, a California limited liability companyl[F olsom Real Estate South, LLC, a Delaware limited liability companyl (the "Developer") in connection withtheissuanceof$-aggregateprincipalamountofFolsom 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"). The Bonds are being issued pursuant to a Trust Agreement, dated as of December 1,2024 (the "Trust Agreement"), among the Folsom Ranch Financing Authority (the
23 (Folsom Ranch) (the "Districf') and
"Trustee").
"Issuer"), the City of Folsom Community Facilities District No.

U.S. Bank Trust Company, National Association, as trustee (the SECTION 1 Pumose of the losrlre Certificate. This Disclosure Certificate is being executed and delivered by the Developer for the benefit of the holders and beneficial owners of the Bonds. The Developer acknowledges that the Issuer and the District have undertaken no responsibility with respect to any reports, notices or disclosures provided or required under this Disclosure Certificate, and has no liability to any person, including any holder or beneficial owner of the Bonds, with respect to this Disclosure Certifi cate.

SECTION 2. Definitions. In addition to the definitions set forth in the Trust Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined herein, the following capitalized terms shall have the following meanings:
"Affiliate" shall mean, with respect to the Developer, any person directly (or indirectly through one or more intermediaries) that exercises managerial control over the Developer or that is under managerial control of the Developer, and about whom information could be material to potential investors in their investment decision regarding the Bonds (including without limitation information relevant to the proposed development of the Property, or to the Developer's ability to pay the applicable Special Tax obligation levied on the Property owned by it when due). "Assumption Agreement" means an agreement containing terms substantially similar to this Disclosure Certificate, whereby a Major Developer agrees to provide Semi-Annual Reports and notices of significant events with respect to the portion of the Property owned by such Major Developer and its Aifiliates, and with respect to the improvements or payments necessary to cause the Planned Development Stage to be reached that such Major Developer, or an Affiliate thereof, intends or is obligated (contractually or otherwise) to make or cause to be made. ,.Bonds" means 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.
"Developer" means [Taylor Morrison of California, LLC, a California limited liability companyl[Folsom Real Estate South, LLC, aDelaware limited liability company]. "Development Plan" means with respect to a Major Developer, the specific improvements such Major Developei intends to make, or cause to be made, in order for the Planned Development Stage to be ,"a"h"d, and the time frame in which such improvements are intended to be made; the Developer's Development Plan, as of the date hereof, is described in the Official Statement under the caption lFor Taylor Morrison: "PROPOSED PROPERTY DEVELOPMENT-TayIor Morrison Development- Development Plan - Taylor Morrison"][For Folsom Real Estate South: "PROPOSED PROPERTY D-9 Page 261
11/12/2024 Item No.1.

DEVELOPMENT-FoIsom Real Estate South Development-Development Plan - Folsom Real Estate South"].
"Disclosure Certificate" means this Disclosure Certificate as the same may be amended from time to time.
,.Dissemination Agent" means initially, the Developer, and any successor Dissemination Agent designated in writing by the Developer and which has filed with the District a written acceptance of such designation.
"District" means the City of Folsom Community Facilities District No. 23 (Folsom Ranch), as the same may be modified by the City Council of the City from time to time. "Event of Bankruptcy" means, with respect to a Person, that such Person files a petition or institutes a proceeding und"r any act or acts, state or federal, dealing with or relating to the subject or subjects ofbankruptcy or insolvency, or under any amendment ofsuch act or acts, either as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby such Person asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of such Person's debts or obfigations, or oflers to such Person's creditors to effect a composition or extension of time to pay such Person's debts or asks, seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of such Person's debts, or for any other similar relief, or if any such petition or any such proceedings of the same or similar kind or character is filed or instituted or taken against such Person, or if a receivir of the business or of the property or assets of such Person is appointed by any court, or if such Person makes a general assignment for the benefit of such Person's creditors. "Financing Plan" means, with respect to a Major Developer, the method by which such Major Developer intends to finance its Development Plan, including specific sources of funding for such Development Plan; Taylor Morrison's Financing Plan, as of the date hereof, is described in the Official Statement under the caption "PROPOSED PROPERTY DEVELOPMENT-TayIor Morrison Development-Financing Plan - Taylor Morrison."
,,Improvement Area" means Improvement Area No. 4 of the District. "Listed Event" means any of the events listed in Section 5 hereof' ..Major Developer" means, as of any date of determination, any owner of land (which owns itself or through any Affiliates), who owns Property that is (i) entitled to include 137 or more of the residential lots in the Improvement Area subject to the Special Taxes or (ii) obligated to pay 20oh or more of the Special Taxes levied on all of the Taxable Property for the then current Fiscal Year. ,.MSRB" shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission as a repository of disclosure information.

Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB' currently located at http://emma.msrb.org.
..Official Statement" means the final, executed Official Statement relating to the Bonds' .'Participating Underwriter" shall mean Piper Sandler & Co., the original underwriter of the Bonds.

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'oPerson" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. "Planned Development Stage" means the stage of development to which the Developer intends to develop the Property, as described in the Official Statement, which is the construction of finished homes. "Property" means, as of the date of determination, collectively, the Taxable Property within the boundaries oithe Improvement Area that (i) is owned by the Developer or any Affiliate thereof (including Taxable Property for which the Developer or any Affiliate thereof has the option to purchase) and (ii) the Developer or any Affiliate thereof has sold to a Major Developer who has not assumed the obligations under ihis Disclosure Certificate pursuant to an Assumption Agreement. Property as of any date of determination does not include real property within the boundaries of the Improvement Area that has been conveyed to individual homeowners or any real property that is the subject of an Assumption Agreement' "semiannual Report" shall mean any Semiannual Report provided by the Developer on or prior to June 1 and December 1 of each year, commencing with the Semiannual Report due June 1,2025, pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "special Taxes" means the special taxes levied on the Taxable Property within the Improvement Area.
"State" shall mean the State of California.
"Taxable Property" means the real property within the boundaries of the Improvement Area that is not exempt from the Special Taxes authorized to be levied in the Improvement Area. o'Trust Agreement" means the Trust Agreement, dated as of December l, 2024, among the Issuer, the District and the Trustee, and as further amended and supplemented from time to time. "Trustee" means U.S. Bank Trust Company, National Association, as trustee under the Trust Agreement, or any successor as trustee.

SECTION 3. Provision of Semiannual Reports. So long as the Developer's obligations hereunder have not been terminated pursuant to SectionT, the Developer shall, or shall cause the Dissemination Agent (if the Dissemination Agent is other than the Developer) to, provide to the MSRB a Semiannual Report which is consistent with the requirements of Section 4, not later than June I and December 1 of each year, commencing June 1, 2025. If, in any year, June 1 or December 1 falls on a Saturday, Sunday or holiday, such deadline shall be extended to the next following business day. The Semiannual Report must be submitted in electronic format, accompanied by such identi$ing information as is prescribed by the MSRB, and may be submitted as a single document or as separate documents "o-piising
a package, and may include by reference other information as provided in Sections 4 or 5 hereof.

SECTION 4. Content of Semiannual Reports. The Developer's Semiannual Report shall contain or incorporate by reference the following information:
(a) If information regarding such Major Developer has not previously been included in the Official Statement or a more recently filed Semiannual Report, the Development Plan and Financing Plan of such Major Developer or, if information regarding such Major Developer has previously been included in the Offiiial Statement or a more recently filed Semiannual Report, a description of the progress made in the Development Plan of such Major Developer since the date of such information and a description of D-l1 Page 263
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any significant changes in such Development Plan and the Financing Plan and the causes or rationale for such changes.
(b) Identification of the conveyance by the Developer of any portion of the Properly to an entify that is not an Affiliate of the Developer, the result of which conveyance is to cause such transferee to become a Major Developer.
(c) The number of building permits issued with respect to the Property. (d) The number of residential lots within the Properly that have not reached the Planned Development Stage and sold (closed escrow) by the Developer since the date of the Official Statement or u -or" ,"..nt Semiannual Report, and, if any such lots were sold to a Major Developer, the identity of the Major Developer.
(e) The number of finished homes within the Property sold and conveyed to individual homeowners by the Developer.
(f) Any material amendments to land use entitlements for the Property, if such amendments would prevent or significantly delay the implementation of the Developer's Development Plan as described in the Official Statement or a more recently filed Semiannual Report.

The Developer's Semiannual Reports required to be provided under Section 4 hereof must be filed in accordance with Section 3.

SECTION 5. Reporting of Significant Events. Pursuant to the provisions of this Section 5, the Developer shall promptly give, or cause to be given, notice of the occuffence of any of the following events with respect to the Developer:
(a) Any failure of the Developer, or any Affiliate of the Developer owning any Property, to pay prior to delinquency any property taxes or assessments due with respect to the Property (to the extent ihi responsibility of the Developer or any such Affiliate), to the extent such failure is not promptly cured upon discovery thereof.
(b) Any denial or termination of credit, any denial or termination of, or default under, any line of credit or loan or any other loss of a source of funds that could have a material adverse effect on the Developer's most recently disclosed Financing Plan or Development Plan or on the ability of the Developer, or any Affiliate of the Developer owning any Property, to pay the Special Taxes with respect to the
-Property
prior to delinquency (to the extent the responsibility of the Developer or any such Affiliate).
(c) The occurrence of an Event of Bankruptcy with respect to the Developer, or any Affiliate owning any Property, that could reasonably be expected to have a material adverse effect on the Developer'i most recently disclosed Financing Plan or Development Plan or on the ability of the Developer, or any Affiliate of the Developer owning Property, to pay Special Taxes with respect to the Property prior to delinquency (to the extent the responsibility of the Developer or any such Affiliate). (d) Any previously undisclosed governmentally-imposed preconditions to commencement or continuation of development on the Property, if such preconditions would prevent or significantly delay the Developer's Development Plan as described in the Official Statement or a more recently filed Semiannual Report.

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(e) Any previously undisclosed legislative, administrative or judicial challenges to development on thl Pioperty, if such challenges would prevent or significantly delay the Developer's Development Plan as described in the Official Statement or a more recently filed Semiannual Report.

Whenever the Developer obtains knowledge of the occuffence of a Listed Event, the Developer shall as soon as possible determine if such event would be material under applicable federal securities laws. If the Developer determines that knowledge of the occuffence of a Listed Event would be material under applicable federal securities laws, the Developer shall promptly file a notice of the occurrence of such Liited Event with the MSRB in electronic format, accompanied by such identif ing information as is prescribed by the MSRB.

SECTION 6. Assumption of Obligations. If any portion of the Property owned by the Developer, or any Affiliate of the Developer, is conveyed such that, upon such conveyance, such new owner will be a Major Developer, the obligations of the Developer under this Disclosure Certificate with respect to the Property transferred by the Developer shall be assumed by such Major Developer pursuant to an Assumption Agreement.

SECTION 7. Termination of Reporting Obligation. All of the Developer's obligations under this Disclosure Certificate shall terminate upon the earliest to occur of (a) the legal defeasance, prior redemption or payment in full of all the Bonds, (b) the date on which (i) the Developer is no longer a Major Developer, or (i) all of the Developer's obligations are assumed under one or more Assumption Agieements entered into pursuant to Section 6 hereof, or (iii) the date on which all Special Taxes levied on the Property owned by the Developer and its Affiliates are paid or prepaid in full. Upon the occu11ence of any such termination prior to the final maturity of the Bonds, the Developer shall give notice of such termination in the same manner as for a Listed Event under Section 5 hereof.

SECTION 8. Amendment: Waiver. Notwithstanding any other provision hereof, the Developer may amend provisions of this Disclosure Certificate and any provision hereof may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3, 4 or 5 hereof, it may be made in connection with a change in circumstances that arises from a change in legal requirements, change in law; and
(b) The proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner piovided in ihe-Trust Agreement for amendments to the Trust Agreement with the consent of holders, or (ii) does not, in the opinion of bond counsel approved by the District, materially impair the interests of the holders or beneficial owners of the Bonds.

SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Developer from disseminating any other information, using the means of dissemination set forttr in this Disclosure Certificate or any other means of communication, or including any other information in any Semiannual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Developer chooses to include any information in any Semiannual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by thii Disclosure Certificate, the Developer shall have no obligation under this Disclosure Certificate- to update such information or include it in any future Semiannual Report or notice of occuffence of a Listed Event.

SECTION 10. Dissemination Agent. The Developer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and D-13 Page 265
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may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The bissemination Agent may resign by providing 30 days' written notice to the Developer. The Developer shall be responsible for paying the fees and expenses of the Dissemination Agent.

SECTION I 1. Default. In the event of a failure of the Developer to comply with any provision of this Disclosure Certificate, any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Developer to iomply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate ihall not be deemed an Event of Default under the Trust Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the Developer to comply with this Disclosure Certificate shall be an action to compel performance.

SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Developer, the Participating Underwriter, the District and holders and beneficial owners from time to time ofthe Bonds, and shall create no rights in any other Person.

SECTION 13. Notices. Any notices or communications to the Developer and the other parties described herein may be given as set forth in Exhibit A hereto or such other address that shall be specified by the Developer or the other parties described herein from time to time.

SECTION 14. Goveming Law. This Disclosure Certificate and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California.

IN WITNESS WHEREOF, the undersigned has executed this Disclosure Certificate as of the day and year written above.
[Taylor Morrison of CaliforniarLLC, a California
limited liabitity companyl[Folsom Real Estate South'
LLC, a Delaware limited liability companyl
By:

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EXHIBIT A TO CONTII\UING DISCLOSURE CERTIFICATE _ HOME BUILDER Any notices or communications to the Developer or the other parties described in the Continuing Disclosure Certificate - Home Builder may be given as follows:

To the Developer: [Taylor Morrison of Californi a, LLC] [Folsom Real Estate South, LLC]
To the Issuer:

Attention:

Email:

Phone:

To the Dissemination
Agent:

Attention:

Email:

Phone:

To the Participating
Underwriter:

Attention:

Email:

Phone
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APPENDIX E

PROPOSED FORM OF'OPINION OF BOND COUNSEL
Folsom Ranch Financing Authority
Folsom, California
Folsom Ranch Financing AuthoritY
City of Folsom Community Facilities District No' 23 (Folsom Ranch) Improvement Area No. 4
Special Tax Revenue Bonds. Series 2024
(FinalOPinion)
Greetings
We have acted as bond counsel to the Folsom Ranch Financing Authority (the "Issuer") in connection with the issuance of $ aggregate principal amount of its 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") pursuant to a trust agreement, dated as of December 1, 2024 (the "Trust Agreement"), among the Issuer, the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Community Facilities District") and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"). The Trust Agreement provides that the Bonds are issued for the stated purpose ofenabling the Issuer to acquire certain special tax bonds to be issued by the Community Facilities District. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Trust Agreement.

In such connection, we have reviewed the Trust Agreement; the tax certificate related to the Bonds dated the date hereof, executed by the Issuer, the Community Facilities District and the City (the "Tax Certificate"); opinions of counsel to the Issuer, the Community Facilities District and the irustee; certificates of the Issuer, the Community Facilities District, the Trustee and others; and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein.

The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court deciiions and cover certain matters not directly addressed by such authorities' Such opini,ons may be affected by actions taken or omitted or events occurring after original delivery of the Bbnds on the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after original delivery of the Bonds on the date hereof. Accordingly, this letter speaks only as of its date and is noi intended to, and may not, be relied upon or otherwise used in connection with any such actions, events or matters. We disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures provided to us and the due and legal execution and delivery thereof by, and validity against, any parties other than the Issuer. We have assumed, without undertaking to veriff, the u""uruty of tn" facfual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants and agreements contained in the Trust Agreement and the Tax Certificate, iniluding (without limitation) covenants and agreements compliance with which is necessary to assure that future actions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds, the Trust Agreement and the Tax Certificate and their enforceability may be subject to bankruptcy, insolvency, receivership, reorganization, arrangement, fraudulent conveyance, moratorium E-1 Page 268
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and other laws relating to or affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against governmental entities such as the Issuer and the Community Facilities District in the State of California.

We express no opinion with respect to any indemnification, contribution, liquidated damages, penalty (including any remedy deemed to constitute a penalty), right of set-off, arbitration, judicial reference, choice of law, choice of forum, choice of venue, non-exclusivity of remedies, waiver or severability provisions contained in the foregoing documents, nor do we express any opinion with respect to the state or quality of title to or interest in any of the property described in or as subject to the lien of the Trust Agreement or the accuracy or sufficiency of the description contained therein of, or the remedies available to enforce liens on, any such properly. We also express no opinion regarding the plans, specifications, maps, financial report or other engineering or financial details of the proceedings, or upon the Rate and Method of Apportionment for Improvement Area No. 4 of the Community Facilities District or the validity of the Special Tax levied upon any individual parcel. Our services did not include financial or other non-legal advice. Finally, we undertake no responsibility for the accuracy, completeness or faimess of the Official Statement or other offering material relating to the Bonds and express no view with respect thereto.

Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions:

1. The Bonds constitute the valid and binding special, limited obligations of the Issuer.

2. The Trust Agreement has been duly executed and delivered by, and constitutes the valid and binding agreement of, the Issuer. The Trust Agreement creates a valid pledge, to secure the payment of the principal of and interest on the Bonds, of the Trust Estate, including the Revenues and any other amounts (including proceeds of the sale of the Bonds) held by the Trustee in the Funds established pursuant to the Trust Agreement (except the Rebate Fund), subject to the provisions of the Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth in the Trust Agreement.

3. 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. Interest on the Bonds is not a specific preference item for purposes of the federal individual alternative minimum tax. We observe that interest on the Bonds included in adjusted financial statement income of certain corporations is not excluded from the federal corporate alternative minimum tax. We express no opinion regarding other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds.

Faithfully yours,

ORRICK, HERRINGTON & SUTCLIFFE LLP
per
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APPENDIX F'

DTC AND THE BOOK-ENTRY ONLY SYSTEM
The description that follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Bonds, payment of principal of, premium, ,f ony, and interest on the Bonds to Participints or Beneficial Owners, confirmation and transfer of beneficial ownership interests in the Bonds, and other related transactions by and between DTC, Participants and Beneficial Owners, is based on information furnished by DTC which the Authority believes to be reliable, but the Authority does not take responsibility for the completeness or accuracy thereof. The Authority cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners either (a) payments of principal, premium, tf any, and interest with respect to the Bonds or ft) certificates representiing ownership interests in or other confirmation of ownership interests in the Bonds, or that they will so do on a timely bssis or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Official Statement. The current "Rules" applicable to DTC are onfile with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are onfile with DTC.

The Depository Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered bond certificate will be issued for each maturity of the Bonds in the aggregate principal amount of such maturity, and will be deposited with DTC. If, however, the aggregate principal amount of any maturity exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such maturity.

DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, amember of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over

3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of iecurities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC iystem is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

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Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (the "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive wriffen confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

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

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

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

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

Principal, redemption price, and interest payments with respect to the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Authority on a payable date in accordance with their respective holdings shown on DTC records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC or its nominee, the Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption price and interest to Cede & Co. (or such F-2 Page 271
11/12/2024 Item No.1.
other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

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

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

The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Authority deems reliable, but the Authority takes no responsibility for the accuracy thereof.

TI{E TRUSTEE, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE

BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES ONLY TO CEDE & CO., OR ITS SUCCESSOR AS DTC'S PARTNERSHIP NOMTNEE. ANY FAILURE OF CEDE & CO., OR ITS SUCCESSOR AS DTC'S PARTNERSHIP NOMINEE TO ADVISE ANY

PARTICIPANT, OR OF ANY PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER OF ANY

NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT TTM, VALIDITY OR

SUFFICIENCY OF THE PROCEEDINGS RELATING TO TFIE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTI{ER ACTION PREMISED ON SUCH NOTICE.

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APPENDIX G

APPRAISAL
G-l Page 273
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ATTACHMENT 6

11/12/2024 Item No.1.

OH&S DRAFT
r0130124
CITY OF FOLSOM COMMUNITY FACILITIES DISTRICT NO. 23
(FOLSOM RANCH) IMPROVEMENT AREA NO. 4
SPECIAL TAX BONDS, SERTES 2024

LOCAL OBLIGATION PURCHASE CONTRACT
NOVEMBER [_1,2024
City of Folsom
Community Facilities District No. 23
(Folsom Ranch)
City of Folsom, City Hall
50 Natoma Street
Folsom, California 95630
Ladies and Gentlemen:

The undersigned Folsom Ranch Financing Authority (the "Authority") offers to enter into this Local Obligation Purchase Contract (the "Local Obligation Purchase Contract") with you, the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Community Facilities District"), which, upon acceptance, will be binding upon the Community Facilities District and the Authority; and except as otherwise provided herein, all capitalized terms used herein shall have the meanings attributed to them in the Indenture, dated as of December l, 2024 (the 'olndenture"), between the Community Facilities District and U.S.

Bank Trust Company, National Association, as trustee (the'oTrustee").

1. Purchase. Sale and Delivery of the Obligations.
(a) Subject to the terms and conditions and in reliance upon the representations and agreements set forth herein, the Authority hereby agrees to purchase from the Community Facilities District, and the Community Facilities District hereby agrees to sell to the Authority, all (but not less than all) of the $l I aggregate principal amount of the City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 4 Special Tax Bonds, Series 2024 (the "Local Obligations") issued under the Indenture, dated the date of their initial delivery, bearing inJerest payable on the dates and at the interest rates, and maturing on the dates and in the amounts and subject to the optional, extraordinary and mandatory redemption provisions, as set forth in Exhibit A attached hereto and incorporated herein.

The purchase price for the Local Obligations shall be $ , which purchase price shall be paid from the proceeds of sale of 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, issued under the Trust Agreement, dated as of December 1,2024, by and among the Authority, the Community Facilities District and U.S. 4126-3969-8003 Page 275
11/12/2024 Item No.1.

Bank Trust Company, National Association, as trustee (the "Trust Agreement"), which bonds issued under the Trust Agreement are referred to herein as the "Authority Bonds." The Local Obligations shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable as provided in the Indenture. (b) At 8:30 a.m., California time, on December I l, 2024, or at such earlier or later time or date as shall be agreed by the Community Facilities District and the Authority (such time and date being herein referred to as the "Closing Date"), the Community Facilities District will deliver to the Authority at the offices of Orrick, Herrington & Sutcliffe LLP, Sacramento, California (or such other location as may be designated by the Authority and approved by the Community Facilities District) the Local Obligations in definitive forms, duly executed by the Community Facilities District and authenticated by the Trustee, and will deliver to the Authority the other documents herein mentioned; and the Authority will accept such delivery and pay the total purchase price of the Local Obligations as set forth in paragraph (a) of this section as provided in the Indenture (such delivery and payment being herein referred to as the "Closing").

2. Representations and Agreements of the Community Facilities District.

The Community Facilities District represents to and agrees with the Authority that:
(a) The Community Facilities District is and will be at the Closing Date duly organized and existing as a community facilities district under and by virtue of the laws of the State of California, with full power and authority to issue the Local Obligations and to carry out and consummate the transactions contemplated by the Local Obligations, this Local Obligation Purchase Contract, the Indenture and the Trust Agreement (collectively, the "Financing Documents"), and the Financing Documents are and will be at the Closing Date valid and binding obligations of the Community Facilities District; (b) When delivered to and paid for by the Authority at the Closing in accordance with the provisions of this Local Obligation Purchase Contract, the Local Obligations will have been duly authorized, executed, issued and delivered and will constitute valid and binding obligations of the Community Facilities District in conformity with, and entitled to the benefit and security of, the Indenture;
(c) By official action of the Community Facilities District, prior to or concurrently with the acceptance hereof, the Community Facilities District has authorized and approved the execution and delivery of the Financing Documents, and authorized and approved the performance by the Community Facilities District of the obligations on its part contained in the Financing Documents and has authorized and approved the consummation by the Community Facilities District of all other transactions contemplated by this Local Obligation Purchase Contract;
(d) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, govemmental agency, public board or body, pending or, to the knowledge of the Community Facilities District, threatened against the Community Facilities District or its properties or operations (i) seeking to restrain or enjoin the issuance, sale, 2 4126-3969-8003 Page 276
11/12/2024 Item No.1.
execution or delivery of the Local Obligations, (ii) in any way contesting or affecting the validity or enforceability of any of the Financing Documents, dfrY proceedings of the Community Facilities District taken conceming the issuance or sale of the Local Obligations, the collection of the special tax securing the Local Obligations (the "special Tax") or the existence or powers of the Community Facilities District relating to the issuance of the Local Obligations or (iii) which, if determined adversely to the Community Facilities District or its interests, would have a material and adverse effect on the consummation of the transactions contemplated by or the validity of the Financing Documents or on the operations of the Community Facilities District with respect to the Local Obligations;
(e) The execution and delivery of the Financing Documents, and the consummation of the transactions therein and herein contemplated, and the fulfillment of or compliance with the terms and conditions thereof and hereof, will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative dicree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the Community Facilities District is a party or by which it or itJproperties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Community Facilities District, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Financing Documents or the operations of the Community Facilities District with respect to the Local Obligations; (D The Community Facilities District is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States or any applicaUle judgment or decree or any loan agreement, indenture, bond, note, resolution, agieement or other instrument to which the Community Facilities District is a party or is otherwise subject, which breach or default may have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Financing Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute such a breach or default under any such instrument; (g) All approvals, consents, authorizations, certifications and other orders of any govemmental authority, board, agency or commission having jurisdiction, and all filings with any such entities, which would constitute conditions precedent to or the failure to obtain which would materially adversely affect the performance by the Community Facilities District of its obligations under the Financing Documents have been duly obtained, and no further consent, upp.ouul, authorization or other action or filing with or by any governmental or regulatory auihority having jurisdiction over the Community Facilities District is or will be required for the issue and sale of the Local Obligations or the consummation by the Community Facilities District of the other transactions described in the Financing Documents; (h) The Special Tax constituting the security for the Local Obligations has been duly and lawfully authorized under and pursuant to the Mello-Roos Community Facilities District Act of 1982 (the "Act") within Improvement Area No. 4 of the Community Facilities District (the "Improvement Area") and such Special Tax is secured by a valid and legally J
4126-3969-8003 Page 277
11/12/2024 Item No.1.
binding continuing lien on the land subject to the Special Tax as provided in the Act; (i) The City Council, as legislative body of the Community Facilities District, has authorized and will annually levy and collect the Special Tax, in addition to amounts necessary to pay debt service on the Local Obligations, in an amount sufficient (subject to any maximum special tax permitted by law) to pay the Expenses arising directly from the administration or enforcement of the Local Obligations.

The execution and delivery of this Local Obligation Purchase Contract by the Community Facilities District shall constitute a representation by the Community Facilities District to the Authority that the representations and agreements contained in this Section 2 are true as of the date hereof; pleviidgd, that as to all matters of law the Community Facilities District is relying on the advice of counsel to the Community Facilities District; and provided further, that no member of the City Council, as legislative body of the Community Facilities District, shall be individually liable for the breach of any representation, warranty or agreement contained herein.

J annr{ifinns fn the D,,rnhaco nf fha T nnol f)hlioqfinnc L.t the A t.fhnrifrr The obligation of the Authority to accept delivery of and pay for the Local Obligations on the Closing Date shall be subject, at the option of the Authority, to (i) the accuracy in all material respects of the representations and agreements on the part of the Community Facilities District contained herein as of the date hereof and as of the Closing Date, (ii) the accuracy in all material respects of the statements of the officers and other officials of the City for and on behalf of the Community Facilities District made in any certificates or other documents, fumished pursuant to the provisions hereof, and (iii) the performance by the Community Facilities District of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions:
(a) At the Closing Date, the Financing Documents shall be in full force and effect in the form heretofore submitted to the Authority and there shall have been taken in connection with the issuance of the Local Obligations and with the transactions contemplated thereby and by this Local Obligation Purchase Contract, all such actions as, in the opinion of Orrick, Herrington & Sutcliffe LLP ("Bond Counsel"), shall be necessary and appropriate; (b) At the Closing Date, the Financing Documents shall not have been amended, modified or supplemented, except as may have been agreed to by the Authority; (c) At or prior to the Closing Date, the Authority and the Trustee shall have received the following documents, in each case satisfactory in form and substance to the Authority:
(l) An executed copy of each of the Financing Documents; (2) An unqualified approving opinion of Bond Counsel, dated the Closing Date and addressed to the Community Facilities District, as to the validity of the Local Obligations;
(3) An opinion of the City Attomey, dated the Closing Date and 4 4126-3969-8003 Page 278
11/12/2024 Item No.1.
addressed to the Community Facilities District and the Authority, in substantially the form attached hereto as Exhibit B; and
(4) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Authority or Bond Counsel may reasonably request to evidence compliance by the Community Facilities District with legal requirements, the truth and accuracy, as of the Closing Date, of the representations of the Community Facilities District contained herein, and the due performance or satisfaction by the Community Facilities District at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Community Facilities District.

If the Community Facilities District shall be unable to satisS the conditions to the Authority's obligations contained in this Local Obligation Purchase Contract, this Local Obligation Purchase Contract shall terminate and neither the Authority nor the Community Facilities District shall have any further obligation hereunder.

4. Expenses. All expenses and costs of the Community Facilities District and the Authority incident to the avthorization, issuance and sale of the Local Obligations and the Authority Bonds, including fees and expenses of consultants, the Trustee, the appraiser, Bond Counsel and counsel for the Community Facilities District and the underwriting fees and expenses incurred by the Authority in connection with the sale of the Authority Bonds shall be puiA Uy the Community Facilities District or the City on its behalf, and the Community Facilities birtriit agrees that it will pay such expenses and costs from the proceeds of the Local Obligations.

5. Notices. Any notice or other communication to be given to the Community Facilities District under this Local Obligation Purchase Contract may be given by delivering the same in writing at the Community Facilities District's address set forth above, Attention: Finance Director, and any such notice or other communications required to be given to the Authority may be given by delivering the same in writing to the Authority at 50 Natoma Street, Folsom, California 95630, Attention: Treasurer. The approval of the Authority when required hereunder or the determination of their satisfaction as to any document referred to heiein shall be in writing signed by the Authority and delivered to the Community Facilities District.

6. Parties In Interest: Governing Law. This Local Obligation Purchase Contract is made solely for the benefit of the Community Facilities District, the Authority and the Trustee and no other persons, partnership, association or corporation shall acquire or have any right hereunder or by virtue hereof. This Local Obligation Purchase Contract shall be governed by the laws of the State of Califomia.

7. Pledge: Assignment. The Community Facilities District hereby approves the pledge and assignment of all the Authority's right, title and interest in the Local Obligations to the Trustee under the Indenture for the benefit of the owners of the Authority Bonds.

8. Limitation on Liabilit)'. The Authority shall incur no liability hereunder or by reason hereof or arising out of the transactions contemplated hereby, and shall be under no 5 4126-3969-8003 Page 279
11/12/2024 Item No.1.
obligation to purchase the Local Obligations hereunder, except from proceeds of the Authority Bonds available therefor held by the Trustee under, and subject to the conditions set forth in, the Indenture. The Community Facilities District shall incur no liability hereunder or by reason hereof or arising out of the transactions contemplated hereunder, except as otherwise provided in Sections 4 and 5 hereol or be obligated to make any payments with respect to the Local Obligations, except from amounts pledged to the payment of the Local Obligations (including the Special Tax levied and collected in the Improvement Area) pursuant to the terms thereof. 6 4126-3969-8003 Page 280
11/12/2024 Item No.1.

9. Counterparts. This Local Obligation Purchase Contract may be signed in two or more counterparts; all such counterparts, when signed by all parties, shall constitute but one single agreement.

FOLSOM RANCH FINANCING AUTHORITY
Stacey Tamagni
Treasurer

ACCEPTED AND AGREED TO

CITY OF FOLSOM
COMMUNITY FACILITIES DISTRICT NO. 23

GOLSOM RANCH)
By
Stacey Tamagni
Finance Director of the City of Folsom
By
7 4126-3969-8003 Page 281
11/12/2024 Item No.1.

Exhibit A
Local obligations Maturity schedule and Redemption Provisions Maturity Schedule
Maturity Date
(September l) Principal Amount Interest Rate
%$
* Term Bonds
Redemption Provisions
Extraordinary Redemption. The Local Obligations 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 or after [March 1,2025f, from funds derived by the Community Facilities District from prepayments of the Special Tax, upon mailed notice as provided in the Indenture, at the following redemption prices (computed upon the principal amount of the Local Obligations or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemption, to wit:
103% if redeemed on an interest payment date on or after March 1,2025, through March l,20ll;
102% if redeemed on an interest payment date on September 1,201-f, or March 1,201 l;
l0l% if redeemed on an interest payment date on September 7,201--f, or March 1,201 l;and
100% if redeemed on September l, 201 f, or any interest payment date thereafter.
4126-3969-8003
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11/12/2024 Item No.1.

Optional Redemption. The Local Obligations 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 in the Indenture, at the following redemption prices (computed upon the principal amount of the Local Obligations 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 1,20f-), through August 31,201 l;
102% if redeemed on any date from September 1,201 1, through August 31, 201 1;
101% if redeemed on any date from September 1,201 f, through August 31, 20[ l; and
100% if redeemed on September 1, 20[ ], and any date thereafter.

Mandatorv Fund Account Redemption of the Local Oblisations. The Local Obligations maturing on September l, 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 1, both years inclusive; and the Local Obligations maturing on September 1,20| f, are subject to mandatory redemption by the Community Facilities District prior to their maturity date in part on September I in each of the years 201) through 201-1, both years inclusive, in each case solely from Minimum Sinking Fund Account Payments deposited in the Sinking Fund Subaccount, upon mailed notice as provided in the Indenture, 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 Account Payments are established for the mandatory redemption and payment of the Local Obligations desuibed in the paragraph above, which payments shall become due during the years ending on the dates and in the amounts as set forth in the following schedules (except that if any of the Local Obligations shall have been optionally redeemed or redeemed from property owner prepayments, the amounts of the Minimum Sinking Fund Account Payments shall be reduced proportionately by the principal amount of all such Local Obligations so redeemed), namely:
4126-3969-8003
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11/12/2024 Item No.1.

Local Obligation Maturing September 1.201 'l
Year Minimum
Ending Sinking Fund
Septpmbe{-L Account Payment
D
* Maturity.

Local Obligation Maturing September 1.20[ I
Year Minimum
Ending Sinking Fund
September 1 Account Payment
$
* Maturity
4t26-3969-8003
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Exhibit B
[Form of City Attomey Opinion]
[cLosING DATE]
Folsom Ranch Financing AuthoritY
Folsom, California
City of Folsom
Community Facilities District No. 23
(Folsom Ranch)
Folsom, California
Piper Sandler & Co.
.

S acramento, C alifornt a
U.S. Bank Trust Company, National Association
Los Angeles, Califomia
City of Folsom Community Facilities DistrictNo.23
(Folsom Ranch) Improvement AreaNo. 4
Special Tax Bonds. 2024
Ladies and Gentlemen:

I have served as counsel to the City of Folsom (the "City") in connection with the issuance, sale and delivery of the above-referenced securities (collectively, the "Local Obligations") by the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the;Community Facilities District"), and this letter is being delivered pursuant to the Local Obligation Purchase Contract dated as of November | ], 2024 (the "Local Obligation Purchase Contiact"), by and between the Folsom Ranch Financing Authority (the "Authority") and the Community Facilities District, and all capitalized terms not otherwise defined herein have the meanings ascribed thereto in the Local Obligation Purchase Contract.

As such counsel, I have examined and am familiar with (i) those documents relating to the existence, organization and operation of the Community Facilities District, including Resolution No. 10435, duly adopted by the City on May 26,2020, establishing the Community Facilities District and designating various improvement areas therein, including Improvement Area No. 4 (the "Improvement Area"); (ii) Resolution No. I I of the City Council approving the issuance of the Local Obligations, the issuance of the Authority Bonds, the Financing Documents and the Official Statement (such resolutions referenced in (i) and (ii), together the 'oResolutions"); (iii) all necessary documentation of the Community Facilities Oistrict relating to the authorization, execution and delivery of the Local Obligations and all of the Financing Documents; (iv) the Preliminary Official Statement, dated November | 1,2024 (the "Prelimlnary Official Statement") relating to the Authority Bonds; (v) the Official Statement, dated November | 1, 2024 (the "Official Statement") relating to the Authority 4126-3969-8003
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11/12/2024 Item No.1.

Bonds; and (vi) the Continuing Disclosure Certificate of the Community Facilities District, dated the date hereof (the "Continuing Disclosure Certificate") relating to the Authority Bonds.

Based on the foregoing, I am of the opinion that:

1. The Community Facilities District is a community facilities district duly organized and existing pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), being Chapter 2.5,Part 1, Division 2,Title 5 of the Government Code of the State of California.

2. The Resolutions have been duly adopted at meetings of the City Council, acting as the legislative body of the Community Facilities District, which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Resolutions are in full force and effect and have not been modified, amended, rescinded or repealed since the date of their respective adoption.

3. The Community Facilities District has the full legal right, power and authority to execute, deliver and perform its obligations and duties under the Financing Documents and the Continuing Disclosure Certificate, including the right and power under the Act to execute the Indenture.

4. The Community Facilities District has complied with the provisions of applicable law in all matters relating to the transactions contemplated by the Financing Documents and the Continuing Disclosure Certificate.

5. The Financing Documents; the Continuing Disclosure Certificate; the Letter of Representations of the Community Facilities District, dated November I l, 2024 (the "Community Facilities District Letter of Representations" and, together with the Financing Documents and the Continuing Disclosure Certificate, the "Community Facilities District Documents") and the Offrcial Statement have each been duly and lawfully authorized, executed and delivered by the Community Facilities District, are each in fulI force and effect and, assuming due authorization, execution and delivery by the other parties thereto, each constitutes a legal, valid and binding agreement of the Community Facilities District enforceable against it in accordance with its terms, subject to laws relating to bankruptcy, insolvency, reorganization, affangement, fraudulent conveyance, moratorium and other similar laws relating to or affecting the enforcement of creditors' rights generally and to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against community facilities districts in the State of Califomia.

6. The Indenture and the Local Obligations have been duly and validly authorized, sold, executed, authenticated and delivered, as applicable, in accordance with the Act and with the Indenture.

7. No approval, consent or authorization of any govemmental or public agency, authority or person is required for the execution and delivery by the Community Facilities District of the Financing Documents or the Continuing Disclosure Certificate or the performance by the Community Facilities District of its respective obligations thereunder. 4126-3969-8003
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11/12/2024 Item No.1.

8. The execution and delivery of the Financing Documents and the Continuing Disclosure Certificate by the Community Facilities District, and compliance with the provisions thereof, will not conflict with or constitute a breach of, or default under, any instrument relating to the organization, existence or operation of the Community Facilities District, or any commitment, agreement or other instrument to which the Community Facilities District is a party or by which it or its property is bound or affected, or any ruling, regulation, ordinance, resolution, judgment, order or decree to which the Community Facilities District (or any of its officers in their respective capacities as such) is subject or any provision of the laws of the State of California relating to the Community Facilities District and its affairs. g. The Local Obligations are valid and binding special tax obligations of the Community Facilities District payable from proceeds of the Special Tax and the other funds provided in the Indenture for such payment and are enforceable in accordance with their terms, subject to bankuptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moiatorium and other similar laws relating to or affecting creditors' rights, to the application of equitable principles where equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against community facilities districts in the State of California, andthe terms of the Act and of the Indenture.

10. Based upon my review of the Preliminary Official Statement, and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Preliminary Offrcial Statement, nothing has come to my attention which would lead me to believe that the Preliminary Official Statement (excluding therefrom the financial statements and the statistical data and the information concerning The Depository Trust Company, the book-entry system and the appendices thereto, as to which no opinion is expressed) as of its date and as of the date of the Local Obligation Purchase Contract contained any untrue statement of a material fact with respect to the Community Facilities District or omitted or omits to state any material fact with respect to the Community Facilities District necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

11. Based upon my review of the Official Statement, and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, nothing has come to my attention which would lead me to believe that the Official Statement (excluding therefrom the financial statements and the statistical data and the information concerning The Depository Trust Company, the book-entry system and the appendices thereto, as to which no opinion is expressed) as of its date and the date hereof contained or contains any untrue statement of a material fact with respect to the Community Facilities District or omitted or omits to state any material fact with respect to the Community Facilities District necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

12. Except as may be stated in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the City or the Community Facilities District) or, to my knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City or the Community Facilities District, or the titles of 4126-3969-8003
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11/12/2024 Item No.1.
their members and officers to their respective offices; or (b) affect the validity of the Community Facilities District Documents or restrain or enjoin the repayment of the Local Obligations or in any way contest or affect the validity of the Community Facilities District Documents or contest the authority of the Community Facilities District to enter into or perform its obligations under any of the Community Facilities District Documents or under which a determination adverse to the City or the Community Facilities District would have a material adverse effect upon the financial condition or the revenues of the City or the Community Facilities District, questions the right of the Community Facilities District to use the Special Tax levied within the Improvement Area for the repayment of the Local Obligations or affects in any manner the right or ability of the Community Facilities District to collect or pledge the Special Tax levied within the Improvement Area for the repayment of the Local Obligations.

Very truly yours,
City Attorney
4126-3969-8003
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11/12/2024 Item No.1.

ATTACHMENT 7

11/12/2024 Item No.1.

Stradling Yocca Carlson & Rauth
Draft of l0/30/24
$

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

SPECIAL TAX REVENUE BONDS
SERIES 2024

BOND PURCHASE AGREEMENT
2024
Folsom Ranch Financing Authority
50 Natoma Street,
Folsom, California 95630
Ladies and Gentlemen:

Piper Sandler & Co., as underwriter (the'oUnderwriter"), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (this "Purchase Agreement") with the Folsom Ranch Financing Authority (the "Authority"), which upon acceptance will be binding upon the Underwriter and the Authority. The agreement of the Underwriter to purchase the Bonds (as hereinafter defined) is contingent upon the Authority purchasing from the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Community Facilities District") the Community Facilities District' s Improvement Area No. 4 Special Tax Bonds, Series 2024 (the "special Tax Bonds") in the aggregate principal amount of $ and upon the Authority and the Community Facilities District satisfying all of the obligations imposed upon them under this Purchase Agreement. This offer is made subject to the Authority's acceptance by the execution of this Purchase Agreement and its delivery to the Underwriter at or before 8:00 P.M., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Authority at any time prior to the acceptance hereof by the Authority. All capitalized terms used herein, which are not otherwise defined, shall have the meaning provided for such terms in the Trust Agreement, dated as of l, 2024 (the "Trust Agreement"), by and among the Authority, U.S. gank Trust Company, National Association, as trustee (the "Trustee") and the Community Facilities District. The Special Tax Bonds are being issued pursuant to an Indenture dated as of 1,2024 (the "District Indenture"), by and between the Community Facilities District and U.S. Bank Trust Company, National Association, as trustee (the "District Trustee"). l. Purchase. Sale and Delivery of the Bonds.

Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the Authority and the Authority hereby agrees to sell to the Underwriter all (but not less than all) of the $- aggregate principal amount of the Folsom Ranch Financing Authority City of Folsom Community f'aiitiiies District No. 23 (Folsom Ranch) Improvement Area No. 4 Special Tax Revenue Bonds, Series 2024 (the "Bonds"), dated the Closing Date (as hereinafter defined), bearing interest at the rates and 4853 -3 583-3 582v3 I 024667 -0160

11/12/2024 Item No.1.
maturing on the dates and in the principal amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be $ (being | 00% of the aggr egate princ ipal amount thereof [plu s/less] [net] original issue [premium/discount] of $_ and less an Underwriter's discount $ . From the proceeds of the Bonds, the Authority agrees to purchase the Special T of
ax
B-onds from the Community Facilities District pursuant to the terms of the Local Obligation Purchase Contract (the "Local Obligation Purchase Contract"), dated -,
2024, by and between the
Community Facilities District and the Authority.

The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from the Revenues as provided in the Trust Agreement, the Official Statement (as hereinafter defined), and the Marks-Roos Local Bond Pooling Act of 1985, as amended, being Article 4, Chapter 5, Division T,Title I of the Government Code of the State of California (the "Bond Law"). The issuance of the Bonds has been duly authorizedby the Authority pursuant to Resolution No. -Folsom Ranch FA (the "Authority Resolution") adopted by the Governing Board oil _, 2024. The net proceeds of the Bonds will be used to purchase the Special Tax Bonds.

The Special Tax Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from Special Tax (as defined in the District Indenture) as provided in the District Indenture.

The Special Tax Bonds are issued under the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Community Facilities District Act"). The issuance of the Special Tax Bonds, the preparation and distribution of the Preliminary Official Statement and the Local Obligation Purchase-Contract have been duly authorized by the City Council of the City of Folsom (the "City Council") actingas the legislative body for the Community Facilities District, pursuant to Resolution No. -
(the';Community Facilities District Resolution") adopted on -,2024.

The net proceeds of the
Special Tax Bonds will be used, as indicated in the District Indenture, for the following purposes: (1) frnance the acquisition of certain public facilities; (2) fund a debt service reserve account; and (3) pay certain costs of issuance of the Bonds and the Special Tax Bonds.

Prior to the acceptance of this Purchase Agreement by the Authority, the Authority shall have caused to be delivered to the Underwriter: (i) the Letter of Representations of the Community Facilities District (the "District Letter of Representations") in substantially the form set forth in Exhibit B hereto; (ii) a Letter of Representations of Taylor Morrison of California, LLC, a California limited liability company ("Taylor Morrison") in substantially the form set forth in Exhibit C hereto; and (iii) a Letter of Representations of Folsom Real Estate South, LLC, a Delaware limited liability company ("Folsom Real Estate South") in substantially the form set forth in Exhibit D hereto.

A. The Authority acknowledges that the Underwriter is entering into this Purchase Agreement in reliance on the representations and agreements made by the Authority herein and by the Community Facilities District in the District Letter of Representations, and the Authority shall take all action necessary to enforce its rights hereunder for the benefit of the Underwriter and shall immediately notify the Underwriter if it becomes aware that any representation or agreement made by the Authority herein is incorrect in any material respect.

The Authority acknowledges and agrees that: (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm's-length commercial transaction between the Authority and the 2 4853 -3 583-3 582v3 1024667 -0 160 Page 291
11/12/2024 Item No.1.

Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as defined in Section 158 of the Securities-exchange Act of 1934, as amended); (iii) the Underwriter has not assumed an advisory or fiduciary r".ponribility in favor of the Authority, the Community Facilities District or the City of Folsom (the "City") with respect to the offering contemplated hereby or the discussions, undertakings and pro.Ldur"r leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the Authority, the Community Facilities District or the City on other matiers); and (iv) the Authority, the Community Facilities District and the City have consulted their own legal, financial and other advisors to the extent that they have deemed appropriate.

B. Pursuant to the authorization of the Authority, the Underwriter has distributed copies of the Preliminary Official Statement dated
-,2024,
relating to the Bonds, which, together
with the cover page, inside cover page and appendices thereto is herein called the "Preliminary Officiat Statement." By its acceptance of this Purchase Agreement, the Authority hereby ratifies the use by the Underwriter of the Preliminary Official Statement, and the Authority agrees to execute a final official statement relating to the Bonds (including any supplements and/or amendments thereto, the "Official Statement") which will consist of the Preliminary Official Statement with such changes as may be made thereto, with the approval of Onick Henington & Sutcliffe LLP, the Community Faciliiies District's and the Authority's Bond Counsel ("Bond Counsel") and Disclosure Counsel ("Disclosure Counsel"), and the Underwriter, and to provide copies thereof to the Underwriter as set forth in Section 3.N hereof. The Authority hereby authorizes the Underwriter to use and promptly distribute, in connection with the offer and sale of the Bonds, the Preliminary Official Statement, the Official Statement and any supplement or amendment thereto. The Authority further authorizes the Underwriter to use and distribute, in connection with the offer and sale of the Bonds, the Trust Agreement, the District Indenture, this Purchase Agreement, the Local Obligation Purchase Contract and all information contained herein, and all other documents, certificates and statements furnished by or on behalf of the Authority, the Community Facilities District or the City to the Underwriter in connection with the transactions contemplated by this Purchase Agreement.

C. To assist the Underwriter in complying with Securities and Exchange Commission Rule l5c2-12(b)(5) (the "Rule"), the Community Facilities District will undertake for and on behalf of the Authority pursuant to the Continuing Disclosure Certificate, in the form attached to the Official Statement as Appendix D (the "Continuing Disclosure Certificate"), to provide annual reports and notices of certain enumerated events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement' D. Except as the Underwriter and the Authority may otherwise agree, the Authority will deliver to the Underwriter, at the offices of Bond Counsel in Sacramento, California, or at such other location as may be mutually agreed upon by the Underwriter, the Community Facilities District and the Authority, the documents hereinafter mentioned; and the Authority will deliver to the Underwriter through the facilities of The Depository Trust Company ("DTC") in New York, New York, the Bonds, in definitive form (all Bonds bearing CUSP numbers), duly executed by the Authority and authenticated by the Trustee in the manner provided for in the Trust Agreement and the Bond Law at 8:00 a.m. Califomia time, ofl
-:
2024 (the "Closing Date"), and the Underwriter
will accept such delivery and pay the purchase price of the Bonds as set forth in the first paragraph of this Section by wire transfer, payable in federal or other immediately available funds (such delivery and payment being herein referred to as the "Closing"). The Bonds shall be in fully registered book- J
4853 -3 583 -3 5 82v3 I 024667 -0160 Page 292
11/12/2024 Item No.1.
entry form (which may be typewritten) and shall be registered in the name of Cede & Co., as nominee of DTC

2. Public Offering and Establishment of Issue Price.

A. The Underwriter agrees to make a bona fide public offering of all of the Bonds initially at the public offering prices (or yields) set forth in Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth in Exhibit A. The Bonds may be offered and sold to certain dealers at prices lower than such initial offering prices.

B. The Underwriter agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at Closing an "issue price" or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit I, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All uiiion. to be taken by the Authority under this section to establish the issue price of the Bonds may be taken on behalf of the Authority by Fieldman, Rolapp & Associates,Inc. (the "Municipal Advisor") and any notice or report to be provided to the Authority may be provided to the Municipal Advisor' C. Except as otherwise set forth in Exhibit A, the Authority will treat the first price at which I 0% of each maturity of the Bonds (the "10"h test") is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Authority the price or prices at which it has sold to the puUti" each maturity of the Bonds. If at that time the 10% test has not been satisfied as to any maturity of tn" Bonds, the Underwriter agrees to promptly report to the Authority the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continueo whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the public.

D. The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the "initial offering price"), or at the corresponding yield or yields, set forth in Exhibit A, except as otherwise set forth therein.

Exhibit A also sets forth, identified under the column "Hold the Offering Price Rule Used," as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the llYo test has not been satisfied and for which the Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the "hold-the- offering-price rule"). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
l. the close of the fifth (5th) business day after the sale date; or 4 48s3-3s83-3 5 82v31024667 -0160

11/12/2024 Item No.1.

2. the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter shall promptly advise the Authority when it has sold l0% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date.

E. The Underwriter confirms that any selling group agreement and any retail distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such retail distribution agreement, as applicable, to: (1) ieport the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the Underwriter that either the l\%otest has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public; and (2) comply with the hold-the-offering- price rule, if applicable, in each case if and for so long as directed by the Underwriter. The Authority acknowledgeJthat, in making the representation set forth in this subsection, the Underwriter will rely on: (A) in the event that a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the hold-the-offering-price rule, if applicable, as set forth in a selling group agreement and the related pricing wires; and (B) in the event that a retail distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is apafty to such agreement to comply with the hold-the-offering-price rule, if applicable, as set forth in the retail distribution agreement and the related pricing wires. The Authority further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold-the-offering-price rule as applicable to the Bonds.

F. The Underwriter acknowledges that sales of any Bonds to any person that is a related party to the Underwriter shall not constitute sales to the public for purposes of this section.

Further, for purposes of this section:

1. "public" means any person other than an underwriter or a related party;

2. "underwriter" means: (A) any person that agrees pursuant to a written contract with the Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public; and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public);

3. a purchaser of any of the Bonds is a "related party" to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to: (A) at least 50%o common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another); (ii) more than50Yo common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another); or (iii) more than 50olo common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and 5 4853-3 583 -3 5 82v 3 1024667 -0160 Page 294
11/12/2024 Item No.1.

4. oosale date" means the date of execution of this Purchase Agreement by all parties.

3. Representations and Covenants of the Authority. The Authority represents and covenants to the Underwriter that:

A. The Authority is a joint exercise of powers authority, duly organized and existing under the Constitution and laws of the State of California (the "State"), and formed pursuant to Articles I through 4 (commencing with Section 6500) of Chapter 5, Division T,Title I of the Government Code (the "JPA Act'o), with full right, power and authority: (i) to enter into this Purchase Agreement; (ii) to enter into the Trust Agreement; (iii) to adopt the Authority Resolution authorizing the issuance of the Bonds and entry into this Purchase Agreement and the Trust Agreement and to take all other actions on the part of the Authority relating thereto (the "Authority Proceedings"); (iv) to issue, sell and deliver the Bonds to the Underwriter as provided herein; (v) to purchase the Special Tax Bonds; and (vi) to carry out and consummate the transactions on its part contemplated by this Purchase Agreement, the Trust Agreement and the Official Statement.

The Trust Agreement, the Bonds, the Local Obligation Purchase Contract and this Purchase Agreement are collectively referred to herein as the "Authority Documents." B. By all necessary official action of the Authority, the Authority has duly authorized and approved the execution and delivery by the Authority of, and the performance by the Authority of the obligations on its part contained in, the Authority Documents, and has approved the use by the Underwriter of the Preliminary Official Statement and the Official Statement and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered by the parties thereto, the Authority Documents will constitute the legally valid and binding obligations of the Authority enforceable upon the Authority in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, rcorganization, moratorium or similar laws or equitable principles relating to or affecting creditors' rights generally. The Authority has complied, and will at the Closing Date be in compliance in all respects, with the terms of the Authority Documents that are applicable to the Authority.

C. The information in the Preliminary Official Statement and in the Official Statement relating to the Authority and the Bonds (other than statements pertaining to the book-entry system, as to which no view is expressed), does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and, upon delivery and up to and including 25 days after the End of the Underwriting Period (as defined in paragraph (D) below), the Official Statement will be amended and supplemented so as to contain no misstatement of any material fact or omission of any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading.

D. Up to and including 25 days after the End of the Underwriting Period (as defined below), the Authority will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The Authority will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise materially affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. As used herein, the term 6 4853 -3 583 -3 5 82v3 I 024667 -016Q

11/12/2024 Item No.1.
"End of the Underwriting Period" means the later of such time as: (i) the Bonds are delivered to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the End ofthe Underwriting Period shall be deemed to be the Closing Date. Any notice delivered puriuant to this provision shall be a written notice delivered to the Authority and the City at or prior to ttre Closing Date, and shall specify a date (other than the Closing Date) to be deemed the "End of the Underwriting Period."
E. As of the time of acceptance hereof and as of the Closing Date, except as otherwise disclosed in the Official Statement, the Authority is not, and as of the Closing Date, will not be, in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreernent, loan agreement, bondo note, resolution, ordinance, agreement or other instrument to which the Authority is a party or is otherwise subject; and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; which breach, default or event could have an adverse effect on the Authority's ability to perform its obligations under the Authority Documents; and, as of such times, except ai disclosed in the Official Statement, the authorization, execution and delivery of the Authority Documents and compliance by the Authority with the provisions of each of such agreements or instruments does not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resol.riion, ordinanci, agreement or other instrument to which the Authority (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties is bound; nor will uny r,r"h authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument, except as may be provided by the Authority Documents.

F. At the time of acceptance hereof there is, and as of the Closing Date, there will be no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body (collectively and individually, anooAction") pending (notice of *ni"n has been served on the Authority) or to the knowledge of the Authority threatened, in which any such Action: (i) in any way questions the corporate existence of the Authority or the titles of the ofiicers of the Authority to their respective offices; (ii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of Revenues (as defined in the Trust Agreement) or any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contests or affects the validity of the Authority Documents or the consummation of the transactions on the part of the Authority contemplated thereby; (iii) contests the exclusion of the interest on the Bonds from federal or state income taxation or contests the powers of the Authority which may result in any material adverse change relating to the financial condition of the Authority; or (iv) contests the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserts that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and, as of the time of acceptance hereof, there is, and as of the Closing Date, there will be no known basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence.
7 4853 -3 583 -3 5 82v3 I 024667 -0160

11/12/2024 Item No.1.

G. The Authority will fumish such information, execute such instruments andtake such other action in cooperation with the Underwriter and at the expense of the Underwriter as the Underwriter may reasonably request in order: (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds, provided; however, that the Authority will not be required to execute a special or general consent to service of process or qualifu as a foreign corporation in connection with any such qualification in any jurisdiction.

H. The Authority Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement. The Authority represents that the Bonds, when issued, executed and delivered in accordance with the Trust Agreement and sold to the Underwriter as provided herein, will be validly issued and outstanding obligations of the Authority, entitled to the benefits of the Trust Agreement. The Trust Agreement creates a valid pledge of the moneys in certain funds and accounts established pursuant to the Trust Agreement, subject in all cases to the provisions of the Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein.

I. The Authority has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the Authority is a bond issuer whose arbitrage certifications may not be relied upon.

J. Any certificate signed by any authorized officer of the Authority and delivered to the Underwriter in connection with the issuance and sale of the Bonds shall be deemed to be a representation and covenant by the Authority to the Underwriter as to the statements made therein.

K.

Trust Agreement.

The Authority will apply the proceeds of the Bonds in accordance with the L. Between the date of this Purchase Agreement and the Closing Date, the Authority will not offer or issue any bonds, notes or other obligations for borrowed money not previously disclosed to the Underwriter.

M. Until such time as moneys have been set aside in an amount sufficient to pay all then outstanding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon and premium, if any, to maturity or to the date of redemption if redeemed prior to maturity, the Authority will faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Trust Agreement.

N. The Preliminary Official Statement was deemed final by a duly authorized officer of the Authority prior to its delivery to the Underwriter, except for the omission of such information as is permitted to be omitted in accordance with paragraph (bxl) of the Rule. The Authority hereby covenants and agrees that, within seven (7) business days from the date hereof, or upon reasonable written notice from the Underwriter within sufficient time to accompany any confirmation requesting payment from any customers of the Underwriter, the Authority shall cause a final printed form of the Official Statement to be delivered to the Underwriter in sufficient quantity to comply with paragraph (b)(a) of the Rule and Rules G-12, G-15, G-32 and G-36 of the Municipal Securities Rulemaking Board.
8 4853-3 583 -3 5 82v3 1024667 -0160

11/12/2024 Item No.1.

The Authority hereby approves the preparation and distribution of the Official Statement, consisting of the Preliminary Official Statement with such changes as are noted thereon and as may be made thereto, with the approval of Bond Counsel, Disclosure Counsel and the Underwriter, from time to time prior to the Closing Date.

The Authority hereby ratifies any prior use of and authorizes the future use by the Underwriter, in connection with the offering and sale of the Bonds, of the Preliminary Official Statement, the Official Statement, this Purchase Agreement and all information contained herein, and all other documents, certificates and written statements furnished by the Authority to the Underwriter in connection with the transactions contemplated by this Purchase Agreement.

The execution and delivery of this Purchase Agreement by the Authority shall constitute a representation to the Underwriter that the representations contained in this Section 3 are true as of the date hereof.

4. Conditions to the Obligations of the Underwriter. The obligation of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the uc"uruiy in all material respects of the representations on the part of the Authority contained herein and of the Community Facilities District in the District Letter of Representations, to the accuracy in all material respects of the statements of the officers and other officials of the Authority made in any certificates or other documents furnished pursuant to the provisions hereof, to the performanc" Uy tft" Authority of its obligations to be performed hereunder at or prior to the Closing Date and, to the following additional conditions:

A. At the Closing Date, the Authority Resolution, the Community Facilities District Resolution, the Authority Documents and this Purchase Agreement, the District Indenture, the Local Obligation Purchase Contract, the Special Tax Bonds, the District Letter of Representations and the Continuing Disclosure Certificate shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been iaken in connection therewith, with the issuance of the Bonds and with the Special Tax Bonds, and with the transactions contemplated thereby, and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel, shall be necessary and appropriate. The Trust Agreement, the District Indenture, the Local Obligation Purchase Contract, the Special Tax Bonds, the District Letter of Representations and the Continuing Disclosure Certificate are herein referred to collectively as the "District Documents."
B. At the Closing Date, except as was described in the Preliminary Official Statement, the Authority shall not be, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contracto agreement or other instrument to which the Authority is a party or is otherwise subject or bound, and the performance by the Authority of its obligations under the Authority Documents, the Authority Resolution and any other instruments cont-emplated by any of such documents, and compliance with the provisions of each thereof, will not conflicf with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, ugin"y or instrumentality of either thereof, or under any applicable court or administrative decree or oid"r,-o. rrnder any loan agreement, note, resolution, indenture, contract, agreement or other instrument 9 4853-3 583 -3 5 82v3 I 024667 -0160

11/12/2024 Item No.1.
to which the Authority is a party or is otherwise subject or bound, in any manner that would materially and adversely affect the performance by the Authority of its obligations under the Authority Documents or the Authority Resolution.

C. At the Closing Date, except as described in the Official Statement, the Community Facilities District shall not be, in any respect material to the transactions referred to in the District Letter of Representations or contemplated therein, in breach of or in default under, any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indentureo contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, and the performance by the Community Facilities District of its obligations under the Community Facilities District Resolution, the District Documents, and any other instruments contemplated by any of such documents, and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed hereunder, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of Califomia, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, in any manner that would materially and adversely affect the performance by the Community Facilities District of its obligations under the Community Facilities District Resolution and the District Documents or the performance of the conditions precedent to be performed by the Community Facilities District under the Community Facilities District Resolution and the District Documents.

D. The information contained in the Official Statement is, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant hereto, true and correct in all material respects and does not, as ofthe Closing Date or as ofthe date of any supplement or amendment thereto, contuin any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

E. Between the date hereof and the Closing Date, the market price or marketability, at the initial offering prices set forth on the cover page of the Official Statement, of the Bonds shall not have been materially adversely affected, in the judgment of the Underwriter (evidenced by a wriffen notice to the Authority terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following:

1. Legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration, or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department ofthe United States of America or the Internal Revenue Service, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon such interest as would be received by any owners of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; 4853-3 583 -3 5 82v3 I 024667 -0160
l0 Page 299
11/12/2024 Item No.1.

2. Legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by oion behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds or the Special Tax Bonds, including any or all underlying alrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Trust Agreement or the District Indenture are not exempt from qualification under or other requirements of the Trust Agreement Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds or the Special Tax Bonds, including any or all underlying affangements, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the federal securities laws as amended and then in effect;

3. A general suspension of trading in securities on the New York Stock Exchange, or a general banking moratorium declared by Federal, State of New York or State of California officials authorized to do so;

4. The introduction, proposal or enactment of any amendment to the Federal or Califomia Constitution or any action by any Federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the Bonds, the Authority or the Community Facilities District, their property, income, securities (or interest thereon), the validity or enforceability of the Special Tax, or the ability of the Authority to purchase any Special Tax Bonds as contemplated by the Official Statement;

5. Any event occurring, or information becoming known which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information toniained in the Preliminary Official Statement or in the Official Statement, or has the effect that the Preliminary Official Statement or the Official Statement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

6. Any national securities exchange, the Comptroller of the Currency, or any other governmental authority, shall impose as to the Bonds, the Special Tax Bonds or obligations of the geniral character of the Bonds or the Special Tax Bonds , any matetial restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter;

7. There shall have occurred any material outbreak or escalation of hostilities or other calamity or uisis the effect of which on the financial markets of the United States is such as to make it impracticable, in the judgment of the Underwriter, following consultation with the Authority, to sell the Bonds;

8. The filing or threat of an Action described Section 3.F hereof or Section M of the District Letter of Representations; or

9. Any proceeding shall have been commenced or be threatened in writing by the Securities and Exchange Commission against the City or the Authority. 4853 -3 583 -3 5 82v3 1024667 -0160
ll Page 300
11/12/2024 Item No.1.

F. At or prior to the Closing Date, the Underwriter shall have received a counterpart original or certified copy of the following documents, in each case satisfactory in form and substance to the Underwriter:

1. The Official Statement, executed on behalf of the Authority by its Treasurer or other authorized officer;

2. The Authority Documents, duly executed and delivered by all parties thereto;

3. The Authority Resolution, together with a certificate of the Secretary of the Authority, dated as of the Closing Date, to the effect that such resolution is a true, correct and complete copy of the resolution duly adopted by the Governing Board of the Authority;

4. The Community Facilities District Resolution, together with a certificate dated as of the Closing Date of the City Clerk, acting on behalf of the Community Facilities District to the effect that the Community Facilities District Resolution is a true, correct and complete copy of the one duly adopted by the City Council, acting as the legislative body of the Community Facilities District;

5. The District Documents duly executed and delivered by all parties thereto;

6. An unqualified approving opinion for the Bonds, dated the Closing Date and addressed to the Authority, of Bond Counsel, in substantially the form included as Appendix E to the Official Statement, together with a letter addressed to the Trustee to the effect that such opinion may be relied upon by the Trustee to the same extent as if such opinion was addressed to the Trustee;

7. A supplemental opinion or opinions, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, in substantially the form attached hereto as Exhibit G;

8. A certificate, dated the Closing Date and signed by the Treasurer of the Authority or other authorized officer, to the effect that: (i) the representations of the Authority contained herein are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) to the best knowledge of such officer, no event has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (iii) the Authority has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the Authority Documents and the Authority Resolution at or prior to the Closing Date; g. A certificate dated the closing Date and signed by an authorized representative of the Community Facilities District or an authorized designee, on behalf of the Community Facilities District to the effect that: (i) the representations made by the Community Facilities District contained in the District Letter of Representations are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, provided that any references as to the Preliminary Official Statement shall be deemed to be to the Official Statement; (ii) to the best knowledge of such officer, no event has occurred since the date of the Official 4853 -3 583 -3 5 82v3 1024667 -0160
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Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (iii) the Community Facilities District has complied with all the agreements and satisfied all the conditions on its part to be satisfied under the District Documents prior to the Closing Date;

10. An opinion ofthe City Attorney ofthe City, as counsel to the Authority, dated the date of Closing and addressed to the Underwriter, the Authority, the Community Facilities District, the Trustee and the District Trustee, to the effect that:
(i) The Authority is a public body, corporate and politic, duly organized and validly existing as a joint powers authority under the laws of the State of California; (iD The Authority has full legal power and lawful authority to enter into the Authority Documents and to cany out the transactions contemplated under the Authority Documents;
(iii) The Authority Resolution was duly adopted at a regular meeting of the governing body of the Authority, which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Authority Resolution is in full force and effect and has not been modified, amended, rescinded or repealed since the date of its adoption;
(iv) The Authority Documents have been duly authorized, executed and delivered by the Authority and constitute the legal, valid and binding obligations of the Authority enforceable against the Authority in accordance with their terms, subject to bankruptcy, insolvency, rcorganization, moratorium and other similar laws affecting creditors' rights, to the application of equitable principles where equitable remedies are sought and to the exercise ofjudicial discretion in appropriate cases;
(v) To the best knowledge of such counsel, the execution and delivery of the Authority Documents and the Official Statement and compliance with the provisions thereof under the circumstances contemplated thereby: (a) do not in any material respect conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument to which the Authority is a party or by which it is bound; and (b) do not and will not in any material respect or constitute on the part of the Authority a violation, breach of or default under any court order or consent decree to which the Authority is subject;
(vD The Authority Documents and the Official Statement have been duly authorized by the Governing Board of the Authority and executed on its behalf by an authorized officer of the Authority;
(vii) Except as may be stated in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the Authority) or, to the City Attomey's knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the Authority, or the titles of its members and officers to their respective offices; (b) enjoin or restrain the issuance, sale and delivery of the Bonds, the collection of the Revenues or the pledge thereof; (c) in any way question or affect any of the rights, powers, duties or obligations of the 4853-3 583 -3 5 82v3 I 024667 -0160
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Authority with respect to the Revenues or the moneys and assets pledged or to be pledged to pay the principai of, premium, if any, or interest on the Bonds; (d) in any way question or affect any authority lor the issuance of the Bonds, or the validity or enforceability of the Bonds; or (e) in any way question or affect the Authority Documents or the transactions contemplated by the Authority Documents, the Official Statement, or any activity regarding the Bonds; 1 l. An opinion of the City Attorney of the City, dated the date of Closing and addressed to the Underwriter, the Authority, the Community Facilities District, the Trustee and the District Trustee to the effect that:
(i) The Community Facilities District is a community facilities district organized and existing pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part l, Division 2, Title 5 of the Govemment Code of the State of California;
(iD The Community Facilities District Resolution has been duly adopted at a meeting of the City Council, acting as the legislative body of the Community Facilities Disirict, which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Community Facilities District Resolution is in full iorce and effect and has not been modified, amended, rescinded or repealed since the date of its adoption;
(iii) The District Documents and the Official Statement have been duly and lawfully authorized, executed and delivered by the Community Facilities District and the District Documents constitute the legal, valid and binding obligations of the Community Facilities District enforceable against the Community Facilities District in accordance with their terms, subject to bankruptcy, insolvency, reorganization,arrangement, fraudulent conveyance, moratorium and other similar laws relating to or affecting creditors' rights, to the application of equitable principles where equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against community facilities districts in the State of California; (iv) The Community Facilities District has the right and power under the Community Facilities District Act to execute the District Indenture and no other authotization for the execution thereof is required, and the District Indenture is in full force and effect; (v) The Special Tax Bonds are valid and binding special tax obligations of the Community Facilities District payable from proceeds of the Special Tax and the othei funds provided in the District Indenture for such payment and are enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other similar laws relating to or affecting creditors' rights, to the application of equitable principles where equitable remedies are sought, to the exercise of judicial discretion in appropriate casei and to the limitations on legal remedies against community facilities districts in the Slate of Catifornia, and the terms of the Community Facilities District Act and of the District Indenture; (vi) The District Indenture and the Special Tax Bonds have been duly and validly authorized, sold, executed, authenticated and delivered in accordance with the Community Facilities District Act and with the District Indenture; 4853-3 583-3 5 82v3 1024667 -01 60
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(viD Except as may be stated in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the City or the Community Facilities District) or, to such counsel's knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City or the Community Facilities District, or the titles of its members and officers to their respective offices; or (b) affect the validity of the District Documents or restrain or enjoin the repayment ofthe Special Tax Bonds or in any way contest or affect the validity of the District Documents or contest the authority of the Community Facilities District to enter into or perform its obligations under any of the District Documents or under which a determination advsrse to the City or the Community Facilities District would have a material adverse affect upon the financial condition or the revenues of the City or the Community Facilities District, questions the right of the Community Facilities District to use the Special Tax levied within the Improvement Area for the repayment of the Special Tax Bonds or affects in any manner the right or ability of the Community Facilities District to collect or pledge the Special Tax levied within the Improvement Area for the repayment of the Special Tax Bonds;

12. A transcript of all proceedings relating to the authorizationo issuance, sale and delivery of the Bonds and the Special Tax Bonds, including copies of the signed Trust Agreement and the District Indenture and certified copies of all resolutions of the City and the Authority relating thereto;

13. A certificate dated the closing Date from NBS addressed to the Authority, the Community Facilities District and the Underwriter to the effect that: (i) the Special Tax (after payment of Priority Administrative Expenses) if collected in the maximum amounts permitted pursuant to the Rate and Method of Apportionment of Special Taxes would generate at least ll0o/o of the annual debt service payable with respect to the Special Tax Bonds in each year, based on such assumptions and qualifications as shall be acceptable to the Underwriter; and (ii) the statements in the Preliminary Official Statement and the Official Statement provided by NBS concerning the Special Tax and the Rate and Method of Apportionment of the Special Taxes and all information supplied by it for use in the Preliminary Official Statement, as of the date of the Preliminary Official Statement, and inthe Official Statement, as of the date of the Official Statementand as of the Closing Date, did not and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;;

14. Certified copies of the general resolution of the Trustee and District Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee and District Trustee, which resolution authorizes the execution of the Trust Agreement, the District Indenture and the authentication of the Bonds and the Special Tax Bonds;

15. A certificate of the Trustee, addressed to the Underwriter, the Authority and the Community Facilities District dated the Closing Date, to the effect that: (i) the Trustee is authorized to carry out corporate trust powers, and have full power and authority to perform their respective duties under the Trust Agreement and the District Indenture; (ii) the Trustee is duly authorized to execute and deliver the Trust Agreement and the District Indenture, to accept the obligations created by the Trust Agreement and the District Indenture and to authenticate the Bonds and the Special Tax Bonds pursuant to the terms of the Trust Agreement and the District Indenture, respectively; (iii) no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the 4853 -3 583-3 5 82v3 1024667 -0160
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authentication of the Bonds or the Special Tax Bonds or the consummation by the Trustee of the other transactions contemplated to be performed by the Trustee in connection with the authentication of the Bonds and the Speclal Tax Bonds and the acceptance and performance of the obligations created by the Trust Agreement and the District Indenture; and (iv) to the best of its knowledge, compliance with the terms of the Trust Agreement and the District Indenture will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, trust agreement' bond, note, resolution or any other agreement or instrument to which the Trustee is a party or by which it is bound, or any law or uny ,u1", regulation, order or decree of any court or govemmental agency or body having jurisdiction over the Trustee or any of its activities or properties;

16. An opinion of counsel to the Trustee, dated the Closing Date, addressed to the Underwriter, the Authority and the Community Facilities District to the effect that the Trustee is a national banking association duly organi zed andvalidly existing under the laws of the United States having full power and being qualified to enter into, accept and agree to the provisions of the Trust Agreernent and the District Indenture, and that each of such documents has been duly authorized, executed and delivered by the Trustee and, assuming due execution and delivery by the other parties thereto, constitutes the legal, valid and binding obligation of the Trustee enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by the application of equitable principles if equitable remedies are sought; I7. A certificate of the Authority dated the Closing Date, in a form acceptable to Bond Counsel and the Underwriter, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Intemal Revenue Code of 1986, as amended;

18. An opinion of Stradling Yocca Carlson & Rauth LLP, counsel to the Underwriter ("Underwriter's Counsel"), dated the date of Closing and addressed to the Underwriter in form and substance acceptable to the Underwriter;

19. A closing certificate of Taylor Morrison dated the Closing Date, substantially in the form attached as Exhibit E hereto;

20. A continuing disclosure certificate of Taylor Morrison in the form attached as Appendix D to the Official Statement (the "Taylor Morrison Continuing Disclosure Certificate").

21. One or more opinions of counsel to Taylor Morrison, dated the Closing Date and addressed to the Authority and the Underwriter, in form and substance acceptable to the Underwriter and Underwriter's Counsel, regarding (i) Taylor Morrison's due organization and qualification to do business, (ii) the due authorizationand execution of the Taylor Morison Continuing I]isclosure Certificate executed by Taylor Morrison, (iii) the absence of litigation pending against Taylor Morrison (with service of process to Taylor Morrison having been duly given and completed) or overtly threatened against Taylor Morrison which would materially and adversely affect the validity or enforceability of the Taylor Morrison Continuing Disclosure Certificate executed by Taylor Morrison or Taylor Morrison's ability to pay the Special Taxes when due, and (iv) negative assurance regarding the Preliminary Official Statement and the Official Statement;

22. A closing certificate of Folsom Real Estate South dated the Closing Date, substantially in the form attached as Exhibit F hereto; 4853 -3 583 -3 5 82v3 1024667'0160
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23. A continuing disclosure certificate of Folsom Real Estate South in the form attached as Appendix D to the Official Statement (the "Folsom Real Estate South Continuing Disclosure Certificate").

24. One or more opinions of counsel to Folsom Real Estate South, dated the Closing Date and addressed to the Authority and the Underwriter, in form and substance acceptable to the Underwriter and Underwriter's Counsel, regarding (i) Folsom Real Estate South's due organization and qualification to do business, (ii) the due authorization and execution of the Folsom Real Bstate South Continuing Disclosure Certificate executed by Folsom Real Estate South, (iii) the absence of litigation pending against Folsom Real Estate South (with service of process to Folsom Real Estate South having been duly given and completed) or overtly threatened against Folsom Real Estate South which would materially and adversely affect the validity or enforceability of the Folsom Real Estate South Continuing Disclosure Certificate executed by Folsom Real Estate South or Folsom Real Estate South's ability to pay the Special Taxes when due, and (iv) negative assurance regarding the Preliminary Official Statement and the Official Statement;

25. A certificate of the Appraiser, substantially in the form attached hereto as Exhibit H; and

26. Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the material representations of the Authority contained herein, and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Authority and the Community Facilities District at or prior to the-Closing of all agreements then to be performed and all conditions then to be satisfied by the Community Facilitfus District and the Authority in connection with the transactions contemplated hereby and by the District Indenture, the Trust Agreement, and the Official Statement.

If the Authority shall be unable to satisfu the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obiigations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neithei the Authority nor the Underwriter shall be under any further obligation hereunder, except that the respective obligations of the Underwriter and the Authority set forth in Section 6 hereof shall continue in full force and effect.

5. Conditions to the Obligations of the Authorit)'.

A. The obligations of the Authority shall be subject to the satisfaction of the conditions contained in Section 4 of this Purchase Agreement.

B. If the Authority shall be unable to satisfy the conditions to the obligations of the Authority to purchase, accept delivery of and pay for the Special Tax Bonds contained in the Local Obligation Purchase Contract, or if the obligations of the Authority to purchase, accept delivery of and puy ?o. the Special Tax Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Authority nor the Community f'acitities District shall be under any further obligation hereunder, except that the obligations of the Authority set forth in Section 6 hereof shall continue in full force and effect. 4853 -3 583 -3 5 82v3 1024667 -0160
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6. Expenses. Whether or not the transactions contemplated by this Purchase Agreement are consummated, the Underwriter shall be under no obligation to pay, and the Authority shall pay only from the proceeds of the Bonds, or cause the Community Facilities District to pay out of the proceeds of the Special Tax Bonds or any other legally available funds of the City, the Community Facilities District or the Authority, but only as the Authority and such other party providing such services may agree, all expenses and costs of the Authority incident to the performance of its obligations in connection with the authorization, execution, sale and delivery of the Bonds to the Undirwriter, including, without limitation, printing costs, initial fees of the Trustee, including fees and disbursements of their counsel, if any, fees and disbursements of Bond Counsel, Disclosure Counsel and other professional advisors employed by the Authority, costs of preparation, printing, signing, transportation, delivery and safekeeping of the Bonds and for expenses (included in the expense component of the spread) incurred by the Underwriter on behalf of the Authority's employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, lodging, and entertainment of those employees. The Underwriter shall pay all out-of- pocket expenses of the Underwriter, including, without limitation, advertising expenses, the California bebt and Investment Advisory Commission fee, CUSIP Services Bureau charges, regulatory fees imposed on new securities issuers and any and all other expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds, including fees of its counsel.

7. Notices. Any notice of other communication to be given to the City or the Authority under this Purchase Agreement may be given by delivering the same in writing to the City of Folsom, 50 Natoma Street, Folsom, CA, 95630, Attention: Finance Director; any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Piper Sandler & Co, 3626 Fair Oaks Blvd., Suite 100, Sacramento, California 95864, Attention: Dennis McGuire.

8. Parties In Interest. This Purchase Agreement is made solely for the benefit of the Authority and Underwriter (including any successors or assignees of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. g. Survival of Representations. The representations of the Authority under this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the Authority and regardless of delivery of and payment for the Bonds.

10. Execution in Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

11. Effective. This Purihase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the Authority and shall be valid and enforceable as of the time of such acceptance.

12. No Prior Agreements. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understanding among the parties hereto in relation to the sale of the Bonds by the Authority.
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13. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California.
4853 -3 583-3 5 82v3 I 024667 -0160
19 Page 308
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By:

Its:

14. Effective Date. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the Authority and shall be valid and enforceable as of the time of such acceptance.

Very truly yours,
PIPER SANDLER & CO.

By:

Its: Authorized Officer

FOLSOM RANCH FINANCING

AUTHORITY
Treasurer
485 3 -3 583 -3 5 82v 3 I 024667 -0 160
s-1 Page 309
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EXHIBIT A

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

SPECIAL TAX REVENUE BONDS
SERIES 2024
Schedule of Bond Maturities, Principal Amounts,Interest Rates, Yields and Initial Offering Prices
Maturity
Date
(September 1)
Principal
Amount
Initial
Offering
Price
10% Test
Used
Hold the
Price
Olfering
Rule UsedInterest Rate Yield
r Term Bonds.
c Priced to the September |,2}3-optional redemption date, at Optionat 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 September l, 20-, from arry rouice of available funds other than Minimum Sinfting Fund Payments and Special Tax Pripayments, 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:

I03yo if redeemed on any date on or after September 1,2}-through August 31,20-; 102% if redeemed on any date from September 7,z}-through August 31,20-; lU% if redeemed on any date from September |,z}-through August 31,20-; and lO0% if redeemed on September 1,20-and any date thereafter.

Extruordinary 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 4853-3 583-3 5 82v3 1024667 -0160
A-1 Page 310
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on any Interest Payment Date on or after March l, 2025, solely from funds derived from the extraoidinary redemption of Local Obligations from Special Tax Prepayments, at the following redemption prices (computed upon the principal amount of the Bonds or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemption:
103% if redeemed on an Interest Payment Date on or after March 1,2025 through March 1, 20_;
I02yo if redeemed on an Interest Payment Date on September 7,20-and March 7,20-; l0l% if redeemed on an Interest Payment Date on September 1,20-and March 1,20-; and 100% if redeemed on September 1,20-and any Interest Payment Date thereafter.

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

Sinking Fund
Redemption Date
(September 1) Principal Amount to be Redeemed
t Maturity.

The Bonds maturing on September 1,20_are subject to mandatory redemption in part by lot 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:

Sinking Fund
Redemption Date
(September I) Principal Amount to be Redeemed
1 Maturity.

The Bonds maturing on September 1,20_are subject to mandatory redemption in part by lot on September 1 of each year commencing Septemberl,20-, at a redemption price equal to one 4853 -3 583 -3 5 82v 3 I 024667 -0 1 60
A-2 Page 311
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hundred percent (100%) of the principal amount thereof called for redemption together with accrued interest thereon to the date fixed for redemption:

Sinking Fund
Redemption Date
(September 1) Principal Amount to be Redeemed
t Maturity.

The Bonds maturing on September 1,20_are subject to mandatory redemption in part by lot on September 1 of each year commencing Septemberl,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:

Sinking Fund
Redemption Date
(September 1) Principal Amount to be Redeemed
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. 4853-3583 -3 582v3 I 024667 -0160
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EXHIBIT B

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

SPECIAL TAX REVENUE BONDS
SERIES 2024

LETTER OF REPRESENTATIONS OF THE DISTRICT
2024_)
Piper Sandler & Co.
3626Fak Oaks Boulevard
Sacramento, California 9 5864
City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 4 Special Tax Bonds, Series 2024
Ladies and Gentlemen:

In connection with the proposed offer and sale of the above-referenced bonds (the "Special Tax Bonds"), the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Community Facilities District") hereby represents and covenants to Piper Sandler & Co., as underwriter (the "Underwriter") of the Folsom Financing Authority City of Folsom Community Facilities DistrictNo. 23 (Folsom Ranch) Improvement AreaNo. 4 Special Tax Revenue Bonds, Series 2024 (the "Bonds"), as follows:

A. The City of Folsom (the "City") is duly organized and validly existing as a municipal corporation and charter city under the Constitution and laws of the State of California and the Charter and the Community Facilities District is a community facilities district organizedand existing pursuant to the Mello-Roos Community Facilities Act of 7982, as amended, being Chapter 2.5, Part 1, Division 2,Title 5 of the Government Code of the State of California.

B. The City has duly authorized the formation of the Community Facilities District and the establishment of Improvement Area No. 4 therein (the "Improvement Area'o) pursuant to resolutions and an ordinance duly adopted by the City Council (collectivelY, the o'Community Facilities District Formation Resolutions" and, together with Resolution No. authorizing the issuance and sale of the Special Tax Bonds, the "Community Facilities District Resolutions") and the Community Facilities District Act. The City Council, acting as the legislative body of the Community Facilities District has duly adopted the Community Facilities District Resolutions, and has caused to be recorded in the real property records of the County of Sacramento, a Notice of Special Tax Lien (the "Notice of Special Tax Lien") (the Community Facilities District Formation Resolutions and Notice of Special Tax Lien being collectively referred to herein as the "Formation Documents"). Each of the Formation Documents remains in full force and effect as of the date hereof and has not been amended.

Re:
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C. The Community Facilities District has, and at the Closing Date will have, as the case may be, full legal right, power and authority: (i) to execute, deliver and perform its obligations under the District Indenture, the Trust Agreement, the Continuing Disclosure Certificate and the Local Obligation Purchase Contract, and to carry out all transactions contemplated by each of such documents; (ii) to issue, sell and deliver its Special Tax Bonds to the Authority; and (iii) to carry out, give effect to and consummate the transactions contemplated by the Formation Documents, the District Indenture, the Trust Agreement, the Local Obligation Purchase Contract, the Special Tax Bonds, this Letter of Representations, the Continuing Disclosure Certificate and the Official Statement.

This Letter of Representations, the Trust Agreement, the District Indenture, the Local Obligation Purchase Contract, the Special Tax Bonds and the Continuing Disclosure Certificate are collectively referred to herein as the "District Documents." D. The Community Facilities District has complied, and will at the Closing Date be in compliance in all material respects, with the Formation Documents and the District Documents, and immaterial noncompliance by the Community Facilities District, if any, will not impair the ability of the Community Facilities District to carry out, give effect to or consummate the transactions contemplated by the foregoing. From and after the date of issuance of its Special Tax Bonds, the Community Facilities District will continue to comply with the covenants of the Community Facilities District contained in the District Documents.

E. Except as described in the Preliminary Official Statement, the Community Facilities District is not, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, and the performance of its obligations under the District Documents and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed by the Community Facilities District pursuant to the District Documents, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree o, oid"r, or under any loan agreemento note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, in any manner that would materially and adversely affect the performance by the Community Facilities District of its obligations under the District Documents or the performance of the conditions precedent to be performed by the Community Facilities District pursuant to the District Documents.

F. Except as may be required under the "blue sky" or other securities laws of any jurisdiction, all approvals, consents, authorizations, elections and orders of, or filings or registrations with, any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the Community Facilities District of its obligations under the District Documents, have t""n o. will be obtained at the Closing Date and are or will be in full force and effect at the Closing Date.

G. The District Documents conform as to form and tenor to the descriptions thereof contained in the Preliminary Official Statement.
48 5 3 -3 5 83 -3 5 82v 3 I 024 667 -0 | 60
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H. The Special Tax Bonds are payable from the Special Tax, as set forth in the District Indentureo the levy of which has been duly and validly authorized pursuant to the Community Facilities District Act and the Special Tax within the Improvement Area will be fixed and levied in an amount which, together with other available funds, is required for the payment of the principal of, and interest on, the Special Tax Bonds when due and payable, all as provided in the District Indenture. The Community Facilities District has covenanted to cause the Special Tax to be levied and collected at the same time and in the same manner as ordinary ad valorem property taxes.

I. The District Indenture creates a valid pledge of, first lien upon and security interest in, the Special Tax, and in the moneys in the Special Tax Fund established pursuant to the District Indenture, on the terms and conditions set forth in the District Indenture.

J. Except as disclosed in the Preliminary Official Statement, there are, to the best of the Community Facilities District's knowledge, no entities with outstanding assessment liens against any of the properties within the Improvement Area or which are senior to or on a parity with the Special Tax referred to in paragraph (H) hereof.

K. The information contained in the Preliminary Official Statement (otherthan statements therein pertaining to the Authority, DTC and its book-entry system and under the captions "PROPOSED PROPERTY DEVELOPMENT - Taylor Morison Development," "- Folsom Real Estate South Development,o' and "CONTINUING DISCLOSURE - Taylor Morrison and Folsom Real Estate South," as to which no view is expressed) does not and shall not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and, upon delivery and up to and including 25 days after the End of the Underwriting Period (as defined in paragraph (L) below), the Official Statement will be amended and supplemented so as to contain no misstatement of any material fact or omission of any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were madg, not misleading.

L. Up to and including 25 days after the End of the Underwriting Period, the Community Facilities District will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The Community Facilities District will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise materially affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. As used herein, the term "End of the Underwriting Period" means the later of such time as: (i) the Bonds are delivered to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the End of the Underwriting Period shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be a written notice delivered to the City at or prior to the Closing Date, and shall speci$' a date (other than the Closing Date) to be deemed the "End of the Underwriting Period."
M. There is no action pending (notice of which has been served on the Community Facilities District or the City) or to the best knowledge of the Community Facilities District threatened, in which any such action: (i) in any way questions the existence of the Community Facilities District or the titles of the officers of the City to their respective offices; (ii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of the Bonds or the Special Tax Bonds or the payment or 4853-3 583-3 5 82v3 1024667 -0160
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collection of the Special Tax or any amounts pledged or to be pledged to pay the principal of and interest on the Special Tax Bonds or the Bonds, or in any way contests or affects the validity of the Formation Documents or the District Documents or the consummation of the transactions on the part of the Community Facilities District contemplated thereby; (iii) contests the exemption of interest on the Bonds or the Special Tax Bonds from federal or State income taxation, as applicable, or contests the powers of the City or the Community Facilities District which may result in any material adverse change relating to the financial condition of the Community Facilities District; or (iv) contests the completeness or accuracy of the Preliminary Official Statement or any supplement or amendment thereto or asserts that the Preliminary Official Statement contained any untrue statement of a material fact or omitted to state any materi al fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence.

N. Any certificate signed on behalf of the Community Facilities District by any officer or employee of the City authorized to do so shall be deemed a representation by the Community Facilities District to the Authority and the Underwriter on behalf of itself and the Community Facilities District as to the statements made therein.

O. At or prior to the Closing, the Community Facilities District will have duly authorized, executed and delivered the Continuing Disclosure Certificate in substantially the form attached as Appendix D to the Official Statement. Except as disclosed in the Preliminary Official Statement, the City has not failed to comply in all respects with any previous undertakings with regard to the Rule to provide annual reports or notices of material events in the last five years.

P. The Community Facilities District will apply the proceeds of its Special Tax Bonds in accordance with the District Indenture.
a. Between the date of the Purchase Agreement and the date of Closing, the Community Facilities District will not offer or issue any bonds, notes or other obligations for bomowed money not previously disclosed to the Underwriter.
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Capitalizedterms not otherwise defined herein shall have the meaning ascribed to them in the Bond Purchase Agreement by and between the Authority and the Underwriter.

CITY OF FOLSOM COMMUNITY FACILITIES
DTSTRICT NO. 23 (FOLSOM RANCH)
Finance Director of the City of Folsom
By
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EXHIBIT C

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

SPECIAL TAX REVENUE BONDS
SERIES 2024

LETTER OF REPRESENTATIONS OF TAYLOR MORRISON OF CALIFORNIA, LLC 2024,
Folsom Ranch Financing AuthoritY
50 Natoma Street
Folsom, California 95630
City of Folsom Community Facilities District No. 23
(Folsom Ranch)
50 Natoma Street
Folsom, California 95630
Piper Sandler & Co.
3626Fair Oaks Boulevard, Suite 100
Sacramento, California 95864
Ladies and Gentlemen:

Reference is made to the Folsom Ranch Financing Authority City of Folsom Community Facilities DistrictNo. 23 (Folsom Ranch) ImprovementAreaNo. 4 Special TaxRevenue Bonds, Series 2024 (the o'Bonds") and to the Bond Purchase Agreement to be entered into in connection therewith (the'oPurchase Agreement"). This Letter of Representations of Taylor Morrison of California,LLC (the "Letter of Representations") is delivered pursuant to the Purchase Agreement. Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Purchase Agreement.

Each of the undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of Taylor Morrison of California,LLC, a California limited liability company (the "Developer"), and each of the undersigned, on behalf of the Developer further certifies as follows:
l. The Developer is a validly existing limited liability company in good standing under the laws of the State of California, and has or will have all requisite corporate right, power and authority: (i) to execute and deliver this Letter of Representations; (ii) execute and deliver at the Closing the Taylor Morrison Continuing Disclosure Certificate; and (iii) to undertake all of the transactions on its part described in the Preliminary Official Statement.

2. As set forth in the Preliminary Official Statement, the Developer owns certain property (herein, the "Property") within Improvement Area No. 4 (the "Improvement Area") of City of 4853 -3 583-3 5 82v3 I 024667 -0160
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Folsom Community Facilities DistrictNo.23 (Folsom Ranch) (the "Community Facilities District").

The undersigned, on behalf of the Developer, makes the representations herein with respect to all such Property.

3. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersignedl, (a) the Developer and its Affiliates2 are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond or note (collectively, the "Material Agreements") to which the Developer or its Affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Developer's ability to complete the development of the Property as desuibed in the Preliminary Official Statement or to pay the Special Tax on the Property (to the extent the responsibility of the Developer or its Affiliates) prior to delinquency and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default.

4. To the Actual Knowledge of the Undersigned, neither the Developer, nor any of its Affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Developer's ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Special Tax on the Property (to the extent the responsibility of the Developer) prior to delinquency.

5. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, is pending against any current Affiliate (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against the Developer or any such Affiliate which if successful, is reasonably likely to materially and adversely affect the Developer's ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Special Tax or ad valorem tax obligations on its Property (to the extent the responsibility of the Developer) prior to delinquency.
1 As used in this Letter of Representations, the phrase "Actual Knowledge of the Undersigned" shall mean, as of the date of this Letter ofRepresentations, the actual (as opposed to constructive) knowledge that the undersigned has or has obtained from obtained from (i) interviews with such current officers and responsible employees of the Developer as the undersigned has determined are likely, in the ordinary course oftheir respective duties, to have knowledge ofthe matters set forth in this Letter ofRepresentations, and/or (ii) a review of such documents as the undersigned determined were reasonably necessary to obtain knowledge of the matters set forth in this Letter ofRepresentations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Developer's current businessand operations. The undersigned has not contacted individuals who are no longer employed by the Developer 2 "Affiliut.' means, with respect to the Developer, any other Person: (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Developer, and (ii) for whom information, including financial information or operating dat4 conceming such Person is material to potential investors in their evaluation of the Improvement Area and investment decision regarding the Bonds (i.e., information relevant to: (a) the Developer's development plans with respect to its Property and the payment of its Special Tax on the Property (to the extent the responsibility of the beveloper) prior to delinquency; or (b) such Person's assets or funds that would materially affect the Developer's ability to develop its Property as described in the Preliminary Official Statement or to pay its Special Tax on the Property (to the extent the r.rponiibility of the Developer) prior to delinquency). "Person" means an individual, a corporation, a partnership, a limited tiaUitity company, an associition, a joint stock company, a trust, any unincorporated organization or a govemment or political subdivlsion thereof. For purposes hereof, the term "control" (including the terms "controlling," "controlled by" or "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 4853 -3 583-3 5 82v3 I 024667 -0160
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6. As of the Date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information contained therein solely as such information describes the Developer, its Affiliates, ownership of the Property, the Developer's development plan, the Developer's financing plan, the Developer's lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer's development plan or the Developer's financing plan, loans of such Affiliates) as set forth under the captions "PROPOSED PROPERTY DEVELOPMENT- Taylor Morrison Development" and "CONTINUING DISCLOSURE-TayIor Morrison and Folsom Real Estate South" (excluding therefrom in all cases (a) bny information regarding any other property owner or the property owned by a property owner other than the Developer, (b) any information on appraised andmarket values, and annual special tax rates and ratios, including information regarding the Appraisal (as such term is defined in the Preliminary Official Statement), and (c) any information which is identified as having been provided by a source other than the Developer) is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

7. The Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Developer and its Affiliates which it controls will not bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body, that in any way seeks to challenge or overtum the formation of the Community Facilities District or the Improvement Area, to challenge the adoption of Ordinance No. 1305 of the City levying the Special Tax within the Improvement Area, to invalidate the Community Facilities District, the Improvement Area or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the Notice of Special Tax Lien relating thereto. The foregoing covenant shall not prevent the Developer or any Affiliate in any way from bringing any other action, suit or proceeding including, withouf limitation, (a) an action or suit contending that the Special Tax has not been levied in agcordance with the methodologies contained in the Community Facilities District's Rate and Method of Apportionment of Special Taxes for the Improvement Area pursuant to which the Special Tax is levied, (b) an action or suit with respect to the application or use of the Special Tax levied and collected, or (c) to enforce the obligations of the Authority, the City, and/or the District under any agreements among the Developer and its Affiliates, the Authority, the City, and/or the District or to which the Developer or its Affiliates is aparly or beneficiary.

8. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the Developer is not aware that any other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized or any assessment districts or community facilities dirtti"tr have been or are in the process of being formed that include any portion of the Property.
g. The Developer has been developing or has been involved in the development of numerous projects over an extended period of time. It is likely that the Developer and its Affiliates has been delinquent at one time or another in the payment of ad valorem property taxes, special assessments or special taxes. However, except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, neither the Developer nor any current Affiliate is currently in default in, or in the last five (5) years has ever defaulted to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by the Developer or any such Affiliate within the boundaries of a community facilities district or an assessment district within California that (a) caused a draw on a reserve fund relating to such assessment district or 4853 -3 583 -3 5 82v3 I 024667 -0160
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community facilities district financing or (b) resulted in a foreclosure action being commenced in a court of law against the delinquent Developer or Affiliate.

10. The Developer intends to comply with the provision of the Mello-Roos Community Facilities District Act of 1982, as amended, relating to the Notice of Special Tax described in Govemment Code Section 53341.5 in connection with the sale of the Property, or portions thereof. 1 l. To the Actual Knowledge of the Undersigned, the Developer is able to pay its bills as they become due and no legal proceedings are pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened in writing in which the Developer may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.

12. To the Actual Knowledge of the Undersigned, Affiliates of the Developer are able to pay their bills as they become due and no legal proceedings are pending against any Affiliates of the beveloper (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned, threatened in writing in which the Affiliates of the Developer may be adjudicated as bankrupt or discharged from any or all of their debts or obligations, or granted an extension of time to pay their debts or obligations, or be allowed to reorganize or readjust their debts or obligations, or be subject to control or supervision of the Federal Deposit Insurance Corporation.

13. If between the date hereof and the Closing Date any event relating to or affecting the Developer, its Affiliates, ownership of the Property, the Developer's development plan, the Developer's financing plan, the Developer's lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer's development plan or the Developer's financing plan, loans of such Affiliates) shall occur of which the undersigned has actual knowledge and which the undersigned believes would cause the information under the sections of the Preliminary Official Statement indicated in Paragraph 6 hereof (and subject to the limitations and exclusions contained in Paragraph 6 of the Letter of Representations), to contain an untrue statement of a materialfact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the undersigned shall notify the Authority and the Underwriter and if in the opinion of counsel to the Authority or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Developer shall reasonably cooperate with the Authority in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance reasonably satisfactory to counsel to the Authority and to the Underwriter'

14. The Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached as Exhibit E to the Purchase Agreement.

15. The Developer agrees to deliver the Taylor Morrison Continuing Disclosure Certificate at the time of issuance of the Bonds in substantially the form attached as Appendix D to the Preliminary Official Statement.
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16. On behalf of the Developer, I have reviewed the contents of this Letter of Representations and have met with counsel to the Developer for the purpose of discussing the meaning of its contents.

The undersigned has executed this Letter of Representations solely in his or her capacity as an officer or authorized representative of the Developer and he or she will have no personal liability arising from or relating to this Letter of Representations.

TAYLOR MORRTSON OF CALIFORNIA' LLC,
a California limited liability company
By
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EXHIBIT D
FOLSOM RANCH FINAI\CING AUTHORITY
CITY OF FOLSOM COMMUNITY FACILITIES DISTRICT NO.23
(FOLSOM RANCH) IMPROVEMENT AREA NO. 4

SPECIAL TAX REVENUE BONDS
SERIES 2024

LETTER OF REPRESENTATIONS OF FOLSOM REAL ESTATE SOUTH, LLC _,2024
Folsom Ranch Financing AuthoritY
50 Natoma Street
Folsom, California 95630
City of Folsom Community Facilities District No. 23
(Folsom Ranch)
50 Natoma Street
Folsom, California 95630
Piper Sandler & Co.
3626Faft Oaks Boulevard, Suite 100
Sacramento, California 9 5864
Ladies and Gentlemen:

Reference is made to 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") and to the Bond Purchase Agreement to be entered into in connection therewith (the "Purchase Agreement"). This Letter of Representations of Folsom Real Estate South, LLC (the 'i1,etter of Representations") is delivered pursuant to the Purchase Agreement. Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Purchase Agreement.

The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of Folsom Real Estate South, LLC, aDelaware limited liability company (the "Developer"), and the undersigned, on behalf of the Developer further certifies as follows:

1. The Developer is a validly existing limited liability company in good standing under the laws of the State of Delaware and qualified to do business in the State of California, and has all requisite corporate right, power and authority: (i) to execute and deliver this Letter of Representations; (iij execute and deliver at the Closing the Folsom Real Estate South Continuing Disclosure Certificate; and (iii) to undertake all of the transactions on its part described in the Preliminary Official Statement. 4853 -3 583-3 5 82v 3 I 024667 -0160
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2. As set forth in the Preliminary Official Statement, the Developer owns certain property (herein, the "Property") within Improvement Area No. 4 (the "Improvement Area") of City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Community Facilities District").

The undersigned, on behalf of the Developer, makes the representations herein with respect to all such Property.

3. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned3, (a) the Developer and its Affiliatesa are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreemento development agreement, indenture, fiscal agent agreement, bond or note (collectively, the "Material Agreements") to which the Developer or its Affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Developer's ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Special Tax on the Property (to the extent the responsibility of the Developer) prior to delinquency and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default.

4. To the Actual Knowledge of the Undersigned, neither the Developer, nor any of its Affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Developer's ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Special Tax on the Property (to the extent the responsibility of the Developer) prior to delinquency.

5. Except as set forth in the Preliminary Official Statement, no action, suito proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, is pending against any current Affiliate (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against the Developer or any such Affiliate which if successful, is reasonably likely to materially and adversely affect the Developer's ability to 3 As used in this Letter of Representations, the phrase "Actual Knowledge of the Undersigned" shall mean, as of the date of this Letter of Representations, the actual (as opposed to constructive) knowledge that the undersigned has or has obtained from obtained from (i) interviews with such current officers and responsible employees of the Developer as the undersigned has determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Letter of Representations, and/or (ii) a review of such documents as the undersigned determined were reasonably necessary to obtain knowledge of the matters set forth in this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Developer's current business and operations. The undersigned has not contacted individuals who are no longer employed by the Developer.
4 "Affili"t." means, with respect to the Developer, any other Person: (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Developer, and (ii) for whom information, including financiai information or operating dat4 concerning such Person is material to potential investors in their evaluation of the Improvement Area and investment decision regarding the Bonds (i.e., information relevant to: (a) the Developer's development plans with respect to its Property and the payment of its Special Tax on the Property (to the extent the responsibility of the Developer) prior to delinquency; or (b) such Person's assets or funds that would materially affect the Developer's ability to develop its Property as described in the Preliminary Official Statement or to pay its Special Tax on the Property (to the extent the responsibility of the Developer) prior to delinquency). "Person" means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. For purposes hereof, the term "control" (including the terms "controlling," "controlled by" or "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 4853-3 583-3 5 82v3 1024667 -0160
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complete the development of the Property as described in the Preliminary Official Statement or to pay the Special Tax or ad valorem tax obligations on its Property (to the extent the responsibility of the Developer) prior to delinquency.

6. As of the Date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information contained therein solely as such information describes the Developer, its Affiliates, the development status and ownership of the Property, the Developer's development plan, the Developer's planned sale and transfer of the Property, the Developer's financing plan, the Developer's lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer's development plan or the Developer's financing plan, loans of such Affiliates) as set forth underthe captions "PROPOSED PROPERTY DEVELOPMENT-FoIsom Real Estate South Development" and "CONTINUING DISCLOSURE-TayIor Morrison and Folsom Real Estate South" (excluding therefrom in all cases (a) any information regarding any other property owner or the property owned by a property owner other than the Developer or an Affiliate, (b) any information on appraised and market values, and annual special tax rates and ratios, including information regarding the Appraisal (as such term is defined in the Preliminary Official Statement), and (c) any information which is identified as having been provided by a source other than the Developer) is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

7. The Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Developer and its Affiliates which it controls will not bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body, that in any way seeks to challenge or overtum the formation ofthe Community Facilities District or the Improvement Area, to challenge the adoption of Ordinance No. 1305 of the City levying the Special Tax within the Improvement Areao to invalidate the Community Facilities District, the Improvement Area or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 31 15.5 of the Streets and Highways Code based on recordation of the Notice of Special Tax Lien relating thereto. The foregoing covenant shall not prevent the Developer or any Affiliate in any way from bringing any other action, suit or proceeding including, without limitation, (a) an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the Community Facilities District's Rate and Method of Apportionment of Special Taxes for the Improvement Area pursuant to which the Special Tax is levied, (b) an action or suit with respect to the application or use of the Special Tax levied and collected, or (c) to enforce the obligations of the Authority, the City, and/or the District under any agreements among the Developer and its Affiliates, the Authority, the City, and/or the District or to which the Developer or its Affiliates is apafiy or beneficiary.

8. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the Developer is not aware that any other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized or any assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property.

9. The Developer has been developing or has been involved in the development of numerous projects over an extended period of time. It is likely that the Developer and its Affiliates have been delinquent at one time or another in the payment of ad valorem property taxes, special assessments or special taxes. However, except as disclosed in the Preliminary Official Statement, to 4853 -3 583 -3 582v3 /02466't -01 60
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the Actual Knowledge of the Undersigned, neither the Developer nor any current Affiliate is currently in default in, or in the last five (5) years has ever defaulted to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by the Developer or any such Affiliate within the boundaries of a community facilities district or an assessment district within California that (a) caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced in a court of law against the delinquent Developer or Affiliate.

10. The Developer intends to comply with the provision of the Mello-Roos Community Facilities District Act of 1982, as amended, relating to the Notice of Special Tax described in Government Code Section 53341.5 in connection with the sale of the Property, or portions thereof'

11. To the Actual Knowledge of the Undersigned, the Developer is able to pay its bills as they become due and no legal proceedings are pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened in writing in which the Developer may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.

12. To the Actual Knowledge of the Undersigned, Affiliates of the Developer are able to pay their bills as they become due and no legal proceedings are pending against any Affiliates of the Developer (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned, threatened in writing in which the Affiliates of the Developer may be adjudicated as bankrupt or discharged from any or all of their debts or obligations, or granted an extension of time to pay their debts or obligations, or be allowed to reorganize or readjust their debts or obligations, or be subject to control or supervision of the Federal Deposit Insurance Corporation.

13. If between the date hereof and the Closing Date any event relating to or affecting the Developer, its Affiliates, ownership of the Property, the Developer's development plan, the Developer's financing plan, the Developer's lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer's development plan or the Developer's financing plan, loans of such Affiliates) shall occur of which the undersigned has actual knowledge and which the undersigned believes would cause the information under the sections of the Preliminary Official Statement indicated in Paragraph 6 hereof (and subject to the limitations and exclusions contained in Paragraph 6 of this Leffer of Representations), to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the undersigned shall notify the Authority and the Underwriter and if in the opinion of counsel to the Authority or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Developer shall reasonably cooperate with the Authority in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance reasonably satisfactory to counsel to the Authority and to the Underwriter.

14. The Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached as Exhibit F to the Purchase Agreement.
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11/12/2024 Item No.1.

15. On behalf of the Developer, I have reviewed the contents of this Letter of Representations and have met with counsel to the Developer for the purpose of discussing the meaning of its contents.

The undersigned has executed this Letter of Representations solely in his or her capacity as an officer or authorized representative of the Developer and he or she will have no personal liability arising from or relating to this Letter of Representations.

FOLSOM REAL ESTATE SOUTH, LLC
a Delaware limited liability company
By
I
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