Fontana City Council
July 12, 2022

WHEREAS, on June 21, 2021, the Planning Commission received public testimony on Design Review No. 21-032, and,
WHEREAS, pursuant to Article II and Article V, of the Zoning and Development Code, a single-family residential project up to 5.0 dwelling units per acre is a permitted use and requires approval of a Design Review application; and WHEREAS, the City of Fontana wishes to protect and preserve the quality of the life throughout the City, through effective land use and planning; and WHEREAS, Conditions of Approval have been prepared and are attached hereto as Exhibit “A” for the Design Review; and
WHEREAS, the owners of property within 660 feet of the proposed project site were notified via public hearing notice mailer prior to the Public Hearing; and a notice of the public hearing was published in the local Fontana Herald newspaper on June 10, 2022, posted at City Hall and at the project site; and
WHEREAS, the Planning Commission carefully considered all information pertaining to the proposed project, including the staff report, findings, and all the information, evidence, and testimony presented at its public hearing on June 21, 2022; and
WHEREAS, all other legal prerequisites to the adoption of this resolution have occurred.

NOW, THEREFORE, the Commission RESOLVES as follows:

SECTION NO 1. The City of Fontana’s Planning Commission hereby makes the following findings for Design Review No. 21-032 in accordance with Section No. 30-120 “Findings for Approval” for Design Review of the Zoning and Development Code:

Finding No. 1: The proposal is consistent with the General Plan, Zoning and Development Code, and any applicable Specific Plan.

Findings of Fact: The project site is located on the north side of Merrill Avenue east of Palmetto Avenue, the project site is otherwise identified as 8844, 8843, 8851, 8859, 8864, 8667, 8876, 8877, 8884, 8885, 8892, and 8893 Encinitas Court (APNs: 0192-242-61, -62, -63, -64, -65, -66, - 67, -68, -69, -70, -71, and -72). The project site has a General Plan land use designation of Single-Family Residential (R-SF) which is consistent with the General Plan Land Use Designation. The R-SF include detached single-family housing with density ranging from 2.1 to 5 dwelling units per acre.

The General Plan is the document that sets the framework for the City of Fontana and provides the overall policies for development within the community. Furthermore, the General Plan encourages a ATTACHMENT NO.
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variety of development including single-family housing pursuant to the City of Fontana’s, General Plan Land Use, Zoning, and Urban Design Element, Chapter No. 15, Goal No. 3 (page 15.37-15.38) and Chapter No. 15, Goal No. 7 (page 15.40-15.41).

The proposed project is located within the Single-Family Residential (R-1) zoning district with no related Community/Specific Plan. The R-1 zoning district permits detached homes on individual lots within defined neighborhoods. As proposed, the applicant is requesting to construct twelve two-story single-family primary homes, five (single-story) standard detached accessory dwelling units, seven (single-story) non-standard detached accessory dwelling units, and four attached junior accessory dwelling units on a previously approved/recorded tract map (Tentative Tract Map No. 20230).

This project is a proposal to construct twelve two-story single-family homes ranging in size from 2,865 square feet and 2,937 square feet, including the garage square footage, four attached junior accessory dwelling at 495 square feet, five (single-story) standard accessory dwelling units detached from the primary dwelling unit at a maximum of 800 square feet, seven (single-story) non-standard detached accessory dwelling units at 900 square feet and 1,175 square feet.

The development, as proposed, will conform to the provisions of the Zoning and Development Code. This development meets the criteria contained in the Design Review section of the Municipal Code.

Additionally, the project is aesthetically enhanced with architectural detail. The buildings will not exceed the maximum height of 35-foot.

The project will be an appropriate and desirable development for the community. Each elevation has a contemporary architectural theme using cool and natural colors with contrasting colors of grey and beige. A variety of design features and materials are provided on the elevations such as architectural pop-outs, stone veneer, wood siding, decorative window treatments, varied rooflines, covered porches, and other features appropriate to the contemporary architecture. The development will comply with the required setbacks. All other applicable development standards specified in the Zoning and Development Code will be met.

Finding No. 2: The proposal meets or exceeds the criteria contained in this chapter and will result in an appropriate, safe, and desirable development promoting the public health, safety, and welfare of the community.

Findings of Fact: The proposed project is located within the Single-Family Residential (R-1) zoning district and has been determined to be aesthetically and architecturally pleasing and compatible with the neighborhood. The proposed neighborhood is contemporary and true to style with the ATTACHMENT NO.
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surrounding homes, and are compatible, resulting in high quality architectural design appropriate and desirable for the surrounding community. The proposed development will enhance the character of the surrounding residential area through appropriate attention to aesthetics and design.

The project includes street improvements: sidewalks, drainage, grading, and perimeter/privacy walls to provide a safe and well-designed neighborhood. The proposed neighborhood has been reviewed by Planning, Engineering, Building and Safety, and Fontana Fire Prevention for site circulation, access, and safety. The proposed project meets or exceeds the standards of the Zoning and Development Code and will provide a safe design for normal public access.

Finding No. 3: The proposal, in its design and appearance, is aesthetically and architecturally pleasing resulting in a safe, well-designed facility while enhancing the character of the surrounding neighborhood.

Findings of Fact: The proposed project will result in much needed and appropriate improvements, not only for the project site, but the surrounding area as well. The project includes street improvements: sidewalks, drainage, grading and perimeter and privacy walls to provide a safe and well-designed neighborhood. The proposed neighborhood has been reviewed by Planning, Engineering, Building and Safety, and Fontana Fire Prevention for site circulation, access, and safety. The proposed project meets or exceeds the standards of the Zoning and Development Code and will provide a safe design for normal public access. These structures will be built pursuant to all applicable building, zoning, and fire codes and standards and; therefore, shall promote the public health, safety, and welfare of the surrounding community.

Finding No. 4: The site improvements are appropriate and will result in a safe, well-designed facility.

Findings of Fact: The proposed project has been determined to be appropriate and will result in a safe, well-designed development. The tract of homes has been designed and will be developed with appropriate pavement, curb, gutter, and sidewalk. The proposed project has been reviewed by Planning, Engineering, Building and Safety, and Fontana Fire Prevention for site circulation, access, and safety. The character of the surrounding neighborhood reflects residential uses primarily single-family dwellings.

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SECTION NO. 2. Based on the foregoing, the City of Fontana’s Planning Commission hereby approves Design Review No. 21-032, subject to the conditions of approval, which are attached hereto as Exhibits “A” to this Resolution and incorporated herein by this reference.

SECTION NO. 3. Resolution Regarding Custodian of Record: The documents and materials that constitute the record of proceedings on which this Resolution has been based are located at the Planning Department, 8353 Sierra Avenue, Fontana, CA 92335.

This information is provided in compliance with Public Resources Code, Section No. 21081.6.

SECTION NO. 4. The Secretary shall certify to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED by the Planning Commission of the City of Fontana, California, at a regular meeting held on this 21st day of June 2022.

City of Fontana
___________________________
Cathline Fort, Chairperson
ATTEST:

I, Idilio Sanchez, Secretary of the Planning Commission of the City of Fontana, California, do hereby certify that the foregoing resolution was duly and regularly adopted by the Planning Commission at a regular meeting thereof, held on the 21st day of June 2022, by the following vote, to-wit:

AYES:

NOES:

ABSENT:

ABSTAIN:
___________________________
Idilio Sanchez, Secretary
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Exhibit “A”

CITY OF FONTANA

CONDITIONS OF APPROVAL
PROJECT: Master Case No. 18-097R1 DATE: June 21, 2022
Design Review No. 21-032
LOCATION: The project site is located on the north side of Merrill Avenue east of Palmetto Avenue, the project site is otherwise identified as 8844, 8843, 8851, 8859, 8864, 8667, 8876, 8877, 8884, 8885, 8892, and 8893 Encinitas Court (APNs: 0192-242-61, -62, -63, -64, -65, -66, -67, -68, -69, -70, -71, and -72).

PLANNING DEPARTMENT:

1. The applicant/developer/property owner shall defend, indemnify, protect and hold harmless the City of Fontana or its agents, officers, attorneys and employees from any and all actual or alleged claims, actions or proceedings against the City of Fontana or its agents, officers, attorneys or employees to attack, set aside, void, annul or seek monetary damages arising out of any challenge to the applicant’s proposed project or to any approvals of the Planning Commission and/or City Council concerning this project, including but not limited to actions challenging CEQA actions, permits, variances, plot plans, design plans, maps, licenses, and amendments. The City of Fontana shall promptly notify the applicant of any claim, action, or proceeding and the City of Fontana shall cooperate in the defense.

In the event of any such third-party action or proceeding, the City shall have the right to retain legal counsel. The applicant shall be responsible and reimburse the City for such legal fees and costs, in their entirety, including actual attorneys’ fees, which may be incurred by the City in defense of such action or proceeding. This indemnification shall also include, but not be limited to, damages, fees and/or costs awarded against the City, if any, and cost of suit, attorneys’ fees, and other costs, liabilities and expenses incurred in connection with such claim, action, or proceeding whether incurred by applicant, the City and/or any parties bringing such forth.

The City of Fontana and the applicant acknowledge that the City would not have approved this project if the City were to be liable to applicant in damages under or with respect to all or any part of this application or this condition of approval.

Accordingly, applicant shall not sue the City for damages or monetary relief for any matter arising from or related to this condition of approval. Applicant’s sole and exclusive remedy shall be limited to declaratory/injunctive relief, mandate, and/or specific performance.

2. This Design Review shall become null and void two (2) years from the date of approval, unless the appropriate permits have been obtained and construction, 412
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defined as permit obtainment, commencement of construction of the primary building on site, and successful completion of the first Building and Safety Division inspection, has commenced within this period.

3. All Conditions of Approval contained herein shall be incorporated into all applicable final construction plans and a copy of these conditions shall be placed on a sheet in the final building and grading plans prior to issuance of any building or grading permits.

4. The rights and privileges granted by this project shall not become effective, nor shall the Applicant commence the use for which this project is granted, until all of the following have occurred:

A. All requirements of the City of Fontana’s Municipal Code shall be complied with.

B. All Conditions of Approval imposed on this project have been fulfilled.

C. All of the improvements, construction, alteration, and other work set forth in this project have been completed and have been accepted by the City, as evidenced by the City’s final inspection and acceptance of the work.

5. Prior to the construction of any modifications, all structural and aesthetic changes to the project design must be requested and approved in writing by the Director of Planning or his/her designee. Major structural and aesthetic changes exceeding the codified parameters of administrative policy shall be presented to the Planning Commission for approval. Changes made without approval as stated herein, will prevent the occupancy of the residential structure until corrections are approved in writing by all appropriate staff.

6. The Director of Planning, or his/her designee, shall have the authority for minor architectural changes focusing around items such as window treatments, color combinations, façade treatments, and architectural relief. Questions on the interpretation of this provision or changes not clearly within the scope of this provision shall be submitted to the Planning Commission for consideration under a Revision to the Design Review.

7. Upon discovery of any cultural tribal cultural or archaeological resources, cease construction activities in the immediate vicinity of the find until the find can be assessed. All cultural tribal and archaeological resources unearthed by project construction activities shall be evaluated by the qualified archaeologist and tribal monitor/consultant. If the resources are Native American in origin, interested Tribes (as a result of correspondence with area Tribes) shall coordinate with the landowner regarding treatment and curation of these resources. Typically, the Tribe will request preservation in place or recovery for educational purposes. Work may continue on other parts of the project while evaluation takes place.

Preservation in place shall be the preferred manner of treatment. If preservation in place is not feasible, treatment may include implementation of archaeological data recovery excavation to remove the resource along the subsequent laboratory processing and analysis. All Tribal Cultural Resources shall be returned to the Tribe. Any historic archaeological material that is not Native American in origin shall be curated at a public, non-profit institution with a research interest in the materials, ATTACHMENT NO.
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if such an institution agrees to accept the material. If no institution accepts the archaeological material, they shall be offered to the Tribe or a local school or historical society in the area for educational purposes.

Archaeological and Native American monitoring and excavation during construction projects shall be consistent with current professional standards. All feasible care to avoid any unnecessary disturbance, physical modification, or separation of human remains and associated funerary objects shall be taken. Principal personnel shall meet the Secretary of the Interior standards for archaeology and have a minimum of 10 years’ experience as a principal investigator working with Native American archaeological sites in southern California. The Qualified Archaeologist shall ensure that all other personnel are appropriately trained and qualified.

8. The construction contractor will use the following source controls at all times:

A. Use of noise-producing equipment will be limited to the interval from 8:00 a.m. to 5:00 p.m., Monday through Friday.

B. For all noise-producing equipment, use types and models that have the lowest horsepower and the lowest noise generating potential practical for their intended use.

C. The construction contractor will ensure that all construction equipment, fixed or mobile, is properly operating (tuned-up) and lubricated, and that mufflers are working adequately.

D. Have only necessary equipment onsite.

E. Use manually adjustable or ambient-sensitive backup alarms. When working adjacent to residential use(s), the construction contractor will also use the following path controls, except where not physically feasible, when necessary:
i. Install portable noise barriers, including solid structures and noise blankets, between the active noise sources and the nearest noise receivers.
ii. Temporarily enclose localized and stationary noise sources.

9. Foam treatment used for architecture features and/or projections located on the first floor (under 14-foot) shall be covered with concrete or similar durable material a minimum of ¼ inch thick, or as determined by the Director of Planning.

10. If solar panel systems are installed on the roof of any residential structure, the installation shall be on top or above the approved roof tile. If a solar panel system is flush mounted to the roof, matching roof tiles shall be replaced immediately upon removal of the solar panels.

11. No solid masonry wall shall be higher than nine-foot from top of ground (finish grade) when used in combination with a retaining wall unless otherwise stated for this project.

12. All garage doors shall be metal, sectional roll-up and have windows. 414
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13. Wall-mounted decorative lighting fixtures shall be provided at the front porch area as well as on each side of the garage door. Wall-mounted decorative lighting fixtures shall be a minimum of 18 inches in height.

14. Prior to the issuance of a Certificate of Occupancy, the applicant/developer/property owner shall underground all utilities, which for the purpose of this condition shall also include all boxes, structures and/or other equipment located in the public right-of-way, any public utility easement(s) and on any private property, to the satisfaction of the Director of Planning or his/her designee.

15. All new block walls that can be seen by public view shall be constructed with a decorative block and capped with a prefabricated block cap. New bock walls that cannot be seen by public view could be constructed of CMU block with a masonry cap.

16. The following electrical outlets and garage door opener will be provided in all garages:

A. Install one automatic garage door opener for the double garage door.

B. Install at least one duplex receptacle within garage.

17. In the event that one or more of the Conditions of Approval for this project needs to be amended and/or deleted due to health, safety or welfare concerns, the City Manager is authorized to approve or conditionally approve such amendment/deletion, provided that City manager shall bring such proposed amendment/deletion to the City Council at the next available meeting for City Council ratification, but in no event later than sixty (60) days following the City Manger’s decision. The noticing of such City Council meeting for possible ratification shall be pursuant to Sections No. 30-30 and Sections No. 30-31 of the Municipal Code.

18. The current Development Fees shall be paid.

Prior to Issuance of Building /Construction Permits

19. The applicant/developer/property owner shall provide clustered and/or individual mailbox(es) for the delivery of mail to future residents of the development. The location shall be convenient for the residents and not block the line-of-sight for pedestrians or vehicle traffic.

20. The mailboxes shall be made of durable material and shall be installed in a manner that is resistant to vandalism and meets the requirements of the Post Office. The Post Office currently approves freestanding mailboxes that are F-series and wall-mounted boxes that are 4C series. The developer is responsible for contacting the Post Office for the type and location of the mailboxes within their development.

Any replacements of the mailboxes subsequent to the original installation shall be the responsibility of the developer, each individual homeowner and/or the homeowners association, and the Post Office.

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BUILDING AND SAFETY DIVISION:

21. The applicant/developer/property owner shall comply with the latest adopted edition of the following codes as applicable:

A. California Building Code
B. California Residential Code
C. California Electrical Code
D. California Mechanical Code
E. California Plumbing Code
F. California Energy Code
G. California Fire Code
H. California Green Building Standards Code

22. The applicant/developer/property owner shall install an automatic fire suppression system, which is required in all new construction per FMC Chapter 11 Article II.

Design and type of system shall be based upon the requirements of the Building Code, Fire Code and the requirements of the Fontana Fire Prevention District.

23. The applicant/developer/property owner shall verify that any temporary building, trailer, commercial coach, etc. installed and/or used in connection with a construction project complies with FMC Chapter No. 5 Article XIV.

24. The applicant/developer/property owner shall verify that all perimeter/boundary walls are designed and constructed so that the outer/exterior face of the wall is as close as possible to the lot line. In any case, the outer/exterior face of the wall shall be within two (2) inches of the lot line. Distances greater than two (2) inches may be approved prior to construction by the Building Official on a case-by-case basis for extenuating circumstances.

25. The applicant/developer/property owner shall have the tract map recorded prior to the issuance of any building permits.

26. The applicant/developer/property owner shall comply with the following grading requirements:

A. Grading plans shall be submitted to and approved by Building & Safety. The grading plans shall indicate all site improvements and shall indicate complete drainage paths of all drainage water run-offs.

B. All drainage water shall drain via approved methods to an approved location, such as a public street, a public drainage system, etc.

C. Drainage water shall not cross over a public sidewalk. Drainage water may, however, cross under a sidewalk if an approved drainage structure is used.

D. A recorded drainage acceptance agreement is required from adjoining property(s) receiving flows from this property.

E. No water course or natural drainage shall be obstructed.

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F. Minimum slope or grade for ALL drainage structures shall be one half (0.50) percent for concrete and one (1.0) percent for all other, or as otherwise approved by the Building Official.

G. Drainage water shall not pass from an ‘improved’ type of drainage structure to an ‘unimproved’ type of drainage structure (e.g., concrete swale to a dirt swale) unless otherwise approved by the Building Official.

H. A complete hydrology study using the latest edition of the San Bernardino County Flood Control Hydrology Manual, and complete hydraulic calculations justifying the size, slope, capacity, etc. of any and all drainage structures being utilized, shall be submitted to and approved by Building & Safety.

The on-site drainage system shall, as a minimum, be designed to handle the run-off generated by a ten (10) year storm. Check for flooding of all on-site structures (buildings) and all adjacent properties during a hundred (100) year storm.

I. The grading plans shall, as a minimum, contain sections at all lot lines and/or permit boundary lines. These sections shall clearly indicate:
i. The relationship between the proposed finished on-site grade elevations and the existing adjacent property grade elevations (Indicate any additional drainage water that may come from an adjacent property.); ii. The ground cover/finished surface material being proposed (e.g., type of pavement, plant material, etc.);
iii. All proposed drainage structures;
iv. Any proposed and/or required walls or fencing.

27. The applicant/developer/property owner shall verify that all exterior lighting shall be oriented, directed, and/or shielded as much as possible so that direct illumination does not infringe onto adjoining properties.

PRIOR TO ISSUANCE OF BUILDING/CONSTRUCTION PERMITS

28. The following items shall be completed and/or submitted to Building & Safety – as applicable – prior to the issuance of building permits for this project:

A. Precise grading plans shall be approved
B. Rough grading completed
C. Compaction certification
D. Pad elevation certification
E. Rough grade inspection signed off by a City Building Inspector For more information related to Building & Safety, please visit our web page at https://www.fontana.org/136/Building-Safety.
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ENGINEERING DEPARTMENT:

29. Applicant shall pay all applicable service fees pursuant to the City of Fontana Municipal Code.

30. The former approved Conditions of Approval for Tentative Tract Map No. 20230 shall apply.

FIRE PROTECTION DISTRICT:

31. Jurisdiction. The above referenced project is under the jurisdiction of the San Bernardino County Fire Department (herein “Fire Department”). Prior to any construction occurring on any parcel, the applicant shall contact the Fire Department for verification of current fire protection requirements. All new construction shall comply with the current California Fire Code requirements and all applicable statutes, codes, ordinances, and standards of the Fire Department.

32. Fire Access Road Width. Prior to map recordation, all fire access roadways shall be designed to meet the requirements for this development and shall be approved by the Fire Department. All buildings shall have access provided by approved roads, alleys and private drives with a minimum twenty-six (26) foot unobstructed width and vertically to fourteen (14) feet six (6) inches in height. Buildings three (3) stories in height or more shall have a minimum access of thirty (30) feet unobstructed width and vertically to fourteen (14) feet six (6) inches in height. California Fire Code sec 503, SBCFD Standard 503.1

33. Turnaround. An approved turnaround shall be provided at the end of each roadway one hundred and fifty (150) feet or more in length. Cul-de-sac length shall not exceed six hundred (600) feet; and all roadways shall not exceed a 12 percent grade and have a minimum of nineteen (19) foot inside radius and a forty-five (45) foot outside radius for all turns.

34. Street Signs. Approved temporary or permanent street signs shall be installed throughout the project prior any combustible materials being placed on the construction site. California Fire Code sec. 505, SBCFD Standard 505.1

35. Water System Residential. Prior to map recordation, all water supply systems shall be designed to meet the required fire flow for this development and shall be approved by the Fire Department. The required fire flow shall be determined by using Appendix B of the California Fire Code. A minimum of one new six (6) inch fire hydrant assembly with two (2) two and one half (2 1/2) inch and one (1) four (4) inch outlet shall be provided. All fire hydrants shall be spaced no more than six hundred (600) feet as measured along vehicular travel-ways. California Fire Code sec 508, SBCFD Standard 508.1
The Fire Flow for this project shall be: 1500 GPM for a 2-hour duration at 20 psi residual operating pressure. Fire Flow is based on a 2,000 square foot structure.

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36. Hydrant Marking. Blue reflective pavement markers indicating fire hydrant locations shall be installed as specified by the Fire Department. SBCFD Standard 508.5.2.

37. Water System Certification. The applicant shall provide the Fire Department with a letter from the serving water company, certifying that the required water improvements have been made or that the existing fire hydrants and water system will meet distance and fire flow requirements. Fire flow water supply shall be in place prior to placing combustible materials on the job-site.

38. Combustible Protection. Prior to combustibles being placed on the project site an approved paved roadway providing fire access and fire hydrants providing an acceptable fire flow shall be installed. California Fire Code sec 508, SBCFD Standard 508.1

39. Fire Sprinkler-NFPA #13D. An automatic life safety fire sprinkler system complying with NFPA 13D and Fire Department standards is required. A fire sprinkler contractor shall submit three (3) sets of detailed plans with hydraulic calculations and manufacturer specification sheets to the Fire Department for approval. The required fees shall be paid at the time of plan submittal. SBCFD Standard 903D.

40. Residential Addressing. The street address shall be installed on the building with numbers that are a minimum of four (4) inches in height and with a one half (½) inch stroke. The address shall be visible from the street. During the hours of darkness, the numbers shall be internally and electrically illuminated with a low voltage power source. Numbers shall contrast with their background and be legible from the street.

Where the building is fifty (50) feet or more from the roadway, additional contrasting four (4) inch numbers shall be displayed at the property access entrances. California Fire Code sec. 505, SBCFD Standard 505.1
MANAGEMENT SERVICES:

41. To eliminate the negative fiscal impact on municipal services associated with this proposal, the project will be required to annex into an existing community facilities district (CFD) or form a new community facilities district (CFD) for the purpose of financing the costs of maintenance and operation of the street lighting, landscaping, parkways and the removal of or cover of graffiti within the boundaries of, or along the perimeter of the district. The district’s annual levy will include an amount for the maintenance of city parks. The city will determine which is more appropriate for the project, establishing a new district or annexing into an existing district. The district formation or annexation must be completed prior to the issuance of building permits.

END OF CONDITIONS OF APPROVAL
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NOTICE OF EXEMPTION
ATTACHMENT NO. 4
TO: Clerk of the Board of Supervisors
County of San Bernardino
385 N. Arrowhead Avenue, 2nd Floor
San Bernardino, CA 92415-0130
FROM: City of Fontana
Planning Department
8353 Sierra Avenue
Fontana, CA 92335

1. Project Title: Master Case No. 18-097R1
Design Review No. 21-032

2. Project Location: The project site is located at Encinitas Court approximately 360 feet east of the intersection of
Merrill Avenue and Palmetto Avenue (APNs: 0192-
242-61, -62, -63, -64, -65, -66, -67, -68, -69, -70, -71, and -72)

3. (a) Project Location - City: Fontana, CA 92335
(b) Project Location - County: San Bernardino

4. Description of nature, purpose, and beneficiaries of Project: Design Review No. 21-032 is a request for the site and architecture review to construct twelve singlefamily homes, seven non-standard accessory dwelling units, five standard accessory dwelling units, and four junior accessory dwelling units on a previously approved/recorded tract map (Tentative Tract Map No. 20230) that subdivided a parcel of approximate 3.0 adjusted gross acres.

5. Name of Public Agency approving project: City of Fontana

6. Name of Person or Agency carrying out project: Andresen Architecture 17087 Orange Way
Fontana, CA 92335

1. Exempt status: (Check one)
(a) ____ Ministerial project.
(b) ____ Not a project.
(c) ____ Emergency Project.
(d) __X_ Categorical Exemption. State type and class number: Exempt under Section No. 15332 (Class 32, In-Fill Development Projects) of the California Environmental Quality Act and Section No. 3-13 (Certain Infill Projects) of the 2019 Local Guidelines for Implementing CEQA. (e) ____ Declared Emergency.
(f) ____ Statutory Exemption. State Code section number:
(g) ____ Other Explanation: __________________________________________

2. Reason why project was exempt: This project site is considered In-Fill Development and meets the CEQA requirement of In-Fill.

3. Contact Person: Jon S. Dille, Associate Planner Telephone: (909) 350-6681 Date Received for Filing: __________________________________ Salvador Quintanilla
(Clerk Stamp Here) Senior Planner
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Publish: June 10, 2022
ATTACHMENT NO. 5

NOTICE OF PUBLIC HEARING
SI DESEA INFORMACION EN ESPAÑOL REFERENTE A ESTA NOTIFICACION O PROYECTO, FAVOR DE COMUNICARSE AL (909) 350-6728.

In compliance with Section No. 202 of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132) and the federal rules and regulations adopted in implementation thereof, the Agenda will be made available in appropriate alternative formats to persons with a disability. Should you need special assistance to participate in this meeting, please contact the City Clerk’s Department by calling (909) 350-7602. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.

A PUBLIC HEARING HAS BEEN SCHEDULED BEFORE THE PLANNING COMMISSION OF THE CITY OF FONTANA FOR THE FOLLOWING:

Master Case (MCN) No. 18-097R1/Design Review (DRP) No. 21-032: A request to construct twelve (12) two-story single-family homes, seven (7) non-standard accessory dwelling units, five (5) standard accessory dwelling units, and four (4) junior accessory dwelling units on a previously approved recorded tract map (Tentative Tract Map No. 20230).

Environmental
Determination:

This project qualifies for a categorical exemption pursuant to Section No. 15332 (In-Fill Development Projects) of the California Environmental Quality Act and Section No. 3.18 of the Local
Guidelines for implementing
CEQA.

Location of
Property:

Encinitas Court (APNs: 0192-
242-61, -62, -63, -64, -65, -66,
-67, -68, -69, -70, -71, and -
72)
Date of Hearing: June 21, 2022
Place of Hearing: City Hall Council Chambers
8353 Sierra Avenue
Fontana, CA 92335
Time of Hearing: 6:00 P.M.

Should you have any questions concerning this project, please contact Jon Dille, Associate Planner, at (909) 350-6681. E-mail: [email protected]

ANY INTERESTED PARTY MAY PROVIDE INFORMATION BY LETTER OR EMAIL WHICH MAY BE OF ASSISTANCE TO THE PLANNING COMMISSION. A COPY OF THE APPLICATION AND ENVIRONMENTAL DOCUMENTATION IS AVAILABLE FOR INSPECTION. PLEASE CONTACT THE PLANNER LISTED ABOVE.

IF YOU CHALLENGE IN COURT ANY ACTION TAKEN CONCERNING A PUBLIC HEARING ITEM,

YOU MAY BE LIMITED TO RAISING ONLY THOSE ISSUES YOU OR SOMEONE ELSE RAISED AT

THE PUBLIC HEARING DESCRIBED IN THIS NOTICE, OR IN WRITTEN CORRESPONDENCE TO THE CITY AT, OR PRIOR TO, THE PUBLIC HEARING.
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ATTACHMENT NO. 7
823
City of Fontana
Action Report
Planning Commission
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1489 Agenda Date: 6/21/2022
Agenda #: DC-A Category: Director Comments
Director’s Communications: Upcoming City Council and Planning Commission memos.

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ATTACHMENT NO. 7
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ATTACHMENT NO. 7
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NOTICE OF EXEMPTION
TO: Clerk of the Board of Supervisors
County of San Bernardino
385 N. Arrowhead Avenue, 2nd Floor
San Bernardino, CA 92415-0130
FROM:

City of Fontana
Planning Department
8353 Sierra Avenue
Fontana, CA 92335
Project Title: Municipal Code Amendments (Master Case No. 22-049, Master Case No. 22-071, Municipal Code Amendment No. 22-004, and Municipal Code Amendment No. 22-005)
Project Location - Specific: Citywide
(a) Project Location - City: Fontana, CA
(b) Project Location - County: San Bernardino

1. Description of nature, purpose, and beneficiaries of Project: Municipal Code Amendments to update Chapters 26 and 30 of the Municipal Code to revise standards, eliminate inconsistencies, and include provisions for finance and conveyance maps, density/replacement units to address Senate Bill 330, and sign programs.

2. Name of Public Agency approving project: City of Fontana

3. Name of Person or Agency carrying out project: City of Fontana

4. Exempt status: (Check one)
(a) _____ Ministerial project.
(b) _____ Not a project.
(c) _____ Emergency Project.
(d) __X__ Categorical Exemption. State type and class number: Exempt under guidelines section Sections 15060(c), 15061(B)(3) (the common-sense exemption), and 15378 and Sections No. 3.01, 3.22, and 10.59 of the 2019 Local Guidelines for Implementing CEQA. (e) _____ Declared Emergency.
(f) _____ Statutory Exemption. State Code section number: _______________________ (g) _____ Other. Explanation: _______________________________________________

5. Reason why project was exempt: This project is a citywide code update to Chapter 26 and 30 of the Fontana Municipal Code. There is no associated development with this project.

6. Contact Person: Rina Leung, Senior Planner Telephone: (909) 350-6566 Date Received for Filing: __________________________________ Rina Leung
Senior Planner
(Clerk Stamp Here)
ATTACHMENT NO. 8
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ATTACHMENT NO. 9

NOTICE OF PUBLIC HEARING
SI DESEA INFORMACION EN ESPAÑOL REFERENTE A ESTA NOTIFICACION O PROYECTO, FAVOR DE COMUNICARSE AL (909) 350-6728.

In compliance with Section No. 202 of the Americans with Disabilities Act of 1990 (42 U.S.C.

Sec. 12132) and the federal rules and regulations adopted in implementation thereof, the agenda will be made available in appropriate alternative formats to persons with a disability.

Should you need special assistance to participate in this meeting, please contact the City Clerk’s Department by calling (909) 350-7602 or email [email protected]. Notification 48 hours prior to the meeting will enable the city to make reasonable arrangements to ensure accessibility to this meeting.

A PUBLIC HEARING HAS BEEN SCHEDULED BEFORE THE CITY COUNCIL OF THE CITY OF FONTANA FOR THE FOLLOWING:

Master Case No. 22-049, Master Case No. 22-071, Municipal Code Amendment No. 22-004 and Municipal Code Amendment No. 22-005: Update to the City of Fontana Municipal Code for amendments to Chapter 26 Subdivisions and Chapter 30 Zoning and Development Code to provide updated standards, flexibility in site design regulations, and address time saving effectiveness. Updates to Chapter 26 include the addition of provisions pertaining to subdivision and conveyance maps. Updates to Chapter 30 to allow truck sales within the General Commercial C-2 Zoning District along Valley Boulevard with a Conditional Use Permit (CUP) application, reducing the buffer for smoke shops from 1,500 to 600 feet, reduce required setbacks for residential accessory structures within the Single-Family R-1 Zoning District, include a provision for sign programs and add language for density bonuses/replacement units to address Senate Bill 330 no net loss provisions.

Environmental
Determination:

This project qualifies for a categorical exemption pursuant to the California Environmental Quality Act (CEQA) Guidelines Sections 15060(c), 15061(B)(3) (the common-sense exemption), and 15378 and Sections No. 3.01, 3.22, and 10.59 of the 2019 Local Guidelines for Implementing CEQA.

Location: Citywide

Date of Hearing: July 12, 2022
Place of Hearing: City Hall Council Chambers
8353 Sierra Avenue
Fontana, CA 92335
Time of Hearing: 7:00 P.M.

Should you have any questions concerning this project, please contact Rina Leung, Senior Planner, at (909) 350-6566. E-mail: [email protected]. 830
ATTACHMENT NO. 9

ANY INTERESTED PARTY MAY PROVIDE INFORMATION BY LETTER OR EMAIL WHICH MAY BE OF ASSISTANCE TO THE CITY COUNCIL. A COPY OF THE APPLICATION AND ENVIRONMENTAL DOCUMENTATION IS AVAILABLE FOR INSPECTION. PLEASE CONTACT THE PLANNER LISTED ABOVE.

IF YOU CHALLENGE IN COURT ANY ACTION TAKEN CONCERNING A PUBLIC HEARING

ITEM, YOU MAY BE LIMITED TO RAISING ONLY THOSE ISSUES YOU OR SOMEONE ELSE

RAISED AT THE PUBLIC HEARING DESCRIBED IN THIS NOTICE, OR IN WRITTEN CORRESPONDENCE TO THE CITY AT, OR PRIOR TO, THE PUBLIC HEARING.

Publish: ¼ page
831
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1512 Agenda Date: 7/12/2022
Agenda #: C. Category: Public Hearing
FROM:

Planning Department
SUBJECT:

Master Case No. 22-072, Municipal Code Amendment No. 22-006 - Request to approve an Ordinance Repealing Sections 30-6 Through 30-11 of Division 3 of Article 1 of Chapter 30, Amending Chapter 30 Permitted Uses, And Adding Chapter 33, “Cannabis Businesses And Activities” RECOMMENDATION:
(a) Determine that the project is Categorically Exempt pursuant to Section No. 15061(B)(3) (the “common sense” exemption), Section 15303 (Class No. 3, Small Structures) of the California Environmental Quality Act and Section No. 3-22 (Categorical Exemptions) of the 2019 Local Guidelines for implementing the CEQA, and direct staff to file a Notice of Exemption; and, (b) Read by title only and waive further reading of and introduce Ordinance No. 1899. an Ordinance of the City Council of the City of Fontana, approving Municipal Code Amendment (MCA) No. 22-006 to amend Chapter 30 of the Fontana Municipal Code and add Chapter 33, “Cannabis Businesses and Activities”, and the reading of the title constitutes the first reading thereof.

COUNCIL GOALS:
· To promote economic development by concentrating on job creation. · To promote economic development by pursuing business retention, expansion and attraction. · To promote economic development by striving to constantly improve the city's competitiveness.
· To improve public safety by maximizing fire and emergency medical service resources.

DISCUSSION:

Background:

Planning Commission Consideration: At its June 21, 2022 meeting, the Planning Commission considered proposed MCA22-006, an ordinance to provide for commercial cannabis retail sales within the City of Fontana on a limited basis. Two written communications were received prior to the hearing, and three speakers spoke in person on the item. During a lengthy discussion, questions and concerns raised by the Planning Commission and answered by staff included security, sensitive receptors and buffers, the application process and scoring, permit issuance, expiration, and revocation, and signage. After consideration, the Planning Commission voted 4-1 to deny the City of Fontana Page 1 of 3 Printed on 7/6/2022
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revocation, and signage. After consideration, the Planning Commission voted 4-1 to deny the recommendation to the City Council.

State, Federal, and Local Legislation: On November 8, 2016, California voters passed Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act (“AUMA”), legalizing the use and possession of cannabis and cannabis products by adults aged 21 years and older. At that time, approximately 53.5% of Fontana voters voted in favor of legalizing commercial cannabis. On June 27, 2017, Senate Bill 94 was signed into law, which created a single regulatory scheme for both medicinal and non-medicinal cannabis known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”). MAUCRSA gives local jurisdictions, including the City of Fontana (“City”), the authority to adopt and enforce local ordinances regulating cannabis businesses. On January 1, 2018, State licensing authorities began issuing licenses to businesses that operate in local jurisdictions that allow commercial cannabis activity.

The City currently prohibits the establishment and operation of commercial cannabis activity of any kind, and requires a City-issued permit for residential indoor cannabis cultivation. In 2021, City Council directed staff to review economic development and regulatory options for possible cannabis businesses in the City in light of neighboring cities success in regulating commercial cannabis businesses. As such, the City is now considering allowing cannabis retail establishments that would be permitted to operate a limited number of storefront retailers and for the sale of cannabis by delivery to customers by those same storefront retailers. Currently, there are 1,058 cannabis retailers statewide, of which 734 are storefront retailers and the remaining 324 are non-storefront delivery services, which only sell cannabis to customers.

Analysis:

The attached Ordinance is generally based on the City of Pomona’s model and is designed to create a merit-based, professional review process for the issuance of a Commercial Cannabis Permit (“Permit”) that is transparent and comprehensive. Permits would only allow for the retail sale and delivery of commercial cannabis, including both medicinal and recreational adult-use cannabis. As currently proposed, only three (3) Permits would be available in the City. If the proposed Ordinance is adopted, and the three Permits are issued, the issuance of any additional Permits would require an amendment to the Fontana Municipal Code.

Each of the three (3) Permits issued would be issued for one of three designated areas within the City (i.e., North, Central, and South), as shown in the attached map (Exhibit “C”). Within each of those designated areas, Permits may be issued in the following zone districts: C-1 (Community Commercial), C-2 (General Commercial), and Specific Plan areas designated in the proposed Ordinance. In addition to all other applicable zoning regulations, no Permit would be issued for a business located within a 600-foot radius of a school providing instruction in kindergarten or any grades one through twelve, a day care center, park, a youth and recreation center, or city boundaries.

As proposed, neither the Planning Commission, nor the City Council would play a role in the evaluation and scoring of applications for Permits, nor would either play a role in the selection or Permit issuance. The parameters and criteria for the issuance of a Permit is set out in specific detail in the Ordinance and includes a rigorous five-phase application process, the implementation of which is wholly administrative. Taken together, the five-phases of the Permit application process include (1) City of Fontana Page 2 of 3 Printed on 7/6/2022
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an initial screening process with a background checks for all proposed owners and operators, (2) scoring of an application on specified criteria, (3) an interview, (4) identification of a proposed business location and a detailed site plan, and (5) final scoring and ranking of applicants, and Permit issuance, if available.

All Permit applicants would be required to comply with Process Integrity Standards, which would be established by a separate City Council Resolution. Failure to abide by the Process Integrity Standards may result in disqualification from the review process or revocation of an issued Permit.

Prior to being issued a Permit to commence operations, the proposed Permittee must enter into a fully executed Operating Agreement with the City which will include fiscal mitigation measures including a community benefit charge in an amount determined by a City Council approved Operating Agreement, and obtain a City Business License.

Once issued, the Permits would be non-assignable and nontransferable, and changes in either the location or ownership of the Commercial Cannabis Business would require approval by the City.

Each Permit will expire three (3) years after initial issuance, and will then be renewed annually thereafter. Once a Permit is issued the City retains broad discretion to revoke, suspend or terminate Permits for failure to comply with the requirement imposed by the newly added Chapter 33 “Cannabis Businesses and Activities” or compliance with state law, including state licensing requirements. City Council would only hear appeals from decisions affecting a Permittee, such as nonrenewal, suspension, or revocation.

The Ordinance and associated attachments include edits to address discussion at the Planning Commission meeting as well as concerns raised by Planning Commissioners, along with other minor updates and clarifications. Written communications received prior to the Planning Commission hearing are attached. Additionally, the proposed ordinance was presented at a Development Advisory Board (DAB) meeting on June 30, 2022 which provided further opportunity for input.

FISCAL IMPACT:

Regular taxes and special fees to be generated by the cannabis retailers are estimated to be between $700,000 and $1,000,000 per location annually.

MOTION:

Adopt Ordinance No. 1899
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ORDINANCE NO. 1899

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF FONTANA, CALIFORNIA, REPEALING SECTIONS 30-
6 THROUGH 30-11 OF DIVISION 3 OF ARTICLE 1 OF
CHAPTER 30, AMENDING CHAPTER 30 PERMITTED
USES, AND ADDING CHAPTER 33, “CANNABIS
BUSINESSES AND ACTIVITIES”
WHEREAS, the City of Fontana, California (the “City”) is a municipal corporation, duly organized under the constitution and laws of the State of California; and WHEREAS, on September 13, 2016, the City Council adopted Ordinance No. 1747 prohibiting all marijuana uses in the City to the extent allowed under California state law, and included a provision requiring a Residential Indoor Marijuana Cultivation (“RIMC”) permit for any individual who desires to grow up to six (6) marijuana plants in their private residence; and WHEREAS, on November 8, 2016, California voters approved Proposition 64, titled the “Adult Use of Marijuana Act” (the “AUMA”) and enacted a state statutory scheme legalizing, controlling, and regulating the cultivation, processing, manufacturing, distribution, testing, and sale of nonmedical (“adult-use“ or “recreational”) cannabis, including cannabis products, for use by adults twenty-one (21) years of age and older; and
WHEREAS, on January 24, 2017, the City Council adopted Ordinance No. 1758 amending the Zoning and Development Code by adding a new Section 30-7(b) entitled “Residential Indoor Marijuana Cultivation” to regulate indoor cultivation of marijuana and adopted Resolution No. 2017-05 establishing fees for a RIMC permit; and
WHEREAS, on March 12, 2019, the City council adopted Ordinance No. 1794 amending the RIMC fees; and
WHEREAS, on June 27, 2017, Governor Brown signed Senate Bill 94, the “Medicinal and AdultUse Cannabis Regulation and Safety Act” (“SB 94” or the “MAUCRSA”). SB 94 creates one state regulatory structure for medical and adult-use commercial cannabis activities, reconciling AUMA, with the Compassionate Use Act of 1996 (Proposition 215) and MCRSA (collectively referred to as “the Act”). SB 94 provided that a state license will not be approved for a business to engage in Commercial Cannabis Activity if the business activity violates any local ordinance or regulation; and
WHEREAS, three State licensing authorities charged with licensing and regulating commercial cannabis activities in California, the Bureau of Cannabis Control (“BCC”), the California Department of Food and Agriculture (“CDFA”), and the California Department of Public Health (“CDPH”), commenced releasing emergency regulations, outlining the standards and licensing procedures for both medicinal and adult-use commercial cannabis, and began issuing licenses for such activities on January 1, 2018; and
WHEREAS, having banned commercial cannabis citywide so as to monitor continuous developments with state law and how neighboring cities would regulate cannabis, the City Council ATTACHMENT NO. 1
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2 has developed an approach to regulating cannabis businesses within the City which will increase the likelihood of high quality and successful businesses and minimize potential adverse secondary impacts; and
WHEREAS, City Council intends to adopt this Ordinance to add Chapter 33 establishing a regulatory permit scheme for commercial cannabis activities, such that each proposed commercial activity must have an operating agreement and a regulatory permit prior to operation; and WHEREAS, City Council intends to repeal Sections 30-6 through 30-11 of Division 3 to comport with the provisions of Chapter 33, and
WHEREAS, the City Council finds and declares that this Ordinance constitutes a valid exercise of police power in accordance with Article XI, Section 7 of the California Constitution, is consistent with the language and intent of the AUMA, MAUCRSA, and related laws regulations, and policies issued by the state, consistent with the General Plan, and furthers the health, safety, and general welfare of the residents of the City of Fontana.

NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fontana as follows:

SECTION 1: Division 3 “Marijuana Uses” of Chapter 30 of the Fontana Municipal Code, is hereby repealed in its entirety.

SECTION 2: The Fontana City Code is hereby amended by adding Chapter 33, “Cannabis Businesses and Activities,” which shall read as follows:

CHAPTER 33 CANNABIS BUSINESSES AND ACTIVITIES
Sec. 33-1. Purpose and Intent.

Sec. 33-2. Legal Authority.

Sec. 33-3. Commercial Cannabis Businesses Prohibited Unless Specifically Authorized by this Chapter.

Sec. 33-4. Compliance with Laws.

Sec. 33-5. Definitions.

Sec. 33-6. Commercial Cannabis Permit Required to Engage in Commercial Cannabis Business.

Sec. 33-7. Maximum Number of Commercial Cannabis Businesses Authorized and Designated Locations; Application Process.

Sec. 33-8. Initial Commercial Cannabis Permit Application and Scoring.

Sec. 33-9. Application Review, Scoring and Selection Process; Permit Issuance.

Sec. 33-10. Expiration of Commercial Cannabis Permits.

Sec. 33-11. Revocation of Permits.

Sec. 33-12. Renewal Applications.

ATTACHMENT NO. 1
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3 Sec. 33-13. Effect of State License Suspension, Revocation, or Termination.

Sec. 33-14. Appeals.

Sec. 33-15. Commercial Cannabis Permit – Nonassignable and Nontransferable.

Sec. 33-16. Change in Location of Commercial Cannabis Business.

Sec. 33-17. Changes in Ownership of Commercial Cannabis Business.

Sec. 33-18. Change in Ownership when the Permittee is a Partnership or Corporation.

Sec. 33-19. Changes in Name Only.

Sec. 33-20. Alterations to Approved Facility.

Sec. 33-21. Operating Agreement Required.

Sec. 33-22. City Business License.

Sec. 33-23. Permits and Inspections Prior to Commencing Operations.

Sec. 33-24. City Discretion and Limitations on City’s Liability.

Sec. 33-25. Records and Recordkeeping.

Sec. 33-26. Restriction on Alcohol and Tobacco Sales, Dispensing or Consumption.

Sec. 33-27. Fees and Charges.

Sec. 33-28. Commercial Cannabis Businesses Permissible Zone Districts.

Sec. 33-29. Operating Requirements Applicable to all Commercial Cannabis Businesses.

Sec. 33-30. Additional Operating Regulations for Storefront Retail.

Sec. 33-31. Additional Operating Regulations for Cannabis Delivery.

Sec. 33-32. Promulgation of Regulations, Standards and Other Legal Duties.

Sec. 33-33. Fees Deemed Debt to City.

Sec. 33-34. Responsibility for Violations.

Sec. 33-35. Inspections.

Sec. 33-36. Violations and Penalties.

Sec. 33-37. Effect on Other Ordinances.

Sec. 33.38. Whistleblower Protection.

Sec. 33.39. Revolving Door Prohibition.

Sec. 33.40. Process Integrity Provision.

Sec. 33.41. Cannabis, Personal Use.

Sec. 33.42. Residential Indoor Cannabis Cultivation.

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4 Sec. 33-1 Purpose and Intent.

It is the purpose and intent of this Chapter to implement the provisions of the Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”) to accommodate the needs of medicallyill persons and provide access to adult-use cannabis for medicinal purposes as recommended by their health care provider(s), and to provide access to adult-use of cannabis for persons over the age of 21 as authorized by the Control, Tax & Regulate the Adult Use Cannabis Act (“AUMA” or “Proposition 64” passed by California voters in 2016), while imposing reasonable regulations on the use of land to protect the City’s residents, neighborhoods, and businesses from disproportionately negative impacts. As such, it is the purpose and intent of this Chapter to regulate the sale, delivery, and transportation of medicinal and adult-use cannabis and cannabis products in a responsible manner to protect the health, safety, and welfare of the residents of Fontana and to enforce rules and regulations consistent with state law.

It is the further purpose and intent of this Chapter to require all Commercial Cannabis Businesses operating in the City to obtain and renew annually a Commercial Cannabis Permit to operate within Fontana and an annual City of Fontana Business License.

Nothing in this Chapter is intended to authorize the possession, use, or provision of cannabis for purposes that violate state or federal law. The provisions of this Chapter are in addition to any other permits, licenses and approvals which may be required to conduct business in the City, and are in addition to any permits, licenses and approval required under state, county, or other law.

Sec. 33-2 Legal Authority.

Pursuant to Sections 5 and 7 of Article XI of the California Constitution, the provisions of MAUCRSA, any subsequent state legislation and regulations regarding same, the City is authorized to adopt ordinances that establish standards, requirements and regulations for the licensing and permitting of commercial medicinal and adult-use cannabis activity. Any standards, requirements, and regulations regarding health and safety, security, and worker protections established by the State of California, or any of its departments or divisions, shall be the minimum standards applicable in the City to all Commercial Cannabis Activity.

Sec. 33-3 Commercial Cannabis Businesses Prohibited Unless Specifically Authorized by this Chapter.

Except as specifically authorized in this Chapter, commercial cultivation, manufacture, processing, storing, laboratory testing, labeling, sale, distribution or transportation (other than as provided under California Business & Professions Code section 26090(e)), of cannabis or cannabis products is expressly prohibited.

Sec. 33-4 Compliance with Laws.

Nothing in this Chapter shall be construed as authorizing any actions that violate federal, state law or local law with respect to engaging in, or in the operation of, a Commercial Cannabis Business.

Nor shall this Chapter be construed as amending existing prohibitions on smoking tobacco or cannabis in public buildings and parks. It shall be the responsibility of the Permittees and Responsible Persons of a Commercial Cannabis Business to ensure that a Commercial Cannabis ATTACHMENT NO. 1
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5 Business is, at all times, operating in a manner compliant with all applicable federal, state and local laws, including for as long as applicable, all state cannabis laws, any subsequently enacted state law or regulatory, licensing, or certification standards or requirements, and any specific, additional operating procedures or requirements which may be imposed as conditions of approval of a required license or permit.

Sec. 33-5 Definitions.

When used in this Chapter, the following words shall have the meanings ascribed to them as set forth herein. Any reference to California statutes includes any regulations promulgated thereunder, and is deemed to include any successor or amended version of the referenced statute or regulatory provision.
“A-License” is a license issued by the State of California under MAUCRSA for cannabis or cannabis products that are intended for adults 21 years of age and over and who do not possess physician’s recommendations.
“Applicant” shall include any individual or entity applying for a permit under this Chapter, desiring to enter into an operating agreement, and including any officer, director, partner, or other duly authorized representative applying on behalf of an entity. “Business License” is the license issued by the City’s Business License Division after payment of the business tax as set forth in Division 1 of Article VIII of Chapter 50 of the City of Fontana City Code.
“Bureau” means the Bureau of Cannabis Control within the Department of Consumer Affairs, and shall have the same meaning as in Section 26001(e) of the Business and Professions Code, as same may be amended from time to time.
“Cannabis” means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or purified, obtained from cannabis. “Cannabis” does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter, “cannabis” does not mean “industrial hemp” as defined by Section 11018.5 of the California Health and Safety Code. Cannabis shall also have the same meaning as in Section 26001(f) of the Business and Professions Code, as same may be amended from time to time.
“Cannabis Accessories” means any equipment, products or materials of any kind which are used, intended for use, or designed for use in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, smoking, vaporizing, or containing cannabis, or for ingesting, inhaling, or otherwise introducing cannabis or cannabis products into the human body. Cannabis ATTACHMENT NO. 1
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6 accessories shall also have the same meaning as in Section 11018.2 of the Health and Safety Code, as same may be amended from time to time.
“Cannabis Concentrate” means cannabis that has undergone a process to concentrate one or more active cannabinoids, thereby increasing the product’s potency. Resin from granular trichomes from a cannabis plant is a concentrate for purposes of this Chapter. A cannabis concentrate is not considered food, as defined by Section 109935 of the Health and Safety Code, or drug, as defined by Section 109925 of the Health and Safety Code. Cannabis accessories shall also have the same meaning as in Section 26001(h) of the Business and Professions Code, as same may be amended from time to time.
“Cannabis Products” means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, including but not limited to concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.

Cannabis concentrate is not considered food, as defined by Section 109935 of the Health and Safety Code, or drug, as defined by Section 109925 of the Health and Safety Code. Cannabis products shall also have the same meaning as in Section 11018.1 of the Health and Safety Code, as same may be amended from time to time.
“Cannabis Retailer-Storefront” is a storefront retailer of a Commercial Cannabis Business facility where cannabis, cannabis products, or devices for the use of cannabis or cannabis products are offered, either individually or in any combination, for retail sale to customers at a fixed location, including an establishment that also offers delivery of cannabis and cannabis products as part of a retail sale, and which are open to the public, and where the operator is authorized to operate in the City as a retailer, and holds a valid state license as required by state law to operate a retailer. “Caregiver” or “Primary Caregiver” has the same meaning as that term is defined in Section 11362.7 of the California Health and Safety Code.
“City” shall mean the City of Fontana, California.
“City Manager” shall mean the City Manager of the City, including his or her designee. “Code” shall mean The Code of the City of Fontana.
“Commercial Cannabis Activity” includes the possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products as provided for in MAUCRSA. Commercial cannabis activity shall also have the same meaning as in Section 26001(k) of the Business and Professions Code, as same may be amended from time to time.
“Commercial Cannabis Business” means any business or operation which engages in medicinal or adult-use Commercial Cannabis Activity.
“Commercial Cannabis Permit” means the regulatory permit issued by the City to a Commercial Cannabis Business, which is required before any Commercial Cannabis Activity may be conducted in the City, pursuant to this Chapter.

ATTACHMENT NO. 1
840
7 “Cultivation” means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.
“Cultivation area” means the area where cannabis plants are cultivated, cultivation-related materials and supplies are stored, and any cannabis processed from the cultivation in excess of

28.5 grams.
“Customer” is a natural person 21 year of age or older; or, a natural person 18 years of age or older who possesses a physician’s recommendation, or a primary caregiver. Customer shall also have the same meaning as in Section 26001(n) of the Business and Professions Code, as same may be amended from time to time.
“Day Care Center” has the same meaning as in Section 1596.76 of the Health and Safety Code, as same may be amended from time to time.
“Delivery” is the commercial transfer of cannabis or cannabis products to a customer. Delivery also includes the use by a retailer of any technology platform owned and controlled by the retailer.

Delivery shall also have the same meaning as in Section 26001(o) of the Business and Professions Code, as same may be amended from time to time.
“Directly engage in cultivation” means to handle the cannabis plants in the cultivation process. “Dispensing” means any activity involving the retail sale of cannabis or cannabis products from a retailer.
“Edible Cannabis Product” means a cannabis product that is intended to be used, in whole or in part, for human consumption, and is not considered food. Edible cannabis product has the same meaning as Business and Professions Code section 26001(u). “Fire Chief” shall mean the City’s Fire Chief.
“Indirectly engage in cultivation” means to assist, even if not handling cannabis plants, in the cultivation process
“Law enforcement agency” refers to the agency charged with enforcing the pertinent laws in the City. The law enforcement agency for the City shall be the Fontana Police Department. Unless the provisions of the context otherwise require, whenever any provision of this Code makes reference to the law enforcement agency of the City, such shall be construed to mean, and deemed to constitute, that person holding the office of Chief of Police for the City and his or her authorized deputies or officers, performing law enforcement functions for the City. “Law enforcement officer” means any law enforcement officer of the City’s law enforcement agency, or officer of the Fontana Police Department, authorized to enforce the City’s laws, including those contained in this Chapter.
“License or State License” means a license issued by the State of California, or one of its departments or divisions, under MAUCRSA, and any subsequent State of California legislation regarding the same, to lawfully engage in Commercial Cannabis Activity.

ATTACHMENT NO. 1
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8 “Licensee” means any person holding a license issued by the State of California to conduct Commercial Cannabis Business activities.
“Manager” means any person(s) designated by the Commercial Cannabis Business to act as the representative or agent of the Commercial Cannabis Business in managing day-to-day operations with corresponding liabilities and responsibilities, or the person in apparent charge of the premises where the Commercial Cannabis Business is located. Evidence of management includes, but is not limited to, evidence that the individual has the power to direct, supervise, or hire and dismiss employees, controls hours of operations, creates policy rules, or purchases supplies. “M-license” means a license issued by the state of California under MAUCRSA for Commercial Cannabis Activity involving medicinal cannabis.
“Medicinal cannabis or medicinal cannabis product” refers to cannabis or a cannabis product, respectively, intended to be sold for use pursuant to the Compassionate Use Act of 1996 (Proposition 215) or the Medical Marijuana Program Act of 2003, found at Sections 11362.5 and 11362.71 et seq. of the Health and Safety Code, by a medicinal cannabis patient in California who possesses a valid and current identification card issued by a California licensed physician’s recommendation.
“Operation” means any act for which a license is required under the provisions of the Act, or any commercial transfer of cannabis or cannabis products. Operation shall also have the same meaning as in Section 26001(al) of the Business and Professions Code, as same may be amended from time to time.
“Owner” means any of the following, or a group or combination of any of the following acting as a unit:
(1.) A person with an aggregate ownership interest of one percent (1%) or more in the entity applying for a City Commercial Cannabis Permit, whether a partner, shareholder, principal, member, or the like, unless the interest is solely a security, lien, or encumbrance.
(2.) The chief executive officer of a nonprofit or other entity. (3.) A member of the board of directors of a nonprofit. (4.) An individual who will be participating in the direction, control, or management of the person applying for a City Commercial Cannabis Permit.
“Patient or qualified patient” means the same definition as California Health and Safety Code Section 11362.7 et seq., as it may be amended, and which means a person who is entitled to the protections of California Health & Safety Code Section 11362.5. “Permittee” means any person to whom a current and valid City-issued Commercial Cannabis Business Permit has been issued.

ATTACHMENT NO. 1
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9 “Person” means any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit or entity, and the plural as well as the singular. “Personal use” means to possess, use, or give away to persons 21 years of age or older without any compensation whatsoever.
“Premises” means the designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the applicant where the Commercial Cannabis Business will be or is conducted. The premises shall be a contiguous area and shall only be occupied by one Permittee.
“Private Residence” means a house, an apartment unit, a mobile home, or other similar dwelling. “Purchaser” means the customer who is engaged in a transaction with a Permittee for purposes of obtaining cannabis or cannabis products.
“Regulations” means those regulations prescribed and issued by the State of California, through its respective departments and divisions, pursuant to Section 26013 of the Business and Professions Code, including those regulations as found in the California Code of Regulations (including, Title 3, Division 8; Title 16, Division 42; and Title 17, Division 1), as same may be amended from time to time, to implement, interpret, administer and enforce the Act, and providing licensing and enforcement criteria for commercial cannabis activities and businesses. “Responsible Person” means all Owners and Operators of a Commercial Cannabis Business, including the Permittee and all officers, directors, managers, or partners, and all persons with authority, including apparent authority, over the premises of the Commercial Cannabis Business. “Security deposit/bond” means a financial commitment in the form of a cash payment, surety bond, letter of credit or other legal instrument securing an Applicant’s or Permittee’s commitments as required by this Chapter.
“Sell,” “sale,” “retail sale,” or “to sell” includes any transaction whereby, for any consideration or gross receipt, whether actual or intangible, title to cannabis or cannabis products are transferred from one person to another, and includes the delivery of cannabis or cannabis products pursuant to an order placed for the purchase of the same and soliciting or receiving an order for the same, but does not include the return of cannabis or cannabis products by a Customer to the Licensee from whom the cannabis or cannabis product was purchased. “State law” means all laws of the State of California, which includes, but are not limited to, all rules, regulations, and policies adopted by State of California agencies, departments, divisions, and regulatory entities, as same may be amended from time to time. “Topical Cannabis” means a product intended for external application or absorption through the skin. A topical cannabis product is not considered a drug as defined by Section 109925 of the California Health and Safety Code.

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10 “Transport” means the transfer of cannabis products from the permitted business location of one licensee to the permitted business location of another licensee, for the purposes of conducting Commercial Cannabis Activity authorized by law and which may be amended or repealed by any subsequent State of California legislation regarding the same. “Youth and Recreation Center” means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities. Parks with organized youth-oriented programs are also Youth and Recreation Centers for the purposes of this Chapter 33. Youth and recreation center shall also have the same meaning as in Section 11353.1 of the Health and Safety Code and Section 26001(ax) of the Business and Professions Code, as each may be amended from time to time.

Any term defined in this section also means the very term as defined in the California Business and Professions Code or the California Health and Safety Code, unless otherwise specified.

Sec. 33-6 Commercial Cannabis Permit Required to Engage in Commercial Cannabis Business.
(a) No person may engage in any Commercial Cannabis Business or in any Commercial Cannabis Activity within the City unless the person (a) has a valid Commercial Cannabis Permit from the City, (b) has a valid State of California Seller’s Permit, (c) has entered into a fully executed Operating Agreement, approved by City Council, and (d) is in compliance with all applicable state and local laws and regulations pertaining to the Commercial Cannabis Business and commercial cannabis activities, including the duty to obtain any required state licenses, business license obtained and all taxes paid and all other applicable laws including without limitation zoning and fire codes.
(b) The classification and type of Commercial Cannabis Businesses allowed for by this Chapter are retailer-storefront and the ancillary transportation and delivery of cannabis or cannabis products to a Customer.
(c) In addition to all other applicable zoning regulations and the requirements of all required state and local permits, no Commercial Cannabis Permit will be valid if the proposed Commercial Cannabis Business is located within a 600-foot radius of a school providing instruction in kindergarten or any grades one through twelve, a day care center, park, a Youth and Recreation Center with primary Youth and Recreation Center activities, which is in lawful existence at the time a successful application was submitted to the City, or the City boundaries.

No Commercial Cannabis Permit will be valid if the proposed Commercial Cannabis Business is located within a 600-foot radius of the City boundaries.

Sec. 33-7 Maximum Number of Commercial Cannabis Businesses Authorized and Designated Locations; Application Process.
(a) The maximum number of Commercial Cannabis Permits that may be issued in the City is three (3). One may be issued for the North Area, one may be issued for the Central Area and one may be issued for the South Area based on the boundaries of the Commercial Cannabis Map approved by the City Council concurrently with the adoption of this Chapter.

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11 (b) The process for issuing Commercial Cannabis Permits to qualified cannabis businesses is meant to result in qualified businesses that will operate in accordance with state and local law, be successful, contribute positively to the community and local economy, and avoid secondary adverse impacts. Toward that objective, the application process includes these five phases:
(1.) PHASE ONE: Application submittal. This includes submitted complete information, completed Livescan and background check information (state and federal database) of all Responsible Persons, and processing fees. (2.) PHASE TWO: Initial scoring of application by a qualified third party. (3.) PHASE THREE: Interview process.
(4.) PHASE FOUR: Location identification and verification. (5.) PHASE FIVE: Final scoring, and, if permits available, permit issuance.

Sec. 33-8 Initial Commercial Cannabis Permit Application and Scoring (a) The City Manager may establish additional submittal requirements for an application for a Commercial Cannabis Permit. The intent of this Chapter is to create a meritbased, competitive evaluation system. Applications submitted by legal representatives, consultants, partners or investors will not be accepted. The following information shall be included in any application for a Commercial Cannabis Permit:
(1.) Name of Applicant
(2.) Business Trade Name (if applicable) of the applicant (3.) Identification of Owner(s) (full name, primary phone number, social security number or individual taxpayer identification number, date and place of birth, email address, and mailing address for the primary owner submitting the Application)
(4.) For each person that is an “owner” of the applicant, (i.) Percentage of interest held in the applicant entity by each owner; (ii.) Whether the owner has an ownership or financial interest, as defined in section 5003 of the Regulations, in any other Commercial Cannabis Business licensed under the AUMA or MAUCRSA;
(iii.) A copy of each Responsible Person’s government-issued identification, acceptable forms are a document issued by a federal, state, county, or municipal government that includes the name, date of birth, physical description, and picture of the owner, such as a driver’s license;
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12 (iv.) A detailed description of the owner’s criminal convictions, if applicable. A conviction for this purpose means a plea or guilty verdict of guilty or a conviction following a plea of nolo contendere.

Convictions dismissed under Penal Code section 1203.4 or equivalent non-California law must be disclosed. Convictions dismissed under Health & Safety Code section 11361.8 or equivalent non-California law must be disclosed. Juvenile Adjudications and traffic infractions under $300 that did not involve alcohol, dangerous drugs, or controlled substances do not need to be included. For each conviction, provide: (1) the date of conviction; (2) dates of incarceration, if applicable; (3) dates of probation, if applicable; (4) dates of parole, if applicable; (5) a detailed description of the offense for which the owner was convicted; and (6) a statement of rehabilitation for each conviction written by the owner that demonstrates the owner’s fitness for consideration; (v.) If applicable, a detailed description of a commercial cannabis license, revocation of a commercial cannabis license, or sanctions for unlicensed Commercial Cannabis Activity by a licensing authority or local agency against the applicant or a business entity in which the applicant was an owner or officer within the three (3) years immediately preceding the date of the application; (vi.) If applicable, a detailed description if the City issued the applicant a notice or citation for unlicensed Commercial Cannabis Activity, or if the applicant was a defendant in a civil or criminal proceeding filed by the City or the People of the State of California, for allowing, causing, or permitting unlicensed commercial cannabis activities within the City’s jurisdiction;
(vii.) An attestation of each owner as follows: “Under penalty of perjury, I hereby declare that the information contained within and submitted with the application is complete, true, and accurate. I understand that a misrepresentation of fact or omission may be cause for rejection or denial of this application, or revocation of any Commercial Cannabis Permit or any permit, license or approval issued in reliance thereon.”
(5.) Primary Contact: The contact information for the applicant’s designated primary contact person, including the name, title, phone number, and email address of said individual.
(6.) Qualifications and Experience of Applicants and Owners: The application shall include information concerning any special business or professional qualifications or licenses of the applicants and owners, and the years of relevant and related experience, that would add to the number or quality of services that facility would provide, or otherwise demonstrates the ATTACHMENT NO. 1
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13 applicants’ and owners’ capacity to operate a successful commercial cannabis facility in compliance with applicable laws and regulations. (7.) Disclosure of Lobbying Activity: If applicant contracted, employed or in any manner paid or will pay any person for influencing or attempting to influence an elected official, appointed official or any employee of the City, shall fully disclose the name of individuals and organization(s) performing lobbying services.
(8.) Description of Operating Procedures: Applications shall include a detailed description of the applicant’s proposed operating procedures for each commercial cannabis activity, including an explanation for how the business will comply with the operating regulations of this Code and state law. The application must include copies of any applicable policies or manuals of the applicant and address each of the following, if applicable:
(i.) Transportation Procedures: A description of the procedure for transporting cannabis and cannabis products, including whether or not the applicant will be transporting cannabis or cannabis products or contracting for transportation services.
(ii.) Inventory Procedures:

1. A description of the applicant’s procedure for receiving shipments of inventory;

2. Where the applicant’s inventory will be stored on the premises and how records of the inventory will be
maintained; and

3. Procedure for performing inventory reconciliation and for ensuring that inventory records are accurate.
(iii.) Quality Control Procedures:

1. Procedures for preventing the deterioration of cannabis or cannabis products held by the applicant;

2. Procedures for ensuring that cannabis and cannabis products are properly packaged and labeled; and

3. Procedure for ensuring that an independent licensed testing laboratory samples and analyzes cannabis and cannabis
products held by the applicant.
(iv.) Security Procedures: All applicants shall propose sufficient security measures to deter and prevent the unauthorized access or entrance into areas containing cannabis or cannabis products, and to deter and ATTACHMENT NO. 1
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14 prevent the theft of cannabis or cannabis products at the Commercial Cannabis Business (together a “Security Plan”). The proposed Security Plan will remain confidential and shall include, but shall not be limited to, all of the following:

1. Preventing individuals from remaining on the premises of the Commercial Cannabis Business if they are not engaging in an activity directly related to the permitted operations of the Commercial Cannabis Business.

2. Establishing limited access areas accessible only to authorized Commercial Cannabis Business personnel.

3. How and where all cannabis and cannabis products will be stored in a secured and locked room, safe, or vault. How all cannabis and cannabis products, will be kept in a manner as to prevent diversion, theft, and loss.

4. Procedures for installing 24-hour security surveillance cameras (CCTV) of at least HD-quality video with audio to monitor all entrances and exits to and from the premises, all interior spaces within the Commercial Cannabis Business which are open and accessible to the public, all interior spaces where cannabis, cash or currency, is being stored for any period of time on a regular basis and all interior spaces where diversion of cannabis could reasonably occur.

Procedures for how the applicant will ensure that the security surveillance camera’s footage is remotely accessible to law enforcement, and that it is compatible with the City’s
software and hardware. In addition, procedures on how
remote and real-time, live access to the video footage from the cameras will be provided to law enforcement. Procedures for ensuring video recordings are maintained for a minimum of sixty (60) calendar days, and procedures to make them available to law enforcement upon request. Procedures to ensure video shall be of sufficient quality for effective prosecution of any crime found to have occurred on the site of the Commercial Cannabis Business.

5. A description of where sensors will be installed to detect entry and exit from all secure areas.

6. A description of procedures of installing panic buttons in the premises.

7. Description of having a professionally installed, maintained, and monitored alarm system, with the required City alarm ATTACHMENT NO. 1
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15 permit as required by this Fontana City Code Section 14- 391, et seq.

8. A description of the physical security features and
improvements that will be installed on the exterior and within the interior of the building, in full compliance with all applicable Building and Safety and Fire Code
requirements and any applicable zoning requirements. Use of wrought iron on any exterior door, window or opening is prohibited.

9. Procedures on establishing a plan to have security personnel on-site 24 hours a day, or alternative security as authorized by the City. Description or documentation showing that the proposed security personnel are licensed by the State of California Bureau of Security and Investigative Services personnel. Procedure to submit to the City and the City’s law enforcement agency the names and contact information of security personnel, with copies of state-issued licenses and permits, government-issued identification form, and photographs of uniforms and badges. Acknowledgement
from applicant indicating that it shall be responsible for providing this confirming information to law enforcement, with updating information within seven (7) calendar days of a change in security personnel, agents, or representatives.

10. Procedures on how each applicant shall have the capability to remain secure during a power outage and ensure that all access doors are not solely controlled by an electronic access panel to ensure that locks are not released during a power outage.

11. Identification of a designated security representative/liaison to the City, who shall be reasonably available to meet with City staff, as well as law enforcement regarding any security related measures or operational issues.

12. A storage and transportation plan, describing in detail the procedures for safely and securely receiving, storing and transporting all cannabis, cannabis products, including the use of child-safe cannabis containers, and any currency.

13. An affirmative commitment that the applicant will cooperate with the City whenever the City Manager, or his or her
designee, makes a request, upon reasonable notice, to inspect or audit the effectiveness of any Security Plan or of any other requirement of this subsection.

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16 14. A description and plan of how the applicant will notify law enforcement within 24 hours after discovering any of the following:
a. Significant discrepancies identified during
inventory. The level of significance shall be
determined by the regulations promulgated by law
enforcement.
b. Diversion, theft, loss, or any criminal activity
involving the Commercial Cannabis Business or any
agent or employee of the Commercial Cannabis
Business.
c. The loss or unauthorized alteration of records related to cannabis, registering qualifying patients, primary
caregivers, or employees or agents of the
Commercial Cannabis Business.
d. Any other breach of security.
(9.) All applicants shall submit a workforce plan that may include, but is neither limited to, nor required to include, a (1) commitment for local hires; (2) commitment to offer apprenticeships and/or compensation for continuing education in the field; (3) pay a living wage to its employees, and (4) draft collective bargaining agreement with labor organization that currently represents cannabis workers in the United States.
(10.) Seller’s Permit: The applicant shall provide a valid seller’s permit number issued by the California Department of Tax and Fee Administration, if applicable. If the applicant has not yet received a seller’s permit, the applicant shall attest that the applicant is or will before commencing operations, apply for a seller’s permit.
(11.) Indemnification Agreement: To the fullest extent permitted by local, state and federal law, the City shall not assume any liability whatsoever with respect to having issued a Commercial Cannabis Permit or otherwise approving the operation of any Commercial Cannabis Business. As a condition to the approval of any Commercial Cannabis Permit, the applicant is to execute a separate Indemnification Agreement prepared by the City that fully indemnifies the City for all liabilities associated with the Commercial Cannabis Permit, the Commercial Cannabis Permittee's Commercial Cannabis Activities, and any action taken by the Cannabis Permittee. The Indemnification Agreement shall include the defense of the City and reimbursement of all fees, costs and expenses incurred by the City related to any action arising from the Agreement.

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17 (12.) Payment of Application Fee: Each applicant shall pay the applicable fee(s) pursuant to this Chapter.
(13.) Each Applicant shall provide the City a Security deposit or bond for code compliance costs. The Security deposit or bond shall be in an amount established by the City Council and shall be provided with the application. (14.) Conceptual renderings of the interior and exterior of the proposed premises. (b) Background Check. Pursuant to California Penal Code Sections 11105(b)(11) and 13300(b)(11), which authorizes City authorities to access state and local summary criminal history information for employment, licensing, or certification purposes; and authorizes access to federal level criminal history information by transmitting fingerprint images and related information to the Department of Justice to be transmitted to the Federal Bureau of Investigation, every applicant and Responsible Person of the Commercial Cannabis Business must submit fingerprints and other information deemed necessary by the Fontana Police Department, or the City’s law enforcement agency, for a background check. No person shall be issued a permit to operate a Commercial Cannabis Business unless they have first cleared the background check, as determined by the City, Fontana Police Department, or the City’s law enforcement agency as required by this section. (c) The City Manager may adopt any procedure(s) to supplement the initial application process. The City Manager is authorized to prepare the necessary applications, forms, adopt any necessary rules to the application, regulations and processes, and solicit applications. (d) Any Applicant whose ’ownership’ includes a person with a past plea or verdict of guilty or a conviction following a plea of nolo contendere for operating a non-licensed cannabis business shall be disqualified from receiving a Commercial Cannabis Permit Sec. 33-9 Application Review, Scoring, and Selection Process; Permit Issuance. (a) Phase One. The City Manager or City Manager’s designee will determine that a complete and timely initial application has been submitted, and will conduct a background check for all responsible parties.
(b) Phase Two. Scoring of Application. The review of the application will be performed by the City Manager of the City Manager’s designee. The applications will be evaluated on the following criteria:
(1.) Qualifications/Business Plan (40 points)
(i.) Existing or prior retail Cannabis businesses.
(ii.) Cannabis Experience of the Permittee and all Responsible Persons. (iii.) General Business Experience of Responsible Persons. (iv.) Financial means of Applicant and Responsible Persons.

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18 (2.) Operating Plan (40 points)
(i.) Retail distribution.
(ii.) Inventory control procedures.
(iii.) Security procedures.
(iv.) Workforce Plan.
(3.) Community Improvement (20 points)
(i.) Social service support.
(ii.) Conceptual renderings of interior and exterior.
(c) Phase Three. Applicants who score a minimum of eighty (80) points in Phase Two are eligible to undergo the interview process of Phase Three (70 points). The City Manager shall designate a Commercial Cannabis Permit Application Evaluator who shall not have participated in the initial review and scoring in Phase Two. The Commercial Cannabis Permit Application Evaluator shall hold an interview for each qualified Applicant. (1.) The Commercial Cannabis Permit Application Evaluator may be an independent contractor or a designated employee. The Commercial Cannabis Permit Application Evaluator must file a Fair Political Practices Commission Form 700, commonly known as a Statement of Economic Interests, upon assuming the role, exiting the role, and as otherwise required by law for designated filers.
(d) Phase Four: The nine top scoring Applicants, based on points awarded in the Phase Three interview process, will proceed to Phase Four. Those nine top scoring Applicants, in order from highest to lowest, will select the area in which they would like to operate, North, Central, or South. Each area will be limited to selection by a maximum of three applicants. By way of example, if the three top scoring Applicants all choose the North, the fourth highest scorer will be required to choose from the Central or South areas for their location. After all nine Applicants have selected, or have been assigned their area, based on points, each applicant will be provided with 120 days, from the date Applicants are notified in writing by the City Manager of their assignments, to identify a proposed location within their respective area. Within those 120 days, the Applicant shall submit the physical address of the proposed location, as well as the San Bernardino County Assessor Parcel Number and property owner’s written consent. Additionally, the Applicant shall submit the following:
(1.) Evidence of the applicant’s right to use and occupy the property, which shall consist of premises of not less than 4,000 square feet. If owned by applicant, a grant deed or a copy of title for the property. If not owned by applicant, a document from the landowner or the landowner’s agent stating the applicant has the right to occupy the property and acknowledges that the applicant ATTACHMENT NO. 1
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19 may use the property to potentially conduct a Commercial Cannabis Business for which the applicant is applying, plus any lease agreement. (2.) A complete and detailed site plan of the premises, interior and exterior elevations of the premises, and a map showing the premises’ location within the City. The site plan and must comply with the following:
(i.) Shows the boundaries of the property and the proposed premises to be utilized, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, bathrooms, windows, doorways, and common or common shared entryways, and a brief statement of the principal activity to be conducted therein;
(ii.) Map identifying any instruction in kindergarten or any grades 1 through 12, day care, park, Youth and Recreation Center facilities, City boundaries and any Commercial Cannabis Business located within 600 feet of the property lines of the proposed location. If the proposed location is not within 600 feet of any such uses, identify on the map the closest such use, and the distance in feet between that use and the property line of the proposed location;
(iii.) Identifies all commercial cannabis activities that will take place in each area of the premises, and identification of limited access areas; (iv.) The location of all proposed security cameras with a number assigned to each for identification purposes;
(v.) The diagram shall be clear, legible, and to scale, and shall not include any highlighting; and
(vi.) If the proposed premises include only a portion of a property, the diagram must be labeled indicating which part of the property is the proposed premises and what the remainder will be used for. (3.) The Commercial Cannabis Permit Application Evaluator may conduct a site inspection as part of the review.
(4.) Upon submission, the City will verify the proposed location satisfies the requirements of this Chapter and the Commercial Cannabis Permit Application Evaluator will score the proposed location, site plan, and interior and exterior elevations of the premises (30 points). (e) Phase Five: The scores for Phases Three and Four will be aggregated. The Commercial Cannabis Permit Application Evaluator will determine the final rankings of the Commercial Cannabis Permit applications per area, as the areas are described in Section 33-7. A total of 100 points are available in Phase Five. After the rankings per area are complete, the City Manager will issue the highest ranking applicants in each area Commercial Cannabis Permits to the extent that there are permits available.

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20 (f) If after final rankings by the Commercial Cannabis Permit Application Evaluator there is a tie in total points by two or more applicants, the City Manager may designate a third party to hold an allotment by chance to complete the ranking system. (g) Notwithstanding anything in this Chapter to the contrary, the City reserves the right to reject any or all applications, at any time in the review process, if it determines it would be in the best interest of the City, taking into account the health, safety and welfare of the community. (h) The City Manager may promulgate additional rules or policies to establish supplemental or more detailed scoring categories, with respective scoring points, under any one or all of the criteria listed hereinabove, prior to the commencement of the City accepting any applications.
(i) The City Manager’s decision as to the selection of the prevailing candidates shall be final and not subject to appeal.
(j) Being issued a Notice of Selection does not constitute a land use entitlement and does not satisfy the requirements of securing a technical permits for all construction and structural alterations, including building, electrical, plumbing, and mechanical permits, undergoing and passing all building and fire intermittent and final inspections, and securing any other required permits, licenses, or reviews as may be necessary by the relevant departments or government agencies in charge of said permits. Nor does it guarantee that the plans submitted via the application process meet the standards or requirements in the Fontana Zoning Ordinance, or any building or fire codes, laws, rules or regulations, or any other permit requirement from other local or state departments or agencies.
(k) Applicants shall have no right to a Commercial Cannabis Permit until a permit is actually issued, and then only for the duration of the permit’s term. Each applicant assumes the risk that, at any time prior to the issuance of a permit, the City Council may terminate or delay the program created under this Chapter.
(l) If an application is denied at any phase, in the event that the City is receiving new applications, a new application may not be filed for one (1) year from the date of the denial. (m) Prior to operating a Commercial Cannabis Business, each person awarded a Commercial Cannabis Permit shall be required to pay a permit fee established by resolution of the City Council, to cover the costs of administering the Commercial Cannabis Permit program created in this Chapter. They shall also provide a Security deposit or bond to in an amount established by the City Council to be used by the City in the event City finds it necessary to seek code enforcement or legal assistance to ensure compliance with this Chapter and state cannabis laws.

Sec. 33-10 Expiration of Commercial Cannabis Permits.

Each Commercial Cannabis Permit issued pursuant to this Chapter shall expire three (3) years after the date of its issuance. Commercial Cannabis Permits may be renewed annually as provided in this Chapter.

Sec. 33-11 Revocation of Permits.

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21 (a) The following are grounds for revocation of a Commercial Cannabis Permit:
(1.) The Commercial Cannabis Business is not operational within eighteen (18) months of permit issuance. This timeframe may be extended at the discretion of the City Manager or designee.
(2.) Failure of a permittee to comply with any requirement imposed by the provisions of this Code, including but not limited to any rule, regulation, condition or standard adopted pursuant to this Chapter, or any term or condition imposed on the Commercial Cannabis Permit, or any provision of state law;
(3.) Revocation of a state license held by a Responsible Person or permittee of a Commercial Cannabis Permit issued by the City;
(4.) If the Permittee, its owner(s), manager(s) or a Responsible Person, within the past three years has been sentenced or had a judgment issued in a criminal or civil court proceeding, or has been sanctioned or fined for, enjoined from, or found guilty of or pled guilty or no contest to a charge for engaging in a Commercial Cannabis Activity in the state without the necessary permits and approvals from the applicable state or local jurisdictions;
(5.) Conviction within the past 10 years of a Responsible Person, including a plea of guilty or no contest, to any the following offenses shall be grounds for revocation of a Commercial Cannabis Permit issued by the City:
(i.) A violent felony, as specified in Section 667.5(c) of the Penal Code. (ii.) A serious felony, as specified in Section 1192.7(c) of the Penal Code.
(iii.) A felony involving fraud, deceit, or embezzlement. (iv.) A felony for hiring, employing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance to a minor; or selling, offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance to a minor.
(v.) A felony for drug trafficking with enhancements pursuant to Section 11370.4 or 11379.8 of the Health and Safety Code.
(vi.) A felony or misdemeanor involving the illegal possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance occurring after January 1, 2016.

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22 (b) If the City Manager determines that a ground for revocation of a Commercial Cannabis Permit exists, the City Manager shall serve written notice of revocation to the Permittee or Responsible Person. The notice may be served on the recipient either personally or by certified first class mail to the address listed on the application. The notice must state the grounds for revocation, the effective date of the decision, and that the permittee has a right to an evidentiary appeal hearing to challenge the revocation decision.
(c) The permittee may appeal a revocation decision within 15 days of the date of the notice of revocation. To exercise the right to appeal, the permittee must file with the City Clerk written basis for the appeal, including evidence relating to the grounds for revocation, and the applicable appeal fee. The appeal will be heard by the City Council in accordance with Section 33-14. If no timely appeal is filed, the City Manager’s decision will be final 15 days after the date on the notice of revocation. If a timely appeal is filed in accordance with this Chapter, then the effective date of the notice is stayed until a decision is made after the hearing on the appeal.

Sec. 33-12 Renewal Applications.
(a) An application for renewal of a Commercial Cannabis Permit and renewal fee shall be filed with the City Manager’s office prior to, but not more than 120 days before, the expiration date of an active and current permit.
(b) The applicant shall pay a fee in an amount to be set by the City Council to cover the costs of processing the renewal permit application, together with any costs incurred by the City to administer the program created under this Chapter.
(c) Any permittee submitting a renewal application less than sixty calendar days before permit expiration may be required to pay a late renewal application fee, as established by resolution of the City Council.
(d) To ensure on-going compliance with the initial screening criteria, the renewal application shall be required to contain all the information required for new applications. (e) An application for renewal of a Commercial Cannabis Permit may be denied if any of the following exists:
(1.) Any of the grounds for denial of an application or revocation of a permit. (2.) The Commercial Cannabis Permit is suspended or revoked at the time of the renewal application submittal.
(3.) The permittee fails or is unable to renew its State of California license. (4.) The permittee made a false, misleading, or fraudulent statement or omission of fact in the renewal application.
(f) The City Manager is authorized to make all decisions concerning the issuance of a renewal permit. In making the decision, the City Manager is authorized to impose additional conditions to a renewal permit, if it is determined to promote compliance with state or local laws ATTACHMENT NO. 1
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23 and regulations or otherwise to preserve the public health, safety or welfare. Prior to renewal of a permit, the City Manager may audit expenses resulting in an adjustment to the annual fee. Appeals of the decision of the City Manager shall be handled pursuant to the provisions of section 33-14 of this Chapter.
(g) If a renewal application is denied, the permittee may file a new application pursuant to this Chapter no sooner than one year from the date of the rejection and only if and when the City is receiving new applications. If a renewal application is denied, the City Manager may issue qualifying applicants the available permit in the order of highest ranked applicants.

Sec. 33-13 Effect of State License Suspension, Revocation, or Termination. (a) Suspension of a license issued by the State of California, or by any of its departments or divisions, shall immediately suspend the ability of a Commercial Cannabis Business to operate within the City, unless and until the State of California, or its respective department or division, reinstates or reissues the State license. (b) Should the State of California, or any of its departments or divisions, revoke or terminate the license of a Commercial Cannabis Business operating in the City, such revocation or termination shall also revoke or terminate the ability of a Commercial Cannabis Business to operate within the City.
(c) Permittee shall notify the City Manager in writing within five days of suspension or revocation of a license issued by the State of California, or by any of its departments or divisions.

Sec. 33-14 Appeals.
(a) Notice of and Time to Appeal and Effect of Timely Appeal. (1.) A permittee of a Commercial Cannabis Business may appeal a decision of the City Manager made pursuant to this Chapter to suspend, revoke, condition, or not renew a permit. Appeals are made by filing with the City Clerk a written Notice of Appeal within fifteen calendar days from the date of service of the notice issued by the City Manager of his or her decision.

Date of service shall mean the date when a notice or written decision was personally delivered to the permittee or the date when the notice was sent by certified, first class mail. Unsuccessful applicants have no right of appeal.
(2.) The Notice of Appeal shall be in writing and signed by the person making the appeal (“appellant”), or his or her legal representative, and shall contain the following:
(i.) Name, address, and telephone number of the appellant. (ii.) Specify the decision, action, or a particular part thereof, made by the City Manager that is the subject of the appeal.

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24 (iii.) Include a true and correct copy of the notice of decision issued by the City Manager which is the subject of the appeal.
(iv.) State with specificity the reasons and grounds for making the appeal, including, but not limited to, a statement of facts upon which the appeal is based in sufficient detail to enable the City Council, or any appointed hearing officer, to understand the nature of the controversy, the basis of the appeal, and the relief requested. (v.) All documents or other evidence pertinent to the appeal that the appellant requests the considered at the appeal hearing. (vi.) An appeal fee, as established by resolution of the City Council. (3.) Failure to file a timely Notice of Appeal constitutes a waiver of the right to appeal rendering the City Manager’s notice of revocation, nonrenewal, suspension or other action final and binding. If no appeal is timely filed in the event of a decision of nonrenewal, the Commercial Cannabis Permit shall expire at the conclusion of the term of the permit. If no appeal is timely filed in the event of a decision of suspension or revocation, the suspension or revocation shall become effective upon the expiration of the period for filing a written Notice of Appeal.
(4.) In the event a written Notice of Appeal is timely filed, the nonrenewal, suspension, revocation, or other properly appealed action shall not become effective until a final decision has been rendered and issued by the City Council, or appointed hearing officer or body.
(b) Review by City Council; Appeal Hearing and Proceedings. (1.) (1) The City Council or its appointed hearing officer will decide timely appeals. The appellant(s) listed on the written Notice of Appeal shall be notified in writing of the date, time, and location of the hearing at least ten calendar days before the date of the hearing.
(2.) All requests by an appellant to continue a hearing must be submitted to the City Clerk in writing no later than three business days before the date scheduled for the hearing. The City Council or its appointed hearing officer or body may continue a hearing for good cause or on its own motion. (3.) The City Council shall preside over the hearing on appeal, or at the City Council’s discretion, the City Council may appoint a hearing officer to conduct the hearing.
(4.) At the date, time and location set forth in the notice of appeal hearing, the City Council, or its appointed hearing officer or body, shall hear and consider the testimony and any documentary evidence properly submitted for consideration.

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25 (5.) Appeal hearings are informal, and formal rules of evidence and discovery do not apply. However, rules of privilege shall be applicable to the extent they are permitted by law, and irrelevant, collateral, undue, and repetitious testimony may be excluded. The City Manager’s decision will be upheld only if a preponderance of the evidence supports the nonrenewal, suspension, or revocation.
(c) Final Decision.
(1.) Following the conclusion of the appeal hearing, the City Council, or its appointed hearing officer or body, shall determine if any ground exists for the nonrenewal, suspension or revocation of a Commercial Cannabis Permit or other action subject to appeal under this Chapter. If the City Council, or its appointed hearing officer or body, determines that no grounds for denial, nonrenewal, suspension, revocation, or other action exist, the City Manager’s notice of decision shall be deemed vacated. If the City Council, or its appointed hearing officer or body, determines that one or more of the reasons or grounds enumerated in notice of decision exists, the City Manager’s decision may be affirmed or modified.
(2.) The decision of the City Council, or its appointed hearing officer or body, is the final administrative decision and subject to judicial review within the time limits set forth in California Code of Civil Procedure Section 1094.6.

Sec. 33-15 Commercial Cannabis Permit – Nonassignable and Nontransferable. (a) A Commercial Cannabis Permit issued under this Chapter is valid only as to the permittee and approved location and is nontransferable to other persons, projects or locations. (b) No Commercial Cannabis Permit may be sold, transferred or assigned by a permittee, or by operation of law, to any other person, persons, or entities. Any such sale, transfer, or assignment, or attempted sale, transfer, or assignment shall be deemed to constitute a voluntary surrender of such permit and such permit shall thereafter be null and void, except as set forth in this Chapter.

Sec. 33-16 Change in Location of Commercial Cannabis Business.

No permittee shall change the location of the Commercial Cannabis Business specified in the Commercial Cannabis Permit until any such change of location is approved by the City Council.

The proposed location shall meet all the requirements under this Code, including but not limited to this Chapter and the Fontana Zoning Ordinance. The proposed location shall be reviewed and evaluated using the same review criteria and procedure as used and relied on under the initial application process, including a public meeting.

Sec. 33-17 Changes in Ownership of Commercial Cannabis Business. (a) No permittee shall transfer ownership or control of a Commercial Cannabis Business unless and until the proposed new owner submits all required application materials and ATTACHMENT NO. 1
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26 pays all applicable fees, and the proposed new owner independently meets the requirements of this Chapter such as to be entitled to the issuance of an original Commercial Cannabis Permit. (b) A substantial change in the ownership of a permitted business entity (changes that result in a cumulative change of 10% or more of the original ownership or if adding a new Responsible Person), must be approved by the City Manager after completion of the application process under this Chapter, including evaluation under any applicable review criteria used and relied upon during the original review and selection process. (c) A permittee may change the form of business entity without applying for a new Commercial Cannabis Permit provided that either:
(1.) The ownership of the new business entity is the same as the original permit holder business entity; or
(2.) If the original permittee is an unincorporated association, mutual or public benefit corporation, agricultural or consumer cooperative corporation and subsequently transitions to or forms a new business entity as allowed under the MAUCRSA, provided that the Board of Directors (or in the case of an unincorporated association, the individual(s) listed on the City permit application) of the original permittee entity are the same as the new business entity.
(d) Although a new Commercial Cannabis Permit is not required in the two circumstances listed in this subsection (c), the permittee shall notify the City in writing of the change within ten (10) calendar days of the change and obtain an amendment to the original Commercial Cannabis Permit.
(e) No permittees may avail themselves of the provisions of this section if the City Manager, or his or her designee, has notified the permittee that the Commercial Cannabis Permit has been or may be suspended, revoked, or not renewed.
(f) Failure to comply with this section is grounds for revocation of a Commercial Cannabis Permit.
(g) Any attempt to transfer a Commercial Cannabis Permit either directly or indirectly in violation of this section is hereby declared void and such a purported transfer is a ground for revocation of the permit.

Sec. 33-18 Change in Ownership when the Permittee is a Partnership or Corporation. (a) One or more proposed partners in a partnership granted a Commercial Cannabis Permit may make application to the City Manager, together with the fee established by the City Council, to amend the original application, providing all information as required for partners in the first instance and, upon approval thereof, the transfer of the interests of one or more partners to the proposed partner or partners may occur. If the permittee is a partnership and one or more of the partners should die, one or more of the surviving partners may acquire, by purchase or otherwise, the interest of the deceased partner or partners without effecting a surrender or ATTACHMENT NO. 1
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27 termination of such permit, and in such case, the Commercial Cannabis Permit, upon notification to the City Manager, shall be placed in the name of the surviving partners. (b) If the Commercial Cannabis Permit is issued to a corporation, stock may be sold, transferred, issued, or assigned to stockholders who have been named on the application. If 51% or more of any stock is sold, transferred, issued, or assigned to a person not listed on the application as a stockholder, the permit shall be deemed terminated and void; provided, however, the proposed stock purchaser transferee may submit to the City Manager, together with the fee established by the City Council, an application to amend the original application providing all information as required for stockholders in the first instance under this Chapter, and, upon approval thereof, the transfer may then occur.
(c) All changes in ownership as described in this section, with the exception of transfers occurring due to death of a partner or stockholder, must be submitted to the City within thirty calendar days, along with any organizational documents reflecting the changes.

Sec. 33-19 Changes in Name Only.
(a) The permittee shall advise the City Manager within fifteen calendar days of all changes of name or designation under which the business is to be conducted. The change of name or designation shall be accompanied by a non-refundable fee established by resolution of the City Council to defray the costs of reissuance of the Commercial Cannabis Permit. (b) No permittee shall operate, conduct, manage, engage in, or carry on the business of a Commercial Cannabis Business under any name other than the name of the Commercial Cannabis Business specified in the permit.

Sec. 33-20 Alterations to Approved Facility.

All required City approvals, plan approvals, and permits must be obtained before causing, allowing, or permitting alterations to or extensions or expansions of the existing building(s), structure(s), or portions thereof, approved as a location for a Commercial Cannabis Business.

Alterations, extensions, or expansions shall comply with all applicable laws, regulations and standards, including those concerning building and fire safety, as well as occupancy.

Sec. 33-21 Operating Agreement Required.

Prior to issuing the permit and commencing operations, a Permittee of a Commercial Cannabis Business must enter into a fully executed operating agreement with appropriate fiscal mitigation measures, in a form satisfactory to City Manager and City Attorney. City Manager shall be authorized to execute a the operating agreement.

Sec. 33-22 City Business License.

Prior to commencing operations, a Permittee of a Commercial Cannabis Business shall obtain a City business license, in accordance with Fontana City Code Section 50-502, et seq.

Sec. 33-23 Permits and Inspections Prior to Commencing Operations.

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28 Prior to commencing operations, a Commercial Cannabis Business shall be subject to a mandatory inspection of the premises, and must obtain all required building permits and approvals which would otherwise be required for any business of the same size and intensity operating in that zone.

The permittee shall also obtain all required Building Safety Department approvals, Fire Department approvals, Health Department approvals and any other permit or approval required by this code or applicable law.

Sec. 33-24 City Discretion and Limitations on City’s Liability. (a) Commercial Cannabis Business applicants and operators shall sign an acknowledgment and waiver, in a form prepared by the City Attorney, in which they accept that the City has complete discretion to award a Commercial Cannabis Business permit and to continue or ban commercial cannabis operations in the future.
(b) To the fullest extent permitted by law, the City shall not assume any liability whatsoever with respect to having issued a Commercial Cannabis Permit or otherwise approving the operation of any Commercial Cannabis Business. As a condition to the approval of any Commercial Cannabis Permit, the applicant shall be required to meet all of the following conditions before they can receive the Commercial Cannabis Permit:
(1.) They must execute an agreement, in a form approved by the City Attorney, agreeing to indemnify, defend at the applicant’s sole cost and expense, and hold harmless the City, and its officers, officials, employees, representatives, attorneys, and agents from any and all claims, losses, damages, injuries, liabilities or losses which arise out of, or which are in any way related to the City’s issuance of the Commercial Cannabis Permit, the City’s decision to approve the operation of the Commercial Cannabis Business or activity; the process used by the City in making its decision to issue, approve or deny a permit; or the alleged violation of any federal, state or local laws by the Commercial Cannabis Business or any of its officers, employees or agents.
(2.) Maintain insurance at coverage limits, and with conditions thereon determined necessary and appropriate from time to time by the City’s Risk Manager.
(3.) Reimburse the City for all costs and expenses, including but not limited to attorney fees and costs and court costs, which the City may be required to pay as a result of any legal challenge related to the City’s approval of the applicant’s Commercial Cannabis Permit, or related to the City’s approval of the applicant’s Commercial Cannabis Activity. The City may, at its sole discretion, participate at its own expense in the defense of any such action, but such participation shall not relieve any of the obligations imposed hereunder.

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29 (c) The terms and provisions as enumerated in this section related to indemnification and limitation on the City’s liability shall be an explicit term of a Commercial Cannabis Permit that an applicant and a permittee shall agree to in order for same to be valid.

Sec. 33-25 Records and Recordkeeping.
(a) Each owner and operator of a Commercial Cannabis Business shall maintain accurate books and records in an electronic format, detailing all of the revenues and expenses of the business, and all of its assets and liabilities. On no less than an annual basis, or at any time upon reasonable request of the City, each Commercial Cannabis Business shall file a sworn statement detailing the Commercial Cannabis Business’ revenue and number of sales during the previous twelve-month period (or shorter period based upon the timing of the request), provided on a per-month basis. The statement shall also include gross revenues for each month, and all applicable taxes paid or due to be paid. On an annual basis, each owner and operator shall submit to the City a financial audit of the business’ operations conducted by an independent certified public accountant. Each permittee shall be subject to a regulatory compliance review and financial audit as determined by the City Manager, or his or her designee. (b) Each owner and operator of a Commercial Cannabis Business shall maintain a current register of the names and the contact information (including the name, address, and telephone number) of anyone owning or holding an interest in the Commercial Cannabis Business, and separately of all the officers, managers, employees, agents and volunteers currently employed or otherwise engaged by the Commercial Cannabis Business. The register required by this paragraph shall be provided to the City Manager upon request. (c) All records collected by a permittee pursuant to this Chapter shall be maintained for a minimum of seven (7) years and shall be made available by the permittee to the agents or employees of the City upon request, except that private medical records shall be made available only pursuant to a properly executed search warrant, subpoena, or court order. (d) Subject to any restrictions under the Health Insurance Portability and Accountability Act (HIPAA) regulations, each Commercial Cannabis Business shall allow City officials to have access to the business’s books, records, accounts, together with any other data or documents relevant to its permitted commercial cannabis activities, for the purpose of conducting an audit or examination. Books, records, accounts, and any and all relevant data or documents will be produced no later than twenty-four (24) hours after receipt of the City’s request, unless otherwise stipulated by the City. The City may require the materials to be submitted in an electronic format that is compatible with the City’s software and hardware.

Sec. 33-26 Restriction on Alcohol and Tobacco Sales, Dispensing or Consumption.

No person shall cause or permit the sale, dispensing, or consumption of alcoholic beverages or tobacco products on or about the premises of a Commercial Cannabis Business.

Sec. 33-27 Fees and Charges.

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30 (a) All related fees and charges associated with the operation of a Commercial Cannabis Business as referenced or determined by this Chapter shall be established by Resolution of the City Council, which may be amended from time to time. (b) No person may commence or continue any Commercial Cannabis Activity in the City, without timely paying in full all fees and charges required for the operation of a Commercial Cannabis Business, including any charges in-lieu of tax or tax imposed pursuant to this Chapter, voter approval, or by operating agreement.
(c) All Commercial Cannabis Businesses authorized to operate under this Chapter shall pay all sales tax, use tax, business tax and other applicable taxes, and all license, registration, and other fees required under federal, state and local law. Each Commercial Cannabis Business shall cooperate with the City with respect to any reasonable request to audit the Commercial Cannabis Business’ books and records for the purpose of verifying compliance with this section, including but not limited to a verification of the amount of fees, costs or taxes required to be paid during any period.

Sec. 33-28 Commercial Cannabis Businesses Permissible Zoning Districts.

Commercial Cannabis Businesses may be permitted to engage in retail and delivery in the following zoning districts:
(a) C-1 (Community Commercial),
(b) C-2 (General Commercial),
(c) The following Form Based Code districts:
(1.) Downtown Gateway
(2.) Downtown Retail
(3). Route 66 Gateway
(4.) Sierra Gateway
(5.) Valley Gateway
(c) The following Specific Plan areas:
(1.) Arboretum (Activity Center);
(2.) Citrus Heights North (Neighborhood Commercial);
(3.) Empire Center (Promotional Center);
(4.) Hunter’s Ridge (Neighborhood Commercial);
(5.) Northgate (Neighborhood Commercial);
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31 (6.) Promenade (Commercial);
(7.) Providence Point (General Commercial);
(8.) Rancho Fontana (Commercial);
(9.) Sierra Lakes (Commercial Retail, Village Center, Town Center); (10.) Southridge Village (Neighborhood Commercial);
(11.) Summit Heights (Regional Mixed Use);
(12.) Ventana at Duncan Canyon (Commercial);
(13.) Walnut Village (The Corner);
(14.) West End (Commercial VC and CC); and
(15.) Westgate (Commercial Retail).

Sec. 33-29 Operating Requirements Applicable to all Commercial Cannabis Businesses. (a) No Commercial Cannabis Business may be located within a 600-foot radius of a school providing instruction in kindergarten or any grades 1 through 12, a day care center, a park, a Youth and Recreation Center, which is in lawful existence at the time a successful application for a Commercial Cannabis Permit was submitted to the City, or the City boundaries. The distance specified in this section shall be the horizontal distance measured in a straight line from the property line of the school or other protected use to the closest property line of the lot on which the Commercial Cannabis Business is located, without regard to intervening structures. (b) Commercial Cannabis Businesses may operate only during the hours established by resolution of the City Council and as specified in the Commercial Cannabis Permit issued by the City.
(c) Cannabis shall not be consumed by anyone on the premises of any Commercial Cannabis Business, unless explicitly authorized by a City ordinance, resolutions, rules, regulations or pursuant to explicit terms of a Commercial Cannabis Permit. (d) No cannabis or cannabis products shall be visible from the exterior of any property issued a Commercial Cannabis Permit or on any of the vehicles owned or used as part of the Commercial Cannabis Business. No outdoor storage of cannabis or cannabis products is permitted at any time.
(e) Each Commercial Cannabis Business shall have in place a point-of-sale or management inventory tracking system to track and report on all aspects of the Commercial Cannabis Business including, but not limited to, such matters as cannabis tracking, inventory data, gross sales (by weight and by sale) and other information which may be deemed necessary by the City. The Commercial Cannabis Business shall ensure that such information is compatible with ATTACHMENT NO. 1
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32 the City’s record-keeping systems. In addition, the system must have the capability to produce historical transactional data for review. Furthermore, any system selected must be approved and authorized by the City Manager prior to being used by the permittee. (f) All cannabis and cannabis products sold, tested, distributed or manufactured shall be cultivated, manufactured, and transported by licensed facilities that maintain operations in full conformance with the State of California and local regulations. (g) No physician shall be permitted in any Commercial Cannabis Business at any time for the purpose of evaluating patients for the issuance of a medicinal cannabis recommendation or medicinal cannabis identification card where applicable. (h) All commercial cannabis retailers shall have a manager on the premises at all times during hours of operation.
(i) Each Commercial Cannabis Business shall provide the City Manager with the name, telephone number (both landline and mobile) of an on-site manager or owner to whom emergency notice may be provided at any hour of the day. (j) Signage and Notices:
(1.) In addition to the requirements otherwise set forth in this section, business identification signage for a Commercial Cannabis Business shall conform to the requirements of state law and the City Code, including, but not limited to, the requirements for a City sign permit and applicable zoning laws regulating signs.
(2.) Each Commercial Cannabis Business premises shall be visibly posted with clear and legible notices indoors indicating that smoking, ingesting, or otherwise consuming cannabis on the premises or in the areas adjacent to the Commercial Cannabis Business is prohibited.
(k) Persons under the age of 21 years shall not be allowed on the premises of a Commercial Cannabis Business. It shall be unlawful and a violation of this Chapter for any person to employ any person at a Commercial Cannabis Business who is not at least 21 years of age. (l) Odor control devices and techniques shall be incorporated in all Commercial Cannabis Businesses to ensure that odors from cannabis are not detectable off-site. Commercial Cannabis Businesses shall provide a sufficient odor absorbing ventilation and exhaust system so that odor generated inside the Commercial Cannabis Business that is distinctive to its operation is not detected outside of the facility, anywhere on adjacent property or public rights-of-way, on or about the exterior or interior common area walkways, hallways, breezeways, foyers, lobby areas, or any other areas available for use by common tenants or the visiting public, or within any other unit located inside the same building as the Commercial Cannabis Business. As such, Commercial Cannabis Businesses must install and maintain the following equipment, or any other equipment which the City Engineer or Public Works Director or Building Official determines is a more effective method or technology:

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33 (1.) An exhaust air filtration system with odor control that prevents internal odors from being emitted externally;
(2.) An air system that creates negative air pressure between the Commercial Cannabis Business’s interior and exterior, so that the odors generated inside the Commercial Cannabis Business are not detectable on the outside of the Commercial Cannabis Business.
(m) The original Commercial Cannabis Permit issued by the City pursuant to this Chapter, the City issued business license, and the state-issued Seller’s Permit shall be posted inside the Commercial Cannabis Business in a location readily-visible to any City, County or State employee, official, or agent authorized to enforce the City’s Code, or applicable cannabis-related laws.
(n) The permittee of a Commercial Cannabis Business shall prohibit loitering by persons outside on the premises, and is required to enforce this prohibition within its premises and adjacent public areas, including cooperating with the City’s law enforcement agency dispatched to enforce same. The placement and use of no loitering signs shall be included as part of any submittal and depicted on a business or operational plan. (o) Prior to the operation of a Commercial Cannabis Business, the person intending to establish a Commercial Cannabis Business must first obtain all applicable planning, zoning, building, and other applicable permits and approvals from the relevant City or County department or division which may be applicable to the zoning district in which such Commercial Cannabis Business intends to establish and to operate.
(p) Permittees shall adhere to all applicable operating procedures, including those submitted as part of the initial application process, and pursuant to those established in applicable State of California laws, regulations, and policies.
(q) Permittees must comply with all applicable local, state and federal laws and regulations pertaining to persons with disabilities.
(r) No Commercial Cannabis Business may discriminate or exclude patrons in violation of local, state and federal laws and regulations. (s) Each Commercial Cannabis Business shall provide the name, telephone number, and email address of a community relations contact to whom notice of problems associated with the Commercial Cannabis Business can be provided. Each Commercial Cannabis Business shall also provide this information to all businesses and residences located within 600 feet of the Commercial Cannabis Business.
(t) The owner, manager, and community relations representative from each Commercial Cannabis Business holding a Commercial Cannabis Permit shall, if requested by the City Manager, attend a quarterly meeting with the interested parties to discuss costs, benefits, and other community issues arising as a result of implementation of this Chapter.

Sec. 33-30 Additional Operating Regulations for Storefront Retail.

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34 (a) No commercial cannabis retailer offering storefront purchase shall be located within 600 feet from another commercial cannabis storefront retailer. The distance specified in this section shall be the horizontal distance measured in a straight line from the property line of one commercial cannabis storefront retailer to the closest property line of the lot on which another Commercial Cannabis Business is located without regard to intervening structures. (b) Prior to dispensing medicinal cannabis or medicinal cannabis products to any person, the commercial medicinal cannabis business shall obtain verification from the recommending physician that the person requesting medicinal cannabis or medicinal cannabis products is a qualified patient, and shall maintain a copy of the physician recommendation or Identification Card as described in Health and Safety Code Sections 11362.71 through 11362.77, as may be amended from time to time, on site for period of not less than seven years. (c) Storefront retailers also providing delivery shall comply with the requirements pertaining to deliveries in Section 33-30 of this Chapter. (d) Commercial cannabis retailers selling medicinal cannabis shall verify the age and all necessary documentation of each customer to ensure the customer is not under the age of 18 years and that the potential customer has a valid doctor’s recommendation. Adult use retailers shall verify the age of all customers to ensure persons under the age of 21 are not permitted on the premises. Entrances into the retailer shall be locked at all times with entry strictly controlled. A “buzz-in” electronic/mechanical entry system shall be utilized to limit access to and entry to the retailer to separate it from the reception or lobby area. (e) Retailers may have only that quantity of cannabis and cannabis products reasonably anticipated to meet the demand readily available for sale on-site in the retail sales area of the retailer.
(f) All restroom facilities shall remain locked and under the control of management. (g) A cannabis storefront retailer shall notify qualified patients, primary caregivers, and customers (verbally or by written agreement) and by posting of a notice or notices conspicuously in at least 15 point type within the permitted premises that state as follows:
(1.) “The sale or diversion of cannabis or cannabis products without a permit issued by the City of Fontana is a violation of state law and the Fontana City Code.”
(2.) “Secondary sale, barter, or distribution of cannabis or cannabis products purchased from a Permittee is a crime and can lead to arrest.” (3.) “Patrons must not loiter in or near these premises and may not consume cannabis or cannabis products in the vicinity of this business or in any place not lawfully permitted. These premises and vicinity are monitored to ensure compliance.”
(4.) “Warning: the use of cannabis or cannabis products may impair a person’s ability to drive a motor vehicle or operate heavy machinery.” ATTACHMENT NO. 1
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35 (5.) “CALIFORNIA PROP. 65 WARNING: Smoking of cannabis and cannabis-derived products will expose you and those in your immediate vicinity to cannabis smoke. Cannabis smoke is known by the State of California to cause cancer.”
(6.) Waste Management. When managing cannabis goods, chemicals, hazardous or dangerous waste, Retailers are obligated to obtain all required permits, licenses, or other clearances and comply with all orders, laws, regulations, or other requirements of other regulatory agencies, including, but not limited to, local health agencies, regional water quality control boards, air quality management districts or air pollution control districts, local land use authorities, and fire authorities. The sale of cannabis waste is prohibited. Retailers shall maintain accurate and comprehensive records at the premises regarding cannabis waste that accounts for, reconciles, and provides evidence of, all activity related to the generation and disposal or deposition of cannabis waste.

Sec. 33-31 Additional Operating Requirements for Cannabis Delivery. (a) Permittee shall maintain a database and provide a list of the individuals and vehicles authorized to conduct transportation on behalf of the cannabis store-front retail business pursuant to Commercial Cannabis Permit issued by the City.
(b) Individuals authorized to conduct transportation on behalf of the cannabis storefront retail business shall be at least 21 years old and have a valid California Driver’s License . (c) Individuals transporting cannabis or cannabis products on behalf of the cannabis distribution business pursuant to a Commercial Cannabis permit shall maintain a physical copy of the transportation request and invoice and shall make them available upon request of agents or employees of the City requesting documentation.
(d) During transportation, the individual conducting transportation on behalf of the cannabis retail business shall maintain a copy of the Commercial Cannabis Permit and shall make it available upon the request of agents or employees of the City requesting documentation. (e) Cannabis or cannabis products shall be transported only in a vehicle that is (i) insured at or above the legal requirement in California, (ii) capable of securing (locking) the cannabis or cannabis products during transportation, and (iii) capable of being temperature controlled if perishable cannabis products are being transported.

Sec. 33-32 Promulgation of Regulations, Standards and Other Legal Duties. (a) The City Manager may promulgate additional or supplemental operating requirements applicable to all Commercial Cannabis Businesses to promote the public’s safety, welfare or health.

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36 (b) The City Manager may establish additional rules, regulations, policies and standards consistent with this Chapter governing the application review and approval process; the issuance, denial or renewal of Commercial Cannabis Permits; the ongoing operation of Commercial Cannabis Businesses and the City's oversight of them; and concerning any other subject determined to carry out the intent and purposes of this Chapter, including without limitation, establishing time periods to solicit applications pursuant to this Chapter, and corresponding deadlines for timely submittals of applications to the City. (c) Additional rules, regulations, policies and standards shall be published on the City’s website and maintained and available to the public in the Office of the City Clerk. (d) Rules, regulations, policies, and standards promulgated by the City Manager shall become effective upon date of publication. Commercial Cannabis Businesses shall be required to comply with all state and local laws and regulations, including but not limited to any rules, regulations or standards adopted by the City Manager.

Sec. 33-33 Fees Deemed Debt to City.

The amount of any fee, cost or charge imposed pursuant to this Chapter shall be deemed a debt to the City that is recoverable in any manner authorized by this Code, state law, or in any court of competent jurisdiction.

Sec. 33-34 Responsibility for Violations.

Permittees, their Responsible Persons and managers shall be responsible for violations of the laws of the State of California or of the City Municipal Code, whether committed by the permittee, or any employee or agent of the permittee, which violations occur on the premises of the Commercial Cannabis Business whether or not the violations occur within the permittee’s presence. Any act or omission of any employee constituting a violation of the provisions of this Chapter shall be deemed the act or omission of the permittee for purposes of determining whether the permit shall be revoked, suspended, or not renewed.

Sec. 33-35 Inspections.
(a) The City Manager, Police Chief, Fire Marshal, Code Compliance Representative and their designees charged with enforcing the provisions of the City Code may enter the location of a Commercial Cannabis Business at any time during regular business hours, without notice, and inspect the location of any Commercial Cannabis Business as well as any recordings and records required to be maintained pursuant to this Chapter or under applicable provisions of state law. (b) It is unlawful for any person having responsibility over the operation of a Commercial Cannabis Business, to impede, obstruct, interfere with, or otherwise not to allow, the City to conduct an inspection, review or copy records, recordings or other documents required to be maintained by a Commercial Cannabis Business under this Chapter or under state or local law.

It is also unlawful for a person to conceal, destroy, deface, damage, or falsify any records, recordings or other documents required to be maintained by a Commercial Cannabis Business under this Chapter or under state or local law.

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37 Sec. 33-36 Violations and Penalties.
(a) (a) Any person who violates any provision of this Chapter is guilty of a misdemeanor and subject to the penalties in Section 1-7 of this Code. (b) It is unlawful for any Permittee of a Commercial Cannabis Business, or its Responsible Person, manager or any other person employed by or working in concert with them or on their behalf, whether directly or indirectly, to continue to operate, conduct, or maintain a Commercial Cannabis Business after the City-issued Commercial Cannabis Permit has been suspended or revoked, or not renewed, pursuant to a non-contested notice of decision issued by the City Manager, or after the issuance of a final order after an appeal hearing. (c) Any Commercial Cannabis Business operated, conducted, or maintained contrary to the provisions of this Chapter is unlawful and a public nuisance, and the City may, in addition to or in lieu of prosecuting a criminal action, commence an administrative or civil action(s). The City may conduct proceeding(s), for the abatement, removal and enjoinment thereof, in the manner provided by law, and may take such other steps and may apply to such court or courts as may have jurisdiction to grant such relief to abate, cause cessation, or remove such Commercial Cannabis Business and restrain and enjoin any person from operating, conducting or maintaining a Commercial Cannabis Business contrary to the provisions of this Chapter. (d) Each person shall be guilty of a separate offense for each and every day, or part thereof, during which a violation of this Chapter, or of any law or regulation referenced herein, is allowed, committed, continued, maintained or permitted by such person, and shall be punishable accordingly.
(e) Whenever in this Chapter any act or omission is made unlawful, it shall include causing, permitting, aiding, abetting, suffering, or concealing the fact of such act or omission. (f) The penalties set forth herein are cumulative and in addition to all other remedies, violations, and penalties set forth in this Chapter, the City’s Code, or in any other ordinance, laws, rules or regulations of the City, County, or the State of California.

Sec. 33-37 Effect on Other Ordinances.

Except as designated in this Chapter, the provisions of this Chapter shall control for regulation of Commercial Cannabis Businesses as defined herein if other provisions of the Code conflict therewith. This Chapter shall not, however, relieve any person of his or her duty to comply with such laws if additional obligations, duties, or prohibitions are imposed thereby.

Sec. 33-38 Whistleblower Protection.

It shall be unlawful for a permitee of a Commercial Cannabis Business, or its Responsible Person, manager or any other person employed by the permitee, to discriminate in any manner or take adverse action against any Employee in retaliation for exercising rights protected under this section. These rights include, but are not limited to: the right to file a complaint or inform any person about any party’s alleged noncompliance with this chapter; and the right to inform any person of his or her potential rights under this section and to assist him or her in asserting such ATTACHMENT NO. 1
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38 rights. Protections under this section shall apply to any Employee who mistakenly, but in good faith, alleges noncompliance with this chapter. Taking adverse action against an Employee within 90 days of the Employee’s exercise of rights protected under this section shall raise a rebuttable presumption of having done so in retaliation for the exercise of such rights.

Sec. 33-39 Revolving Door Prohibition.
(a) A local elected official, appointed official or any former employee of the City shall not for a period of one year after leaving that office, position or employment, act as an agent or attorney for, consultant or otherwise represent, for compensation, any other person, by making any oral or written communication to the City Council, or any committee, subcommittee, Board, Commission or present member thereof, or any officer or employee of the City, if the appearance or communication is made for the purpose of influencing administrative or legislative action, or influencing any action or proceeding involving issuance, amendment, awarding, or revocation of a permit, license, grant or contract, or the sale or purchase of goods or property, as described in this Chapter.
(b) Subdivision (a) does not apply to an individual who is, at the time of the appearance or communication, an elected official, a board member, officer, or employee of another local government agency or an employee or representative of a public agency and is appearing or communicating on behalf of that agency.

Sec. 33-40 Process Integrity Provision.

All permit applicants listed on the application or any persons lobbying on their behalf shall comply with the Process Integrity Standards adopted by separate Resolution of the City Council. Failure to abide by the Process Integrity Standards may result in disqualification from an existing cannabis permit review process or revocation if it is later determined that the applicant or any person associated with the application or any third party lobbying on their behalf has violated the standards.

Sec. 33-41 Cannabis, personal use.
(a) Outdoor cultivation. A person may not plant, cultivate, harvest, dry, or process cannabis plants outdoors in any zoning district of the City. No use permit, building permit, variance, or any other permit or entitlement, whether administrative or discretionary, shall be approved or issued for any such use or activity.
(b) Indoor cultivation.
(1) A person may not plant, cultivate, harvest, dry, or process cannabis plants inside a private residence, or inside an accessory structure to a private residence located upon the grounds of a private residence, or inside any other enclosed structure within any zoning district of the City. No use permit, building permit, variance, or any other permit or entitlement, whether administrative or discretionary, shall be approved or issued for any such use or activity. (2) To the extent a complete prohibition on indoor cultivation is not permitted under California law, a person may not plant, cultivate, harvest, dry, or process cannabis plants inside a private ATTACHMENT NO. 1
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39 residence, or inside an accessory structure to a private residence located upon the grounds of a private residence, unless the person is issued an indoor cultivation permit by the Director of Planning. A person may not plant, cultivate, harvest, dry, or process cannabis plants inside any enclosed structure within any zoning district of the City which is not either a private residence or an accessory structure to a private residence located upon the grounds of a private residence.

Sec. 33-42 Residential Indoor Cannabis Cultivation.

Purpose. The purpose of this section is to prescribe the requirements and process for the residential indoor cannabis cultivation (RICC) permit. The RICC permit is intended to serve as an instrument of the City's reasonable regulation of residential indoor cannabis cultivation as provided by California Health and Safety Code § 11362.2(b)(1).
(a) Applicability.
(1.) A person may directly or indirectly engage in residential indoor cannabis cultivation only after obtaining and maintaining a valid RICC permit from the City of Fontana.
(2.) A RICC permit authorizes:
(i.) Only one person,
(ii.) To directly or indirectly engage in residential indoor cannabis cultivation for personal use,
(iii.) At only one residence.
(3.) A RICC permit does not authorize:
(i.) Construction or improvements of any structure,
(ii.) A property-at-large for cannabis cultivation,
(iii.) The permit holder or any others to engage in any activity licensed by the State of California under the Business and Professions Code Division 10 “Uniform Controlled Substances Act”, or
(iv.) The following people to directly or indirectly engage in residential indoor cannabis cultivation: the permit holder's family members, cohabitants, guests, future residents, or any other person other than the permit holder.
(4.) A person may not hold more than one RICC permit at a time. Multiple permit holders may be authorized to engage in residential indoor cannabis cultivation at the same residence, but a residence must include no more than one cultivation area, and no residence may cultivate more than six plants in total, regardless of how many permit holders are present.

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40 (b) Review and appellate authority.
(1.) Applications for a RICC permit will be processed and reviewed by the Director of Planning or his or her designee. The Director of Planning may approve or deny an application based on the findings provided in Section 33-42(d), below.
(2.) A decision by the Director of Planning may be appealed to the City Manager or his or her designee by the following parties within 15 days after receipt of the Director of Planning’s final decision:
(i.) The applicant, or
(ii.) Owner(s) or resident(s) of the property.
(c) Application and notice.
(1.) Applications for RICC permit shall be filed with the Planning Division upon such forms and accompanied by such data, information, and fees as may be required by the Planning Division, to ensure a full presentation of the facts.

No application shall be considered by the Planning Commission until the application is determined to be complete and all required fees have been paid to the City.
(i.) Application fees shall be assessed as provided by resolution of the City Council.
(ii.) The City will provide written notification of the complete application to the applicant within thirty (30) calendar days of complete submission, indicating whether the application has been approved or denied.
(d) Findings for approval for an RICC permit. The Director of Planning or his or her designee may approve an application for an RICC permit if the following findings are made:
(1.) The applicant shall be 21 years of age or older.
(2.) The residence shall be the primary dwelling of the applicant; moreover, shall not be used for any of the following activities:
(i.) Day care.
(ii.) Youth center.
(iii.) Group homes.
(iv.) Any facility that does not allow cultivation of cannabis by law or policy.

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41 (e) Cultivation area.
(1.) The cultivation area must be located within the residence or within an accessory structure.
(2.) The cultivation area must not be used or prepared in a manner to cultivate more than six cannabis plants.
(3.) The cultivation area must not be visible from anywhere outside the residence. Any windows, skylight, ventilation, or other opening must be sufficiently covered or opaque as to obscure visibility of the cultivation area from any adjacent property.
(4.) The cultivation area must not produce odors, sounds, or other emissions that are sensible from adjacent properties and may indicate cannabis cultivation. (f) Expiration and renewal.
(1.) A RICC permit expires, if not renewed, one year from the date of approval. (2.) A RICC permit may be renewed, if prior to the expiration, the permit holder:
(i.) Completes forms and submittal materials for renewal as required by the Director of Planning,
(ii.) The permit holder passes an inspection approved by the Director of Planning, and
(iii.) Pays a renewal fee as approved by resolution by City Council. (g) Suspension and termination.
(1.) The City may suspend or terminate a RICC permit at any time for failure to comply with applicable governing regulations.
(2.) If a RICC permit is suspended, the suspension will be effective and the permit holder's cannabis crop may be impounded until the permit holder:
(i.) Demonstrates compliance with the applicable governing regulations, and
(ii.) Pays a fine and renewal fee as approved by resolution by City Council.
(3.) If a RICC permit is terminated, the permit holder's cannabis crop may be impounded. The permit holder may not apply for another RICC permit until the permit holder pays a fine as approved by resolution by City Council.

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42 (4.) A suspension or termination of a RICC permit may be appealed to the City Manager or designee by the permit holder.
(h) Subsequent applications.
(1.) Application for a different residence.
(i.) If a permit holder applies for a RICC permit for a residence other than specified on the existing permit, the existing RICC permit will be suspended upon application for the new permit.
(ii.) If the application is approved, the existing RICC permit is rescinded. (iii.) If the application is denied, the existing RICC permit is reinstated. (iv.) If the applicant appeals a denial of the application, the existing RICC permit remains suspended until a final decision is reached. (2.) Application for a different cultivation area in the same residence. If a permit holder applies for a RICC permit for the residence on the existing permit, but for cultivation area other than specified on the existing permit, the existing permit will terminate upon approval of the application. Only one cultivation area may exist in a residence at one time, and if another application is approved, the existing RICC permit will terminate. (3.) Application for same cultivation area in same residence. If another individual applies for a RICC permit for the same cultivation area, no permit will be issued if the existing permit has been terminated or suspended. An additional RICC permit for the same cultivation area shall only be issued if all permits related to that cultivation area remain in good standing with the City.
(i.) No sale or transfer. A RICC permit may not be sold or transferred.

SECTION 3: Chapter 16 “Miscellaneous Provisions and Offenses” of the Fontana Municipal Code is hereby amended to replace all references to “marijuana” with “cannabis.” SECTION 4: Section 30-233 “Purpose” of Chapter 30 of the Fontana Municipal Code, is hereby amended in its entirety as follows:
“A Director's determination is intended to specify that a use that is not listed within an established list of uses, may be allowed to operate within a particular zoning district. The Director of Planning shall have the authority to determine other uses, in addition to those specifically listed in this article, which may be permitted or conditionally permitted in each of the various zones when, in his or her judgment supported by specific findings, such other uses are similar to and no more objectionable to the public welfare than those listed.” ATTACHMENT NO. 1
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43 SECTION 5: Section 30-263(4) “Prohibited home occupation uses” of Chapter 30 of the Fontana Municipal Code, is hereby amended as “(4) Cannabis dispensaries and sales.” SECTION 6: Section 30-360(d)(14) “Special use regulations” of Chapter 30 of the Fontana Municipal Code, is hereby amended in its entirety as follows “A Commercial Cannabis Business shall not be permitted pursuant to this section.” SECTION 7: Section 30-453 “Uses permitted within mixed use development projects” of Chapter 30 of the Fontana Municipal Code, is hereby amended to replace “Medical marijuana dispensaries” in Table No. 30-453 as follows:

Table No. 30-453
Uses Permitted Within Mixed Use Development Projects
C. Business and Professional Offices R-4 R-5
Medical marijuana dispensaries Commercial Cannabis Businesses — — SECTION 8: Section 30-489 “Uses permitted ” of Chapter 30 of the Fontana Municipal Code, is hereby amended in its entirety as provided in Exhibit “A.” SECTION 9: Section 30-491“Special Use Regulations” of Chapter 30 of the Fontana Municipal Code, is hereby amended to add subsection 21, as follows:
(21) Commercial Cannabis Businesses. Commercial Cannabis Businesses shall comply with the provisions of Chapter 33 “Cannabis Businesses And Activities” of the Fontana Municipal Code.

SECTION 10: Section 30-611(8)(k) “Special Use Regulations” of Chapter 30 of the Fontana Municipal Code, is hereby amended as “(k) A medical cannabis dispensary shall not be permitted pursuant to this section.”
SECTION 11: CEQA. The City Council, on the basis of the whole record and exercising independent judgment, finds that this Ordinance is not subject to further environmental review pursuant to CEQA Guidelines Section 15303 of the State Guidelines for Implementations of the California Environmental Quality Act (CEQA). Section 15303 pertains to “construction and location of limited numbers of new, small facilities” including up to three (3) “stores” in “urbanized areas.“ Here, Section 15303 applies as the Ordinance could, at most, only reasonably foreseeably result in the construction and location of only three (3) new retail facilities in an urban area.

SECTION 12: Severability. If any section, subsection, sentence, clause, phrase or portion of this Ordinance is for any reason held to be invalid or unconstitutional by any court of competent jurisdiction, such decision shall not affect the validity of the remainder of the Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions may be declared invalid or unconstitutional.

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44 SECTION 13: Nothing in this Ordinance shall be construed to allow persons to engage in conduct that violates state law, endangers others, causes a public nuisance, allows the use or diversion of cannabis in an unlawful manner or inconsistent with state law SECTION 14: The City Clerk shall attest to the passage and adoption of this ordinance, causing it to be posted as required by law, and it shall become effective thirty (30) days after its adoption.

ATTACHMENT NO. 1
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45 PASSED, APPROVED AND ADOPTED this ____ day of __________, 2022. ________________________________
Acquanetta Warren, Mayor
City of Fontana
________________________________
Germaine McClellan Key
City Clerk
Read and Approved as to form:

Best, Best & Krieger, LLP.
__________________________________
Ruben Duran, City Attorney
ATTACHMENT NO. 1
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46 Exhibit “A”
Sec. 30-489. - Uses permitted.
(a) Uses by zoning district. Table No. 30-4589, lists the uses permitted in each of the commercial and mixed-use zoning districts. A "P" indicates a use is permitted by right subject to design review by the Planning Commission, or administrative site plan review by the Director of Community Development, or regulatory permit issued by the City, an "M" indicates the use requires the granting of a minor use permit approved by the Director of Community Development, a "C" indicates the use requires the granting of a conditional use permit approved by the Planning Commission, and "—" means the use is not permitted in that zoning district. (b) Uses subject to specific requirements. Permitted uses marked with an asterisk "*" indicate that the use is subject to special use regulations in Section 30-491 and Chapter 15 of the Municipal Code. Conditional uses are subject to the provisions in Section 30-492.

Table No. 30-489
Allowed Uses within Commercial Zoning Districts
Use C-1 C-2 RMU
Retail Sales
Adult Businesses P* P* —
Antique Shop P P P
Automobile Sales Agency with or without Incidental Repair and Sales Display Area
— C C
Automobile Supply Store (no machine shop) P P P
Bakery Goods Store P P P
Bar, Cocktail Lounge C C C
Bicycle Shop P P P
Boat Sales with Incidental Repair and Sales Display Area — C C Book Store P P P
Building Materials, Retail Sale of (if contained within a completely enclosed building)
— P P
Building Materials with Outdoor Storage — P* P*
Blueprinting Establishment — P P
Commercial Cannabis Business (with City Permit) P* P* — Caterer P P P
Clothing Store P P P
Computer Store P P P
Convenience Store P P P
Cyber Cafés C C C
Department Store — P P
Discount Store P P P
Drugstore P P P
ATTACHMENT NO. 1
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47 Electrical Supply Store P P P
Feed Store C M —
Florist Shop P P P
Furniture Store P P P
Garden Furniture and Supplies Store P* P* P*
Glass or Mirror Store P P P
Grocery, Fruit, Vegetable, Meat, Fish, Poultry, or Delicatessen Store, P P C Hardware Store P* P* P*
Hobby Supplies Store P P P
Home Furnishing Store P P P
Household Appliance Store P P P
Ice Cream Store P P P
Ice Storage Locker (if not more than five-ton capacity) P P P Interior Decorating Shop P P P
Jewelry and Coin Store P P P
Liquor Store C C C
Micro-Brewery — C C
Newsstand P P P
Novelties Store P P P
Nursery, Plant (includes statuary sales) P* P* P*
Paint and Wallpaper Shop P P P
Pawn Shop — C C
Pet Boarding — M —
Pet Shop P P P
Plumbing Supply Store — P P
Radio, Television, and Small Electrical Appliance Shop (including repair when incidental to retail sales)
P P P
Restaurant and Café, Excluding Those Having Dancing and/or Floorshows. Alcoholic Beverages are not Permitted.

P* P* P*
Restaurant and Café with Entertainment and/or Dancing. Alcoholic Beverages Permitted.

C* C* C*
Restaurant and Café Without Entertainment and/or Dancing. Alcoholic Beverages Permitted. (See Section 30-492 For Alcoholic Beverage Sales)
C C C
Restaurant, Drive-Thru and Take Out P* P* P*
Secondhand Store — P P
Shoe Store P P P
Smoke/Tobacco Shop and Vape Shop C C C
Sporting Goods Store P P P
Swap Meet (Indoor/outdoor) — — —
Tattoo Establishments P* P* P*
Trailer and Mobile Home Sales and Rental — P* C
Wholesale Auto Sales (requires one stall) C C —
Warehousing Sales, Retail C P* P*
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48 Warehousing Sales, Wholesale — C P*
Business and Professional Offices C-1 C-2 RMU
Administrative and Professional Offices Involving no Retail Trade P P P Art Gallery P P P
Financial Institution P P P
Clinic, Medical or Dental, Acupuncture P P P
Convention Centers — — P
Government Offices P P P
Medical Laboratory — P P
Optician P P P
Pharmacy P P P
Radio/Television Studio (with transmitter) — C C
Studio (without transmitter) P P P
Studios for Professional Work or Teaching of Any Form Of Fine Art P P P Service Establishments C-1 C-2 RMU
Ambulance Service P P P
Animal Hospital M P C
Animal Hospital (w/ Boarding) M —
Assembly/Meeting Hall For, Private Clubs, Religious Services, or Similar Uses
C C C
Automobile Fueling Station C C C
Automobile and Truck Rental, Two-Ton, Single Unit Maximum — C C Automobile/Vehicle Body and Fender Repair Shop — C C
Automobile/Vehicle Repair C C C
Automotive Custom Repair (includes lowering and lifting) C C C Automotive Stereo, Alarm and Upholstery Installation C M M Automobile Wash, — M M
Barber Shop or Beauty Parlor P P P
Chemical substance abuse facility C C C
Cleaners P* P* P*
Clothing and Costume Rental Establishment P P P
Community Care Facility C C C
Community Center C C C
Construction Trailer (Temporary Use Permit) P* P* P*
Convalescent Hospital M M C
Copying, Packing and Mailing Services P P P
Day Care—Commercial M M M
Day Care—Commercial (24 hour) — C C
Depot—Bus — P* P*
Depot—Railway, Park-and-Ride — P P
Dressmaker or Millinery Shop P P P
Equipment Rental — P* P*
Fortune-Telling P P P
ATTACHMENT NO. 1
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49 Hospitals — M M
Hotels — C C
Laundromat, Self Service P P P
Locksmith P P P
Machine Shop — C C
Masseur or Masseuse, Day Spa, Acupressure — C C
Self-Storage Facility — C C
Mortuaries — C C
Library P P P
Museums P P P
Motel — C C
Music and Vocal Instruction P P P
Nightclub — C C
Nursing Home M M C
Parks P P P
Photographer P P P
Pick-Up Truck Rated Over One Ton (carrying weight), Commercial Truck or Van, or Trailer Rental
— C C
Picture Framing Store P P P
Post office M M M
Printer, Blueprint Shop — P P
Private Schools C C C
Public Utility Structures and Facilities M M M
Publishing Establishments — P P
Repair Shop for Household Appliances P P P
Schools Such as Business Colleges, Music Conservatories, Dancing Schools, and Other Schools That Offer Training In Non-Industrial Professions
P P P
Stenographic Services P P P
Swimming Pool, Commercial P P P
Sign Shop in Enclosed Structure — P P
Tailor P P P
Telephone Answering Service or Exchange P P P
Ticket Agency, Travel Bureau P P P
Tire Shop — C C
Truck Repair Service — — —
Truck Storage Yard — — —
Upholstery Shop — P P
Wedding Chapel P P P
Amusement Establishments C-1 C-2 RMU
Amusement Enterprise for Children Including Pony Rides (No Stables), Merry-Go-Round, and The Like When Incidental To A Permitted Use P P P
Amusement Park — C C
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50 Arcades—Pinball, Video, and the Like — C C
Archery Range — C C
Baseball; Batting Range — C C
Bowling Alley C C C
Boxing Arena — C C
Dance Hall — C C
Entertainment Centers C C C
Golf, Driving Range, Miniature, Pitch and Putt — C C
Gymnasiums, Health Spas, or Physical Culture Establishments Under 4,000 Square Feet in Floor Area
P P P
Gymnasiums, Health Spas, or Physical Culture Establishments Over 4,000 Square Feet in Floor Area
C C C
Pool Hall, Billiard Center C C C
Skating Rink, Roller or Ice C C C
Smoking Lounge, Hookah Lounge, Vapor Lounge, E-Lounge (allowed only as a secondary use to a full-service restaurant)
C C C
Theater, Indoor C C C
Indoor Playground/Recreation P P P
Residential Uses C-1 C-2 RMU
Senior Housing M M M
Multiple-Family Dwellings with an Area Plan C
Other Uses C-1 C-2 RMU
Animal Kennel — C C
Animals, Small—Keeping and Raising P* P* P*
Antenna, Transmitting C C C
Cemetery and Related Uses — M C
Construction Trailer P* P* P*
Home Occupation P* P* P*
Homeless Shelters — — —
Emergency Shelter Subject to the activation of an Emergency Operation Center
P P P
Metal Storage Containers (temporary storage only with a temporary use permit)
P* P* P*
Museum and Art Galleries — M M
Parking Lots (not related to use on same property) — P P Parking Structures — P P
Research and Development — P P
ATTACHMENT NO. 1
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City of Fontana, City of Rancho Cucamonga, California State Parks, Esri, HERE, Garmin, SafeGraph, GeoTechnologies, Inc, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, USDA, Esri, NASA, NGA, USGS, FEMA Limited Streets
Areas
City Limits
City Sections

CENTRAL
NORTH
SOUTH
0 0.75 mi 1.5
6/13/2022
Scale 1 : 90,000
/
City of Fontana
Cannabis Areas Map
ATTACHMENT NO. 2
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Tuesday, June 21, 2022
6:00 PM
City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Grover W. Taylor Council Chambers
Planning Commission
Cathline Fort, Chair
Raj Sangha, Vice Chair
Idilio Sanchez, Secretary
Matthew Gordon, Commissioner
Ralph Thrasher, Commissioner
Minutes

ATTACHMENT NO. 3
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CALL TO ORDER/ROLL CALL:

The Regular Meeting of the Fontana Planning Commission was held on Tuesday, June 21, 2022, in the Grover W. Taylor Council Chambers at 8353 Sierra Avenue, Fontana, California. Chair Fort called the meeting to order at 6:01 p.m.

ROLL CALL:

Present: Chair Fort, Vice Chair Sangha, Secretary Sanchez, and Commissioners Thrasher and Gordon

Absent: None
INVOCATION/PLEDGE OF ALLEGIANCE:

Following the Invocation by Commissioner Gordon, the Pledge of Allegiance was led by Commissioner Thrasher.

PUBLIC COMMUNICATIONS:

There were no public communications received.

CONSENT CALENDAR:

ACTION: Motion was made by Commissioner Thrasher, seconded by Secretary Sanchez, and passed by a vote of 4-0-1 to adopt Consent Calendar Item CC-A (AYES:

Fort, Sangha, Sanchez and Thrasher: NOES: None: ABSTAINED: Gordon).

The motion carried by the following vote:

Chairperson Fort, Vice Chair Sangha, Secretary Sanchez and Commissioner Thrasher

Aye:

Abstain: Commissioner Gordon
A. Approval of Minutes
Approve the Regular Planning Commission Meeting Minutes of June 7, 2022.

CC-A Approval of Minutes of June 7, 2022 21-1490
PUBLIC HEARINGS:

PH-A Master Case No. 18-097R1; Design Review No. 21-032 - a proposal to construct twelve two-story single-family primary homes, five (single-story) standard detached accessory
dwelling units, seven (single-story) non-standard detached accessory dwelling units, and four attached junior accessory dwelling units on a previously approved/recorded tract map (Tentative Tract Map No. 20230).

RECOMMENDATION:

Based on the information in the staff report and subject to the attached Findings and Conditions of Approval, staff
recommends that the Planning Commission adopt Resolution 21-1488

ATTACHMENT NO. 3
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Planning Commission Minutes June 21, 2022
PC No. 2022-018; and,

1. Determine that the project is Categorically Exempt pursuant Section No. 15332, (Class No. 32, In-Fill Development Project) and Section No. 3-18 (In-Fill Projects of the 2019 Local Guidelines for implementing CEQA, and direct staff to file a Notice of Exemption; and

2. Approve Design Review No. 21-032.

APPLICANT:

Andresen Architecture, Inc.
17087 Orange Way
Fontana CA 92335
LOCATION:

The project site is located on the north side of Merrill Avenue east of Palmetto Avenue, the project site is otherwise
identified as 8844, 8843, 8851, 8859, 8864, 8667, 8876, 8877, 8884, 8885, 8892, and 8893 Encinitas Court (APNs:
0192-242-61, -62, -63, -64, -65, -66, -67, -68, -69, -70, -71, and -72)
PROJECT PLANNER:

Jon S. Dille, Associate Planner
Chair Fort opened Public Hearing Item PH-A.

Associate Planner Jon Dille provided the staff report.

No written communications were received.

Representing Andresen Architecture Inc., Doug Andresen, acknowledged that he had read and agreed to the Conditions of Approval.

The Commission and staff discussed garage spaces, onsite and street parking in relation to the proposed development.

There were no public communications received for this item.

The Public Hearing was closed.

The commission and staff further discussed the parking issues: garage spaces, overnight parking, adjustment of red curbs to allow for additional parking, state code and development advisory parking requirements.

ACTION: Motion was made by Chairperson Fort, seconded by Secretary

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Planning Commission Minutes June 21, 2022
Sanchez, and passed unanimously by a vote of 5-0 to adopt Public Hearing Item PH-A.

The motion carried by the following vote:

Chairperson Fort, Vice Chair Sangha, Secretary Sanchez, Commissioner Gordon and Commissioner Thrasher

Aye:

PH-B Master Case No. 21-126; Tentative Parcel Map No. 20485 (TPM No. 21-026), Tentative Tract Map No. 20511 (TTM No. 21-010), Conditional Use Permit No. 21-024 and Design Review No. 21-049; A request for site and architectural approval for the development of 143 condominium units (96 attached
motorcourt units and 47 detached cluster units) in a Planned Unit Development (PUD) and to subdivide the subject 10.3 acre site for condominium purposes.

RECOMMENDATION:

Based on the information contained within this staff report, and subject to the attached findings and Conditions of
Approval, staff recommends that the Planning
Commission adopt Resolution PC No. 2022-019, to:

1. Adopt the Addendum and Mitigation, Monitoring and
Reporting Program (MMRP) to the Lytle Creek Apartments EIR (SCH No. 2005021054) and direct staff to file a Notice of Determination; and,

2. Approve Tentative Parcel Map No. 20485 (TPM No. 21-026)

3. Approve Tentative Tract Map No. 20511 (TTM No. 21-010);

4. Approve Conditional Use Permit No. 21-024; and

5. Approve Design Review No. 21-049.

APPLICANT:

Ryan Combe
Lennar Homes
980 Montecito Drive, Suite No. 302
Corona, CA 92879
LOCATION:

The project site is located on the south side of Sierra Lakes Parkway between Lytle Creek Road and Maloof Avenue (APNs:
1108-052-02, -03, -04, -05, -06, -07, -08, -09, -10, -11, -12, -13, -14, -15, -16, -17)
21-1474

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Planning Commission Minutes June 21, 2022
PROJECT PLANNER:

Cecily Session-Goins, Associate Planner
Chair Fort opened Public Hearing Item PH-B.

Associate Planner Cecily Session-Goins provided the staff report.

Written communications were received from the following:
· Jasmine Cunningham
· Courtney Welch
Representing Lennar Homes, Candyce Burnett, acknowledged that she had read and agreed to the Conditions of Approval.

The following individuals spoke in opposition of the project:
· Robert Holcomb
The Public Hearing was closed.

The commission requested clarification on the roofing and type of market rate or rentals.

Associate Planner Session-Goins confirmed that the roofing will be tile roofing.

The units will be market rate units for sale, and there will be a Home Owners Association in place.

ACTION: Motion was made by Secretary Sanchez, seconded by Commissioner Gordon, and passed unanimously by a vote of 5-0 to adopt Public Hearing Item- PH-B.

The motion carried by the following vote:

Chairperson Fort, Vice Chair Sangha, Secretary Sanchez, Commissioner Gordon and Commissioner Thrasher

Aye:

PH-C Master Case No. 22-042, Conditional Use Permit No. 22-014 and Design Review No. 22-024 - A request for site and
architectural review for the construction of a two-story building to be used for public assembly (religious facility) and the operation of associated functions by Water of Life
Community Church.

RECOMMENDATION:

Based on the information contained within this staff report and subject to the attached findings, and conditions of approval, staff recommends that the Planning Commission adopt
Resolution PC No. 2022-020: and,
21-1457

ATTACHMENT NO. 3
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Planning Commission Minutes June 21, 2022

1. Determine that the project is Categorically Exempt pursuant to Section No. 15332, (Class No. 32, In-Fill) of the California Environmental Quality Act and Section No. 3-18 (Infill Projects) of the 2019 Local Guidelines for implementing the CEQA, and direct staff to file a Notice of Exemption; and,

2. Approve Conditional Use Permit No. 22-014; and,

3. Approve Design Review No. 22-024.

APPLICANT:

Raymond Allard
16866 Seville Avenue
Fontana, CA 92335
LOCATION:

The project site is located on the south side of Arrow Avenue, between Tokay Avenue and Citrus Avenue (APN: 0232-201-12 and -13).

PROJECT PLANNER:

Cecily Session-Goins, Associate Planner
Chair Fort opened Public Hearing Item PH-C.

Associate Planner Cecily Session-Goins provided the staff report.

No Written communications were received.

Chair Fort inquired about the commencement of the next planning phases.

Associate Planner Sessions-Goins stated the next phases are dependent on funding and would probably start in a year to two years.

Discussion ensued regarding the following: conditional use permit, security, space utilization, multi-purpose rooms, food pantry storage and distribution service, food prep area, community gathering and assembly rooms, noise impact, and operating conditions.

Applicant Ray Allard, acknowledged that he had read and agreed to the Conditions of Approval. He also thanked Associate Planner Session-Goins for her hard work and working thoroughly on this project.

The following individual was called upon to speak during this period but was absent from the Chambers:
• Jim Kensinger (Mr. Kensinger, a representative from Water of Life submitted a speaker card because he thought it was necessary to potentially speak as a part of the applicant’s team).

ATTACHMENT NO. 3
891
Planning Commission Minutes June 21, 2022
The hearing was closed.

The hearing was reopened for the following speakers.
• Miguel Espinoza spoke in opposition of the project
• Elizabeth Sena spoke in opposition of the project
The commission inquired about the zoning and whether there were any other projects presented for the property.

Associate Planner Session-Goins stated there were no other projects presented other than the proposed, and that the land is zoned for the intended use.

ACTION: Motion was made by Commissioner Thrasher, seconded by Commissioner Gordon, and passed unanimously by a vote of 5-0 to adopt Public Hearing Item PH-C.

The motion carried by the following vote:

Chairperson Fort, Vice Chair Sangha, Secretary Sanchez, Commissioner Gordon and Commissioner Thrasher

Aye:

PH-D Master Case No. 22-039; Tentative Parcel Map No. 20549 (TPM No. 22-006) and Design Review No. 22-022 - A proposal to consolidate four parcels and for the site and architectural review and approval to construct an industrial commerce center building totaling approximately 77,558 square feet on approximately 4.378 adjusted gross acres.

RECOMMENDATION:

Based on the information in the staff report and subject to the attached Findings and Conditions of Approval, staff
recommends that the Planning Commission adopt
Resolution PC No. 2022-021; and,

1. Adopt the Addendum and Mitigation, Monitoring, and
Reporting Program (MMRP) to the SWIP PEIR (SCH NO.
2009091089) and direct staff to file a Notice of Determination; and,

2. Approve Tentative Parcel Map No. 20549 (TPM No. 22-006)

3. Approve Design Review (DRP) No. 22-022
APPLICANT:

Luke Rutherford
Citrus LPIV 11 LLC
2442 Dupont Drive
21-1444

ATTACHMENT NO. 3
892
Planning Commission Minutes June 21, 2022
Irvine, CA 92612
LOCATION:

The project site is located at 11208, 11232, and 11236 Citrus Avenue and 16056 Jurupa Avenue (APNs: 0237-191-15, -33, -36 and -48), west of Citrus Avenue and north of Jurupa Avenue.

PROJECT PLANNER:

Salvador Quintanilla, Senior Planner
Chair Fort opened Public Hearing Item PH-D.

Senior Planner Salvador Quintanilla provided the staff report.

Written communications were received from the following:
• Maribel Nunez in opposition
• Californians for Homeownership
Commissioner Gordon inquired about the expected number of truck trips for the proposed facility and whether the project was in the Southwest Industrial Park (“SWIP”) designated area.

Senior Planner Quintanilla stated that based on the trip generation study conducted, the facility will have around 176 truck trips, a low number compared to surrounding areas. Mr. Quintanilla also confirmed that the project is in SWIP.

Representing the Applicant, Michael Sizemore, acknowledged that he had read and agreed to the Conditions of Approval.

Commissioner Gordon thanked the applicant for bringing this project to Fontana.

The following individuals spoke in favor of the project:
• Angel Esparza
• Orlando Garcia
• Thomas Ruiz
The following individuals spoke in opposition of the project:
• Gabriel Mendez
• Janet Bernabe
• Elizabeth Sena
The hearing was closed.

In reference to re-zoning, Director Nevins clarified that there is no re-zoning for the proposed project and the uses are permitted.

ATTACHMENT NO. 3
893
Planning Commission Minutes June 21, 2022
The Commission and staff further discussed proximity to Jurupa Hills High School, truck traffic and obstruction on Jurupa Avenue.

ACTION: Motion was made by Commissioner Gordon, seconded by Secretary Sanchez, and passed unanimously by a vote of 5-0 to adopt Public Hearing Item PH-D.

The motion carried by the following vote:

Aye: Chairperson Fort, Vice Chair Sangha, Secretary Sanchez, Commissioner Gordon and Commissioner Thrasher
PH-E Master Case No. 22-013; Tentative Parcel Map No. 20508 (TPM No. 22-002) and Design Review No. 22-007 - A proposal for site and architectural review and approval to construct an
industrial commerce center building totaling approximately 289,875 square feet on approximately 12.4 adjusted gross acres.

RECOMMENDATION:

Based on the information in the staff report and subject to the attached Findings and Conditions of Approval, staff
recommends that the Planning Commission adopt
Resolution PC No. 2022-022; and,

1. Adopt the Addendum and Mitigation, Monitoring, and
Reporting Program (MMRP) to the SWIP PEIR (SCH NO.
2009091089) and direct staff to file a Notice of Determination;

2. Approve Tentative Parcel Map No. 20508 (TPM No. 22-002); and

3. Approve Design Review (DRP) No. 22-007.

APPLICANT:

CPL Slover LLC
2442 Dupont Drive
Irvine, CA 92612
LOCATION:

The project site is located at 14070, 14092 and 14138 Slover Avenue and 10400 Banana Avenue (APNs: 0236-021-02, -03, -20, and -21, and 0236-031-01 and -02).

PROJECT PLANNER:

Alejandro Rico, Associate Planner
21-1455

ATTACHMENT NO. 3
894
Planning Commission Minutes June 21, 2022
Chair Fort opened Public Hearing Item PH-E.

Associate Planner Alejandro Rico provided the staff report.

Written communications were received from the following:
• Maribel Nunez in opposition
• Californians for Homeownership
Commissioner Gordon and staff discussed potential traffic backup, proximity to schools, location in relation to Southwest Industrial Park Specific Plan and zoning.

Representing the applicant, Michael Sizemore, acknowledged that he had read and agreed to the Conditions of Approval.

Commissioner Sanchez thanked the applicant for bringing this project to Fontana.

The following individuals spoke in favor of the project:
• Janet Bernabe
• Elizabeth Sena
• Jeffrey Scott
• Andres Bujanda
• Adam Kawamoto
• Jorge Sorta
• Thomas Ruiz
No one spoke in opposition of the project.

The hearing was closed.

In reference to traffic queuing on streets, Deputy City Manager, Development Services Organization, Phil Burum reminded the commission that the city passed an updated ordinance to make it illegal in the City of Fontana. Mr. Burum stated that going forward staff reports will state whether the projects comply with the new sustainability ordinance.

ACTION: Motion was made by Commissioner Gordon, seconded by Vice Chair Sangha, and passed unanimously by a vote of 5-0 to adopt this Public Hearing Item PH-E.

The motion carried by the following vote:

Chairperson Fort, Vice Chair Sangha, Secretary Sanchez, Commissioner Gordon and Commissioner Thrasher

Aye:

PH-F Master Case No. 22-072, Municipal Code Amendment No. 21-1473

ATTACHMENT NO. 3
895
Planning Commission Minutes June 21, 2022
22-006 - Request to approve Master Case No. 22-72;
MCA22-006; Request to approve Ordinance No. 2022-XX
Repealing Sections 30-6 Through 30-11 of Division 3 of Article 1 of Chapter 30, Amending Chapter 30 Permitted Uses, And Adding Chapter 33, “Cannabis Businesses And Activities.” RECOMMENDATION:

Based on the information contained within this staff report and subject to the attached findings, staff recommends that the Planning Commission adopt Resolution PC No.
2022-023: and,

1. Determine that the project is Categorically Exempt pursuant to Section No. 15061(B)(3) (the “common sense” exemption), or, in the alternative, Section 15303 (Class No. 3, Small Structures) of the California Environmental Quality Act and Section No. 3-22 (Categorical Exemptions) of the 2019 Local Guidelines for implementing the CEQA, and direct staff to file a Notice of Exemption; and,

2. Approve a resolution recommending that the City Council adopt an ordinance for Municipal Code Amendment (MCA) No. 22-006 to amend Chapter 30 of the Fontana Municipal Code and add Chapter 33, “Cannabis Businesses and Activities”.

APPLICANT:

City of Fontana - Planning Department
8353 Sierra Avenue
Fontana, CA 92355
LOCATION:

Citywide
PROJECT PLANNER:

Patty Nevins, Director of Planning
Chair Fort opened Public Hearing Item PH-F.

Deputy City Manager, Development Services Organization, Phillip Burum, provided the staff report.

Written communications were received from the following:
• Kareem Gongora
• Amparo Munoz Miramontes
The Commission, Attorney Jennifer Farrell and staff discussed a number of

ATTACHMENT NO. 3
896
Planning Commission Minutes June 21, 2022
topics, including at-will inspections and limitations; documentation of transactions buffer requirements, location scoring; special events permits; approximate revenue/ gross receipts to be generated; limit to the size of the business; on site security; difficulty of revoking the permit after approval.

The Commission inquired about the final decisions in issuing the permit and Deputy City Manager Burum stated the ultimate authority in the issuance of permitting and selecting is the City Manager. The permitting will be based solely and exclusively on the scoring of the third-party consultant.

A recess was called at 8:30 p.m.

The meeting reconvened at 8:33 p.m.

The commission, attorney and staff continued their discussions, including air filtration systems; prohibition of onsite consumption, signage, social service support, security plan requirements; clarification on prohibiting smoking cannabis and tobacco in city owned and operated parks; and regulating operating hours of cannabis businesses.

The following individuals spoke regarding the public hearing:
• Janet Bernabe
• Ana Gaeta
• Elizabeth Sena
The hearing was closed.

In reference to previous discussions and given the volume of information provided, Commissioner Gordon stated he was undecided on the issue.

Chair Fort expressed her concerns in relation to the public health, safety, and general welfare finding.

Discussion ensued regarding the Public Hearing Item PH-F ordinance and feedback pertaining to lack of community input; buffer zone requirements and crime statistics, future permit revocation process, number of permits, and public usage.

Chair Fort asked for a Motion. Motion was made by Commissioner Thrasher.

There was no second and the motion died.

Attorney Farrell suggested there can be a second motion.

ACTION: Motion was made by Commissioner Sanchez, seconded by Commissioner Gordon, and passed by a vote of 4-1-0 to DENY Public Hearing Item PH-F Master Case No. 22-072 and not recommend the item to

ATTACHMENT NO. 3
897
Planning Commission Minutes June 21, 2022
City Council.

The motion carried by the following vote:

Aye: Chairperson Fort, Vice Chair Sangha, Secretary Sanchez and Commissioner Gordon
Noes: Commissioner Thrasher
PH-G Master Case No. 22-071 and Municipal Code Amendment No. 22-005 - Fontana Municipal Code amendment to Chapter 30 (Zoning and Development Code).

RECOMMENDATION:

Based on the information in the staff report staff recommends that the Planning Commission adopt Resolution PC No.
2022-024; and,

1. Determine that this Ordinance is categorically exempted pursuant to the California Environmental Quality Act (CEQA) Guidelines Sections 15060(c), 15061(B)(3) (the common-sense exemption), and 15378 and Sections No. 3.01, 3.22, and 10.59 of the 2019 Local Guidelines for Implementing CEQA, in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment where it can be with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA; and,

2. Approve a resolution recommending that the City Council adopt an Ordinance for Municipal Code Amendment (MCA) No. 22-005 to amend Chapter 30 of the Municipal Code.

APPLICANT:

City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
LOCATION:

Citywide
PROJECT PLANNER:

Rina Leung, Senior Planner
21-1469
Chair Fort opened Public Hearing Item PH-G.

ATTACHMENT NO. 3
898
Planning Commission Minutes June 21, 2022
Senior Planner Rina Leung provided the staff report.

There were no written communications received.

Commissioner Gordon requested clarification on the 1500 feet buffer reduction to 600 feet and whether it would be consistent with other similar buffers in the city.

Senior Planner Leung stated the 600 feet buffer would be consistent with other similar buffers in the city such as Alcohol Beverage Control (ABC) Licenses.

There were no public communications received for this item.

The Public Hearing was closed.

Discussion ensued regarding the 600 feet versus the 1500 feet buffer requirement in relation to community safety and consistency with similar buffers.

Commissioner Gordon made a motion to not recommend Public Hearing Item G to City Council.

ACTION: Motion was made by Commissioner Gordon, seconded by Secretary Sanchez, and passed by a vote of 4-1-0 to not to recommend approval of Public Hearing Item PH-G.

The motion carried by the following vote:

Chairperson Fort, Vice Chair Sangha, Secretary Sanchez and Commissioner Gordon

Aye:

Nay: Commissioner Thrasher
DIRECTOR COMMUNICATIONS:

A. Director Communications:

Director Nevins announced this will be the last meeting with paper agenda packets distributed to the Commission, going forward agendas will be available to the commission electronically.

COMMISSION COMMENTS:

A. Planning Commission Remarks:

Commissioner Gordon stated he was glad to have the electronic agenda transition. He commended his fellow commissioners for tough decisions they had to make tonight. He stated he is proud to be part of the commission and that there is no doubt the commission truly has the best interest of the Fontana community at heart.

ATTACHMENT NO. 3
899
Planning Commission Minutes June 21, 2022
Vice Chair Sangha thanked the staff for the staff reports and presentations. He stated that he is excited about all the development and great projects that are coming into the city.

Thanked all who wished him a Happy Father’s Day and wished everyone a happy and safe 4th of July and a good night.

Commissioner Thrasher thanked Planning and Information Technology departments staff for their hard work and support of the commission.

Commissioner Sanchez thanked staff for their hard work, staff reports and presentations.

He commended the commission and stated he is honored to be part of the commission.

He congratulated his daughter on her recent marriage and wished everyone a good night and blessings.

Chair Fort echoed her fellow commissioners’ comments and thanked the commission for their commitment and decisions; thanked everyone that participated in tonight’s meeting and wished everyone a good night.

ADJOURNMENT:

By consensus, the Planning Commission meeting adjourned at 9:59 p.m. to the next Regular Planning Commission Meeting on Tuesday, July 5, 2022, at 6:00 p.m. in the Grover W. Taylor Council Chambers located at 8353 Sierra Avenue, Fontana, California. __________________________
Evelyne C. Ssenkoloto
Senior Administrative
Analyst

THE FOREGOING MINUTES WERE APPROVED BY THE PLANNING COMMISSION ON THE 5TH DAY OF JULY 2022.
___________
Cathline Fort
Chairperson

ATTACHMENT NO. 3
900

NOTICE OF PUBLIC HEARING
Si desea información en Español referente a esta notificación o proyecto, favor de comunicarse al (909) 350-6728.

In compliance with Section No. 202 of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132) and the federal rules and regulations adopted in implementation thereof, the agenda will be made available in appropriate alternative formats to persons with a disability. Should you need special assistance to participate in this meeting, please contact the City Clerk’s Department by calling (909) 350-7602. Notification 48 hours prior to the meeting will enable the city to make reasonable arrangements to ensure accessibility to this meeting.

A PUBLIC HEARING HAS BEEN SCHEDULED BEFORE THE CITY COUNCIL OF THE CITY OF FONTANA FOR THE FOLLOWING:

Master Case No. 22-072; and Municipal Code Amendment No. 22-006: Update to the City of Fontana Municipal Code for amendments to modify Chapter 30 and add Chapter 33 to regulate cannabis businesses and activities, along with a provision for commercial cannabis operations for certain commercially designated properties along with standards, operating requirements, maximum number of commercial cannabis businesses, and permit requirements.

Environmental Determination: This project qualifies for a categorical exemption pursuant to the California Environmental Quality Act (CEQA) Guidelines Sections 15061(B)(3) (the common-sense exemption), or, in the alternative, 15303 (new construction or conversions of small structures), along with Sections 3.07 and 3.22 of the 2019 Local Guidelines for Implementing CEQA. Section 15303 pertains to “construction and location of limited numbers of new, small facilities” including up to three (3) “stores” in “urbanized areas.“ Here, Section 15303 applies as the Ordinance could, at most, only reasonably foreseeably result in the construction and location of only three (3) new retail facilities in an urban area.

Location: Citywide
Date of Hearing: July 12, 2022
Place of Hearing: City Hall Council Chambers, 8353 Sierra Avenue, Fontana, CA 92335 Time of Hearing: 7:00 P.M.

Should you have any questions concerning this project, please contact Patty Nevins at (909) 350- 7625 or [email protected]

ANY INTERESTED PARTY MAY PROVIDE INFORMATION BY LETTER OR EMAIL WHICH MAY BE OF ASSISTANCE TO THE CITY COUNCIL. A COPY OF THE APPLICATION AND ENVIRONMENTAL DOCUMENTATION IS AVAILABLE FOR INSPECTION. PLEASE CONTACT THE PLANNER LISTED ABOVE.

IF YOU CHALLENGE IN COURT ANY ACTION TAKEN CONCERNING A PUBLIC HEARING ITEM,

YOU MAY BE LIMITED TO RAISING ONLY THOSE ISSUES YOU OR SOMEONE ELSE RAISED

AT THE PUBLIC HEARING DESCRIBED IN THIS NOTICE, OR IN WRITTEN CORRESPONDENCE TO THE CITY AT, OR PRIOR TO, THE PUBLIC HEARING.

Publish: July 1, 2022
S.B. Sun Newspaper
CNSB#3600705
ATTACHMENT NO. 4
901
Maria Torres
From:

Sent:

To:

Subject:

Attachments:

Fontana,
TheReal Amparo <[email protected]>
Tuesday, June 21, 2022 4:59 PM
Planning
PH-F Master Case No. 22-072,
Fontana Canibis Letter.docx

CAUTION - EXTERNAL SENDER - THIS EMAIL ORIGINATED OUTSIDE OF THE CITY'S EMAIL SYSTEM Do not click links or open attachments unless you recognize the sender and know the content is safe.

We are writing regarding PH-F Master Case No. 22-072, Municipal Code Amendment No. 22-006 - Request to approve Master Case No. 22-72; MCA22-006; Request to approve Ordinance No. 2022-XX Repealing Sections 30-6 Through 30-11 of Division 3 of Article 1 of Chapter 30, Amending Chapter 30 Permitted Uses, And Adding Chapter 33, "Cannabis Businesses and Activities."
On behalf of the residents of Fontana who expressly reserves the right to supplement these comments at or prior to hearings on the Project, and at any later hearings and proceedings related to this Project. Cal. Gov. Code§ 65009{b); Cal. Pub. Res. Code§ 21177{a); Bakersfield CitizensforLocal Control v. Bakersfield {2004) 124 Cal. App. 4th 1184, 1199-1203; see Galante Vineyards v. Monterey Water Dist. {1997) 60 Cal. App. 4th 1109, 1121. The residents of Fontana have not been allowed to participate per legal requirements of CEQA due to the short comment period as the city habitually violates the intent of CEQA by preventing comments and hiding Environmental Impacts to the residents of Fontana such as Master Case N.22-072 as it fails to execute a EIR report as precedents set by Citizens for Clean Energy v City of Woodland {2014) 225 Cal. App. 4th 173, 191 {finding that any party who has objected to the Project's environmental documentation may assert any issue timely raised by other parties).

This Master Case N.22-072 utilizes the SWIP Specific Plan Update that was approved and adopted by the City of Fontana {City) on May 8, 2012 pursuant to the certified FEIR; and Master Case N.22-072 states that there is no need to make public an addendum to any further updates of the SWIP FEIR. This is a false statement, and in violation of Quality Act {CEQA) Guidelines {Guidelines) that are contained at Title 14 of the California Code of Regulations, beginning with Section {§) 15000. On December 28th, 2018, the California Office of Administrative Law completed the rulemaking process and approved amendments and additions to the Guidelines. A draft environmental impact report or proposed negative declaration/mitigated negative declaration that has circulated prior to April 27, 2019 does not need to comply with the updated Guidelines when the document is finalized, however, planners are encouraged to incorporate changes as feasible. Note: If a draft document must be recirculated after April 27, 2019, then it must comply with the updated Guidelines. • Any drafts not circulated before April 27, 2019, must comply with the updated Guidelines. 1 ATTACHMENT NO. 5
902
Maria Torres
From:

Sent:

To:

Subject:

Hello,
Kareem Gongora < [email protected] >
Tuesday, June 21, 2022 4:32 PM
Planning
Agenda Item PH-F

CAUTION - EXTERNAL SENDER - THIS EMAIL ORIGINATED OUTSIDE OF THE CITY'S EMAIL SYSTEM Do not click links or open attachments unless you recognize the sender and know the content is safe.

I am writing today IN OPPOSITION to an item on tonight's agenda (06/21/22), items PH-F.

As a longtime resident and former city planning commissioner, I am supportive of commercial cannabis in the City of Fontana, but there should be more community input and engagement before a decision is made. Throughout the region, cities like Corona, Riverside, and Pomona have embraced a process that prioritizes transparency, while also including important discussions regarding social equity and restorative justice.

As stated, I am in support of regulated commercial cannabis in Fontana, however, the ordinance should include labor standards that guarantee jobs entering our community are sustainable for families. In addition, a strong labor peace agreement (LPA) provision, is essential in protecting the interests of the both the city and California. Currently, California requires an LPA for cannabis operators with 20 or more employees. The City of Fontana should consider lowering the threshold to 5 or more employees as it will permit workers to choose what is right for them and their coworkers when it comes to representation in the workplace.

Lastly, I am in full support of a merit-based system that awards points in determining which operators receive permits.

There should be points added for operators that provide the following: paying a livable wage, provide access to healthcare and have signed Collective Bargaining Agreements as well as incorporate social equity.

Ultimately, we should award points to companies who have CBAs, to ensure we bring in the best employers, who are truly committed to our community.

I respectfully ask for your NAY vote to PH-F as it currently reads and direct staff to consider the items discussed in this letter as well as coordinate meetings that engage the public in this process.

Thank you,

KAREEM GONGORA, MAM
C: 909-969-4735 IE: [email protected]
1 ATTACHMENT NO. 5
903
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1500 Agenda Date: 7/12/2022
Agenda #: A. Category: New Business
FROM:

Management Services
SUBJECT:

Issuance of Special Tax Bonds for CFD #106 (Mountainview) RECOMMENDATION:

Adopt Resolution No. 2022-067, of the City Council of the City of Fontana authorizing the issuance of City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds, Series 2022, in an aggregate principal amount of not to exceed $8,000,000, authorizing the execution and delivery of an Indenture, a Bond Purchase Agreement and a Continuing Disclosure Agreement, authorizing the distribution of an Official Statement in connection therewith and authorizing the execution of necessary documents and certificates and related actions.

COUNCIL GOALS:
· To practice sound fiscal management by developing long-term funding and debt management plans.

DISCUSSION:

On July 13, 2021, the City Council authorized the formation of Community Facilities District No. 106 (Mountainview) and conducted a special election to levy taxes within the District. This project consists of 156 residential lots located east of Lytle Creek Road north of Summit Avenue. Bond proceeds will be used to fund public infrastructure including sewer, storm drain, street improvements, landscaping, public facilities and park facilities.

In order to issue the special tax bonds, it is necessary to execute bond documents and agreements relating to this District. The recommended action complies with the City’s debt management strategy.

The following documents, in their materially correct form, are attached hereto:

1. Indenture;

2. District Continuing Disclosure Agreement;

3. Bond Purchase Agreement;

4. First Amendment to Acquisition and Funding Agreement;

5. Preliminary Official Statement; and

6. Appraisal Report.

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File #: 21-1500 Agenda Date: 7/12/2022
Agenda #: A. Category: New Business
FISCAL IMPACT:

These bonds will produce project funds of approximately $7.2 million, of which 20% ($1.4 million) will be available to the City for a defined community benefit. Costs of issuance will be paid from gross bond proceeds. Debt service payments will be made from special taxes levied on the property owners within the district.

MOTION:

Approve staff recommendation.

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1 4135-0958-2135.2
RESOLUTION NO. 2022-067

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

FONTANA AUTHORIZING THE ISSUANCE OF CITY OF
FONTANA COMMUNITY FACILITIES DISTRICT NO. 106
(MOUNTAINVIEW) SPECIAL TAX BONDS, SERIES 2022, IN

AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO
EXCEED $8,000,000, AUTHORIZING THE EXECUTION

AND DELIVERY OF AN INDENTURE, A BOND PURCHASE

AGREEMENT AND A CONTINUING DISCLOSURE

AGREEMENT, AUTHORIZING THE DISTRIBUTION OF

AN OFFICIAL STATEMENT IN CONNECTION

THEREWITH AND AUTHORIZING THE EXECUTION OF

NECESSARY DOCUMENTS AND CERTIFICATES AND

RELATED ACTIONS
WHEREAS, the City Council (the “City Council”) of the City of Fontana (the “City”) has formed City of Fontana Community Facilities District No. 106 (Mountainview) (the “Community Facilities District”) under the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”);
WHEREAS, the Community Facilities District is authorized under the Act to levy special taxes (the “Special Taxes”) to pay for the costs of certain public facilities (the “Facilities”) and to issue bonds payable from the Special Taxes;
WHEREAS, in order to provide funds to finance certain of the Facilities, the Community Facilities District proposes to issue its City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds, Series 2022 (the “Series 2022 Bonds”), in the aggregate principal amount of not to exceed $8,000,000;
WHEREAS, in order to provide for the authentication and delivery of the Series 2022 Bonds, to establish and declare the terms and conditions upon which the Series 2022 Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Community Facilities District proposes to enter into an Indenture with U.S.

Bank Trust Company, National Association, as trustee (the “Trustee”) (such Indenture, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Indenture”); WHEREAS, Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), has presented the Community Facilities District with a proposal, in the form of a Bond Purchase Agreement, to purchase the Series 2022 Bonds from the Community Facilities District (such Bond Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Purchase Agreement”);
WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”) requires that, in order to be able to purchase or sell the Series 2022 Bonds, the underwriter thereof must have reasonably determined that the Community Facilities District has, 906
2 4135-0958-2135.2
or one or more appropriate obligated persons have, undertaken in a written agreement or contract for the benefit of the holders of the Series 2022 Bonds to provide disclosure of certain financial information and certain listed events on an ongoing basis; WHEREAS, in order to cause such requirement to be satisfied, the Community Facilities District desires to enter into a Continuing Disclosure Agreement with U.S. Bank Trust Company, National Association in its capacity as trustee and in its capacity as dissemination agent thereunder (such Continuing Disclosure Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Continuing Disclosure Agreement”);
WHEREAS, a form of the Preliminary Official Statement to be distributed in connection with the public offering of the Series 2022 Bonds has been prepared (such Preliminary Official Statement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Preliminary Official Statement”);
WHEREAS, there have been prepared and submitted to this meeting forms of:
(a) the Indenture;
(b) the Purchase Agreement;
(c) the Continuing Disclosure Agreement; and
(d) the Preliminary Official Statement;
WHEREAS, Kitty Siino & Associates, Inc. has prepared and provided to the Community Facilities District an appraisal report, dated June 29, 2022 (the “Appraisal”), providing an opinion of value of the property in the Community Facilities District, which has been submitted to this meeting;
WHEREAS, Section 5852.1 of the California Government Code (the “Government Code”) requires that the City Council obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the Series 2022 Bonds, good faith estimates of (a) the true interest cost of the Series 2022 Bonds, (b) the sum of all fees and charges paid to third parties with respect to the Series 2022 Bonds, (c) the amount of proceeds of the Series 2022 Bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the Series 2022 Bonds, and (d) the sum total of all debt service payments on the Series 2022 Bonds calculated to the final maturity of the Series 2022 Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Series 2022 Bonds; WHEREAS, in compliance with Section 5852.1 of the Government Code, the City Council has obtained from CSG Advisors Incorporated, as the Community Facilities District’s municipal advisor (the “Municipal Advisor”), the required good faith estimates, which the Municipal Advisor has prepared in consultation with the Underwriter, and such estimates are disclosed and set forth in Exhibit A attached hereto;
907
3 4135-0958-2135.2
WHEREAS, the Community Facilities District desires to proceed to issue and sell the Series 2022 Bonds and to authorize the execution of such documents and the performance of such acts as may be necessary or desirable to effect the offering, sale and issuance of the Series 2022 Bonds; and
WHEREAS, the City Council is the legislative body of the Community Facilities District; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana, as follows:

Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

Section 2. Subject to the provisions of Section 3 hereof, the issuance of the Series 2022 Bonds, in an aggregate principal amount of not to exceed $8,000,000, on the terms and conditions set forth in, and subject to the limitations specified in, the Indenture, be and the same is hereby authorized and approved. The Series 2022 Bonds shall be dated, shall bear interest at the rates, shall mature on the dates, shall be subject to call and redemption, shall be issued in the form and shall be as otherwise provided in the Indenture, as the same shall be completed as provided in this Resolution.

Section 3. The Indenture, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. Each of the Mayor of the City, and such other member of the City Council as the Mayor may designate, the City Manager of the City, the Chief Financial Officer, Management Services, of the City and such other officer or employee of the City as the City Manager may designate (the “Authorized Officers”) is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Indenture in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Indenture by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not authorize an aggregate principal amount of Series 2022 Bonds in excess of $8,000,000, shall not result in a final maturity date of the Series 2022 Bonds later than September 1, 2053 and shall not result in a true interest cost for the Series 2022 Bonds in excess of 6.50%.

Section 4. The Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Purchase Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate underwriter’s discount (not including any original issue discount) from the principal amount of the Series 2022 Bonds in excess of 1.50% of the aggregate principal amount of the Series 2022 Bonds. The City Council hereby finds and determines that the sale of the Series 908
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2022 Bonds at negotiated sale as contemplated by the Purchase Agreement will result in a lower overall cost.

Section 5. The Continuing Disclosure Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Continuing Disclosure Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Continuing Disclosure Agreement by such Authorized Officer.

Section 6. The Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, be and the same is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Series 2022 Bonds is hereby authorized and approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, to certify on behalf of the Community Facilities District that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12).

Section 7. The preparation and delivery of a final Official Statement (the “Official Statement”), and its use in connection with the offering and sale of the Series 2022 Bonds, be and the same is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement, with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute the final Official Statement and any amendment or supplement thereto.

Section 8. Based upon the property values within the Community Facilities District reported in the Appraisal and the value-to-lien information set forth in the Preliminary Official Statement, the City Council, for purposes of Section 53345.8 of the Act, hereby finds and determines that the value of the real property that would be subject to the Special Tax to pay debt service on the Series 2022 Bonds will be at least three times the principal amount of the Series 2022 Bonds to be sold and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within the Community Facilities District or a special assessment levied on property within the Community Facilities District.

Section 9. The City Council hereby waives the provisions of the City of Fontana Community Facilities and Assessment District Policy for the Provision of Public Facilities and Services (Operation and Maintenance) and Fee Deferrals in Proposed Development Projects that are inconsistent or in conflict with the offering, issuance and sale of the Series 2022 Bonds and the financing of the Facilities as approved and authorized hereby. In the judgment of the City Council, additional benefit inures to the ultimate property owners, the Community Facilities District and/or the City as a result of such waiver.
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Section 10. The City Council hereby approves the execution and delivery of all agreements, documents, certificates and instruments referred to herein with electronic signatures as may be permitted under the California Uniform Electronic Transactions Act and digital signatures as may be permitted under Section 16.5 of the Government Code using DocuSign.

Section 11. All actions heretofore taken by the officers, employees and agents of the City with respect to the issuance and sale of the Series 2022 Bonds, or in connection with or related to any of the agreements or documents referred to herein, are hereby approved, confirmed and ratified.

Section 12. The Authorized Officers and the officers, employees and agents of the City are, and each of them is, hereby authorized and directed, for and in the name of the Community Facilities District to take all actions and do any and all things and to execute and deliver any and all documents which they, or any of them, may deem necessary or advisable in order to consummate the transactions contemplated by this Resolution and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution not inconsistent with the provisions hereof.

Section 13. This Resolution shall take effect immediately upon its adoption.

PASSED AND ADOPTED the 12th day of July, 2022.
__________________________________
Mayor
ATTEST:
_________________________________
City Clerk
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EXHIBIT A

GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Series 2022 Bonds in accordance with Section 5852.1 of the Government Code. Such good faith estimates have been provided to the Community Facilities District by the Municipal Advisor, which the Municipal Advisor has prepared in consultation with the Underwriter.

Principal Amount. The Municipal Advisor has informed the Community Facilities District that, based on the Community Facilities District’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Series 2022 Bonds to be issued and sold is $6,785,000 (the “Estimated Principal Amount”), which does not include approximately $87,000 of net premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for such bonds is higher than the face value of such bonds. Such Estimated Principal Amount and such estimated net premium amount would produce approximately $6,872,000 of gross proceeds.

True Interest Cost of the Series 2022 Bonds. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2022 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Series 2022 Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Series 2022 Bonds, is 4.74%.

Finance Charge of the Series 2022 Bonds. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2022 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Series 2022 Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Series 2022 Bonds), is $327,000.

Amount of Proceeds to be Received. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2022 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the Community Facilities District for sale of the Series 2022 Bonds, less the finance charge of the Series 2022 Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Series 2022 Bonds, is $6,084,000.

Total Payment Amount. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2022 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the Community Facilities District will make to pay debt service on the Series 2022 Bonds, plus the finance charge for the Series 2022 Bonds, as described above, not paid with the proceeds of the Series 2022 Bonds, calculated to the final maturity of the Series 2022 Bonds, is $12,824,000, 911
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which excludes any reserves or capitalized interest funded or paid with proceeds of the Series 2022 Bonds (which may offset such total payment amount).

The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the Series 2022 Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Series 2022 Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Series 2022 Bonds issued and sold being different from the Estimated Principal Amount, (c) the actual amortization of the Series 2022 Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Series 2022 Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the Community Facilities District’s financing plan, or a combination of such factors. The actual date of sale of the Series 2022 Bonds and the actual principal amount of Series 2022 Bonds issued and sold will be determined by the Community Facilities District based on the timing of the need for proceeds of the Series 2022 Bonds and other factors. The actual interest rates borne by the Series 2022 Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Series 2022 Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the Community Facilities District. 912
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CITY OF FONTANA )

COUNTY OF SAN BERNARDINO )

STATE OF CALIFORNIA )
I, Germaine McClellan Key, City Clerk of the City of Fontana, California, and Ex-Officio Clerk of the City Council, do hereby certify that the foregoing Resolution is the actual Resolution duly and regularly adopted by the City Council of said City at a regular meeting thereof, held on July 12, 2022, by the following vote to-wit:

AYES:

NOES:

ABSENT:

City Clerk
Mayor
ATTEST:

City Clerk
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INDENTURE
by and between

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106
(MOUNTAINVIEW)
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,

AS TRUSTEE
Dated as of _________ 1, 2022
Relating to
City of Fontana
Community Facilities District No. 106
(Mountainview)
Special Tax Bonds
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ARTICLE I DEFINITIONS; EQUAL SECURITY ........................................................................3 Section 1.01. Definitions......................................................................................................3 Section 1.02. Rules of Construction ..................................................................................10 Section 1.03. Equal Security..............................................................................................10 ARTICLE II THE BONDS............................................................................................................12 Section 2.01. Authorization of Bonds; Special, Limited Obligations................................12 Section 2.02. Terms of Series 2022 Bonds........................................................................12 Section 2.03. Execution of Bonds......................................................................................13 Section 2.04. Authentication of Bonds..............................................................................13 Section 2.05. Registration Books.......................................................................................14 Section 2.06. Transfer and Exchange of Bonds.................................................................14 Section 2.07. Book-Entry System......................................................................................14 Section 2.08. Bonds Mutilated, Lost, Destroyed or Stolen................................................16 Section 2.09. Temporary Bonds.........................................................................................17 ARTICLE III ISSUANCE OF SERIES 2022 BONDS; APPLICATION OF PROCEEDS; ADDITIONAL BONDS ..................................................................................18 Section 3.01. Issuance of Series 2022 Bonds ....................................................................18 Section 3.02. Application of Proceeds...............................................................................18 Section 3.03. Costs of Issuance Fund ................................................................................18 Section 3.04. Improvement Fund.......................................................................................19 Section 3.05. Conditions for the Issuance of Additional Bonds........................................20 Section 3.06. Procedure for the Issuance of Additional Bonds .........................................21 Section 3.07. Additional Bonds.........................................................................................22 ARTICLE IV REDEMPTION OF BONDS..................................................................................23 Section 4.01. Redemption of Series 2022 Bonds...............................................................23 Section 4.02. Notice of Redemption..................................................................................25 Section 4.03. Selection of Bonds for Redemption.............................................................25 Section 4.04. Partial Redemption of Bonds.......................................................................26 Section 4.05. Effect of Notice of Redemption...................................................................26 ARTICLE V SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS .......................27 Section 5.01. Pledge...........................................................................................................27 Section 5.02. Special Tax Fund .........................................................................................27 Section 5.03. Bond Fund....................................................................................................28 915

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Section 5.04. Reserve Fund ...............................................................................................28 Section 5.05. Redemption Fund.........................................................................................29 Section 5.06. Rebate Fund .................................................................................................30 Section 5.07. Administrative Expense Fund......................................................................30 Section 5.08. Investment of Moneys..................................................................................30 ARTICLE VI COVENANTS ........................................................................................................33 Section 6.01. Collection of Special Tax Revenues............................................................33 Section 6.02. Foreclosure...................................................................................................33 Section 6.03. Compliance with Act ...................................................................................34 Section 6.04. Punctual Payment.........................................................................................34 Section 6.05. Extension of Payment of Bonds...................................................................34 Section 6.06. Against Encumbrances; Defense of Pledge .................................................34 Section 6.07. Tax Covenants .............................................................................................34 Section 6.08. Non-Cash Payments of Special Taxes.........................................................35 Section 6.09. Reduction in Special Taxes..........................................................................35 Section 6.10. Continuing Disclosure .................................................................................35 Section 6.11. Accounting Records.....................................................................................35 Section 6.12. State Reporting.............................................................................................36 Section 6.13. Annual Reports to the California Debt and Investment Advisory Commission ...............................................................................................36 Section 6.14. Further Assurances.......................................................................................36 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES........................................................37 Section 7.01. Events of Default .........................................................................................37 Section 7.02. Foreclosure...................................................................................................37 Section 7.03. Other Remedies............................................................................................37 Section 7.04. Remedies Not Exclusive ..............................................................................38 Section 7.05. Application of Net Special Tax Revenues After Default.............................38 Section 7.06. Power of Trustee to Enforce ........................................................................38 Section 7.07. Owners’ Direction of Proceedings...............................................................39 Section 7.08. Limitation on Owners’ Right to Sue............................................................39 Section 7.09. Absolute Obligation.....................................................................................39 Section 7.10. Termination of Proceedings.........................................................................39 916

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Section 7.11. No Waiver of Default...................................................................................40 ARTICLE VIII TRUSTEE ............................................................................................................41 Section 8.01. Duties and Liabilities of Trustee..................................................................41 Section 8.02. Qualifications; Removal and Resignation; Successors................................41 Section 8.03. Liability of Trustee ......................................................................................42 Section 8.04. Right to Rely on Documents and Opinions .................................................44 Section 8.05. Accounting Records and Financial Statements............................................44 Section 8.06. Preservation and Inspection of Documents..................................................44 Section 8.07. Compensation and Indemnification .............................................................44 ARTICLE IX SUPPLEMENTAL INDENTURES .......................................................................46 Section 9.01. Supplemental Indentures..............................................................................46 Section 9.02. Effect of Supplemental Indenture ................................................................47 Section 9.03. Endorsement of Bonds; Preparation of New Bonds....................................47 Section 9.04. Amendment of Particular Bonds..................................................................47 ARTICLE X DEFEASANCE........................................................................................................48 Section 10.01. Discharge of Indenture...............................................................................48 Section 10.02. Bonds Deemed To Have Been Paid...........................................................48 Section 10.03. Unclaimed Moneys....................................................................................49 ARTICLE XI MISCELLANEOUS ...............................................................................................50 Section 11.01. Notices.......................................................................................................50 Section 11.02. Successor Is Deemed Included in All References to Predecessor.............50 Section 11.03. Limitation of Rights...................................................................................50 Section 11.04. Destruction of Bonds .................................................................................51 Section 11.05. Severability of Invalid Provisions..............................................................51 Section 11.06. Evidence of Rights of Owners...................................................................51 Section 11.07. Disqualified Bonds.....................................................................................51 Section 11.08. Money Held for Particular Bonds..............................................................52 Section 11.09. Funds and Accounts...................................................................................52 Section 11.10. Business Days............................................................................................52 Section 11.11. Waiver of Personal Liability......................................................................52 Section 11.12. Conflict with Act........................................................................................52 Section 11.13. Conclusive Evidence of Regularity ...........................................................53 917

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Section 11.14. Governing Laws.........................................................................................53 Section 11.15. Electronic Signature...................................................................................53 Section 11.16. Execution in Several Counterparts.............................................................53 EXHIBIT A PERMITTED INVESTMENTS ........................................................................... A-1 EXHIBIT B FORM OF SERIES 2022 BOND...........................................................................B-1 918
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INDENTURE
THIS INDENTURE (this “Indenture”), dated as of _________ 1, 2022, is by and between CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW), a community facilities district organized and existing under the laws of the State of California (the “Community Facilities District”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as trustee (the “Trustee”).

W I T N E S S E T H:

WHEREAS, the City Council of the City of Fontana has formed the Community Facilities District under the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”); WHEREAS, the Community Facilities District is authorized under the Act to levy special taxes (the “Special Taxes”) to pay for the costs of certain public facilities (the “Facilities”) and to issue bonds payable from the Special Taxes;
WHEREAS, in order to provide funds to finance certain of the Facilities, the Community Facilities District desires to provide for the issuance of City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds, Series 2022 (the “Series 2022 Bonds”), in the aggregate principal amount of not to exceed $__________; WHEREAS, the Community Facilities District desires to provide for the issuance of additional bonds (the “Additional Bonds”) for refunding purposes payable from the Special Taxes on a parity with the Series 2022 Bonds, provided that said issuance is in accordance with the Act and this Indenture (the Series 2022 Bonds and any such Additional Bonds being collectively referred to as the “Bonds”);
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Community Facilities District has authorized the execution and delivery of this Indenture; and WHEREAS, the Community Facilities District has determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the Community Facilities District, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special, limited obligations of the Community Facilities District, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Indenture has been in all respects duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of, premium, if any, and the interest on all Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the 919
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Bonds by the owners thereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Community Facilities District does hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows:
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ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of any certificate, opinion or other document herein mentioned, have the meanings herein specified.
“Act” means the Mello-Roos Community Facilities Act of 1982, constituting Sections 53311 et seq. of the California Government Code.
“Acquisition Account” means the account by that name within the Improvement Fund established and held by the Trustee pursuant to Section 3.04. “Acquisition Agreement” means the Acquisition and Funding Agreement, dated as of July 1, 2021, by and among the Community Facilities District, the City and the Developer, as originally executed and as it may be amended from time to time in accordance with the terms thereof.
“Acquisition Facilities” has the meaning ascribed thereto in the Acquisition Agreement. “Additional Bonds” means Bonds other than Series 2022 Bonds issued hereunder in accordance with the provisions of Sections 3.05 and 3.06. “Administrative Expense Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.07.
“Administrative Expenses” means costs directly related to the administration of the Community Facilities District, including: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules and the costs of collecting the Special Taxes, the costs of remitting the Special Taxes to the Trustee, the fees and costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under this Indenture, the costs incurred by the Community Facilities District in complying with the disclosure provisions of any continuing disclosure undertaking and this Indenture, including those related to public inquiries regarding the Special Taxes and disclosures to Owners, the costs of the Community Facilities District related to an appeal of the Special Taxes, any amounts required to be rebated to the federal government in order for the Community Facilities District to comply with Section 6.07, an allocable share of the salaries of the City staff providing services on behalf of the Community Facilities District directly related to the foregoing and a proportionate amount of City general administrative overhead related thereto, and the costs of foreclosure of delinquent Special Taxes. “Annual Debt Service” means, for each Bond Year, the sum of (a) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled (including by reason of mandatory sinking fund redemptions), and (b) the principal of the Outstanding Bonds due in such Bond Year (including by reason of mandatory sinking fund redemptions).
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“Authorized Denominations” means (a) with respect to the Series 2022 Bonds, $5,000 and any integral multiple thereof, and (b) with respect to each Series of Additional Bonds, the authorized denominations for such Series of Additional Bonds specified in the Supplemental Indenture pursuant to which such Additional Bonds are issued. “Authorized Representative” means, with respect to the Community Facilities District, the City Manager of the City and the Chief Financial Officer, Management Services, of the City, and any other Person designated as an Authorized Representative of the Community Facilities District in a Written Certificate of the Community Facilities District filed with the Trustee. “Average Annual Debt Service” means the average of the Annual Debt Service for all Bond Years, including the Bond Year in which the calculation is made. “Beneficial Owners” means those Persons for which the Participants have caused the Depository to hold Book-Entry Bonds.
“Bond Counsel” means a firm of nationally recognized bond counsel selected by the Community Facilities District.
“Bond Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.03.
“Bond Year” means the twelve-month period beginning on September 2 in each year and extending to the next succeeding September 1, both dates inclusive, except that the first Bond Year shall begin on the Closing Date and end on September 1, 2022. “Bonds” means the City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds issued hereunder, and includes the Series 2022 Bonds and any Additional Bonds.
“Book-Entry Bonds” means the Bonds of a Series registered in the name of the Depository, or the Nominee thereof, as the registered owner thereof pursuant to the terms and provisions of Section 2.07.
“Business Day” means a day which is not (a) a Saturday, Sunday or legal holiday in the State, (b) a day on which banking institutions in the State, or in any state in which the Office of the Trustee is located, are required or authorized by law (including executive order) to close, or (c) a day on which the New York Stock Exchange is closed. “Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to a Series of Book-Entry Bonds.
“City” means the City of Fontana, a general law city organized and existing under the laws of the State, and its successors.
“City Council” means the City Council of the City.
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“Closing Date” means the date upon which the Series 2022 Bonds are delivered to the Original Purchaser, being ___________, 2022.
“Code” means the Internal Revenue Code of 1986.
“Community Facilities District” means City of Fontana Community Facilities District No. 106 (Mountainview), a community facilities district organized and existing under the laws of the State, and its successors.
“Construction Account” means the account by that name within the Improvement Fund established and held by the Trustee pursuant to Section 3.04. “Construction Facilities” means the Facilities other than the Acquisition Facilities. “Corresponding Bond Year” means, with respect to any Fiscal Year, the Bond Year that commences in such Fiscal Year.
“Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the Community Facilities District relating to the authorization, issuance, sale and delivery of the Bonds, including printing expenses, rating agency fees, filing and recording fees, initial fees, expenses and charges of the Trustee and its counsel, including the Trustee’s first annual administrative fee, fees, charges and disbursements of attorneys, municipal advisors, accounting firms, consultants and other professionals, fees and charges for preparation, execution and safekeeping of the Bonds, any premium for bond insurance securing payment of the Bonds and any other cost, charge or fee in connection with the original issuance of the Bonds. “Costs of Issuance Fund” means the fund by that name established and held by the Trustee pursuant to Section 3.03.
“County” means the County of San Bernardino, a county and political subdivision of the State organized and existing under the laws of the State, and any successor thereto. “County Assessor” means the Assessor of the County.
“County Auditor” means the Auditor-Controller of the County. “Defeasance Securities” means (a) non-callable direct obligations of the United States of America (“United States Treasury Obligations”), and (b) evidences of ownership of proportionate interests in future interest and principal payments on United States Treasury Obligations held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying United States Treasury Obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated.
“Depository” means DTC, and its successors as securities depository for any Series of Book-Entry Bonds, including any such successor appointed pursuant to Section 2.07. 923
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“Developer” means Fontana 37, LLC, a limited liability company organized and existing under the laws of the State of Delaware, and any successor thereto. “Developer Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated as of _________ 1, 2022, executed by D.R. Horton Los Angeles Holding Company, Inc., as originally executed and as it may be amended from time to time in accordance with the terms thereof.
“District Continuing Disclosure Agreement” means the Continuing Disclosure Agreement, dated as of _________ 1, 2022, by and between the Community Facilities District and U.S. Bank Trust Company, National Association, in its capacity as Trustee and in its capacity as dissemination agent thereunder, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof. “DTC” means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York.
“Event of Default” means any event specified in Section 7.01. “Facilities” means the public facilities authorized to be financed by the Community Facilities District, as described in the Resolution of Formation. “Fiscal Year” means the period beginning on July 1 of each year and ending on the next succeeding June 30, or any other twelve-month period hereafter selected and designated as the official fiscal year period of the Community Facilities District. “Improvement Fund” means the fund by that name established and held by the Trustee pursuant to Section 3.04.
“Indenture” means this Indenture, dated as of _________ 1, 2022, by and between the Community Facilities District and U.S. Bank Trust Company, National Association, as Trustee, as originally executed and as it may be modified or amended from time to time by any Supplemental Indenture.
“Independent Consultant” means any consultant or firm of such consultants selected by the Community Facilities District and who, or each of whom (a) is generally recognized to be qualified in the financial consulting field, (b) is in fact independent and not under the control of the Community Facilities District or the City, (c) does not have any substantial interest, direct or indirect, with or in the Community Facilities District or the City, with or in any owner of real property in the Community Facilities District or in any real property in the Community Facilities District, and (d) is not connected with the Community Facilities District or the City as an officer or employee thereof, but who may be regularly retained to make reports to the Community Facilities District or the City.
“Interest Account” means the account by that name within the Bond Fund established and held by the Trustee pursuant to Section 5.03.
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“Interest Payment Dates” means March 1 and September 1 of each year, commencing _________ 1, 20__.
“Letter of Representations” means the Letter of Representations from the Community Facilities District to the Depository, in which the Community Facilities District makes certain representations with respect to issues of its securities for deposit by the Depository. “Maximum Annual Debt Service” means the largest Annual Debt Service for any Bond Year, including the Bond Year in which the calculation is made. “Moody’s” means Moody’s Investors Service, Inc., a corporation duly organized and existing under the laws of the State of Delaware, and its successors and assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Community Facilities District. “Net Special Tax Revenues” means Special Tax Revenues, less amounts required to pay Administrative Expenses.
“Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.07.
“Office of the Trustee” means the principal corporate trust office of the Trustee in Los Angeles, California or such other office as may be specified to the Community Facilities District by the Trustee in writing; provided, however, that with respect to presentation of Bonds for payment or for registration of transfer and exchange, such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted, which other office or agency shall be specified to the Community Facilities District by the Trustee in writing.
“Ordinance Levying Special Taxes” means any ordinance adopted by the City Council levying the Special Taxes.
“Original Purchaser” means the original purchaser of the Series 2022 Bonds from the Community Facilities District.
“Outstanding” means, when used as of any particular time with reference to Bonds, subject to the provisions of Section 11.07, all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation, (b) Bonds with respect to which all liability of the Community Facilities District shall have been discharged in accordance with Section 10.01, and (c) Bonds in lieu of which other Bonds shall have been authenticated and delivered by the Trustee, or that have been paid without surrender thereof, pursuant to Section 2.08. “Owner” means, with respect to a Bond, the Person in whose name such Bond is registered on the Registration Books.
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“Participant” means any entity which is recognized as a participant by DTC in the bookentry system of maintaining records with respect to Book-Entry Bonds. “Participating Underwriter” has the meaning ascribed to such term in the District Continuing Disclosure Agreement and the Developer Continuing Disclosure Certificate. “Payment Request” has the meaning ascribed to such term in the Acquisition Agreement. “Permitted Investments” is defined in Exhibit A hereto. “Person” means an individual, corporation, limited liability company, firm, association, partnership, trust or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.
“Principal Account” means the account by that name within the Bond Fund established and held by the Trustee pursuant to Section 5.03.
“Rate and Method” means the rate and method of apportionment of the Special Taxes approved by the qualified electors of the Community Facilities District. “Rebate Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.06.
“Rebate Requirement” has the meaning ascribed to such term in the Tax Certificate. “Record Date” means, with respect to interest payable on any Interest Payment Date, the 15th calendar day of the month preceding such Interest Payment Date, whether or not such day is a Business Day.
“Redemption Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.05.
“Redemption Price” means the aggregate amount of principal of and premium, if any, on the Bonds upon the redemption thereof pursuant hereto.
“Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.05. “Reserve Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.04.
“Reserve Requirement” means, as of the date of any calculation, the least of (a) “10% of the proceeds of the issue,” within the meaning of Section 148 of the Code (excluding Bonds refunded with the proceeds of subsequently issued Bonds), (b) Maximum Annual Debt Service, and (c) 125% of Average Annual Debt Service.
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“Resolution of Formation” means Resolution No. 2021-059, adopted by the City Council on July 13, 2021, as originally adopted and as it may be amended, supplemented or otherwise modified from time to time.
“S&P” means S&P Global Ratings, a business unit of Standard and Poor’s Financial Services, LLC, and its successors and assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Community Facilities District.
“Series” means the initial series of Bonds executed, authenticated and delivered on the date of initial issuance of the Bonds and identified pursuant to this Indenture as the Series 2022 Bonds, and any Additional Bonds issued pursuant to a Supplemental Indenture and identified as a separate Series of Bonds.
“Series 2022 Bonds” means the City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds, Series 2022, issued hereunder. “Special Tax Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.02.
“Special Tax Revenues” means the proceeds of the Special Taxes received by or on behalf of the Community Facilities District, including any prepayments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes, which shall be limited to the amount of said lien and interest and penalties thereon.
“Special Taxes” means the special taxes described and defined in the Rate and Method as the “Facilities Special Tax” approved by the qualified electors of the Community Facilities District.
“State” means the State of California.
“Supplemental Indenture” means any supplemental indenture modifying or amending this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Tax Certificate” means the Tax Certificate executed by the Community Facilities District at the time of issuance of the Series 2022 Bonds relating to the requirements of Section 148 of the Code, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof. “Trustee” means U.S. Bank Trust Company, National Association, a national banking association organized and existing under the laws of the United States of America, or any successor thereto as Trustee hereunder substituted in its place as provided herein. “Verification Report” means, with respect to the deemed payment of Bonds pursuant to clause (ii) of Section 10.02(a), a report of a nationally recognized certified public accountant, or 927
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firm of such accountants, verifying that the Defeasance Securities and cash, if any, deposited in connection with such deemed payment satisfy the requirements of clause (ii) of Section 10.02(a). “Written Certificate” and “Written Request” of the Community Facilities District mean, respectively, a written certificate or written request signed in the name of the Community Facilities District by an Authorized Representative. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.

Section 1.02. Rules of Construction. (a) The terms defined herein expressed in the singular shall, unless the context otherwise indicates, include the plural and vice versa. (b) The use herein of the masculine, feminine or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine or neuter gender, as appropriate.
(c) References herein to a document shall include all amendments, supplements or other modifications to such document, and any replacements, substitutions or novation of, that document.
(d) Any term defined herein by reference to another document shall continue to have the meaning ascribed thereto whether or not such other document remains in effect. (e) The use herein of the words “including” and “includes,” and words of similar import, shall be deemed to be followed by the phrase “without limitation.” (f) Headings of Articles and Sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.
(g) All references herein to designated “Articles,” “Sections,” “Exhibits,” “subsections,” “paragraphs,” “clauses,” and other subdivisions are to the designated Articles, Sections, Exhibits, subsections, paragraphs, clauses, and other subdivisions of this Indenture. (h) The words “hereof” (except when preceded by a specific Section or Article reference) “herein,” “hereby,” “hereunder,” “hereinabove,” “hereinafter,” and other equivalent words and phrases used herein refer to this Indenture and not solely to the particular portion hereof in which any such word is used.

Section 1.03. Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the Community Facilities District, the Trustee and the Owners from time to time of all Bonds authorized, executed, issued and delivered hereunder and then Outstanding to secure the full and final payment of the principal of, premium, if any, and interest on all Bonds which may from time to time be authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Community Facilities District shall be for the equal and proportionate benefit, protection and security of all Owners of the Bonds without distinction, 928
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preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the time of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein. 929
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ARTICLE II

THE BONDS
Section 2.01. Authorization of Bonds; Special, Limited Obligations. (a) The Community Facilities District hereby authorizes the issuance of the Bonds under and subject to the terms of this Indenture, the Act and other applicable laws of the State. The Bonds may consist of one or more Series of Bonds of varying dates, maturities, interest rates and other provisions, subject to the provisions and conditions contained herein. The Bonds shall be designated generally as the “City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds,” each Series thereof to bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Bonds. (b) The Bonds shall be special, limited obligations of the Community Facilities District, payable, as provided herein, solely from Net Special Tax Revenues and the other assets pledged therefor hereunder. Neither the faith and credit nor the taxing power of the Community Facilities District (except to the limited extent set forth herein), the City or the State, or any political subdivision thereof, is pledged to the payment of the Bonds.

Section 2.02. Terms of Series 2022 Bonds. (a) The Series 2022 Bonds shall be designated “City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds, Series 2022.” The aggregate principal amount of Series 2022 Bonds that may be issued and Outstanding under this Indenture shall not exceed $__________, except as may be otherwise provided in Section 2.08.
(b) The Series 2022 Bonds shall be issued in fully-registered form without coupons in Authorized Denominations, so long as no Series 2022 Bond shall have more than one maturity date. The Series 2022 Bonds shall be dated as of the Closing Date, shall be in the aggregate principal amount of $__________, shall mature on September 1 of each year, shall bear interest at the rates per annum (calculated on the basis of a 360-day year comprised of twelve 30-day months) and shall be in the principal amounts as follows:

Maturity Date
(September 1)
Principal
Amount
Interest
Rate
$ %
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(c) Interest on the Series 2022 Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Series 2022 Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event interest thereon shall be payable from such Interest Payment Date, (ii) a Series 2022 Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from the Closing Date, or (iii) interest on any Series 2022 Bond is in default as of the date of authentication thereof, in which event interest thereon shall be payable from the date to which interest has previously been paid or duly provided for. Interest shall be paid in lawful money of the United States on each Interest Payment Date. Interest shall be paid by check of the Trustee mailed by first-class mail, postage prepaid, on each Interest Payment Date to the Owners of the Series 2022 Bonds at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date. Notwithstanding the foregoing, interest on any Series 2022 Bond that is not punctually paid or duly provided for on any Interest Payment Date shall, if and to the extent that amounts subsequently become available therefor, be paid on a payment date established by the Trustee to the Person in whose name the ownership of such Series 2022 Bond is registered on the Registration Books at the close of business on a special record date to be established by the Trustee for the payment of such defaulted interest, notice of which shall be given to such Owner not less than ten days prior to such special record date. (d) The principal of the Series 2022 Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee.
(e) The Series 2022 Bonds shall be subject to redemption as provided in Article IV. (f) The Series 2022 Bonds shall be in substantially the form set forth in Exhibit B hereto, with appropriate or necessary insertions, omissions and variations as permitted or required hereby.

Section 2.03. Execution of Bonds. The Bonds shall be executed in the name and on behalf of the Community Facilities District with the manual or facsimile signature of the Mayor of the City attested by the manual or facsimile signature of the City Clerk of the City. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of such officers who shall have signed or attested any of the Bonds shall cease to be such officers before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the Community Facilities District, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Community Facilities District as though those who signed and attested the same had continued to be such officers, and also any Bonds may be signed and attested on behalf of the Community Facilities District by such Persons as at the actual date of execution of such Bonds shall be the proper officers of the City although at the nominal date of such Bonds any such Person shall not have been such officer of the City.

Section 2.04. Authentication of Bonds. Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form as that set forth in Exhibit B hereto for the Series 2022 Bonds, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive 931
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evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture.

Section 2.05. Registration Books. The Trustee shall keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which shall be open to inspection during regular business hours and upon reasonable notice by the Community Facilities District. Upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds.

Section 2.06. Transfer and Exchange of Bonds. (a) Any Bond may be transferred upon the Registration Books by the Person in whose name it is registered, in person or by such Person’s duly authorized attorney, upon surrender of such Bond to the Trustee for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be so surrendered for transfer, the Community Facilities District shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series and maturity in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. (b) The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same Series and maturity of other Authorized Denominations.

The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. (c) The Trustee shall not be obligated to make any transfer or exchange of Bonds of a Series pursuant to this Section during the period established by the Trustee for the selection of Bonds of such Series for redemption, or with respect to any Bonds of such Series selected for redemption.

Section 2.07. Book-Entry System. (a) Prior to the issuance of a Series of Bonds, the Community Facilities District may provide that such Series of Bonds shall initially be issued as Book-Entry Bonds, and in such event, the Bonds of such Series for each maturity date shall be in the form of a separate single fully-registered Bond (which may be typewritten). Upon initial issuance, the ownership of each such Bond of such Series shall be registered in the Registration Books in the name of the Nominee, as nominee of the Depository. The Series 2022 Bonds shall initially be issued as Book-Entry Bonds.

Payment of principal of, and interest and premium, if any, on, any Book-Entry Bond registered in the name of the Nominee shall be made on the applicable payment date by wire transfer of New York clearing house or equivalent next day funds or by wire transfer of same day funds to the account of the Nominee. Such payments shall be made to the Nominee at the address which is, on the Record Date, shown for the Nominee in the Registration Books. (b) With respect to Book-Entry Bonds, the Community Facilities District and the Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of which such a Participant holds an interest in such Book-Entry Bonds. Without limiting the 932
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immediately preceding sentence, the Community Facilities District and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in Book-Entry Bonds, (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any notice with respect to Book-Entry Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in Book-Entry Bonds of a maturity to be redeemed in the event such Book-Entry Bonds are redeemed in part, (iv) the payment to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any amount with respect to principal of, or premium, if any, or interest on Book-Entry Bonds, or (v) any consent given or other action taken by the Depository as Owner. (c) The Community Facilities District and the Trustee may treat and consider the Person in whose name each Book-Entry Bond is registered in the Registration Books as the absolute Owner of such Book-Entry Bond for the purpose of payment of principal of, and premium, if any, and interest on such Bond, for the purpose of selecting any Bonds, or portions thereof, to be redeemed, for the purpose of giving notices of redemption and other matters with respect to such Book-Entry Bond, for the purpose of registering transfers with respect to such Book-Entry Bond, for the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever, and the Community Facilities District and the Trustee shall not be affected by any notice to the contrary.
(d) In the event of a redemption of all or a portion of a Book-Entry Bond, the Depository, in its discretion (i) may request the Trustee to authenticate and deliver a new BookEntry Bond, or (ii) if the Depository is the sole Owner of such Book-Entry Bond, shall make an appropriate notation on the Book-Entry Bond indicating the date and amounts of the reduction in principal thereof resulting from such redemption, except in the case of final payment, in which case such Book-Entry Bond must be presented to the Trustee prior to payment. (e) The Trustee shall pay all principal of, and premium, if any, and interest on the Book-Entry Bonds only to or “upon the order of” (as that term is used in the Uniform Commercial Code as adopted in the State) the respective Owner, as shown in the Registration Books, or such Owner’s respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the obligations with respect to payment of principal of, and premium, if any, and interest on the Book-Entry Bonds to the extent of the sum or sums so paid.

No Person other than an Owner, as shown in the Registration Books, shall receive an authenticated Book-Entry Bond. Upon delivery by the Depository to the Owners, the Community Facilities District and the Trustee of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such nominee of the Depository. (f) In order to qualify the Book-Entry Bonds for the Depository’s book-entry system, the Community Facilities District shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Community Facilities District or the Trustee any obligation whatsoever with respect to Persons having interests in such Book-Entry Bonds other than the Owners, as shown on the Registration Books. Such Letter of Representations may provide the time, form, content and manner of transmission, of notices to the Depository. In addition to the execution and delivery of 933
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a Letter of Representations by the Community Facilities District, the Community Facilities District and the Trustee shall take such other actions, not inconsistent with this Indenture, as are reasonably necessary to qualify Book-Entry Bonds for the Depository’s book-entry program. (g) In the event the Community Facilities District determines that it is in the best interests of the Beneficial Owners that they be able to obtain certificated Bonds and that such Bonds should therefore be made available, and notifies the Depository and the Trustee of such determination, the Depository will notify the Participants of the availability through the Depository of certificated Bonds. In such event, the Trustee shall transfer and exchange certificated Bonds as requested by the Depository and any other Owners in appropriate amounts. In the event (i) the Depository determines not to continue to act as securities depository for Book-Entry Bonds, or (ii) the Depository shall no longer so act and gives notice to the Trustee of such determination, then the Community Facilities District shall discontinue the Book-Entry system with the Depository. If the Community Facilities District determines to replace the Depository with another qualified securities depository, the Community Facilities District shall prepare or direct the preparation of a new single, separate, fully-registered Bond of the appropriate Series for each maturity date of such Book-Entry Bonds, registered in the name of such successor or substitute qualified securities depository or its nominee. If the Community Facilities District fails to identify another qualified securities depository to replace the Depository, then the Book-Entry Bonds shall no longer be restricted to being registered in the Registration Books in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such Bonds shall designate, in accordance with the provisions of Sections 2.06, 2.08 and 2.09. Whenever the Depository requests the Community Facilities District to do so, the Community Facilities District shall cooperate with the Depository in taking appropriate action after reasonable notice (i) to make available one or more separate certificates evidencing the Book-Entry Bonds to any Participant having Book-Entry Bonds credited to its account with the Depository, and (ii) to arrange for another securities depository to maintain custody of certificates evidencing the Book-Entry Bonds. (h) Notwithstanding any other provision of this Indenture to the contrary, if the Depository is the sole Owner of the Bonds of a Series, so long as any Book-Entry Bond of such Series is registered in the name of the Nominee, all payments of principal of, and premium, if any, and interest on such Book-Entry Bond and all notices with respect to such Book-Entry Bond shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository.
(i) In connection with any notice or other communication to be provided to Owners pursuant to this Indenture by the Community Facilities District or the Trustee, with respect to any consent or other action to be taken by Owners of Book-Entry Bonds, the Trustee shall establish a record date for such consent or other action and give the Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible.

Section 2.08. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Community Facilities District, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of the same Series and maturity in a like principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or upon the order of, the Community 934
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Facilities District. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence and indemnity reasonably satisfactory to the Trustee shall be given, the Community Facilities District, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of the same Series and maturity in a like aggregate principal amount in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been selected for redemption, instead of issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The Community Facilities District may require payment by the Owner of a sum not exceeding the actual cost of preparing the replacement Bond delivered thereto under this Section and the expenses incurred by the Community Facilities District and the Trustee in connection therewith. Any Bond of a Series issued under the provisions of this Section in lieu of any Bond of such Series alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Community Facilities District whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds of such Series secured by this Indenture.

Section 2.09. Temporary Bonds. The Bonds of a Series may be issued in temporary form exchangeable for definitive Bonds of such Series when ready for delivery. Any temporary Bonds may be printed, lithographed or typewritten, shall be of such Authorized Denominations as may be determined by the Community Facilities District, shall be in fully-registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Community Facilities District and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Community Facilities District issues temporary Bonds of a Series it shall execute and deliver definitive Bonds of such Series as promptly thereafter as practicable, and thereupon the temporary Bonds of such Series may be surrendered, for cancellation, at the Office of the Trustee and the Trustee shall authenticate and deliver, in exchange for such temporary Bonds, an equal aggregate principal amount of definitive Bonds of such Series and maturities in Authorized Denominations. Until so exchanged, the temporary Bonds of such Series shall be entitled to the same benefits under this Indenture as definitive Bonds of such Series authenticated and delivered hereunder.
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ARTICLE III
ISSUANCE OF SERIES 2022 BONDS; APPLICATION OF PROCEEDS;

ADDITIONAL BONDS
Section 3.01. Issuance of Series 2022 Bonds. The Community Facilities District may, at any time, execute the Series 2022 Bonds and deliver the same to the Trustee. The Trustee shall authenticate the Series 2022 Bonds and deliver the Series 2022 Bonds to the Original Purchaser upon receipt of a Written Request of the Community Facilities District and upon receipt of the purchase price therefor.

Section 3.02. Application of Proceeds. (a) On the Closing Date, the proceeds of the sale of the Series 2022 Bonds received by the Trustee, $__________, shall be deposited by the Trustee as follows:
(i) the Trustee shall deposit the amount of $________ in the Costs of Issuance Fund;
(ii) the Trustee shall deposit the amount of $________ in the Reserve Fund, which is equal to the Reserve Requirement;
(iii) the Trustee shall deposit the amount of $________ in the Acquisition Account; and
(iv) the Trustee shall deposit the amount of $________ in the Construction Account.
(b) [On the Closing Date, the amount transferred by the Community Facilities District to the Trustee, $________, which consists of Special Taxes collected by the Community Facilities District, shall be deposited by the Trustee as follows:
(i) the Trustee shall deposit the amount of $________ in the Interest Account; and
(ii) the Trustee shall deposit the amount of $________ in the Construction Account.]
Section 3.03. Costs of Issuance Fund. (a) The Trustee shall establish and maintain a separate fund designated the “Costs of Issuance Fund.” On the Closing Date, the Trustee shall deposit in the Costs of Issuance Fund the amount required to be deposited therein pursuant to Section 3.02. There shall additionally be deposited in the Cost of Issuance Fund the portion, if any, of the proceeds of the sale of any Additional Bonds required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued. (b) The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from time to time to pay the Costs of Issuance upon submission of a Written Request of the Community Facilities District stating (i) the Person to whom payment is to be made, (ii) the amount to be paid, (iii) the purpose for which the obligation was incurred, (iv) that such payment 936
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is a proper charge against the Costs of Issuance Fund, and (v) that such amount has not been the subject of a prior disbursement from the Costs of Issuance Fund, in each case together with a statement or invoice for each amount requested thereunder. On the last Business Day that is no later than six months after the Closing Date, the Trustee shall transfer any amount remaining in the Costs of Issuance Fund to the Construction Account and, upon making such transfer, the Costs of Issuance Fund shall be closed.
(c) If the Costs of Issuance Fund has been closed in accordance with the provisions hereof, the Costs of Issuance Fund shall be reopened and reestablished by the Trustee in connection with the issuance of any Additional Bonds, if so provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued.

Section 3.04. Improvement Fund. (a) The Trustee shall establish and maintain a separate fund designated the “Improvement Fund.” Within the Improvement Fund, the Trustee shall establish and maintain a separate account designated the “Acquisition Account” and a separate account designated the “Construction Account.” On the Closing Date, the Trustee shall deposit in the Acquisition Account and the Construction Account the respective amounts required to be deposited therein pursuant to Section 3.02.

The moneys in the Acquisition Account shall be used and withdrawn by the Trustee from time to time to pay the costs of the Acquisition Facilities upon submission of a Written Request of the Community Facilities District stating (i) the Person to whom payment is to be made, (ii) the amount to be paid, (iii) the purpose for which the obligation was incurred, (iv) that such payment constitutes a cost of the Acquisition Facilities and is a proper charge against the Acquisition Account, (v) that such amount has not been the subject of a prior disbursement from the Acquisition Account, and (vi) whether or not such costs of the Acquisition Facilities are to be paid pursuant to a Payment Request submitted in accordance with the Acquisition Agreement, in each case together with a statement or invoice for each amount requested thereunder. If costs of the Acquisition Facilities are to be paid pursuant to a Payment Request submitted in accordance with the Acquisition Agreement, a duplicate original of the signed and approved Payment Request relating to such costs of the Acquisition Facilities, together with all exhibits and attachments thereto, must accompany such Written Request of the Community Facilities District.

Upon the filing of a Written Certificate of the Community Facilities District stating (i) that the portion of the Acquisition Facilities to be financed from the Acquisition Account has been completed and that all costs of such Acquisition Facilities have been paid, or (ii) that such portion of the Acquisition Facilities has been substantially completed and that all remaining costs of such portion of the Acquisition Facilities have been determined and specifying the amount to be retained therefor, the Trustee shall transfer all of the amount remaining in the Acquisition Account (less any such retention) to the Construction Account.
(b) The moneys in the Construction Account shall be used and withdrawn by the Trustee from time to time to pay the costs of the Construction Facilities upon submission of a Written Request of the Community Facilities District stating (i) the Person to whom payment is to be made, (ii) the amount to be paid, (iii) the purpose for which the obligation was incurred, (iv) that such payment constitutes a cost of the Construction Facilities and is a proper charge against the Construction Account, and (v) that such amount has not been the subject of a prior 937
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disbursement from the Construction Account, in each case together with a statement or invoice for each amount requested thereunder. Additionally, upon submission of a Written Request of the Community Facilities District stating (i) that a portion of the amount on deposit in the Construction Account is to be transferred to the Acquisition Account, and (ii) the amount to be so transferred, the Trustee shall transfer such amount from the Construction Account to the Acquisition Account.

Upon the filing of a Written Certificate of the Community Facilities District stating (i) that the portion of the Construction Facilities to be financed from the Construction Account has been completed and that all costs of such Construction Facilities have been paid, or (ii) that such portion of the Construction Facilities has been substantially completed and that all remaining costs of such portion of the Construction Facilities have been determined and specifying the amount to be retained therefor, the Trustee shall (A) if the amount remaining in the Construction Account (less any such retention) is equal to or greater than $25,000, transfer the portion of such amount equal to the largest integral multiple of $5,000 that is not greater than such amount to the Redemption Fund, to be applied to the redemption of Bonds, and (B) after making the transfer, if any, required to be made pursuant to the preceding clause (A), transfer all of the amount remaining in the Construction Account (less any such retention) to the Bond Fund, to be applied to the payment of interest on the Bonds.

Section 3.05. Conditions for the Issuance of Additional Bonds. The Community Facilities District may at any time issue one or more Series of Additional Bonds payable from Net Special Tax Revenues as provided herein on a parity with all other Bonds theretofore issued hereunder, but only subject to the following conditions, which are hereby made conditions precedent to the issuance of such Additional Bonds:
(a) upon the issuance of such Additional Bonds, no Event of Default shall have occurred and be continuing hereunder;
(b) the issuance of such Additional Bonds shall have been authorized under and pursuant to this Indenture and the Act and shall have been provided for by a Supplemental Indenture which shall specify the following:
(i) the purposes for which the proceeds of such Additional Bonds are to be applied, which purposes may only include one or more of (A) providing funds to refund any Bonds previously issued hereunder, (B) providing funds to pay Costs of Issuance incurred in connection with the issuance of such Additional Bonds, and (C) providing funds to make any deposit to the Reserve Fund required pursuant to paragraph (vii) below;
(ii) the designation of such Series of Additional Bonds, the aggregate principal amount of the Additional Bonds of such Series and the principal amount, and the interest rate to be borne by, each maturity of such Additional Bonds; (iii) that such Additional Bonds shall be payable as to interest on the Interest Payment Dates, except that the first installment of interest may be payable on either March 1 or September 1 and shall be for a period of not longer than twelve months;
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(iv) the date, the maturity date or dates and the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional Bonds; provided, however, that each such maturity date and date on which a mandatory sinking fund redemption is to be made shall be a September 1 and, provided, further, that serial maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds, or any combination thereof, shall be established to provide for the redemption or payment of such Additional Bonds on or before their respective maturity dates;
(v) the redemption premiums and terms, if any, for such Additional Bonds;
(vi) the form of such Additional Bonds;
(vii) the amount, if any, to be deposited from the proceeds of sale of such Additional Bonds in the Reserve Fund; provided, however, that the amount on deposit in the Reserve Fund at the time that such Additional Bonds become Outstanding shall be at least equal to the Reserve Requirement; and (viii) such other provisions that are appropriate or necessary and are not inconsistent with the provisions hereof;
(c) Annual Debt Service in each Bond Year, calculated for all Bonds that will be Outstanding after the issuance of such Additional Bonds, will be less than or equal to Annual Debt Service in such Bond Year, calculated for all Bonds that are Outstanding immediately prior to the issuance of such Additional Bonds.

Nothing contained herein shall limit the issuance of any special tax bonds payable from Special Taxes if, after the issuance and delivery of such special tax bonds, none of the Bonds theretofore issued hereunder will be Outstanding.

Section 3.06. Procedure for the Issuance of Additional Bonds. At any time after the sale of any Additional Bonds in accordance with the Act, such Additional Bonds shall be executed by the Community Facilities District for issuance hereunder and shall be delivered to the Trustee and thereupon shall be authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following:
(a) a certified copy of the Supplemental Indenture authorizing the issuance of such Additional Bonds;
(b) a Written Request of the Community Facilities District as to the delivery of such Additional Bonds;
(c) a Written Certificate of the Community Facilities District stating that the conditions precedent to the issuance of such Additional Bonds specified in Section 3.05 have been satisfied;
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(d) an opinion of Bond Counsel substantially to the effect that (i) this Indenture, as modified and amended by all Supplemental Indentures theretofore, or thereupon being, entered into, has been duly authorized, executed and delivered by, and constitutes the valid and binding obligation of, the Community Facilities District, (ii) such Additional Bonds constitute valid and binding special, limited obligations of the Community Facilities District, and (iii) the issuance of such Additional Bonds, in and of itself, will not adversely affect the exclusion of interest on the Bonds Outstanding prior to the issuance of such Additional Bonds from gross income for federal income tax purposes; (e) the proceeds of the sale of such Additional Bonds; and (f) such further documents or money as are required by the provisions hereof or by the provisions of the Supplemental Indenture pursuant to which such Additional Bonds are issued.

Section 3.07. Additional Bonds. So long as any of the Bonds remain Outstanding, the Community Facilities District shall not issue any Additional Bonds or obligations payable from Net Special Tax Revenues on a parity with the Bonds, except pursuant to Sections 3.05 and 3.06.

So long as any of the Bonds remain Outstanding, the Community Facilities District shall not issue any obligations payable from Net Special Tax Revenues on a basis senior to the Bonds. The Community Facilities District may issue obligations payable from Net Special Tax Revenues on a basis subordinate to the Bonds, without complying with Sections 3.05 and 3.06. 940
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ARTICLE IV

REDEMPTION OF BONDS
Section 4.01. Redemption of Series 2022 Bonds. (a) Optional Redemption. The Series 2022 Bonds maturing on and after September 1, 20__, shall be subject to optional redemption, in whole, or in part in Authorized Denominations, on any date on or after September 1, 20__, from any source of available funds, at the following respective Redemption Prices (expressed as percentages of the principal amount of the Series 2022 Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Price
September 1, 20__ through August 31, 20__ 103%
September 1, 20__ through August 31, 20__ 102
September 1, 20__ through August 31, 20__ 101
September 1, 20__ and thereafter 100
The Community Facilities District shall give the Trustee written notice of its intention to redeem Series 2022 Bonds pursuant to this subsection not less than 45 days prior to the applicable redemption date, unless a later date is agreed to by the Trustee. (b) Mandatory Redemption from Special Tax Prepayments. The Series 2022 Bonds shall be subject to mandatory redemption, in whole, or in part in Authorized Denominations, on any Interest Payment Date, from and to the extent of prepaid Special Taxes required to be applied thereto pursuant to Section 5.02(a) and any amount required to be applied thereto pursuant to Section 5.04(c), at the following respective Redemption Prices (expressed as percentages of the principal amount of the Series 2022 Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Price
Any Interest Payment Date through March
1, 20__ 103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and thereafter 100
(c) Mandatory Sinking Fund Redemption. The Series 2022 Bonds maturing September 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on September 1 in each year, commencing September 1, 20__, at a Redemption Price equal to the principal amount of the Series 2022 Bonds maturing September 1, 20__ to be redeemed, without premium, plus accrued interest thereon to the date of redemption, in the aggregate respective principal amounts in the respective years as follows:
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Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed
20__ $
20__
20__
20__
20__ (Maturity)
If some but not all of the Series 2022 Bonds maturing on September 1, 20__ are redeemed pursuant to Section 4.01(a), the principal amount of the Series 2022 Bonds maturing on September 1, 20__ to be redeemed pursuant to Section 4.01(c) on any subsequent September 1 shall be reduced, by $5,000 or an integral multiple thereof, as designated by the Community Facilities District in a Written Certificate of the Community Facilities District filed with the Trustee; provided, however, that the aggregate amount of such reductions shall not exceed the aggregate amount of the Series 2022 Bonds maturing on September 1, 20__ redeemed pursuant to Section 4.01(a). If some but not all of the Series 2022 Bonds maturing on September 1, 20__ are redeemed pursuant to Section 4.01(b), the principal amount of the Series 2022 Bonds maturing on September 1, 20__ to be redeemed pursuant to Section 4.01(c) on any subsequent September 1 shall be reduced by the aggregate principal amount of the Series 2022 Bonds maturing on September 1, 20__ so redeemed pursuant to Section 4.01(b), such reduction to be allocated among redemption dates as nearly as practicable on a pro rata basis in amounts of $5,000 or integral multiples thereof, as determined by the Trustee, notice of which determination shall be given by the Trustee to the Community Facilities District.

The Series 2022 Bonds maturing September 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on September 1 in each year, commencing September 1, 20__, at a Redemption Price equal to the principal amount of the Series 2022 Bonds maturing September 1, 20__ to be redeemed, without premium, plus accrued interest thereon to the date of redemption, in the aggregate respective principal amounts in the respective years as follows:

Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed
20__ $
20__
20__
20__
20__ (Maturity)
If some but not all of the Series 2022 Bonds maturing on September 1, 20__ are redeemed pursuant to Section 4.01(a), the principal amount of the Series 2022 Bonds maturing on September 1, 20__ to be redeemed pursuant to Section 4.01(c) on any subsequent September 1 shall be reduced, by $5,000 or an integral multiple thereof, as designated by the Community Facilities District in a Written Certificate of the Community Facilities District filed with the Trustee; provided, however, that the aggregate amount of such reductions shall not exceed the aggregate amount of the Series 2022 Bonds maturing on September 1, 20__ redeemed pursuant to 942
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Section 4.01(a). If some but not all of the Series 2022 Bonds maturing on September 1, 20__ are redeemed pursuant to Section 4.01(b), the principal amount of the Series 2022 Bonds maturing on September 1, 20__ to be redeemed pursuant to Section 4.01(c) on any subsequent September 1 shall be reduced by the aggregate principal amount of the Series 2022 Bonds maturing on September 1, 20__ so redeemed pursuant to Section 4.01(b), such reduction to be allocated among redemption dates as nearly as practicable on a pro rata basis in amounts of $5,000 or integral multiples thereof, as determined by the Trustee, notice of which determination shall be given by the Trustee to the Community Facilities District.

Section 4.02. Notice of Redemption. The Trustee on behalf and at the expense of the Community Facilities District shall mail by first class mail notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books, at least 30 but not more than 60 days prior to the date fixed for redemption. Such notice shall state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, if any, the Bond numbers and the maturity or maturities of the Bonds to be redeemed (except in the event of redemption of all of the Bonds of such maturity or maturities in whole), and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Bonds will not accrue from and after the date fixed for redemption.

Neither the failure to receive any notice so mailed, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption. With respect to any notice of any optional redemption of Bonds, unless at the time such notice is given the Bonds to be redeemed shall be deemed to have been paid within the meaning of Section 10.02, such notice shall state that such redemption is conditional upon receipt by the Trustee, on or prior to the date fixed for such redemption, of moneys that, together with other available amounts held by the Trustee, are sufficient to pay the Redemption Price of, and accrued interest on, the Bonds to be redeemed, and that if such moneys shall not have been so received said notice shall be of no force and effect and the Community Facilities District shall not be required to redeem such Bonds. In the event a notice of redemption of Bonds contains such a condition and such moneys are not so received, the redemption of Bonds as described in the conditional notice of redemption shall not be made and the Trustee shall, within a reasonable time after the date on which such redemption was to occur, give notice to the Persons and in the manner in which the notice of redemption was given, that such moneys were not so received and that there shall be no redemption of Bonds pursuant to such notice of redemption.

Section 4.03. Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds not previously called for redemption (a) with respect to any optional redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written Request of the Community Facilities District, (b) with respect to any redemption pursuant to Section 4.01(b) and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable, and (c) with respect to any other redemption of Additional Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity in any manner which the Trustee in its sole discretion shall deem appropriate. For purposes of such selection, all Bonds shall 943
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be deemed to be comprised of separate $5,000 denominations and such separate denominations shall be treated as separate Bonds that may be separately redeemed.

Section 4.04. Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Community Facilities District shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Community Facilities District, a new Bond or Bonds of the same Series in Authorized Denominations in an aggregate principal amount equal to the unredeemed portion of the Bonds surrendered.

Section 4.05. Effect of Notice of Redemption. Notice of redemption of the Bonds subject to redemption having been mailed as aforesaid, and moneys for the Redemption Price thereof, and the interest thereon to the applicable date fixed for redemption, having been set aside with the Trustee, such Bonds shall become due and payable on said date, and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the Redemption Price thereof, together with interest accrued and unpaid to said date.

If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be redeemed, together with interest to said date, shall be held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof shall have been mailed as aforesaid and not canceled, then, from and after said date, interest on said Bonds shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners for interest thereon.

All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof shall be canceled upon surrender thereof and destroyed. 944
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ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01. Pledge. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, in order to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of this Indenture and the Act, the Community Facilities District hereby pledges to the Owners, and grants thereto a lien on and a security interest in, all of the Net Special Tax Revenues and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund. Said pledge shall constitute a first lien on and security interest in such assets, which shall immediately attach to such assets and be effective, binding and enforceable against the Community Facilities District, its successors, purchasers of any of such assets, creditors and all others asserting rights therein, to the extent set forth in, and in accordance with, this Indenture, irrespective of whether those parties have notice of the pledge of, lien on and security interest in such assets and without the need for any physical delivery, recordation, filing or further act.

Section 5.02. Special Tax Fund. (a) The Trustee shall establish and maintain a separate fund designated the “Special Tax Fund.” As soon as practicable after the receipt by the Community Facilities District of any Special Tax Revenues, but in any event no later than the date ten Business Days prior to the Interest Payment Date after such receipt, the Community Facilities District shall transfer such Special Tax Revenues to the Trustee for deposit in the Special Tax Fund; provided, however, that with respect to any such Special Tax Revenues that represent prepaid Special Taxes (i) said prepaid Special Taxes shall be identified as such in a Written Certificate of the Community Facilities District delivered to the Trustee at the time such prepaid Special Taxes are transferred to the Trustee, (ii) the portion of such prepaid Special Taxes that is to be applied to the Redemption Price of the Bonds shall be identified in such Written Certificate of the Community Facilities District, shall be deposited by the Trustee in the Redemption Fund and shall be applied to the redemption of Bonds pursuant to Section 4.01(b) and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued, and (iii) the portion of such prepaid Special Taxes that is to be applied to the payment of interest on the Bonds to be so redeemed shall be identified in such Written Certificate of the Community Facilities District, shall be deposited by the Trustee in the Interest Account and shall be applied to the payment of such interest.
(b) Upon receipt of a Written Request of the Community Facilities District, the Trustee shall withdraw from the Special Tax Fund and transfer to the Administrative Expense Fund the amount specified in such Written Request of the Community Facilities District as the amount necessary to be transferred thereto in order to have sufficient amounts available therein to pay Administrative Expenses.
(c) No later than the Business Day immediately preceding each Interest Payment Date, after having made any requested transfer to the Administrative Expense Fund, the Trustee shall withdraw from the Special Tax Fund Net Special Tax Revenues in an amount sufficient to enable the Trustee to make the following transfers in the following order of priority:
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(i) Interest Account. To the Interest Account, the amount, if any, necessary to cause the amount on deposit in the Interest Account to be equal to the interest due on the Bonds on such Interest Payment Date;
(ii) Principal Account. To the Principal Account, the amount, if any, necessary to cause the amount on deposit in the Principal Account to be equal to the principal, if any, due on the Bonds on such Interest Payment Date, including principal due and payable by reason of mandatory sinking fund redemption of such Bonds; and (iii) Reserve Fund. To the Reserve Fund, the amount, if any, necessary to cause the amount on deposit in the Reserve Fund to be equal to the Reserve Requirement.

Upon the receipt of such amounts from the Community Facilities District, the Trustee shall make such transfers in said order of priority.

Section 5.03. Bond Fund. (a) The Trustee shall establish and maintain a separate fund designated the “Bond Fund.” Within the Bond Fund, the Trustee shall establish and maintain a separate account designated the “Principal Account” and a separate account designated the “Interest Account.” The Trustee shall deposit in the Interest Account and the Principal Account from time to time the amounts required to be deposited therein pursuant to Section 5.02. (b) In the event that, on the Business Day prior to an Interest Payment Date, after the deposit in the Interest Account of the amounts required to be deposited therein pursuant to Section

5.02, amounts in the Interest Account are insufficient to pay the interest on the Bonds due and payable on such Interest Payment Date, the Trustee shall withdraw from the Reserve Fund, to the extent of any funds therein, the amount of such insufficiency, and shall transfer any amounts so withdrawn to the Interest Account.
(c) On each Interest Payment Date, the Trustee shall withdraw from the Interest Account for payment to the Owners of the Bonds the interest on the Bonds then due and payable. (d) In the event that, on the Business Day prior to a September 1 on which principal of the Bonds is due and payable, after the deposit in the Principal Account of the amounts required to be deposited therein pursuant to Section 5.02, including principal due and payable by reason of mandatory sinking fund redemption of the Bonds, amounts in the Principal Account are insufficient to pay such principal, after having withdrawn any amounts from the Reserve Fund required to be withdrawn therefrom on such date pursuant to subsection (b) of this Section, the Trustee shall withdraw from the Reserve Fund, to the extent of any funds therein, the amount of such insufficiency, and shall transfer any amounts so withdrawn to the Principal Account. (e) On each September 1 on which principal of the Bonds is due and payable, including principal due and payable by reason of mandatory sinking fund redemption of the Bonds, the Trustee shall withdraw from the Principal Account for payment to the Owners of the Bonds such principal then due and payable.

Section 5.04. Reserve Fund. (a) The Trustee shall establish and maintain a special fund designated the “Reserve Fund.” On the Closing Date, the Trustee shall deposit in the Reserve Fund the amount specified in Section 3.02. The Trustee shall deposit in the Reserve Fund from time to 946
29 4129-0560-2359.2
time the amounts required to be deposited therein pursuant to Section 5.02(c). There shall additionally be deposited in the Reserve Fund, in connection with the issuance of Additional Bonds, the amount required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued.
(b) Except as otherwise provided in this Section, amounts in the Reserve Fund shall be used and withdrawn by the Trustee solely for the purpose of (i) making transfers to the Interest Account in accordance with Section 5.03(b) in the event of any deficiency in the Interest Account of the amount then required for payment of the interest on the Bonds, (ii) making transfers to the Principal Account in accordance with Section 5.03(d) in the event of any deficiency in the Principal Account of the amount then required for payment of the principal of the Bonds, and (iii) redeeming Bonds in accordance with the provisions of this Section. (c) Whenever Bonds are to be optionally redeemed or redeemed from Special Tax prepayments, a proportionate share, determined as provided below, of the amount on deposit in the Reserve Fund shall, on the date on which amounts to redeem such Bonds are deposited in the Redemption Fund or otherwise deposited with the Trustee pursuant to Section 10.02, be transferred by the Trustee from the Reserve Fund to the Redemption Fund or to such deposit held by the Trustee and shall be applied to the redemption of said Bonds; provided, however, that such amount shall be so transferred only if and to the extent that the amount remaining on deposit in the Reserve Fund will be at least equal to the Reserve Requirement (excluding from the calculation thereof said Bonds to be redeemed). Such proportionate share shall be equal to the largest integral multiple of the minimum Authorized Denomination for said Bonds that is not larger than the amount equal to the product of (i) the amount on deposit in the Reserve Fund on the date of such transfer, times (ii) a fraction, the numerator of which is the principal amount of Bonds to be so redeemed and the denominator of which is the principal amount of Bonds to be Outstanding on the day prior to the date on which such Bonds are to be so redeemed.
(d) Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Trustee shall, upon receipt of a Written Request of the Community Facilities District, transfer the amount in the Reserve Fund to the Interest Account, Principal Account and/or Redemption Fund, as applicable, to be applied, on the next succeeding Interest Payment Date to the payment and redemption of all of the Outstanding Bonds. (e) If, as a result of the scheduled payment of principal of or interest on the Bonds, the Reserve Requirement is reduced, the Trustee shall transfer an amount equal to the amount of such reduction to the Interest Account.

Section 5.05. Redemption Fund. (a) The Trustee shall establish and maintain a special fund designated the “Redemption Fund.” The Trustee shall deposit in the Redemption Fund (i) amounts received from the Community Facilities District in connection with the Community Facilities District’s exercise of its rights to optionally redeem Bonds, (ii) the portion of prepaid Special Taxes required to be deposited therein pursuant to Section 5.02(a), (iii) amounts required to be transferred to the Redemption Fund from the Improvement Fund (or accounts therein) pursuant to Section 3.04(b), (iv) amounts required to be transferred to the Redemption Fund from 947
30 4129-0560-2359.2
the Reserve Fund pursuant to Section 5.04(c) or Section 5.04(d), and (v) amounts required to be deposited therein pursuant to any Supplemental Indenture. (b) Amounts in the Redemption Fund shall be disbursed therefrom for the payment of the Redemption Price of Series 2022 Bonds redeemed pursuant to Section 4.01(a) or Section

4.01(b) and for the payment of the Redemption Price of Additional Bonds redeemed under the Supplemental Indenture pursuant to which such Additional Bonds are issued (other than mandatory sinking fund redemptions thereof).

Section 5.06. Rebate Fund. (a) The Trustee shall establish and maintain a special fund designated the “Rebate Fund.” There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Certificate, as specified in a Written Request of the Community Facilities District. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement, for payment to the United States of America. Notwithstanding defeasance of the Bonds pursuant to Article X or anything to the contrary contained herein, all amounts required to be deposited into or on deposit in the Rebate Fund shall be governed exclusively by this Section and by the Tax Certificate, which is hereby incorporated herein as if fully set forth herein. The Trustee shall be deemed conclusively to have complied with such provisions if it follows the written directions of the Community Facilities District, and shall have no liability or responsibility to enforce compliance by the Community Facilities District with the terms of the Tax Certificate. The Trustee may conclusively rely upon the Community Facilities District’s determinations, calculations and certifications required by the Tax Certificate. The Trustee shall have no responsibility to independently make any calculation or determination or to review the Community Facilities District’s calculations. (b) Any funds remaining in the Rebate Fund after payment in full of all of the Bonds and after payment of any amounts described in this Section, shall, upon receipt by the Trustee of a Written Request of the Community Facilities District, be withdrawn by the Trustee and remitted to the Community Facilities District.

Section 5.07. Administrative Expense Fund. (a) The Trustee shall establish and maintain a special fund designated the “Administrative Expense Fund.” The Trustee shall deposit in the Administrative Expense Fund the amounts transferred from the Special Tax Fund and required to be deposited therein pursuant to Section 5.02. (b) The moneys in the Administrative Expense Fund shall be used and withdrawn by the Trustee from time to time to pay the Administrative Expenses upon submission of a Written Request of the Community Facilities District stating (i) the Person to whom payment is to be made, (ii) the amount to be paid, (iii) the purpose for which the obligation was incurred and that such purpose constitutes an Administrative Expense, (iv) that such payment is a proper charge against the Administrative Expense Fund, and (v) that such amount has not been the subject of a prior disbursement from the Administrative Expense Fund, in each case together with a statement or invoice for each amount requested thereunder.

Section 5.08. Investment of Moneys. (a) Except as otherwise provided herein, all moneys in any of the funds or accounts established pursuant to this Indenture held by the Trustee shall be invested by the Trustee solely in Permitted Investments, as directed in a Written Request 948
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of the Community Facilities District received by the Trustee no later than two Business Days prior to the making of such investment. Moneys in all such funds and accounts shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in this Indenture; provided, however, that Permitted Investments in which moneys in the Reserve Fund are so invested shall mature no later than the earlier of five years from the date of investment or the final maturity date of the Bonds and, provided, further, that if such Permitted Investments may be redeemed at par so as to be available on each Interest Payment Date, any amount in the Reserve Fund may be invested in such redeemable Permitted Investments maturing on any date on or prior to the final maturity date of the Bonds. Absent a timely Written Request of the Community Facilities District with respect to the investment of moneys in any of the funds or accounts established pursuant to this Indenture held by the Trustee, the Trustee shall invest such moneys in Permitted Investments described in paragraph (6) of the definition thereof.
(b) Subject to the provisions of Section 5.06, all interest, profits and other income received from the investment of moneys in any fund or account established pursuant to this Indenture (other than the Reserve Fund) shall be retained therein. Subject to the provisions of Section 5.06, all interest, profits or other income received from the investment of moneys in the Reserve Fund shall, prior to the date on which a Written Certificate of the Community Facilities District is delivered to the Trustee pursuant to subsection (b) of Section 3.04, be transferred to the Construction Account and, thereafter, shall be transferred to the Interest Account; provided, however, that, notwithstanding the foregoing, any such transfer shall be made from the Reserve Fund only if and to the extent that, after such transfer, the amount on deposit in the Reserve Fund is at least equal to the Reserve Requirement.
(c) Permitted Investments acquired as an investment of moneys in any fund or account established under this Indenture shall be credited to such fund or account. For the purpose of determining the amount in any fund or account, all Permitted Investments credited to such fund or account shall be valued by the Trustee at the market value thereof (without regard to costs incurred in the acquisition or disposition thereof, including breakage, unwind or other similar fees), such valuation to be performed not less frequently than semiannually on or before each February 15 and August 15. To the extent of any valuations to be made by the Trustee hereunder, the Trustee may utilize computerized securities pricing services that may be available to it, including those available through its regular accounting system. Any Permitted Investment that is a registrable security shall be registered in the name of the Trustee. (d) The Trustee may act as principal or agent in the making or disposing of any investment. Upon the Written Request of the Community Facilities District, the Trustee shall sell or present for redemption any Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investments are credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made or sold pursuant to this Section. For purposes of investment, the Trustee may commingle moneys in any of the funds and accounts established hereunder. The Trustee, in making or disposing of any investment permitted by this Section, may deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or dealing as a principal for its own account.
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(e) The Community Facilities District acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Community Facilities District the right to receive brokerage confirmations of security transactions as they occur, the Community Facilities District specifically waives receipt of such confirmations to the extent permitted by law. The Trustee shall furnish the Community Facilities District periodic cash transaction statements, which shall include detail for all investment transactions made by the Trustee hereunder.
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ARTICLE VI

COVENANTS
Section 6.01. Collection of Special Tax Revenues. (a) The Community Facilities District shall comply with all requirements of the Act so as to assure the timely collection of Special Tax Revenues, including the enforcement of delinquent Special Taxes. (b) Prior to August 1 of each year, the Community Facilities District shall ascertain from the County Assessor the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current year. The Community Facilities District shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Ordinance Levying Special Taxes by each August 10, or otherwise such that the computation of the levy is complete before the final date on which the County Auditor will accept the transmission of the Special Tax amounts for the parcels within the Community Facilities District for inclusion on the next real property tax roll. Upon the completion of the computation of the amounts of the levy, the Community Facilities District shall prepare or cause to be prepared, and shall transmit to the County Auditor, such data as the County Auditor requires in order to include the levy of the Special Taxes on the next real property tax roll. (c) The Community Facilities District shall fix and levy the amount of Special Taxes within the Community Facilities District in each Fiscal Year in accordance with the Rate and Method and, subject to the limitations in the Rate and Method as to the maximum Special Taxes that may be levied, in an amount sufficient to yield Special Tax Revenues in the amount required for (i) the payment of principal of and interest on any Outstanding Bonds becoming due and payable during the Corresponding Bond Year, (ii) any necessary replenishment of the Reserve Fund, and (iii) the payment of Administrative Expenses estimated to be paid from such Special Tax Revenues, taking into account the balances in the funds and accounts established hereunder. (d) The Special Taxes shall be payable and be collected in the same manner and at the same time and in the same installment as the general taxes on real property are payable (or in such other manner as the City Council shall determine, including direct billing of the affected property owners), and have the same priority, become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property.

Section 6.02. Foreclosure. Pursuant to Section 53356.1 of the Act, the Community Facilities District hereby covenants with and for the benefit of the Owners that it will determine or cause to be determined, no later than September 15 of each year, whether or not any owners of property within the Community Facilities District are delinquent in the payment of Special Taxes and, if such delinquencies exist, the Community Facilities District will order and cause to be commenced no later than November 1, and thereafter diligently prosecute, an action in the superior court to foreclose the lien of any Special Taxes or installment thereof not paid when due; provided, however, that the Community Facilities District shall not be required to order the commencement of foreclosure proceedings if (a) the total Special Tax delinquency in the Community Facilities District for such Fiscal Year is less than 5% of the total Special Taxes levied in such Fiscal Year, and (b) the amount then on deposit in the Reserve Fund is equal to the Reserve Requirement. 951
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Notwithstanding the foregoing, if the Community Facilities District determines that any single property owner in the Community Facilities District is delinquent in excess of $5,000 in the payment of the Special Taxes, then the Community Facilities District shall diligently institute, prosecute and pursue foreclosure proceedings against such property owner.

Section 6.03. Compliance with Act. The Community Facilities District shall comply with all applicable provisions of the Act.

Section 6.04. Punctual Payment. The Community Facilities District shall punctually pay or cause to be paid the principal, premium, if any, and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Net Special Tax Revenues and other assets pledged for such payment as provided in this Indenture and received by the Community Facilities District or the Trustee.

Section 6.05. Extension of Payment of Bonds. The Community Facilities District shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon which shall not have been so extended. Nothing in this Section shall be deemed to limit the right of the Community Facilities District to issue Bonds for the purpose of refunding any Outstanding Bonds in accordance with the provisions hereof, and such issuance shall not be deemed to constitute an extension of maturity of the Bonds.

Section 6.06. Against Encumbrances; Defense of Pledge. The Community Facilities District shall not create, or permit the creation of, any pledge of, lien on, security interest in or charge or other encumbrance upon the assets pledged under this Indenture, except as permitted hereby. The Community Facilities District shall at all times, to the extent permitted by law, defend, preserve and protect said pledge of such assets, and the lien thereon and security interest therein created hereby, against all claims and demands of all Persons whomsoever.

Section 6.07. Tax Covenants. (a) The Community Facilities District shall not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of interest on the Series 2022 Bonds under Section 103 of the Code. Without limiting the generality of the foregoing, the Community Facilities District shall comply with the requirements of the Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive payment in full or defeasance of the Series 2022 Bonds. (b) In the event that at any time the Community Facilities District is of the opinion that for purposes of this Section it is necessary or helpful to restrict or limit the yield on the investment of any moneys held by the Trustee in any of the funds or accounts established hereunder, the Community Facilities District shall so instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions. 952
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(c) Notwithstanding any provisions of this Section, if the Community Facilities District shall provide to the Trustee an opinion of Bond Counsel to the effect that any specified action required under this Section is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Series 2022 Bonds, the Trustee may conclusively rely on such opinion in complying with the requirements of this Section and of the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent.

Section 6.08. Non-Cash Payments of Special Taxes. The Community Facilities District shall not authorize owners of taxable parcels within the Community Facilities District to satisfy Special Tax obligations by the tender of Bonds unless the Community Facilities District shall have first obtained a report of an Independent Consultant certifying that doing so would not result in the Community Facilities District having insufficient Special Tax Revenues to pay the principal of and interest on all Outstanding Bonds when due.

Section 6.09. Reduction in Special Taxes. The Community Facilities District shall not initiate proceedings under the Act to modify the Rate and Method if such modification would adversely affect the security for the Bonds. If an initiative is adopted that purports to modify the Rate and Method in a manner that would adversely affect the security for the Bonds, the Community Facilities District shall, to the extent permitted by law, commence and pursue reasonable legal actions to prevent the modification of the Rate and Method in a manner that would adversely affect the security for the Bonds.

Section 6.10. Continuing Disclosure. (a) Each of the Community Facilities District and the Trustee shall comply with and carry out all of the provisions of the District Continuing Disclosure Agreement applicable to it. Notwithstanding any other provision of this Indenture, failure of the Community Facilities District or the Trustee to comply with the District Continuing Disclosure Agreement shall not be considered an Event of Default; provided, however, that the Trustee may (and, at the written direction of any Participating Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Series 2022 Bonds, and upon receipt of indemnification reasonably satisfactory to the Trustee, shall) or any Owner or Beneficial Owner of the Series 2022 Bonds may, take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. (b) D.R. Horton Los Angeles Holding Company, Inc. has executed the Developer Continuing Disclosure Certificate. Notwithstanding any other provision of this Indenture, failure of D.R. Horton Los Angeles Holding Company, Inc. to comply with the Developer Continuing Disclosure Certificate shall not be considered an Event of Default; provided, however, that the Trustee may (and, at the written direction of any Participating Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Series 2022 Bonds, and upon receipt of indemnification reasonably satisfactory to the Trustee, shall) or any Owner or Beneficial Owner of the Series 2022 Bonds may, take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order.

Section 6.11. Accounting Records. The Community Facilities District shall keep or cause to be kept appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the Special Taxes, which records shall be available for inspection by the Trustee at reasonable hours and under reasonable conditions. 953
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Section 6.12. State Reporting. If at any time principal or interest due on any scheduled payment date for the Bonds is not paid, or if funds are withdrawn from the Reserve Fund to pay principal of or interest on the Bonds, the Trustee shall notify the Community Facilities District in writing of such failure or withdrawal, and the Community Facilities District shall notify the California Debt and Investment Advisory Commission of such failure or withdrawal within ten days of the failure to make such payment or the date of such withdrawal.

Section 6.13. Annual Reports to the California Debt and Investment Advisory Commission. Not later than October 30 of each year, commencing October 30, 2023 and continuing until the October 30 following the final maturity of the Bonds, the Community Facilities District shall supply to the California Debt and Investment Advisory Commission the information required to be provided thereto pursuant to Section 53359.5(b) of the Act. Such information shall be made available to any Owner upon written request to the Community Facilities District accompanied by a fee determined by the Community Facilities District to pay the costs of the Community Facilities District in connection therewith. The Community Facilities District shall in no event be liable to any Owner or any other person or entity in connection with any error in any such information.

Section 6.14. Further Assurances. The Community Facilities District shall make, execute and deliver any and all such further agreements, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the rights and benefits provided in this Indenture.
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ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default. The following events shall be Events of Default:
(a) failure to pay any installment of principal of any Bonds when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption or otherwise;
(b) failure to pay any installment of interest on any Bonds when and as the same shall become due and payable;
(c) failure by the Community Facilities District to observe and perform any of the other covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, if such failure shall have continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the Community Facilities District by the Trustee, or to the Community Facilities District and the Trustee by the Owners of not less than 5% in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that, if in the reasonable opinion of the Community Facilities District the failure stated in the notice can be corrected, but not within such 30 day period, such failure shall not constitute an Event of Default if corrective action is instituted by the Community Facilities District within such 30 day period and the Community Facilities District shall thereafter diligently and in good faith cure such failure in a reasonable period of time; or
(d) the commencement by the Community Facilities District or the City of a voluntary case under Title 11 of the United States Code or any substitute or successor statute.

Section 7.02. Foreclosure. If an Event of Default shall occur under Section 7.01(a) or Section 7.01(b) then, and in each and every such case during the continuance of such Event of Default, the Trustee may, or at the written direction of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, and upon being indemnified to its satisfaction therefor, shall, commence foreclosure against any parcels of land in the Community Facilities District with delinquent Special Taxes, as provided in Section 53356.1 of the Act.

Section 7.03. Other Remedies. If an Event of Default shall have occurred and be continuing, the Trustee shall have the right:
(a) by mandamus, suit, action or proceeding, to compel the Community Facilities District and its officers, agents or employees to perform each and every term, provision and covenant contained in this Indenture and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the Community Facilities District and the fulfillment of all duties imposed upon it by this Indenture and the Act; (b) by suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the rights of the Trustee or the Owners; or 955
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(c) by suit, action or proceeding in any court of competent jurisdiction, to require the Community Facilities District and its officers and employees to account as if it and they were the trustees of an express trust.

Section 7.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.

Section 7.05. Application of Net Special Tax Revenues After Default. If an Event of Default shall occur and be continuing, all Net Special Tax Revenues and any other funds thereafter received by the Trustee under any of the provisions of this Indenture shall be applied by the Trustee as follows and in the following order:
(a) to the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners and payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture; (b) to the payment of the principal and interest then due with respect to the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully paid) subject to the provisions of this Indenture, as follows:

First: to the payment to the Persons entitled thereto of all installments of interest on the Bonds then due in the order of the maturity of such installments and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Persons entitled thereto, without any discrimination or preference; and
Second: to the payment to the Persons entitled thereto of all installments of principal of the Bonds then due, whether at maturity or by call for redemption, with interest on the overdue principal at the rate borne by the respective Bonds on the date of maturity or redemption, and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the Persons entitled thereto, without any discrimination or preference; (c) any remaining funds shall be transferred by the Trustee to the Special Tax Fund.

Section 7.06. Power of Trustee to Enforce. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of the Owners of such Bonds, subject to the provisions of this Indenture. 956
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Section 7.07. Owners’ Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken by the Trustee; provided, however, that such direction shall not be otherwise than in accordance with the provisions of this Indenture, the Act and other applicable law and, provided, further, that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Owners not parties to such direction.

Section 7.08. Limitation on Owners’ Right to Sue. No Owner of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Act or any other applicable law with respect to such Bond, unless (a) such Owner shall have given to the Trustee written notice of the occurrence of an Event of Default, (b) the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name, (c) such Owner or said Owners shall have tendered to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, and (d) the Trustee shall have refused or omitted to comply with such request for a period of 60 days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder or under law; it being understood and intended that no one or more Owners shall have any right in any manner whatever by such Owner’s or Owners’ action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners, or to enforce any right under the Bonds, this Indenture, the Act or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners, subject to the provisions of this Indenture.

Section 7.09. Absolute Obligation. Nothing in this Indenture or the Bonds contained shall affect or impair the obligation of the Community Facilities District, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Owners as the same become due, as herein provided, but only out of the Net Special Tax Revenues and other assets pledged therefor hereunder, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds.

Section 7.10. Termination of Proceedings. In case any proceedings taken by the Trustee or any one or more Owners on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Owners, then in every such case the Community Facilities District, the Trustee and the Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the 957
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Community Facilities District, the Trustee and the Owners shall continue as though no such proceedings had been taken.

Section 7.11. No Waiver of Default. No delay or omission of the Trustee or of any Owner to exercise any right or power arising upon the occurrence of any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein, and every power and remedy given by this Indenture to the Trustee or to the Owners may be exercised from time to time and as often as may be deemed expedient.
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ARTICLE VIII

TRUSTEE
Section 8.01. Duties and Liabilities of Trustee. The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of Default which has not been cured or waived, exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

Section 8.02. Qualifications; Removal and Resignation; Successors. (a) The Trustee initially a party hereto and any successor thereto shall at all times be a trust company, national banking association or bank having trust powers in good standing in or incorporated under the laws of the United States or any state thereof, having (or if such trust company, national banking association or bank is a member of a bank holding company system, its parent bank holding company shall have) a combined capital and surplus of at least $250,000,000, and subject to supervision or examination by a federal or state agency. If such trust company, national banking association or bank publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining agency above referred to, then for the purpose of this subsection the combined capital and surplus of such trust company, national banking association or bank shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.
(b) The Community Facilities District may, by an instrument in writing, upon at least 30 days’ notice to the Trustee, remove the Trustee initially a party hereto and any successor thereto unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if (i) at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing), or (ii) the Trustee shall cease to be eligible in accordance with subsection (a) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the Trustee. (c) The Trustee may at any time resign by giving written notice of such resignation by first class mail, postage prepaid, to the Community Facilities District, and to the Owners at the respective addresses shown on the Registration Books. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of subsection (a) of this Section, the Trustee shall resign immediately in the manner and with the effect specified in this Section. (d) Upon removal or resignation of the Trustee, the Community Facilities District shall promptly appoint a successor Trustee by an instrument in writing. Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee; provided, however, that any successor Trustee shall be 959
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qualified as provided in subsection (a) of this Section. If no qualified successor Trustee shall have been appointed and have accepted appointment within 45 days following notice of removal or notice of resignation as aforesaid, the removed or resigning Trustee or any Owner (on behalf of such Owner and all other Owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice, if any, as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Community Facilities District and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the Community Facilities District or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the successor Trustee shall, within 15 days after such acceptance, mail, by first class mail postage prepaid, a notice of the succession of such Trustee to the trusts hereunder to the Owners at the addresses shown on the Registration Books. (e) Any trust company, national banking association or bank into which the Trustee may be merged or converted or with which it may be consolidated or any trust company, national banking association or bank resulting from any merger, conversion or consolidation to which it shall be a party or any trust company, national banking association or bank to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such trust company, national banking association or bank shall be eligible under subsection (a) of this Section, shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

Section 8.03. Liability of Trustee. (a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Community Facilities District, and the Trustee shall not assume responsibility for the correctness of the same or incur any responsibility in respect thereof, other than as expressly stated herein in connection with the respective duties or obligations herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. (b) The Trustee makes no representations as to the validity or sufficiency of this Indenture or of any Bonds, or in respect of the security afforded by this Indenture and the Trustee shall incur no responsibility in respect thereof. The Trustee shall be under no responsibility or duty with respect to the issuance of the Bonds for value, the application of the proceeds thereof except to the extent that such proceeds are received by it in its capacity as Trustee, or the application of any moneys paid to the Community Facilities District or others in accordance with this Indenture. (c) The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. 960
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(d) No provision of this Indenture or any other document related hereto shall require the Trustee to risk or advance its own funds.
(e) The Trustee may execute any of its powers or duties hereunder through attorneys, agents or receivers and shall not be answerable for the actions of such attorneys, agents or receivers if selected by it with reasonable care.
(f) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.
(g) The immunities and protections extended to the Trustee also extend to its directors, officers, employees and agents.
(h) Before taking action under Article VII, under this Article or upon the direction of the Owners, the Trustee may require indemnity reasonably satisfactory to the Trustee be furnished to it to protect it against all fees and expenses, including those of its attorneys and advisors, and protect it against all liability it may incur.
(i) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. (j) The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners, whether or not such committee shall represent the Owners of a majority in aggregate principal amount of the Bonds then Outstanding. (k) The Trustee shall have no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds.
(l) The Trustee shall not be liable for the failure to take any action required to be taken by it hereunder if and to the extent that the Trustee’s taking such action is prevented by reason of an act of God, terrorism, war, riot, strike, fire, flood, earthquake, epidemic or other, similar occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care.
(m) The Trustee shall not be deemed to have knowledge of an Event of Default hereunder unless it has actual knowledge thereof.
(n) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct.
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(o) The Trustee shall not be responsible for or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.

Section 8.04. Right to Rely on Documents and Opinions. (a) The Trustee shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
(b) Whenever in the administration of the duties imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the Community Facilities District, and such Written Certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such Written Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable.
(c) The Trustee may consult with counsel, who may be counsel to the Community Facilities District, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.

Section 8.05. Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with prudent corporate trust industry standards, in which accurate entries shall be made of all transactions made by it relating to the proceeds of the Bonds, the Special Tax Revenues received by it and all funds and accounts established by it pursuant to this Indenture. Such books of record and account shall be available for inspection by the Community Facilities District during regular business hours and upon reasonable notice and under reasonable circumstances as agreed to by the Trustee. The Trustee shall deliver to the Community Facilities District a monthly accounting of the funds and accounts it holds under this Indenture; provided, however, that the Trustee shall not be obligated to deliver an accounting for any fund or account that (a) has a balance of zero, and (b) has not had any activity since the last reporting date.

Section 8.06. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject during business hours and upon reasonable notice to the inspection of the Community Facilities District, the Owners and their agents and representatives duly authorized in writing.

Section 8.07. Compensation and Indemnification. The Community Facilities District shall pay to the Trustee from time to time from Special Tax Revenues all reasonable compensation pursuant to a pre-approved fee letter for all services rendered under this Indenture, and also all reasonable expenses, charges, legal and consulting fees pursuant to a pre-approved fee letter and other disbursements pursuant to a pre-approved fee letter and those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Indenture. 962
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The Community Facilities District shall, to the extent permitted by law, from Special Tax Revenues, indemnify and save the Trustee harmless against any costs, claims, expenses (including fees and expenses of its counsel) and liabilities which it may incur in the exercise and performance of its powers and duties hereunder, including the enforcement of any remedies and the defense of any suit, and which are not due to its negligence or its willful misconduct. The duty of the Community Facilities District to indemnify the Trustee shall survive the resignation or removal of the Trustee and the termination and discharge of this Indenture. 963
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ARTICLE IX

SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures. (a) This Indenture and the rights and obligations of the Community Facilities District, the Trustee and the Owners hereunder may be modified or amended from time to time and at any time by a Supplemental Indenture, which the Community Facilities District and the Trustee may enter into when there are filed with the Trustee the written consents of the Owners of a majority of the aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 11.07. No such modification or amendment shall (i) extend the fixed maturity of any Bond, reduce the amount of principal thereof or the rate of interest thereon, extend the time of payment thereof or alter the redemption provisions thereof, without the prior written consent of the Owner of each Bond so affected, (ii) permit any pledge of, or the creation of any lien on, security interest in or charge or other encumbrance upon the assets pledged under this Indenture prior to or on a parity with the pledge contained in, and the lien and security interest created by, this Indenture or deprive the Owners of the pledge contained in, and the lien and security interest created by, this Indenture, except as expressly provided in this Indenture, without the prior written consents of the Owners of all Bonds then Outstanding, or (iii) modify or amend this Section without the prior written consents of the Owners of all Bonds then Outstanding.
(b) This Indenture and the rights and obligations of the Community Facilities District, the Trustee and the Owners hereunder may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Community Facilities District and the Trustee may enter into without the consent of any Owners for any one or more of the following purposes:
(i) to add to the covenants and agreements of the Community Facilities District in this Indenture contained, other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Community Facilities District; (ii) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in this Indenture, provided that such modification or amendment does not materially adversely affect the rights or interests of the Owners hereunder; (iii) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Article III; (iv) to permit the qualification of this Indenture under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect; (v) to cause interest on the Bonds to be excludable from gross income for purposes of federal income taxation by the United States of America; and 964
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(vi) in any other respect whatsoever as the Community Facilities District may deem necessary or desirable, provided that such modification or amendment does not materially adversely affect the rights or interests of the Owners hereunder. (c) Promptly after the execution by the Community Facilities District and the Trustee of any Supplemental Indenture, the Trustee shall mail a notice (the form of which shall be furnished to the Trustee by the Community Facilities District), by first-class mail, postage prepaid, setting forth in general terms the substance of such Supplemental Indenture, to the Owners at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture.

Section 9.02. Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Community Facilities District, the Trustee and the Owners shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 9.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the effective date of any Supplemental Indenture pursuant to this Article may and, if the Community Facilities District so determines, shall bear a notation by endorsement or otherwise in form approved by the Community Facilities District and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such effective date and presentation of such Bond for such purpose at the Office of the Trustee a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Community Facilities District and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Community Facilities District and authenticated by the Trustee and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such effective date, and presentation of such Bond for such purpose at the Office of the Trustee, such a new Bond in equal principal amount of the same Series, interest rate and maturity shall be exchanged for such Owner’s Bond so surrendered.

Section 9.04. Amendment of Particular Bonds. The provisions of this Article shall not prevent any Owner from accepting any amendment or modification as to any particular Bond owned by it, provided that due notation thereof is made on such Bond. 965
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ARTICLE X

DEFEASANCE
Section 10.01. Discharge of Indenture. (a) If the Community Facilities District shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, then the Owners shall cease to be entitled to the pledge of the Net Special Tax Revenues and the other assets pledged therefor hereunder, and all agreements, covenants and other obligations of the Community Facilities District hereunder shall thereupon cease, terminate and become void and this Indenture shall be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Community Facilities District all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the Community Facilities District all money or securities held by it pursuant hereto that are not required for the payment of the principal of and interest and premium, if any, on the Bonds.
(b) Subject to the provisions of subsection (a) of this Section, if the Community Facilities District shall pay or cause to be paid to the Owner of an Outstanding Bond the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, such Owner shall cease to be entitled to the pledge of the Net Special Tax Revenues and other assets pledged therefor hereunder and all agreements, covenants and other obligations of the Community Facilities District hereunder shall thereupon cease, terminate and become void and this Indenture shall be discharged and satisfied as to such Bond. (c) Notwithstanding the discharge and satisfaction of this Indenture or the discharge and satisfaction of this Indenture in respect of any Bond, those provisions of this Indenture relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, shall remain in effect and shall be binding upon the Trustee and the Owner of such Bond, and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of and interest and premium, if any, on such Bond, and to pay to the Owner of such Bond the funds so held by the Trustee as and when such payment becomes due.

Section 10.02. Bonds Deemed To Have Been Paid. (a) If moneys shall have been set aside and held by the Trustee for the payment or redemption of any Bond and the payment of the interest thereon to the maturity or redemption date thereof, such Bond shall be deemed to have been paid within the meaning and with the effect provided in Section 10.01. Any Outstanding Bond shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in Section 10.01 if (i) in case such Bond is to be redeemed on any date prior to its maturity date, the Community Facilities District shall have given to the Trustee in form satisfactory to it irrevocable instructions to mail, on a date in accordance with the provisions of Section 4.02, notice of redemption of such Bond on said redemption date, said notice to be given in accordance with Section 4.02, (ii) there shall have been deposited with the Trustee either (A) money in an amount which shall be sufficient, or (B) 966
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Defeasance Securities, the principal of and the interest on which when due, and without any reinvestment thereof, together with the money, if any, deposited therewith, will provide moneys which shall be sufficient to pay when due the interest to become due on such Bond on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and premium, if any, on such Bond, and (iii) in the event such Bond is not by its terms subject to redemption within the next succeeding 60 days, the Community Facilities District shall have given the Trustee, in form satisfactory to it, irrevocable instructions to mail as soon as practicable, a notice to the Owner of such Bond that the deposit required by clause (ii) above has been made with the Trustee and that such Bond is deemed to have been paid in accordance with this Section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and premium, if any, on such Bond.
(b) No Bond shall be deemed to have been paid pursuant to clause (ii) of subsection (a) of this Section unless the Community Facilities District shall have caused to be delivered to the Community Facilities District and the Trustee (i) an executed copy of a Verification Report with respect to such deemed payment, addressed to the Community Facilities District and the Trustee, in form and in substance acceptable to the Community Facilities District, (ii) a copy of the escrow agreement entered into in connection with the deposit pursuant to clause (ii)(B) of subsection (a) of this Section resulting in such deemed payment, which escrow agreement shall be in form and in substance acceptable to the Community Facilities District and which escrow agreement shall provide that no substitution of Defeasance Securities shall be permitted except with other Defeasance Securities and upon delivery of a new Verification Report, and no reinvestment of Defeasance Securities shall be permitted except as contemplated by the original Verification Report or upon delivery of a new Verification Report, and (iii) a copy of an opinion of Bond Counsel, dated the date of such deemed payment and addressed to the Community Facilities District and the Trustee, in form and in substance acceptable to the Community Facilities District, to the effect that such Bond has been paid within the meaning and with the effect expressed in this Indenture, all agreements, covenants and other obligations of the Community Facilities District hereunder have ceased, terminated and become void and the Indenture has been completely discharged and satisfied as to such Bonds.

Section 10.03. Unclaimed Moneys. Any moneys held by the Trustee in trust for the payment of the principal of, or premium or interest on, any Bond that remain unclaimed for two years after the date when such principal, premium or interest has become payable, if such moneys were held by the Trustee at such date, or for two years after the date of deposit of such moneys if deposited with the Trustee after the date when such principal, premium or interest become payable, shall be repaid by the Trustee to the Community Facilities District as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owner of such Bond shall look only to the Community Facilities District for the payment of such principal, premium or interest. The Trustee shall hold any such moneys uninvested. 967
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ARTICLE XI

MISCELLANEOUS
Section 11.01. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:

If to the Community Facilities District:

City of Fontana Community Facilities
District No. 106 (Mountainview)
c/o City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attention: Chief Financial Officer, Management Services If to the Trustee:

U.S. Bank Trust Company, National Association
633 West Fifth Street, 24th Floor
Los Angeles, California 90071
Attention: Global Corporate Trust
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by electronic mail, on the date sent, but only if confirmation of the receipt of such electronic mail is received or if notice is concurrently sent by another means specified herein, (d) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (e) if given by any other means, upon delivery at the address specified in this Section.

Section 11.02. Successor Is Deemed Included in All References to Predecessor.

Whenever in this Indenture either the Community Facilities District or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained required hereby to be performed by or on behalf of the Community Facilities District or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

Section 11.03. Limitation of Rights. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any Person other than the Trustee, the Community Facilities District and the Owners any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision therein or herein contained, 968
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and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Trustee, the Community Facilities District and the Owners.

Section 11.04. Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the Community Facilities District of any Bonds, the Trustee shall, in lieu of such cancellation and delivery, destroy such Bonds.

Section 11.05. Severability of Invalid Provisions. If any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein.

The Community Facilities District hereby declares that it would have entered into this Indenture and each and every other Section, subsection, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, subsections, paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable.

Section 11.06. Evidence of Rights of Owners. Any request, consent or other instrument required or permitted by this Indenture to be signed and executed by Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Owners in person or by an agent or agents duly appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and the Community Facilities District if made in the manner provided in this Section.

The fact and date of the execution by any Person of any such request, consent or other instrument or writing may be proved by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the Person signing such request, consent or other instrument acknowledged to such notary public or such officer the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer.

The ownership of Bonds shall be proved by the Registration Books.

Any request, consent or other instrument or writing of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Community Facilities District in accordance therewith or reliance thereon.

Section 11.07. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds that are known by the Trustee to be owned or held by or for the account of the Community Facilities District, or by any other obligor on the Bonds, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Community Facilities District or any other obligor on the Bonds, shall be 969
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disregarded and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Community Facilities District or any other obligor on the Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Community Facilities District shall specify in a Written Certificate of the Community Facilities District delivered to the Trustee those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such Written Certificate.

Section 11.08. Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, principal or premium due on any date with respect to particular Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owner entitled thereto, subject, however, to the provisions of Section 10.03, but without any liability for interest thereon.

Section 11.09. Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account, but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with prudent corporate trust industry standards, and with due regard for the requirements hereof and for the protection of the security of the Bonds and the rights of every Owner thereof. The Trustee may establish any such additional funds or accounts as it deems necessary to perform its obligations hereunder.

Section 11.10. Business Days. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Indenture, shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in this Indenture and, unless otherwise specifically provided in this Indenture, no interest shall accrue for the period from and after such nominal date.

Section 11.11. Waiver of Personal Liability. No member, officer, agent or employee of the Community Facilities District or the City shall be individually or personally liable for the payment of the principal of or premium or interest on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof, but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by any applicable provision of law or by this Indenture.

Section 11.12. Conflict with Act. In the event of any conflict between any provision of this Indenture and any provision of the Act, the provision of the Act shall prevail over the provision of this Indenture.
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Section 11.13. Conclusive Evidence of Regularity. Bonds issued pursuant to this Indenture shall constitute evidence of the regularity of all proceedings under the Act relative to their issuance and the levy of the Special Taxes.

Section 11.14. Governing Laws. This Indenture shall be governed by and construed in accordance with the laws of the State.

Section 11.15. Electronic Signature. Each of the parties hereto agrees that the transaction consisting of this Indenture may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Indenture using an electronic signature, it is signing, adopting and accepting this Indenture and that signing this Indenture using an electronic signature is the legal equivalent of having placed its handwritten signature on this Indenture on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Indenture in a usable format.

Section 11.16. Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the Community Facilities District has caused this Indenture to be signed in its name by its representative thereunto duly authorized, and the Trustee, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.

CITY OF FONTANA

COMMUNITY FACILITIES DISTRICT
NO. 106 (MOUNTAINVIEW)
By:
_____________, City Manager
of the City of Fontana
U.S. BANK TRUST COMPANY,

NATIONAL ASSOCIATION, AS

TRUSTEE
By:

Authorized Officer
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EXHIBIT A

PERMITTED INVESTMENTS
“Permitted Investments” means the following:
(1) Direct general obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of the Treasury of the United States of America);
(2) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including:
-Export-Import Bank
-Rural Economic Community Development Administration
-U.S. Maritime Administration
-Small Business Administration
-U.S. Department of Housing & Urban Development (PHAs)
-Federal Housing Administration
-Federal Financing Bank;
(3) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America:
-Senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC)
-Obligations of the Resolution Funding Corporation (REFCORP) -Senior debt obligations of the Federal Home Loan Bank System; (4) U.S. dollar denominated deposit accounts, federal funds and bankers’ acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of “P-1” by Moody’s and “A-1” or “A-1+” by S&P and maturing not more than 360 calendar days after the date of purchase (ratings on holding companies are not considered as the rating of the bank);
(5) Commercial paper which is rated at the time of purchase in the single highest classification, “P-1” by Moody’s and “A-1+” by S&P and which matures not more than 270 calendar days after the date of purchase;
(6) Investments in a money market fund rated “AAAm” or “AAAm-G” or better by S&P, including a fund for which the Trustee, its parent holding company, if any, or any affiliates or subsidiaries of the Trustee provide investment advisory or other management services; (7) Pre-refunded Municipal Obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and
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(a) which are rated, based on an irrevocable escrow account or fund (the “escrow”), in the highest rating category of Moody’s or S&P or any successors thereto; or (b) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate;
(8) Municipal obligations rated “Aaa/AAA” or general obligations of states with a rating of “A2/A” or higher by both Moody’s and S&P;
(9) Investment agreements with a domestic or foreign bank or corporation (other than a life or property casualty insurance company) the long-term debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least “Aa3” by Moody’s and “AA-” by S&P; provided, that, by the terms of the investment agreement:
(a) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days’ prior notice; (b) the investment agreement shall state that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors; (c) the Trustee or the Community Facilities District receive the opinion of domestic counsel that such investment agreement is legal, valid and binding and enforceable against the provider in accordance with its terms and of foreign counsel (if applicable);
(d) the investment agreement shall provide that if during its term (i) the provider’s rating by either Moody’s or S&P falls below “Aa3” or “AA-,” respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (A) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider’s books) to the Trustee or a holder of the collateral, collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to Moody’s and S&P to maintain an “A” rating in an “A” rated structured financing (with a market value approach); or (B) repay the principal of and accrued but unpaid interest, on the investment, and (ii) the provider’s 973
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rating by either Moody’s or S&P is withdrawn or suspended or falls below “A3” or “A-,” respectively, the provider must, at the direction of the Community Facilities District or the Trustee, within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Trustee; (e) the investment agreement shall state, and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the holder of collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the holder of collateral is in possession); and
(f) the investment agreement must provide that if during its term (i) the provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the Community Facilities District or the Trustee, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Trustee, and (ii) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc., the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Trustee.
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EXHIBIT B
FORM OF SERIES 2022 BOND
No. ________________ $____________

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106
(MOUNTAINVIEW)
SPECIAL TAX BOND, SERIES 2022

INTEREST RATE MATURITY DATE DATED DATE CUSIP
% September 1, 20__ ___________, 2022
REGISTERED OWNER:

PRINCIPAL AMOUNT:

City of Fontana Community Facilities District No. 106 (Mountainview) (the “Community Facilities District”), for value received, hereby promises to pay, solely from the sources hereinafter described, to the Registered Owner identified above or registered assigns (the “Registered Owner”), on the Maturity Date identified above or on any earlier redemption date, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Interest Rate identified above in like lawful money from the date hereof payable semiannually on March 1 and September 1 in each year, commencing ________ 1, 20__ (the “Interest Payment Dates”), until payment of such Principal Amount in full.

This Bond is one of a series of a duly authorized issue of bonds approved by the qualified electors of the Community Facilities District, pursuant to the Mello-Roos Community Facilities Act of 1982, constituting Sections 53311 et seq. of the California Government Code (the “Act”), and issued for the purpose of financing certain public facilities, and is one of the series of bonds designated “City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds, Series 2022” (the “Series 2022 Bonds”) in the aggregate principal amount of $__________.

The Series 2022 Bonds are issued pursuant to the Indenture, dated as of _______ 1, 2022 (the “Indenture”), by and between the Community Facilities District and U.S. Bank Trust Company, National Association, as trustee (said entity or any successor thereto as trustee under the Indenture, the “Trustee”), and this reference incorporates the Indenture herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Indenture, additional bonds (“Additional Bonds”) may be issued by the Community Facilities District on a parity with the Series 2022 Bonds. The Series 2022 Bonds and any Additional Bonds are collectively referred to as the “Bonds.” The Indenture is entered into, and this Bond is issued under, the Act and the laws of the State of California. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Indenture. 975
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Interest on the Series 2022 Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (a) a Series 2022 Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event interest thereon shall be payable from such Interest Payment Date, (b) a Series 2022 Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from the Closing Date, or (c) interest on any Series 2022 Bond is in default as of the date of authentication thereof, in which event interest thereon shall be payable from the date to which interest has previously been paid or duly provided for. Interest shall be paid in lawful money of the United States on each Interest Payment Date. Interest shall be paid by check of the Trustee mailed by first-class mail, postage prepaid, on each Interest Payment Date to the Owners of the Series 2022 Bonds at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date. Notwithstanding the foregoing, interest on any Series 2022 Bond which is not punctually paid or duly provided for on any Interest Payment Date shall, if and to the extent that amounts subsequently become available therefor, be paid on a payment date established by the Trustee to the Person in whose name the ownership of such Series 2022 Bond is registered on the Registration Books at the close of business on a special record date to be established by the Trustee for the payment of such defaulted interest, notice of which shall be given to such Owner not less than ten days prior to such special record date. The principal of the Series 2022 Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee.

The Bonds are special, limited obligations of the Community Facilities District, payable, as provided in the Indenture, solely from Net Special Tax Revenues and the other assets pledged therefor thereunder. Neither the faith and credit nor the taxing power of the Community Facilities District (except to the limited extent set forth in the Indenture), the City of Fontana or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds.

Pursuant to and as more particularly provided in the Indenture, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, in order to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of the Indenture and the Act, the Community Facilities District pledges to the Owners, and grants thereto a lien on and a security interest in, all of the Net Special Tax Revenues and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund. Said pledge constitutes a first lien on and security interest in such assets, which shall immediately attach to such assets and be effective, binding and enforceable against the Community Facilities District, its successors, purchasers of any of such assets, creditors and all others asserting rights therein, to the extent set forth in, and in accordance with, the Indenture, irrespective of whether those parties have notice of the pledge of, lien on and security interest in such assets and without the need for any physical delivery, recordation, filing or further act.

The Series 2022 Bonds are subject to redemption on the dates, at the Redemption Prices and pursuant to the terms set forth in the Indenture. Notice of redemption of any Series 2022 Bond or any portion thereof shall be given as provided in the Indenture.

The Series 2022 Bonds are issuable as fully-registered Bonds without coupons in Authorized Denominations ($5,000 and any integral multiple thereof). 976
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Any Series 2022 Bond may be transferred upon the Registration Books by the Person in whose name it is registered, in person or by such Person’s duly authorized attorney, upon surrender of such Series 2022 Bond to the Trustee for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Series 2022 Bond or Series 2022 Bonds shall be so surrendered for transfer, the Community Facilities District shall execute and the Trustee shall authenticate and shall deliver a new Series 2022 Bond or Series 2022 Bonds of the same maturity in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. The Series 2022 Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Series 2022 Bonds of the same maturity of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.

The Indenture and the rights and obligations of the Community Facilities District, the Trustee and the Owners may be modified or amended in the manner, to the extent, and upon the terms provided in the Indenture.

The Indenture contains provisions permitting the Community Facilities District to make provision for the payment of the principal of and the interest and premium, if any, on any of the Bonds so that such Bonds shall no longer be deemed to be Outstanding under the terms of the Indenture.

Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY

TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
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IN WITNESS WHEREOF, the Community Facilities District has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of the Mayor of the City of Fontana attested by the manual or facsimile signature of the City Clerk of the City of Fontana, all as of the Dated Date identified above.

CITY OF FONTANA COMMUNITY
FACILITIES DISTRICT NO. 106
(MOUNTAINVIEW)
By:

Mayor of the City of Fontana
Attest:

By:

City Clerk of the City of Fontana
978
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4129-0560-2359.2

CERTIFICATE OF AUTHENTICATION
This is one of the Series 2022 Bonds described in the within-mentioned Indenture and registered on the Registration Books.

Date: _______________
U.S. BANK TRUST COMPANY,

NATIONAL ASSOCIATION, AS

TRUSTEE
By:

Authorized Officer
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ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto __________________________________, whose address and social security or other tax identifying number is ____________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) ______________________________, attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.

Dated:

Signature Guaranteed:

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

Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever.
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4163-4486-6103.1

CONTINUING DISCLOSURE AGREEMENT
by and among

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106
(MOUNTAINVIEW)
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,

AS TRUSTEE
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,

AS DISSEMINATION AGENT
Dated as of _________ 1, 2022
City of Fontana
Community Facilities District No. 106
(Mountainview)
Special Tax Bonds, Series 2022
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CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (this “Disclosure Agreement”), dated as of _________ 1, 2022, is by and among CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW), a community facilities district organized and existing under the laws of the State of California (the “Community Facilities District”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America (“U.S. Bank”), in its capacity as Trustee (the “Trustee”) and in its capacity as Dissemination Agent (the “Dissemination Agent”).

W I T N E S S E T H :

WHEREAS, the Community Facilities District has issued its City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds, Series 2022 (the “Series 2022 Bonds”), in the aggregate principal amount of $__________, pursuant to the Indenture, dated as of _________ 1, 2022 (the “Indenture”), by and between the Community Facilities District and the Trustee; and
WHEREAS, this Disclosure Agreement is being executed and delivered by the Community Facilities District, the Trustee and the Dissemination Agent for the benefit of the owners and beneficial owners of the Series 2022 Bonds and in order to assist the underwriter of the Series 2022 Bonds in complying with Securities and Exchange Commission Rule 15c2- 12(b)(5);
NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the receipt whereof is hereby acknowledged, the parties hereto agree as follows:

Section 1. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Disclosure Agreement have the meanings herein specified.

Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Indenture. “Annual Report” means any Annual Report provided by the Community Facilities District pursuant to, and as described in, Sections 2 and 3 hereof. “Annual Report Date” means the date in each year that is the first day of the month following the eighth month after the end of the Community Facilities District’s fiscal year, which date, as of the date of this Disclosure Agreement, is March 1. “Community Facilities District” means City of Fontana Community Facilities District No. 106 (Mountainview), a community facilities district organized and existing under the laws of the State, and its successors.
“Disclosure Representative” means the Chief Financial Officer, Management Services, of the City, or his or her designee, or such other person as the Community Facilities District shall designate in writing to the Trustee and the Dissemination Agent from time to time. 982
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“Dissemination Agent” means U.S. Bank, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Community Facilities District and which has filed with the Trustee and the then existing Dissemination Agent a written acceptance of such designation.
“Financial Obligation” means (a) a debt obligation of the Community Facilities District, (b) a derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation of the Community Facilities District, or (c) a guarantee of (i) a debt obligation of the Community Facilities District, or (ii) a derivative instrument described in clause (b), above; provided, however, that the term “Financial Obligation” shall not include “municipal securities” (as such term is defined in the Securities Exchange Act of 1934, as amended) as to which a “final official statement” (as such term is defined in the Rule) has been provided to the MSRB consistent with the Rule.
“Indenture” means the Indenture, dated as of _________ 1, 2022, by and between the Community Facilities District and U.S. Bank Trust Company, National Association, as Trustee, as originally executed and as it may be modified or amended from time to time in accordance with its terms.
“Listed Events” means any of the events listed in subsection (a) or subsection (b) of Section 4 hereof.
“MSRB” means the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule.

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.
“Participating Underwriter” means the original underwriter of the Series 2022 Bonds required to comply with the Rule in connection with the offering of the Series 2022 Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “Trustee” means U.S. Bank Trust Company, National Association, as Trustee under the Indenture, or any successor thereto as Trustee thereunder substituted in its place as provided therein.

Section 2. Provision of Annual Reports. (a) The Community Facilities District shall, or shall cause the Dissemination Agent to, provide to the MSRB an Annual Report that is consistent with the requirements of Section 3 hereof, not later than the Annual Report Date, commencing with the report for the 2021-22 Fiscal Year. The Annual Report may include by reference other information as provided in Section 3 hereof; provided, however, that the audited financial statements of the Community Facilities District, if any, 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 they are not available by that date. If the Community Facilities District’s fiscal year changes, it shall, or it shall instruct the Dissemination Agent to, give notice of such change in a filing with the MSRB.
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(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 Community Facilities District shall provide the Annual Report to the Dissemination Agent. If by such date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the Community Facilities District to determine if the Community Facilities District is in compliance with the first sentence of this subsection (b).
(c) If the Dissemination Agent has not received a copy of the Annual Report from the Community Facilities District by the date specified in subsection (a) of this Section, the Dissemination Agent shall, in a timely manner, send a notice to the MSRB in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) provide each Annual Report received by it to the MSRB, as provided herein; and
(ii) file a report with the Community Facilities District and the Trustee certifying that such Annual Report has been provided pursuant to this Disclosure Agreement and stating the date it was provided to the MSRB.

Section 3. Content of Annual Reports. The Community Facilities District’s Annual Report shall contain or incorporate by reference the following:
(a) The Community Facilities District’s audited financial statements, if any, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Community Facilities 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 2 hereof, the Annual Report shall contain unaudited financial statements, in a format similar to that used for the Community Facilities District’s audited financial statements, and the audited financial statements, if any, shall be filed in the same manner as the Annual Report when they become available.
(b) The following information:
(i) The principal amount of Series 2022 Bonds Outstanding as of the December 31 next preceding the Annual Report Date;
(ii) The principal amount of Additional Bonds, if any, Outstanding as of the December 31 next preceding the Annual Report Date;
(iii) The balance in the Reserve Fund, and a statement of the Reserve Requirement, as of the December 31 next preceding the Annual Report Date; (iv) The balance in the (A) Acquisition Account, and (B) the Construction Account, as of the December 31 next preceding the Annual Report Date;
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(v) The total assessed value of all parcels within the Community Facilities District on which the Special Taxes are levied, as shown on the assessment roll of the San Bernardino County Assessor last equalized prior to the December 31 next preceding the Annual Report Date, and a statement of assessed value-to-bonded debt ratios therefor, either by individual parcel or by categories (e.g., “below 3:1,” “3:1 to 4.99:1,” etc.);
(vi) Value-to-bonded debt information, based on the assessed values in the assessment roll of the San Bernardino County Assessor last equalized prior to the December 31 next preceding the Annual Report Date, for (A) each property owner that owns four or more taxable parcels within the Community Facilities District, and (B) all other property owners, aggregated together, owning taxable parcels within the Community Facilities District;
(vii) The Special Tax delinquency rate for all parcels within the Community Facilities District, as shown on the assessment roll of the San Bernardino County Assessor last equalized prior to the December 31 next preceding the Annual Report Date, the number of parcels within the Community Facilities District delinquent 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 Community Facilities District; provided, however, that parcels with aggregate delinquencies of $5,000 or less (excluding penalties and interest) may be grouped together and such information may be provided by category;
(viii) The status of foreclosure proceedings and a summary of the results of any foreclosure sales as of the December 31 next preceding the Annual Report Date;
(ix) The identity of any property owner representing more than 5% of the Special Tax levy delinquent in payment of Special Taxes as of the December 31 next preceding the Annual Report Date;
(x) A land ownership summary listing property owners responsible for more than 5% of the annual Special Tax, as shown on the assessment roll of the San Bernardino County Assessor last equalized prior to the December 31 next preceding the Annual Report Date; and
(xi) A description of any changes to the Rate and Method approved by, or submitted for approval to, the qualified electors of the Community Facilities District during the period from the date of filing the prior year’s Annual Report to the date of filing such Annual Report.

Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Community Facilities District or related public entities that have been made available to the public on the MSRB’s website. The 985
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Community Facilities District shall clearly identify each such other document so included by reference.

Section 4. Reporting of Significant Events. (a) Pursuant to the provisions of this Section, the Community Facilities District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Series 2022 Bonds in a timely manner not later than ten business days after the occurrence of the event:
(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 or issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB).
(vi) Tender offers.
(vii) Defeasances.
(viii) Rating changes.
(ix) Bankruptcy, insolvency, receivership or similar event of the Community Facilities District.
(x) Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a Financial Obligation, any of which reflect financial difficulties.

For purposes of the event identified in paragraph (ix) of this subsection, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Community Facilities District 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 Community Facilities District, or if such jurisdiction has been assumed by leaving the existing governmental body and officials 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 or jurisdiction over substantially all of the assets or business of the Community Facilities District. (b) Pursuant to the provisions of this Section, the Community Facilities District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Series 2022 Bonds, if material, in a timely manner not later than ten business days after the occurrence of the event:
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(i) Unless described in paragraph (v) of subsection (a) of this Section, material notices or determinations by the Internal Revenue Service with respect to the tax status of the Series 2022 Bonds or other material events affecting the tax status of the Series 2022 Bonds.
(ii) Modifications to rights of holders of the Series 2022 Bonds. (iii) Series 2022 Bond calls.
(iv) Release, substitution, or sale of property securing repayment of the Series 2022 Bonds.
(v) Non-payment related defaults.
(vi) The consummation of a merger, consolidation, or acquisition involving the Community Facilities District or the sale of all or substantially all of the assets of the Community Facilities District 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.
(vii) Appointment of a successor or additional Trustee or the change of name of a Trustee.
(viii) Incurrence of a Financial Obligation, or agreement to covenants, events of default, remedies, priority rights or other similar terms of a Financial Obligation, any of which affect holders of the Series 2022 Bonds. (c) The Trustee shall, within one business day of obtaining actual knowledge of the occurrence of any of the Listed Events, contact the Disclosure Representative and inform such person of the event.
(d) Whenever the Community Facilities District obtains knowledge of the occurrence of a Listed Event described in subsection (b) of this Section, the Community Facilities District shall determine if such event would be material under applicable Federal securities law. (e) Whenever the Community Facilities District obtains knowledge of the occurrence 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 law, the Community Facilities District shall, or shall cause the Dissemination Agent to, file a notice of the occurrence of such Listed Event with the MSRB, within ten business days of such occurrence.
(f) Notwithstanding the foregoing, notice of Listed Events described in paragraph (iii) of subsection (b) of this Section need not be given any earlier than the notice (if any) of the underlying event is given to holders of affected Series 2022 Bonds pursuant to the Indenture. 987
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Section 5. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Disclosure Agreement must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB.

Section 6. Termination of Reporting Obligation. The Community Facilities District’s obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Series 2022 Bonds. If such termination occurs prior to the final maturity of the Series 2022 Bonds, the Community Facilities District shall give, or cause to be given, notice of such termination in a filing with the MSRB.

Section 7. Dissemination Agent. The Community Facilities District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing 30 days’ written notice to the Community Facilities District and the Trustee.

Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Community Facilities District, the Trustee and the Dissemination Agent may amend this Disclosure Agreement (and the Trustee and the Dissemination Agent shall agree to any amendment so requested by the Community Facilities District, so long as such amendment does not adversely affect the rights or materially increase the obligations of the Trustee or the Dissemination Agent), and any provision of this Disclosure Agreement 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 2 hereof, Section 3 hereof or subsection (a) or (b) of Section 4 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 Series 2022 Bonds, or the 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 Series 2022 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 Series 2022 Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of Owners or Beneficial Owners of the Series 2022 Bonds.

In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Community Facilities District shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Community Facilities District. In 988
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addition, if the amendment relates to the accounting principles to be followed in preparing financial statements (i) notice of such change shall be given in a filing with the MSRB, and (ii) the Annual Report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Community Facilities District from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice required to be filed pursuant to this Disclosure Agreement, in addition to that which is required by this Disclosure Agreement. If the Community Facilities District chooses to include any information in any Annual Report or notice in addition to that which is specifically required by this Disclosure Agreement, the Community Facilities District shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event or any other event required to be reported.

Section 10. Default. In the event of a failure of the Community Facilities District, the Trustee or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Trustee may (and, at the written direction of any Participating Underwriter or the Owners of at least 25% of the aggregate principal amount of Outstanding Series 2022 Bonds, shall, upon receipt of indemnification reasonably satisfactory to the Trustee), or any Owner or Beneficial Owner of the Series 2022 Bonds may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Community Facilities District, the Trustee or the Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the Community Facilities District, the Trustee or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance.

Section 11. Duties, Immunities and Liabilities of Trustee and Dissemination Agent.

Article VIII of the Indenture is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Indenture. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee thereunder. Neither the Trustee nor the Dissemination Agent shall 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 Agreement. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. To the extent permitted by law, the Community Facilities District agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, and which are not due to its negligence or its willful misconduct.

The obligations of the Community Facilities District under this Section shall survive resignation or removal of the Dissemination Agent and the termination of this Disclosure Agreement. 989
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The Dissemination Agent has no power to enforce performance on the part of the Community Facilities District. The Dissemination Agent shall not be responsible for the content of any notice or report prepared by the Community Facilities District pursuant to this Disclosure Agreement.

Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Community Facilities District, the Trustee, the Dissemination Agent, the Participating Underwriter and the Owners and Beneficial Owners from time to time of the Series 2022 Bonds, and shall create no rights in any other person or entity.

Section 13. Governing Laws. This Disclosure Agreement shall be governed by and construed in accordance with the laws of the State of California.

Section 14. Electronic Signature. Each of the parties hereto agrees that the transaction consisting of this Disclosure Agreement may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Disclosure Agreement using an electronic signature, it is signing, adopting and accepting this Disclosure Agreement and that signing this Disclosure Agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this Disclosure Agreement on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Disclosure Agreement in a usable format.

Section 15. Counterparts. This Disclosure Agreement 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement as of the date first above written.

CITY OF FONTANA

COMMUNITY FACILITIES DISTRICT
NO. 106 (MOUNTAINVIEW)
By:
___________, City Manager
of the City of Fontana
U.S. BANK TRUST COMPANY,

NATIONAL ASSOCIATION, AS

TRUSTEE
By:

Authorized Signatory
U.S. BANK TRUST COMPANY,

NATIONAL ASSOCIATION, AS

DISSEMINATION AGENT
By:

Authorized Signatory
991
A-1
4163-4486-6103.1

EXHIBIT A

NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Fontana Community Facilities District No. 106 (Mountainview) Name of Issue: City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds, Series 2022
Date of Issuance: ___________, 2022
NOTICE IS HEREBY GIVEN that City of Fontana Community Facilities District No. 106 (Mountainview) (the “Community Facilities District”) has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement, dated as of _________ 1, 2022, by and among the Community Facilities District and U.S. Bank Trust Company, National Association, in its capacity as Trustee and in its capacity as Dissemination Agent. [The Community Facilities District anticipates that such Annual Report will be filed by ____________.]
Dated: ____________
U.S. Bank Trust Company, National
Association, as Dissemination
Agent, on behalf of City of Fontana
Community Facilities District
No. 106 (Mountainview)
cc: City of Fontana
Community Facilities District
No. 106 (Mountainview)
992
Jones Hall Draft 6-11-2022

BOND PURCHASE AGREEMENT
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022
[Pricing Date]
City of Fontana Community Facilities
District No. 106 (Mountainview)
c/o City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attention: Chief Financial Officer, Management Services Ladies and Gentlemen:

Stifel, Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”) offers to enter into this Bond Purchase Agreement (this “Agreement”) with City of Fontana Community Facilities District No. 106 (Mountainview) (the “Issuer” or the “District”), which, upon your acceptance of this offer, will be binding upon the Issuer and the Underwriter. This offer is made subject to the acceptance by the Issuer of this Agreement on or before 11:59 p.m. on the date set forth above. Terms not otherwise defined herein have the meanings given them in the Indenture described below.

1. Upon the terms and conditions and in reliance upon the respective representations, warranties and covenants herein, the Underwriter hereby agrees to purchase from the Issuer, and the Issuer hereby agrees to sell to the Underwriter, all (but not less than all) of the above-captioned bonds (the “Bonds”) at a purchase price (the “Purchase Price”) of $________ (equal to the par amount of the Bonds ($[PAR].00), plus original issue premium of $________, less an Underwriter’s discount of $________).

The Bonds will be issued by the Issuer under the Mello-Roos Community Facilities Act of 1982 (constituting Section 53311 et seq. of the California Government Code) (the “Act”) and a resolution adopted on July 12, 2022 (the “Bond Resolution”) by the City Council (the “City Council”) of the City of Fontana (the “City”) acting as the legislative body of the Issuer.

The special taxes that provide a source of payment for the Bonds (the “Special Taxes”) will be levied under Ordinance No. 1872 adopted by the City Council on July 27, 2021 (the “Ordinance”). In addition to the Ordinance, the City Council adopted the following in connection with initial formation of the District and the levy of the Special Taxes: (i) Resolution No. 2021-039 (the “Resolution of Intention to Form the District”), (ii) Resolution No. 2021-040 (the “Resolution of Intention to Incur Bonded Indebtedness”), (iii) Resolution No. 2021-060 (“Resolution Declaring Necessity to Incur Bonded Indebtedness”), (iv) Resolution No. 2021-059 (the “Resolution of Formation”), (v) Resolution No. 2021-061 (the “Resolution Calling Election”), and (vi) Resolution No. 2021-062 (the “Resolution Declaring Election Results”; together, the “Formation Resolutions and Ordinance”). Together, the Bond Resolution and the Formation Resolutions and Ordinance are referred to as the “Resolutions and Ordinance.”
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The Bonds will be issued under the terms of an Indenture (the “Indenture”), dated as of August 1, 2022, by and between the Issuer and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The proceeds of the sale of the Bonds will be used by the Issuer to (i) provide financing for certain public facilities and costs related to development within the District, (ii) fund a reserve fund with respect to the Bonds, and (iii) pay the costs of issuing the Bonds. Proceeds of the Bonds will be applied in accordance with the Indenture.

The Issuer acknowledges and agrees that: (i) the primary role of the Underwriter is to purchase securities for resale to investors in an arms-length commercial transaction between the Issuer and the Underwriter and that the Underwriter has financial and other interests that differ from those of the Issuer, and 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 a principal and is not acting as the agent or fiduciary of the District, (ii) the Underwriter is not acting as a municipal advisor (within the meaning of Section 15B of the Securities Exchange Act of 1934, as amended), financial advisor or fiduciary to the Issuer or any other person or entity and has not assumed any advisory or fiduciary responsibility to the Issuer with respect to the transaction contemplated hereby and the discussions, undertakings and proceedings leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the Issuer on other matters), (iii) the only obligations the Underwriter has to the Issuer with respect to the transaction contemplated hereby expressly are set forth in this Agreement, except as otherwise provided by applicable rules and regulations of the Securities and Exchange Commission or the rules of the MSRB or other law, and (iv) the Issuer has consulted its own legal, accounting, tax, municipal, financial and other advisors, as applicable, to the extent it has deemed appropriate in connection with the transaction contemplated herein. The Issuer acknowledges that it has previously provided the Underwriter with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the MSRB.

2. The Bonds will mature on the dates and in the principal amounts and will bear interest at the rates (and have the redemption terms) as set forth in Exhibit A hereto. The Underwriter agrees to make a bona fide public offering of all of the Bonds at the offering prices set forth on the cover of the Final Official Statement described below. Additional details related to the establishment of the issue price of the Bonds is set forth in Section 14.

3. The Issuer agrees to deliver to the Underwriter as many copies of the Final Official Statement dated the date hereof, relating to the Bonds to each of its customers purchasing Bonds no later than the settlement date of the transaction.

In addition, the Issuer has authorized and approved the Preliminary Official Statement dated [POS Date] (the “Preliminary Official Statement”) and the final Official Statement dated the date hereof (the “Final Official Statement”) and consents to their distribution and use by the Underwriter and the execution and approval of the Final Official Statement by a duly authorized officer of the Issuer. The Issuer deems such Preliminary Official Statement final as of its date for purposes of Rule 15c2-12 of the Securities and Exchange Commission (“Rule 15c2-12”), except for information allowed by Rule 15c2-12 to be omitted, and has executed a certificate to that effect in the form of Exhibit D.

In connection with issuance of the Bonds, and in order to assist the Underwriter in complying with Rule 15c2-12, the Issuer will execute a Continuing Disclosure Agreement, dated as of August 1, 2022 (the “District Continuing Disclosure Agreement”), substantially in the form of the Appendix G to the Preliminary Official Statement.
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4. The Issuer represents and warrants to the Underwriter that:
(a) The Issuer is duly organized and validly existing as a community facilities district under the laws of the State of California (the “State”), and has the full legal right, power and authority, among other things, (i) upon satisfaction of the conditions in this Agreement and the Indenture, to issue the Bonds as provided herein, and (ii) to secure the Bonds in the manner set forth in the Indenture. (b) The City Council has the full legal right, power and authority to adopt the Resolutions and Ordinance, and the Issuer has the full legal right, power and authority (i) to enter into this Agreement, the Indenture, and the District Continuing Disclosure Agreement (collectively, the “Issuer Documents”), (ii) to issue, sell and deliver the Bonds to the Underwriter as provided herein, and (iii) to carry out and consummate all other transactions on its part contemplated by the Final Official Statement and each of the Issuer Documents, and the Issuer and the City Council have complied with all provisions of applicable law, including the Act, in all matters relating to such transactions.
(c) The Issuer has duly authorized (i) the execution and delivery by the Issuer of the Bonds and the execution, delivery and due performance by the Issuer of its obligations under the Issuer Documents, (ii) the distribution and use of the Preliminary Official Statement and execution, delivery and distribution of the Final Official Statement, and (iii) the taking of any and all such action as may be required on the part of the Issuer to carry out, give effect to and consummate the transactions on its part contemplated by such instruments. All consents or approvals necessary to be obtained by the Issuer in connection with the foregoing have been received, and the consents or approvals so received are still in full force and effect.
(d) The Resolutions and Ordinance have been duly adopted by the City Council and are in full force and effect; and the Issuer Documents, when executed and delivered by the Issuer and the other party thereto, will constitute a legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with their terms, except as enforceability thereof may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally.
(e) When delivered to the Underwriter, the Bonds will have been duly authorized by the City Council and duly executed, issued and delivered by the Issuer and will constitute legal, valid and binding special obligations of the Issuer enforceable against the Issuer in accordance with their respective terms, except as enforceability thereof may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally, and will be entitled to the benefit and security of the Indenture.
(f) The information (excluding information under first-two paragraphs of the caption “INTRODUCTION – The District”, information under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT,” and information relating to The Depository Trust Company (“DTC”) and its book-entry system) contained in the Preliminary Official Statement is, and as of the Closing Date such information in the Final Official Statement will be true and correct in all material respects, and the Preliminary Official Statement does not as of its date and the Final Official 995
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Statement will not as of the Closing Date contain any untrue or misleading statement of a material fact (excluding information under the caption “INTRODUCTION – The District”, information under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT,” and information relating to DTC and its book-entry system) or omit to state any material fact (excluding information under the caption “INTRODUCTION – The District,” information under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT,” and information relating to DTC and its book-entry system) necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(g) If, at any time up to and including 25 days after the End of the Underwriting Period (as defined below), any event known to the officers of the Issuer participating in the issuance of the Bonds occurs with respect to the Issuer or the City as a result of which the Final Official Statement as then amended or supplemented might include an untrue 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, the Issuer shall promptly notify the Underwriter in writing of such event. Any information supplied by the Issuer for inclusion in any amendments or supplements to the Final Official Statement will not contain any untrue or misleading statement of a material fact relating to the Issuer or the City or omit to state any material fact relating to the Issuer or the City necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 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 (as described in Section 6 below). Any notice delivered pursuant to this provision shall be written notice delivered to the District at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the “End of the Underwriting Period.” (h) Neither the adoption of the Resolutions and Ordinance, the execution and delivery of the Issuer Documents, nor the consummation of the transactions on the part of the Issuer contemplated herein or therein or the compliance by the Issuer with the provisions hereof or thereof will conflict with, or constitute on the part of the Issuer, a violation of, or a breach of or default under, (i) any material indenture, mortgage, commitment, note or other agreement or instrument to which the Issuer is a party or by which it is bound, (ii) any provision of the State Constitution or (iii) any existing law, rule, regulation, ordinance, judgment, order or decree to which the Issuer or the City (or the members of the City Council or any of its officers in their respective capacities as such) is subject, that would have a material adverse effect on the ability of the Issuer to perform its obligations under the Issuer Documents.
(i) The Issuer has never been in default at any time, as to principal of or interest on any obligation which it has issued, including those which it has issued as a conduit for another entity, which default may have an adverse effect on the ability of the Issuer to consummate the transactions on its part under the Issuer Documents, except as specifically disclosed in the Final Official Statement; and the Issuer has 996
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not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the Special Taxes.
(j) Except as is specifically disclosed in the Final Official Statement, to the best knowledge of the Issuer, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending with respect to which the Issuer has been served with process or threatened, which in any way questions the powers of the City Council, the City or the Issuer referred to in paragraph (b) above, or the validity of any proceeding taken by the City Council in connection with the issuance of the Bonds, or wherein an unfavorable decision, ruling or finding could materially adversely affect the transactions contemplated by the Issuer Documents, or which, in any way, could adversely affect the validity or enforceability of the Resolutions and Ordinance, the Bonds or the Issuer Documents or, to the knowledge of the Issuer, which in any way questions the exclusion from gross income of the recipients thereof of the interest on the Bonds for federal income tax purposes or in any other way questions the status of the Bonds under State tax laws or regulations. (k) Any certificate signed by an official of the Issuer authorized to execute such certificate and delivered to the Underwriter in connection with the transactions contemplated by the Issuer Documents shall be deemed a representation and warranty by the Issuer to the Underwriter as to the truth of the statements therein contained.
(l) The Issuer has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon.
(m) The Bonds will be paid from Net Special Tax Revenues (as defined in the Indenture) received by the Issuer and amounts held in certain funds and accounts established and pledged under the Indenture.
(n) The Special Taxes may lawfully be levied in accordance with the rate and method of apportionment of the Special Tax relating to the District (the “Rate and Method”), the Resolutions and Ordinance as described in the Preliminary Official Statement and the Final Official Statement, and, when levied, will be secured by a lien on the property on which they are levied.
(o) The Indenture creates a valid pledge of, and first lien upon the Net Special Tax Revenues deposited thereunder, and the amounts held in certain funds and accounts established and pledged under the Indenture, subject in all cases to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein.
(p) Except as disclosed in the Final Official Statement, in the last five years, neither the City, nor the District, nor any other entity for which the City Council is the legislative body, has failed to comply with any undertaking under Rule 15c2-12 in any material respect.

5. The Issuer covenants with the Underwriter that the Issuer will cooperate with the Underwriter (at the cost of the Underwriter), in qualifying the Bonds for offer and sale under the 997
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securities or Blue Sky laws of such jurisdictions of the United States as the Underwriter may reasonably request; provided, however, that the Issuer shall not be required to consent to suit or to service of process, or to qualify to do business, in any jurisdiction. The Issuer consents to the use by the Underwriter of the Issuer Documents in the course of its compliance with the securities or Blue Sky laws of the various jurisdictions.

6. At 9:00 a.m. on [Closing Date] (the “Closing Date”) or at such other time and/or date as shall have been mutually agreed upon by the Issuer and the Underwriter, the Issuer will deliver or cause to be delivered to the Underwriter the Bonds in definitive form duly executed and authenticated by the Trustee together with the other documents mentioned in Section 8 hereof; and the Underwriter will accept such delivery and pay the Purchase Price of the Bonds by delivering to the Trustee for the account of the Issuer a check payable in federal funds or making a wire transfer in federal funds payable to the order of the Trustee.

The activities relating to the final execution and delivery of the Bonds and the Indenture and the payment therefor and the delivery of the certificates, opinions and other instruments as described in Section 8 of this Agreement shall occur at the offices of Orrick, Herrington & Sutcliffe, Los Angeles, California, as bond counsel to the Issuer (“Bond Counsel”). The payment for the Bonds and simultaneous delivery of the Bonds to the Underwriter is herein referred to as the “Closing.” The Bonds will be delivered as fully registered Bonds initially in denominations of $5,000 each and any integral multiple thereof. The Bonds will be registered in the name of Cede & Co., as nominee of DTC, and will be made available for checking by the Underwriter at such place as the Underwriter and the Trustee shall agree not less than 24 hours prior to the Closing.

7. The Underwriter has the right to cancel its obligations to purchase the Bonds if between the date hereof and the Closing Date:
(a) the House of Representatives or the Senate of the Congress of the United States, or a committee of either, shall have pending before it, or shall have passed or recommended favorably, legislation introduced previous to the date hereof, which legislation, if enacted in its form as introduced or as amended, would have the purpose or effect of imposing federal income taxation upon revenues or other income of the general character to be derived by the Issuer or by any similar body under the Indenture or upon interest received on obligations of the general character of the Bonds, or of causing interest on obligations of the general character of the Bonds, to be includable in gross income for purposes of federal income taxation, and such legislation, in the Underwriter’s reasonable opinion, materially adversely affects the market price of the Bonds; or
(b) a tentative decision with respect to legislation shall be reached by a committee of the House of Representatives or the Senate of the Congress of the United States, or legislation shall be favorably reported or re-reported by such a committee or be introduced, by amendment or otherwise, in or be passed by the House of Representatives or the Senate, or recommended to the Congress of the United States for passage by the President of the United States, or be enacted or a decision by a federal court of the United States or the United States Tax Court shall have been rendered, or a ruling, release, order, circular, regulation or official statement by or on behalf of the United States Treasury Department, the Internal Revenue Service or other governmental agency shall have been made or proposed to be made having the purpose or effect, or any other action or event shall have occurred which has the purpose or effect, directly or indirectly, of adversely affecting the 998
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federal income tax consequences of owning the Bonds, including causing interest on the Bonds to be included in gross income for purposes of federal income taxation, or imposing federal income taxation upon revenues or other income of the general character to be derived by the Issuer under the Indenture or upon interest received on obligations of the general character of the Bonds, or the Bonds and also including adversely affecting the tax-exempt status of the Issuer under the Code, which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of or market for the Bonds; or
(c) legislation shall have been enacted, or actively considered for enactment with an effective date prior to the Closing, or a decision by a court of the United States shall have been rendered, the effect of which is that the Bonds, including any underlying obligations, or the Indenture, as the case may be, is not exempt from the registration, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or
(d) a stop order, ruling, regulation or official statement by the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall have been issued or made or any other event occurs, the effect of which is that the issuance, offering or sale of the Bonds, including any underlying obligations, or the execution and delivery of the Indenture as contemplated hereby or by the Final Official Statement, is or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or (e) any event shall have occurred or any information shall have become known to the Underwriter which causes the Underwriter to reasonably believe that the Final Official Statement as then amended or supplemented includes an untrue statement of a material fact, or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Issuer fails to amend or supplement such Final Official Statement to cure such omission or misstatement under Section 4(g);or (f) there shall have occurred any outbreak of hostilities or any national or international calamity or crisis, including a financial crisis, or the sovereign debt rating of the United States is downgraded by any major credit rating agency or a payment default occurs on United States Treasury obligations, the effect of which on the financial markets of the United States is such as, in the reasonable judgment of the Underwriter, would materially adversely affect the market for or market price of the Bonds; or
(g) there shall be in force a general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction, the effect of which on the financial markets of the United States is such as, in the reasonable judgment of the 999
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Underwriter, would materially adversely affect the market for or market price of the Bonds; or
(h) a general banking moratorium shall have been declared by federal, New York or State authorities; or
(i) any proceeding shall be pending or threatened by the Securities and Exchange Commission against the Issuer; or
(j) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange which adversely affects the Underwriter’s ability to sell the Bonds;
(k) the New York Stock Exchange or other national securities exchange, or any governmental authority, shall impose, as to the Bonds or obligations of the general character of the Bonds, any material 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; (l) an amendment to the federal or State constitution shall be enacted or action taken by any federal or State court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the Issuer, its property, income or securities (or interest thereon), the validity or enforceability of the Special Tax or the ability of the Issuer to issue the Bonds and levy the Special Tax as contemplated by the Indenture, the Rate and Method, the Resolution of Formation, the Ordinance and the Final Official Statement; or
(m) the entry of any order by a court of competent jurisdiction which enjoins or restrains the Issuer from issuing permits, licenses or entitlements within the District or which order, in the reasonable opinion of the Underwriter, otherwise materially and adversely affects development of the real property located in the District.

8. The obligation of the Underwriter to purchase the Bonds is subject (a) to the performance by the Issuer of its obligations to be performed by it hereunder at and prior to the Closing, (b) to the accuracy as of the date hereof and as of the time of the Closing of the representations and warranties of the Issuer herein, and (c) to the following conditions, including the delivery by the Issuer of such documents as are enumerated herein in form and substance satisfactory to the Underwriter:
(a) At the time of Closing, (i) the Final Official Statement and the Issuer Documents shall be in full force and effect and shall not have been amended, modified or supplemented except as may have been agreed to by the Underwriter, and (ii) the Issuer shall have duly adopted and there shall be in full force and effect such resolutions and ordinances (including, but not limited to, the Resolutions and Ordinance) as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated hereby.
(b) Receipt of the Bonds, executed by the Issuer and authenticated by the Trustee, at or prior to the Closing. The terms of the Bonds, when delivered, shall in all instances be as described in Final Official Statement.
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(c) At or prior to the Closing, the Underwriter shall receive the following documents in such number of counterparts as shall be mutually agreeable to the Underwriter and the Issuer:
(i) A final approving opinion of Bond Counsel dated the Closing Date in the form attached to the Final Official Statement.
(ii) A letter or letters of Bond Counsel addressed to the Underwriter, which includes a statement to the effect that Bond Counsel’s final approving opinion may be relied upon by the Underwriter to the same extent as if such opinion were addressed to the Underwriter, and further provides:
(A) the statements contained in the Final Official Statement under the captions “INTRODUCTION – Security and Sources of Payment for the Bonds,” “INTRODUCTION – Description of the Bonds,” “THE BONDS” (other than information relating to DTC and its book-entry only system and information in the section entitled “Debt Service Schedule”, as to which no opinion is expressed), “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” (except information
in the sections entitled “Special Taxes” and “Rate and Method of Apportionment” as to which no opinion need be expressed),” “TAX MATTERS,” and in Appendix F thereto, excluding any material that may be treated as included under such captions by reference to other documents, insofar as such statements expressly summarize certain provisions of the Indenture and Bond Counsel’s final opinion are accurate in all material respects;
(B) this Agreement and the District Continuing Disclosure Agreement have been duly executed and delivered by, and constitute valid and binding obligations of, the Issuer, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting enforcement of creditors’ rights in general and to the application of equitable principles if equitable remedies are sought; and
(C) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended. (iii) An opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, addressed to the Issuer and the Underwriter (“Disclosure Counsel”), to the effect that during the course of serving as Disclosure Counsel in connection with the issuance of the Bonds and without having undertaken to determine independently or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Preliminary Official Statement and the Final Official Statement, no information came to the attention of the attorneys in such firm rendering legal services in connection with the issuance of the Bonds that would lead them to believe that the Preliminary Official Statement as of its date and the date hereof and the Final Official Statement as of its date and the Closing Date, (excluding therefrom the financial statements, any financial or statistical data, or forecasts, charts, numbers, estimates, projections, assumptions or expressions of opinion 1001
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included in the Preliminary Official Statement and the Final Official Statement, information regarding DTC, and the appendices to the Preliminary Official Statement and the Final Official Statement, as to which no opinion need be expressed), contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(iv) A letter of Jones Hall, A Professional Law Corporation (“Underwriter’s Counsel”), dated the Closing Date, addressed to the Underwriter and in form and substance acceptable to the Underwriter.
(v) The Final Official Statement executed on behalf of the Issuer by a duly authorized officer.
(vi) Certified copies of the Resolutions and Ordinance. (vii) Evidence of recordation in the real property records of the County of San Bernardino of the Notice of Special Tax Lien, in the form required by the Act.
(viii) A certificate of DTA, Inc., Newport Beach, California (“Special Tax Consultant”), in form and substance as set forth in Exhibit B hereto, dated as of the Closing Date.
(ix) A certificate of the Issuer, in form and substance as set forth in Exhibit C hereto, dated as of the Closing Date.
(x) Evidence that Federal Form 8038 has been executed by the Issuer and will be filed with the Internal Revenue Service.
(xi) Executed copies of the Issuer Documents.
(xii) A non-arbitrage certificate executed by the Issuer in form and substance satisfactory to Bond Counsel.
(xiii) An opinion, dated the Closing Date and addressed to the Underwriter, of the City Attorney, as counsel to the Issuer, to the effect that:
(A) the Issuer is duly organized and validly existing as a community facilities district under and by virtue of the Constitution and laws of the State (including the Act);
(B) the City Council of the City, acting as legislative body of the Issuer, has the full legal right, power and authority to adopt the Resolutions and Ordinance;
(C) the Resolutions and Ordinance were duly adopted at meetings of the City Council, acting as legislative body of the Issuer which were called and held under law and with all public notice required by law and at which a quorum was present and acting throughout, and the 1002
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Resolutions and Ordinance are in full force and effect and have not been amended or repealed;
(D) to their best knowledge, based on reasonable due diligence, 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 with respect to which the Issuer has been served with process or threatened, in any way affecting the existence of the City, the Issuer or the titles of the Issuer’s officials to their respective offices, or seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds or the application of the proceeds thereof in accordance with the Indenture, or the collection or application of the Special Taxes to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Issuer Documents or any action of the Issuer contemplated by any of said documents, or in any way contesting the completeness or accuracy of the Preliminary Official Statement or of the Final Official Statement or the powers of the Issuer or its authority with respect to the Bonds, the Issuer Documents or any action on the part of the Issuer contemplated by any of said documents, wherein an unfavorable decision, ruling, or finding could materially adversely affect the validity or enforceability of the Bonds or the Issuer Documents;
(E) the execution and delivery of the Bonds and the Issuer Documents, and compliance with the provisions of each, will not conflict with or constitute a breach of or default under any loan agreement, note, ordinance, resolution, indenture, contract, agreement or other instrument of which the Issuer is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the ability of the Issuer to perform its obligations under the Bonds or the Issuer Documents; and
(F) all approvals, consents, authorization, 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 ability of the Issuer, to perform its obligations under the Bonds or the Issuer Documents, have been obtained or made, as the case may be, and are in full force and effect.
(xiv) In connection with printing and distribution of the Preliminary Official Statement, an executed certificate of the Issuer in the form attached hereto as Exhibit D.
(xv) A certificate of the Trustee in the form and substance attached hereto as Exhibit E, together with certifications as to other matters that Bond Counsel may reasonably require, and an opinion of its counsel in form and substance satisfactory to the Underwriter and Bond Counsel.
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(xvi) A certificate of CSG Advisors, Inc., the City’s municipal advisor (the “Municipal Advisor”), in the form and substance attached hereto as Exhibit F.
(xvii) A Letter of Representations of D.R. Horton Los Angeles Holding Company, Inc., a California corporation (the “Developer”) addressed to the District and the Underwriter in connection with the printing of the Preliminary Official Statement dated the date of the Preliminary Official Statement, in the form attached hereto as Exhibit G.
(xviii) A Closing Certificate of the Developer, dated the Closing Date, in the form attached hereto as Exhibit H.
(xix) (i) A negative assurance letter of counsel to the Developer addressed to the Underwriter and the District, dated the date of the Closing, in form and substance acceptable to the Underwriter and Bond Counsel; and (ii) an opinion of counsel to the Developer addressed to the Underwriter and the District, in form and substance acceptable to the Underwriter and Bond Counsel, to the effect that the Developer Continuing Disclosure Certificate in the form attached as an appendix to the Official Statement (the “Developer Continuing Disclosure Certificate”), has been duly authorized, executed and delivered by the Developer;
(xx) A certificate dated the Closing Date from Kitty Siino & Associates, Inc. (the “Appraiser”) addressed to the District and the Underwriter substantially to the effect that (i) the assumptions made in the appraisal of the taxable properties within the District, dated [Appraisal Date] (the “Appraisal Report”), was prepared by the Appraiser, (ii) the Appraisal Report fairly and accurately described, as of the stated date of value (the “Date of Value”), the market values of the properties in the District that are subject to the Special Taxes, (iii) the Appraiser is not aware of any event or act which occurred since the Date of Value which, in its opinion, would materially and adversely affect the conclusions as to the market value of the appraised property in the Community Facilities District, (iv) the Appraiser consents to the reproduction of the Appraisal Report as an appendix to the Preliminary Official Statement and the final Official Statement, each with respect to the Bonds, and to the references to the Appraiser and the Appraisal Report made in the Preliminary Official Statement and the Official Statement, (v) the Appraisal Report complies with the Appraisal Standards for Land-Secured Financings issued by the California Debt and Investment Advisory Commission dated July, 2004, (vi) a true and correct copy of the Appraisal Report is attached as an appendix to the Preliminary Official Statement and the Official Statement; and (vii) neither the Appraisal Report nor the information in the Preliminary Official Statement or the Official Statement referring to it contains any untrue statement of a material fact or omits 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; (xxi) A certificate dated the Closing Date from Empire Economics, Inc. addressed to the District and the Underwriter to the effect that the statements in the Official Statement provided by Empire Economics, Inc. and all information 1004
-13-
supplied by it for use in the Official Statement were as of the date of the Official Statement and are as of the Closing Date true and correct, 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; (xxii) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter, Disclosure Counsel or Bond Counsel may reasonably request to evidence compliance by the Issuer with legal requirements, the truth and accuracy, as of the time of Closing, of the respective representations of the Issuer herein contained and the due performance or satisfaction by the Issuer at or prior to such time of all agreements then to be performed and all conditions then to be satisfied.

If the Issuer is unable to satisfy the conditions to the obligations of the Underwriter contained in this Agreement, or if the obligations of the Underwriter to purchase and accept delivery of the Bonds shall be terminated for any reason permitted by this Agreement, this Agreement shall terminate and neither the Underwriter nor the Issuer shall be under further obligation hereunder; except that the respective obligations to pay expenses, as provided in Section 11 shall continue in full force and effect.

9. The obligations of the Issuer to issue and deliver the Bonds on the Closing Date is subject, at the option of the Issuer, to the performance by the Underwriter of its obligations to be performed hereunder at or prior to the Closing Date.

10. All representations, warranties and agreements of the Issuer hereunder shall remain operative and in full force and effect, regardless of any investigations made by or on behalf of the Underwriter or the Issuer and shall survive the Closing.

11. The Issuer shall pay or cause to be paid all reasonable expenses incident to the performance of its obligations under this Agreement, including, but not limited to, delivery of the Bonds, costs of printing the Bonds, the Preliminary Official Statement and the Final Official Statement, any amendment or supplement to the Preliminary Official Statement or Final Official Statement and this Agreement, fees and disbursements of Bond Counsel and Disclosure Counsel, any financial advisor and other consultants engaged by the Issuer, including the fees and expenses of the special tax consultant and fees of the Trustee.

The Underwriter shall pay the California Debt Investment and Advisory Commission fee, all advertising expenses in connection with the public offering of the Bonds, and all other expenses incurred by it in connection with its public offering and distribution of the Bonds, including fees and expenses of its counsel, meals, transportation, and lodging (but not entertainment expenses), and fees and disbursements in connection with the qualification of the Bonds for sale under the securities or “Blue Sky” laws of the various jurisdictions and the preparation of “Blue Sky” memoranda.

12. Any notice or other communication to be given to the Issuer under this Agreement may be given by delivering the same in writing at its address set forth above, and any notice or other communication to be given to the Underwriter under this Agreement may be given by delivering the same in writing to the following: Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, California 94104, Attention: Sara Oberlies Brown.

13. This Agreement is made solely for the benefit of the Issuer and the Underwriter (including the successors or assigns of the Underwriter) and no other person, including any purchaser of the Bonds, shall acquire or have any right hereunder or by virtue hereof. This Agreement supersedes and replaces all 1005
-14-
prior negotiations, agreements and understanding among the parties hereto in relation to the sale of the Bonds by the Issuer.

14. Establishment of Issue Price.
(a) The Underwriter agrees to assist the Issuer in establishing the issue price of the Bonds and shall execute and deliver to the Issuer 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 Issuer 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 actions to be taken by Issuer under this section to establish the issue price of the Bonds may be taken on behalf of the District by the Municipal Advisor and any notice or report to be provided to the District may be provided to the District’s Municipal Advisor.
(b) Except as otherwise set forth in Exhibit A attached hereto, the Issuer will treat the first price at which 10% of each maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity. At or promptly after the execution of this Agreement, the Underwriter shall report to the Issuer the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Issuer the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, 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, provided that the Underwriter’s reporting obligation after the date of the Closing may be at reasonable periodic intervals or otherwise upon request of the Issuer or Bond Counsel. For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. For clarity, and notwithstanding any other condition to Closing set forth in this Agreement, the sale of 10% of each maturity of the Bonds to the public prior to the Closing Date shall not be a condition to Closing. (c) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also sets forth, as of the date of this Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the Issuer and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Issuer 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:
(1) the close of the fifth (5th) business day after the sale date; or (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 will advise the Issuer promptly after the close of the fifth (5th) business day after the sale date whether it has sold 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.
1006
-15-
(d) The Underwriter confirms that:
(i) any selling group agreement and any third-party 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 brokerdealer that is a party to such third-party distribution agreement, as applicable:
(A)(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that the reporting obligation after the date of the Closing may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offeringprice rule, if applicable, in each case if and for so long as directed by the Underwriter, (B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(ii) any selling group 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 that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that the reporting obligation after the date of the Closing may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.
(e) The Issuer acknowledges that, in making the representations set forth in this subsection, the Underwriter will rely on (i) in the event 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 requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offeringprice rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Issuer 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 third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the holdthe-offering-price rule if applicable to the Bonds. 1007
-16-
(f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party, (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Issuer (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 third-party distribution agreement participating in the initial sale of the Bonds to the public), (iii) 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) more than 50% 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), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% 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
(iv) “sale date” means the date of execution of this Agreement by all parties.

15. In the event that any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, such holding will not invalidate or render unenforceable any other provision of this Agreement.

16. This Agreement may be executed in any number of counterparts, all of which taken together will constitute one agreement, and any of the parties hereto may execute the Agreement by signing any such counterpart.
[Signature Follows on Next Page]
1008
S-1

17. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

Very truly yours,

STIFEL, NICOLAUS & COMPANY,
INCORPORATED, as Underwriter
By:

Authorized Officer
Accepted:

CITY OF FONTANA COMMUNITY
FACILITIES DISTRICT NO. 106
(MOUNTAINVIEW)
By:

Authorized Officer
Time of Execution:
1009
A-1

EXHIBIT A
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10%
Test Not
Satisfied
Subject to
Hold-TheOfferingPrice Rule
_________________
T: Term Bond.

C: Priced to optional redemption date of September 1, 20__, at ___%. * At the time of execution of this Agreement and assuming orders are confirmed immediately after the execution of this Agreement.
1010
A-2

REDEMPTION TERMS
Optional Redemption. The Bonds maturing on and after September 1, 20__ shall be subject to optional redemption, in whole, or in part in Authorized Denominations, on any date on or after September 1, 20__, from any source of available funds, at the following respective Redemption Prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Price
September 1, 20__ through August 31, 20__ 103%
September 1, 20__ through August 31, 20__ 102
September 1, 20__ through August 31, 20__ 101
September 1, 20__ and thereafter 100
Mandatory Redemption from Special Tax Prepayments. The Bonds shall be subject to mandatory redemption, in whole, or in part in Authorized Denominations, on any Interest Payment Date, from and to the extent of prepaid Special Taxes required to be applied thereto pursuant to the Indenture and any amount required to be applied thereto pursuant to the Indenture, at the following respective Redemption Prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Price
Any Interest Payment Date through March 1,
20__
103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and thereafter 100
Mandatory Sinking Fund Redemption. The Bonds maturing September 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on September 1 in each year, commencing September 1, 20__, at a Redemption Price equal to the principal amount of the Bonds maturing September 1, 20__ to be redeemed, without premium, plus accrued interest thereon to the date of redemption, in the aggregate respective principal amounts in the respective years as follows:

Term Bond maturing on September 1, 20__
Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed
(maturity)
1011
A-3
Term Bond maturing on September 1, 20__
Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed
(maturity)
1012
B-1

EXHIBIT B
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022

CERTIFICATE OF SPECIAL TAX CONSULTANT
DTA, Inc. (“Special Tax Consultant”), Newport Beach, California, was retained as Special Tax Consultant and assisted in the preparation of and has reviewed the Rate and Method of Apportionment of Special Tax (the “Rate and Method”) set forth in Appendix A to the Preliminary Official Statement dated [POS Date] (the “Preliminary Official Statement”) and the Official Statement dated [Pricing Date] (the “Official Statement”) relating to the above-referenced bonds (the “Bonds”) being issued by City of Fontana Community Facilities District No. 106 (Mountainview) (the “Issuer”). Based upon the Special Tax Consultant’s review of the Preliminary Official Statement, the Official Statement and such other documents as it deems relevant in the circumstances, the Special Tax Consultant hereby certifies that the Special Tax, if collected in the maximum amounts permitted under the Rate and Method, would generate at least 110% of the gross annual debt service on the Bonds plus estimated Administrative Expenses, provided that the annual debt service figures on the attached debt service schedule, which were relied upon by Special Tax Consultant, are substantially true and correct.

Although the Special Tax if collected in the maximum amounts under the Rate and Method will generate at least 110% of the gross annual debt service payable with respect to the Bonds each year (net of estimated Administrative Expenses), no representation is made herein as to actual amounts that will be collected in future years.

All information with respect to the Rate and Method and all other information sourced to the Special Tax Consultant in the Preliminary Official Statement as of its date and [Pricing Date], and the Official Statement as of its date and the date hereof is true and correct, and a true and correct copy of the Rate and Method is attached to the Preliminary Official Statement and the Official Statement as Appendix A.

Dated: [Closing Date]
DTA, INC.

By:
1013
C-1

EXHIBIT C
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022

ISSUER CLOSING CERTIFICATE
I, the undersigned, hereby certify that I am the ____________ of the City of Fontana (the “City”), the City Council of which is the legislative body for City of Fontana Community Facilities District No. 106 (Mountainview) (the “Issuer”), a community facilities district duly organized and existing under the laws of the State of California (the “State”) and that as such, I am authorized to execute this Certificate on behalf of the Issuer in connection with the issuance of the above-referenced bonds (the “Bonds”).

I hereby further certify on behalf of the Issuer that:
(A) to my best knowledge, after reasonable inquiry, no litigation is pending with respect to which the Issuer has been served with process or threatened (1) to restrain or enjoin the issuance of any of the Bonds or the collection of Net Special Tax Revenues pledged under the Indenture; (2) in any way contesting or affecting the authority for the issuance of the Bonds or the validity or enforceability of the Bonds or the Issuer Documents; or (3) in any way contesting the existence or powers of the Issuer; (B) the representations and warranties made by the Issuer in the Bond Purchase Agreement dated [Pricing Date], between the Issuer and Stifel, Nicolaus & Company, Incorporated (the “Agreement”) are true and correct in all material respects on the Closing Date, with the same effect as if made on the Closing Date;
(C) no event affecting the Issuer has occurred since the date of the Final Official Statement that, as of the Closing Date, would cause any statement or information contained in the Final Official Statement under the caption “ABSENCE OF LITIGATION” to be incorrect or incomplete in any material respect or would cause the information contained under such caption in the Final Official Statement to contain an untrue statement of a material fact or omit to state a material fact necessary in order to make such statements therein, in the light of the circumstances under which they were made, not misleading;
(D) as of the date hereof, the Issuer Documents are in full force and effect in accordance with their terms and have not been amended, modified or supplemented except in such case as may have been agreed to by the Underwriter; and
1014
C-2
(E) the Issuer has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the Issuer Documents prior to issuance of the Bonds.

Capitalized terms not defined herein shall have the same meaning set forth in the Agreement.

IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date herein below set forth.

Dated: [Closing Date]

CITY OF FONTANA COMMUNITY
FACILITIES DISTRICT NO. 106
(MOUNTAINVIEW)
By:

Name:

Title:
1015
D-1

EXHIBIT D

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022
I, the undersigned, hereby certify that I am the _____________ of the City of Fontana (the “City”), the City Council of which is the legislative body for City of Fontana Community Facilities District No. 106 (Mountainview) (the “Issuer”), a community facilities district duly organized and existing under the laws of the State of California (the “State”) and that as such, I am authorized to execute this Certificate on behalf of the Issuer in connection with the issuance of the above-referenced bonds (the “Bonds”).

I further hereby certify on behalf of the Issuer as follows:
(1) This Certificate is delivered in connection with the offering and sale of the Bonds in order to enable the underwriter of the Bonds to comply with Rule 15c2-12 of the Securities Exchange Commission (“Rule 15c2-12”). (2) In connection with the offering and sale of the Bonds, there has been prepared a Preliminary Official Statement, setting forth information concerning the Bonds, the City and the Issuer (the “Preliminary Official Statement”).
(3) As used herein, “Permitted Omissions” shall mean the offering price(s), interest rate(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all with respect to the Bonds. (4) The Preliminary Official Statement is, except for the Permitted Omissions, deemed final within the meaning of Rule 15c2-12.

IN WITNESS WHEREOF, I have hereunto set my hand as of __________, 2022.

CITY OF FONTANA COMMUNITY
FACILITIES DISTRICT NO. 106
(MOUNTAINVIEW)
By:

Name:

Title:
1016
E-1

EXHIBIT E
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022
CERTIFICATE OF U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION The undersigned hereby states and certifies that the undersigned is an authorized officer of U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) under that certain Indenture, dated as of August 1, 2022 (the “Indenture”), between City of Fontana Community Facilities District No. 106 (Mountainview) (the “Issuer”) and the Trustee, relating to the captioned bonds (the “Bonds”) and as such, is familiar with the following facts and is authorized and qualified to certify the following facts on behalf of the Trustee:
(1) The Trustee is duly organized and existing as a national banking association under the laws of the United States of America, having the full power and authority to enter into and perform its duties under the Indenture and the District Continuing Disclosure Agreement.
(2) The Indenture and the District Continuing Disclosure Agreement have been duly authorized, executed and delivered by the Trustee and the Bonds have been authenticated by a duly authorized representative of the Trustee in accordance with the Indenture.
(3) There is no action, suit, proceeding or investigation, at law or in equity, before or by any court or governmental agency, public board or body pending against the Trustee or threatened against the Trustee which in the reasonable judgment of the Trustee would affect the existence of the Trustee or in any way contesting or affecting the validity or enforceability of the Indenture or the District Continuing Disclosure Agreement or contesting the powers of the Trustee or its authority to enter into and perform its obligation under the Indenture or the District Continuing Disclosure Agreement.

Capitalized terms not defined herein have the same meaning as is set forth in the Bond Purchase Agreement relating to the Bonds.

Dated: [Closing Date] U.S. BANK TRUST COMPANY,

NATIONAL ASSOCIATION,
as Trustee
By
Authorized Officer
1017
F-1

EXHIBIT F
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022

CERTIFICATE OF MUNICIPAL ADVISOR
The undersigned hereby states and certifies as follows:
(1) The undersigned is an authorized officer of CSG Advisors, Inc., which has acted as municipal advisor (the “Municipal Advisor”) to City of Fontana Community Facilities District No. 106 (Mountainview) (the “Issuer”) in connection with the issuance of the above-referenced bonds (the “Bonds”), and as such, is familiar with the facts herein certified and is authorized and qualified to certify the same.
(2) The Municipal Advisor has participated in the preparation of the Preliminary Official Statement dated [POS Date] (the “Preliminary Official Statement”) and the final Official Statement dated [Pricing Date] (the “Official Statement”) relating to the Bonds. (3) Nothing has come to the attention of the Municipal Advisor which would lead it to believe that the Preliminary Official Statement or the Official Statement contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.

Dated: [Closing Date] CSG ADVISORS, INC.,
as Municipal Advisor
By:

Authorized Officer
1018
G-1

EXHIBIT G

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022

LETTER OF REPRESENTATIONS
(D.R. Horton Los Angeles Holding Company, Inc.)
[POS Date]
City of Fontana Community Facilities
District No. 106 (Mountainview)
8353 Sierra Avenue
Fontana, California 92335
Stifel, Nicolaus & Company, Incorporated
One Montgomery Street, 35th Floor
San Francisco, California 94104
Reference is made to the City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds, Series 2022 (the “Bonds”) and to the Bond Purchase Agreement to be entered into in connection therewith (the “Bond Purchase Agreement”). This Letter of Representations (D.R. Horton Los Angeles Holding Company, Inc.) (the “Letter of Representations”) is delivered pursuant to and in satisfaction of Section 8(c)(xvii) of the Bond Purchase Agreement.

Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond 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 D.R. Horton Los Angeles Holding Company, Inc., a California corporation (the “Developer”), and the undersigned, on behalf of the Developer, further certifies as follows:

1. The Developer is duly organized and validly existing under the laws of the State of California, and has all requisite right, power and authority (i) to execute and deliver this Letter of Representations, and (ii) to develop its property in the City of Fontana Community Facilities District No. 106 (Mountainview) (the “Community Facilities District”) as described in the Preliminary Official Statement.

2. As set forth in the Preliminary Official Statement, title to a certain portion of the property within the Community Facilities District is held in the name of the Developer (herein, the “Property”). The undersigned, on behalf of the Developer, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Developer’s current expectation is that the Developer shall remain the party responsible for the construction and sale of homes within the Property. Except as disclosed in the Preliminary Official Statement, the Developer has not entered into an agreement for development or management of the Property by any other entity, except such subcontracts, consultant 1019
G-2
agreements and similar agreements for land development activities associated with the Developer’s development plan as are entered into in the ordinary course of business.

3. 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 Undersigned1, is pending against any current Affiliate2(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 (a) to restrain or enjoin the collection of special taxes levied on the Property by the Community Facilities District (the “Special Taxes”) or other sums pledged or to be pledged to pay the principal of and interest on the Bonds (e.g., the reserve fund established under the Indenture (herein, the “Reserve Fund”)), (b) to restrain or enjoin the development of the Property as described in the Preliminary Official Statement, (c) to materially adversely affect the ability of the Developer to perform its obligations under the Continuing Disclosure Certificate (as hereinafter defined), (d) in any way contesting or affecting the validity of the Special Taxes, or (e) which is reasonably likely to materially and adversely affect the Developer’s ability to develop and sell the Property as described in the Preliminary Official Statement or to pay the Special Taxes due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.

4. As of the date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information contained therein solely with respect to the Developer, its Affiliates, the proposed development of the Property, 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 1 “Actual Knowledge of the Undersigned” means, as of the date of this Letter of Representations, the actual (as opposed to constructive) knowledge that the individual signing on behalf of the Developer currently has or has obtained through (i) interviews with such current officers and responsible employees of the Developer and its Affiliates as the undersigned has determined are reasonably 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) review of documents that were reasonably available to the undersigned and which the undersigned has reasonably deemed necessary for the undersigned 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. Individuals who are no longer employees of the Developer and its Affiliates have not been contacted. 2 “Affiliate” 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 data, concerning such Person is material to potential investors in their evaluation of the Community Facilities District and investment decision regarding the Bonds (i.e., information relevant to (a) the Developer’s development plans with respect to the Property and ability to pay its Special Taxes 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 the Property as described in the Preliminary Official Statement or to pay its Special Taxes on the Property (to the extent the responsibility of the Developer). “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. 1020
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Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) as set forth under the sections of the Preliminary Official Statement captioned “INTRODUCTION – The District” (first two paragraphs only), “PROPERTY OWNERSHIP AND THE DEVELOPMENT” and “CONTINUING DISCLOSURE – The Developer” (but in all cases under all captions excluding therefrom (i) information regarding the Appraisal Report (as defined herein), market value ratios and annual special tax ratios, and (ii) 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.

5. Except as described in the Preliminary Official Statement, there are no material loans outstanding and unpaid and no material lines of credit of the Developer or its Affiliates, that are secured by an interest in the Property. Neither the Developer nor, to the Actual Knowledge of the Undersigned, any of its Affiliates is currently in material default on any loans, lines of credit or other obligation related to the development of the Property or any other project which default is reasonably likely to materially and adversely affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Taxes due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.

6. To the Actual Knowledge of the Undersigned, other than as disclosed in the Preliminary Official Statement, the Developer is not aware that any of the Property has a current liability with respect to the presence of a substance presently classified as hazardous under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 or applicable California law or is adversely affected by the presence of endangered or threatened species or habitat for endangered or threatened species.

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 overturn the formation of the Community Facilities District, to challenge the adoption of the ordinance of the Community Facilities District levying Special Taxes within the Community Facilities District, to invalidate the Community Facilities District 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 notices of special tax lien relating thereto. The foregoing covenant shall not prevent the Developer in any way from bringing any other action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body including, without limitation, (a) an action or suit contending that the Special Taxes have not been levied in accordance with the methodologies contained in the Rate and Method of Apportionment of Special Taxes pursuant to which Special Taxes are levied, (b) an action or suit with respect to the application or use of the Special Taxes levied and collected or (c) an action or suit to enforce the obligations of the City and/or the Community Facilities District under the Resolutions and Ordinance, the Indenture, or any other agreements among the Developer, an Affiliate, the City and/or the Community Facilities District or to which the Developer or an Affiliate is a party or beneficiary.
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8. The Developer consents to the issuance of the Bonds. The Developer acknowledges and agrees that the proceeds of the Bonds will be used as described in the Preliminary Official Statement.

9. The Developer intends to comply with the provision of the Mello-Roos Community Facilities 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.

10. 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 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.

11. The Developer agrees to execute at Closing the continuing disclosure certificate substantially in the form attached as Appendix H to the Preliminary Official Statement (the “Continuing Disclosure Certificate”), with such additional changes as may be agreed to by the Developer and the Underwriter. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the Developer is not aware of any material failures by it or any entity under managerial control of the Developer to comply in all material respects with previous continuing disclosure undertakings in a written certificate or agreement executed by it or an entity under the managerial control of the Developer to provide periodic continuing disclosure reports or notices of material events respecting securities offerings in Southern California within the past five years.

12. To the Actual Knowledge of the Undersigned, execution and delivery of the Continuing Disclosure Certificate, and the performance by the Developer of its obligations under the Continuing Disclosure Certificate, will not conflict with or constitute a breach of or default under any loans, lines of credit, agreements, or other contractual or financial obligations of the Developer, or any applicable law, regulation, judgment or decree.

13. 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 Affiliate of the Developer (with proper service of process 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 debt 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 which is reasonably likely to have a materially adverse impact on the ability of the Developer to develop the Property as described in the Preliminary Official Statement, or to pay the Special Taxes or ad valorem tax obligations with respect to the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency.

14. 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 1022
G-5
taxes, special assessments or special taxes. However, to the Actual Knowledge of the Undersigned, during the last five years, neither the Developer nor any current Affiliate has, during the period of its ownership, been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property included within the boundaries of a community facilities district or an assessment district in southern 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 against the delinquent Developer or such Affiliate in a court of law.

15. The Developer has not filed for the reassessment of the assessed value of any portions of the Property, other than in connection with the sale of homes to individual homebuyers.

16. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities by and among the Developer, its Affiliates or any contractors working on the development of the Property which is reasonably likely to materially and adversely affect the Developer’s development of the Property as described in the Preliminary Official Statement, the performance of the Developer’s obligations under the Continuing Disclosure Certificate, or the payment of the Special Taxes due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.

17. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real property, including, but not limited to, the risks described in the Preliminary Official Statement under the section entitled “SPECIAL RISK FACTORS,” the Developer presently anticipates that it will have sufficient funds to develop the Property as described in the Preliminary Official Statement and to pay Special Taxes levied against the Property (to the extent the responsibility of the Developer) prior to delinquency and does not anticipate that the City or the Community Facilities District will be required to resort to a draw on the Reserve Fund for payment of principal of or interest on the Bonds due to the Developer’s nonpayment of Special Taxes. However, neither the Developer nor any of its Affiliates are obligated to make any additional capital contribution or loan to the Developer at any time, and the Developer reserves the right to change its development plans and financing plans for the Property at any time without notice.

18. An appraisal of the taxable properties within the Community Facilities District, dated [Appraisal Date] (the “Appraisal Report”), was prepared by Kitty Siino & Associates, Inc. (the “Appraiser”). The Appraisal Report estimates the market value of the taxable properties within the Community Facilities District as of May 1, 2022 (the “Date of Value”). To the Actual Knowledge of the Undersigned, all information submitted by, or on behalf of and authorized by, the Developer to the Appraiser and contained in the sections of the Appraisal Report highlighted in yellow or circled in Exhibit A attached hereto, was true and correct in all material respects as of the Date of Value.

19. Solely as to the limited information described in the sections of the Preliminary Official Statement indicated in Paragraph 4 herein (and subject to the limitations and exclusions set forth in Paragraph 4), the Developer agrees to indemnify and hold harmless, to the extent permitted by law, the City, the Community Facilities District, and their officials and employees, and each Person, if any, who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, 1023
G-6
as amended (each, an “Indemnified Party” and, collectively, the “Indemnified Parties”), against any and all losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may become subject under any statute or at law or in equity and shall reimburse any such Indemnified Party for any reasonable legal or other expense incurred by it in connection with investigating any such claim against it and defending any such action, insofar as and solely to the extent such losses, claims, damages, liabilities or actions, or legal or other expenses, arise out of or are based upon any untrue statement or alleged untrue statement of a material fact or the omission or alleged omission of a material fact by the Developer in the above-referenced information in the Preliminary Official Statement, as of its date, necessary to make the statements made by the Developer contained therein, in light of the circumstances under which they were made not misleading. This indemnity provision shall not be construed as a limitation on any other liability which the Developer may otherwise have to any Indemnified Party, provided that in no event shall the Developer be obligated for double indemnification, or for the negligence or willful misconduct of an Indemnified Party.

If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Indemnified Party in respect of which indemnification may be sought pursuant to the above paragraph, such Indemnified Party shall promptly notify the Developer in writing; provided that the failure to notify the Developer shall not relieve it from any liability that it may have hereunder except to the extent that it has been materially prejudiced by such failure; and provided, further, that the failure to notify the Developer shall not relieve it from any liability that it may have to an Indemnified Party otherwise than under the above paragraph unless such liability was also conditioned upon such notice. If any such proceeding shall be brought or asserted against an Indemnified Party and it shall have notified the Developer thereof, the Developer shall retain counsel reasonably satisfactory to the Indemnified Party and approved thereby to represent the Indemnified Party in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Developer and the Indemnified Party shall have mutually agreed to the contrary; (ii) the Developer has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Party; (iii) the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Developer such that a material conflict of interest exists for such counsel; or (iv) the named parties in any such proceeding (including any impleaded parties) include the Developer and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. It is understood and agreed that the Developer shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Parties, and that all such fees and expenses, to the extent reasonable, shall be paid or reimbursed as they are incurred. Any such separate firm shall be designated in writing by such Indemnified Parties. The Developer shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Developer agrees to indemnify each Indemnified Party from and against any loss or liability by reason of such settlement or judgment to the extent set forth above. If the Developer shall, after receiving notice of the indemnification obligation of the Developer and within a period of time necessary to preserve any and all defenses to any claim asserted, fails to assume the defense or to retain counsel for that purpose satisfactory to the Indemnified Party, the Indemnified Party shall have 1024
G-7
the right, but not the obligation, to undertake the defense of, and to compromise or settle the claim or other matter on behalf of, for the account of and at the risk of, the Developer. The Developer shall not, without the written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is a party and indemnification could have been sought hereunder by such Indemnified Party, unless such settlement (x) includes an unconditional release of such Indemnified Party, in form and substance reasonably satisfactory to such Indemnified Party, from all liability on claims that are the subject matter of such proceeding , and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party.

20. If between the date hereof and the Closing Date any event relating to or affecting the Developer, its Affiliates, ownership of the Property, the proposed development 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, other loans of such Affiliates) shall occur of which the undersigned has actual knowledge which would cause the information under the sections of the Preliminary Official Statement indicated in Paragraph 4 hereof (and subject to the limitations and exclusions contained in Paragraph 4 hereof), 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 Developer shall notify the City, the Community Facilities District and the Underwriter and if in the opinion of counsel to the City 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 City and the Community Facilities District in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance satisfactory to counsel to the City, the Community Facilities District and to the Underwriter.

21. 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 H to the Bond Purchase Agreement. If any event related to or affecting the Developer, its Affiliates, or the ownership, development, or sale of the Property occurs, as a result of which it is necessary to modify the Closing Certificate, the Developer agrees to deliver a new Closing Certificate revised to reflect such event.

22. On behalf of the Developer, I have reviewed the contents of this Letter of Representations and have had the opportunity to discuss with counsel to the Developer the meaning of the contents of this Letter of Representations. The Developer acknowledges and understands that a variety of state and federal securities laws, including, but not limited to the Securities Act of 1933, as amended, and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, as amended, may apply to the Developer and that under some circumstances, certification as to the matters set forth in this Letter of Representations, without additional disclosures or other action, may not fully discharge all duties and obligations of the Developer under such securities laws.
[Remainder of Page Intentionally Left Blank; Signature Page Follows] 1025
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The undersigned has executed this Letter of Representations solely in his or her capacity as an authorized officer or representative of the Developer and he or she will have no personal liability arising from or relating to this Letter of Representations. Any liability arising from or relating to this Letter of Representations may only be asserted against the Developer.

D.R. HORTON LOS ANGELES HOLDING
COMPANY, INC., a California corporation
By:

Name:

Title:
[SIGNATURE PAGE TO LETTER OF REPRESENTATIONS OF
D.R. HORTON LOS ANGELES HOLDING COMPANY, INC.]
1026
G-9

EXHIBIT A
TO

LETTER OF REPRESENTATIONS
(D.R. Horton Los Angeles Holding Company, Inc.)

DEVELOPER PROVIDED INFORMATION IN APPRAISAL REPORT
See attached.
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H-1

EXHIBIT H
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022

CLOSING CERTIFICATE
(D.R. Horton Los Angeles Holding Company, Inc.)
[Closing Date]
City of Fontana Community Facilities
District No. 106 (Mountainview)
8353 Sierra Avenue
Fontana, California 92335
Stifel, Nicolaus & Company, Incorporated
One Montgomery Street, 35th Floor
San Francisco, California 94104
Ladies and Gentlemen:

Reference is made to the above-captioned bonds (the “Bonds”) and to the Bond Purchase Agreement, dated [Pricing Date] (the “Bond Purchase Agreement”), entered into in connection therewith. This Closing Certificate (D.R. Horton Los Angeles Holding Company, Inc.) (the “Closing Certificate”) is delivered pursuant to Section 8(c)(xviii) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Letter of Representations (D.R. Horton Los Angeles Holding Company, Inc.), dated [POS Date] (the “Letter of Representations”), delivered by D.R. Horton Los Angeles Holding Company, Inc., a California corporation (the “Developer”).

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 the Developer, and the undersigned, on behalf of the Developer, further certifies as follows:

1. The Developer has received the final Official Statement dated [Pricing Date] relating to the Bonds (the “Official Statement”). To the Actual Knowledge of the Undersigned, each statement, representation and warranty made in the Letter of Representations is true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof, except that all references therein to the Preliminary Official Statement shall be deemed to be references to the Official Statement.

2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement affecting the statements and information described in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations) relating to the Developer, its Affiliates, the proposed development of the Property, 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, other loans 1028
H-2
of its Affiliates), which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make such statements and information contained in the Official Statement not misleading in any material respect.

3. For the period through 25 days after the “End of the Underwriting Period” as defined in the Bond Purchase Agreement (provided the Developer may assume the End of the Underwriting Period is the Closing Date (as defined in the Bond Purchase Agreement), unless it receives written notice from the Underwriter that the End of the Underwriting Period is later than the Closing Date), if any event relating to or affecting the Developer, its Affiliates, the proposed development of the Property, 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, other loans of its Affiliates) shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City or the Community Facilities District, to amend or supplement the Official Statement in order to make the information under the sections of the Official Statement indicated in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations) not misleading in the light of the circumstances under which they were made, the Developer shall reasonably cooperate with the City, the Community Facilities District and the Underwriter in the preparation and publication of a supplement or amendment to the information under the sections of the Official Statement indicated in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations), in form and substance satisfactory to the Underwriter and counsel to the City and the Community Facilities District which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. [Remainder of Page Intentionally Left Blank; Signature Page Follows] 1029
H-3
The undersigned has executed this Closing Certificate solely in his or her capacity as an authorized officer or representative of the Developer and he or she will have no personal liability arising from or relating to this Closing Certificate. Any liability arising from or relating to this Closing Certificate may only be asserted against the Developer.

D.R. HORTON LOS ANGELES HOLDING
COMPANY, INC., a California corporation
By:

Name:

Title:
1030
E-1

EXHIBIT I

FORM OF ISSUE PRICE CERTIFICATION
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022

ISSUE PRICE CERTIFICATE
The undersigned, Stifel, Nicolaus & Company, Incorporated (“Stifel”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).

1. Bond Purchase Agreement. On [Pricing Date] (the “Sale Date”), Stifel and the Issuer executed a Bond Purchase Agreement (the “Purchase Agreement”) in connection with the sale of the Bonds. Stifel has not modified the Purchase Agreement since its execution on the Sale Date.

2. Price.
(a) As of the date of this Certificate, for each [Maturity] [[of the General Rule Maturities] of the Bonds, the first price at which at least 10% of each such Maturity of the Bonds was sold to the Public (the “10% Test”) was the respective price for such Maturity listed in Schedule A attached hereto.
(b) [Stifel offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(c) As set forth in the Bond Purchase Agreement, Stifel has agreed in writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-theoffering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold-theOffering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.] (d) [** With respect to each of the General Rule Maturities of the Bonds:
(1) As of the date of this Certificate, Stifel has not sold at least 10% of the Bonds of these Maturities at any single price.
1031
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(2) As of the date of this Certificate, Stifel reasonably expects that the first sale to the Public of Bonds of these Maturities will be at or below the respective price or prices listed on the attached Schedule A as the “Reasonably Expected Sale Prices for Undersold Maturities.”
(3) Stifel will provide actual sales information (substantially similar to the information contained on Schedule B) as to the price at which the first 10% of each such Maturity (i.e., the Undersold Maturity or Maturities) is sold to the Public. (4) On the date the 10% Test is satisfied with respect to all Maturities of the Bonds, Stifel will execute a supplemental certificate substantially in the form attached hereto as Schedule C with respect to any remaining Maturities for which the 10% Test has not been satisfied as of the Closing Date.**]

2. Defined Terms.
(a) “General Rule Maturities” means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) “Hold-the-Offering-Price Maturities” means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) “Holding Period” means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which Stifel has sold at least 10% of such Hold-theOffering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.
(d) “Issuer” means the City of Fontana Community Facilities District No. 106 (Mountainview).
(e) “Maturity” means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(f) “Public” means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.

The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) “Underwriter” means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead Underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph 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. Reserve Fund. The funding of the Reserve Fund under the Indenture, and as provided in the Tax Certificate, is reasonably required, was a vital factor in marketing the Bonds, facilitated the 1032
E-3
marketing of the Bonds at an interest rate comparable to that of bonds and other tax-exempt obligations of a similar type, and is not in excess of the amount necessary for such purpose.

4. The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate of the Issuer dated [Closing Date] and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Managing Director
By:

Director
Dated: [Closing Date]
1033
I-4

SCHEDULE A
TO

ISSUE PRICE CERTIFICATE
[Schedules to be updated at pricing in the event there are Hold-the-Offering-PriceMaturities] Actual Sales Information as of Closing Date
Maturity/CUSIP Coupon Date Sold Time Sold Par Amount Sale Price [**Reasonably Expected Sales Prices for Undersold Maturities as of Closing Date Maturity/CUS
IP
Coupon Par Amount Offering
Prices
**]
1034
I-5
[**SCHEDULE B
TO

ISSUE PRICE CERTIFICATE
Actual Sales for Undersold Maturities as of the Closing Date Maturity/CUSIP Date Sold Time Sold Par Amount Sale Price **]
1035
I-6
[**SCHEDULE C
TO

ISSUE PRICE CERTIFICATE

SUPPLEMENTAL ISSUE PRICE CERTIFICATE OF UNDERWRITER
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022
The undersigned, Stifel, Nicolaus & Company, Incorporated (“Stifel”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).

1. Issue Price.
(a) Stifel sold at least 10% of the _______ Maturities of the Bonds to the Public at the price or prices shown on the Issue Price Certificate dated as of the Closing Date (the “10% Test”). With respect to each of the ______ Maturities of the Bonds, Stifel had not satisfied the 10% Test as of the Closing Date (the “Undersold Maturities”). (b) As of the date of this Supplemental Certificate, Stifel has satisfied the 10% Test with respect to the Undersold Maturities. The first price or prices at which at least 10% of each such Undersold Maturity was sold to the Public are the respective prices listed on Exhibit A attached hereto.

2. Defined Terms.
(a) “Issuer” means the City of Fontana Community Facilities District No. 106 (Mountainview).
(b) “Maturity” means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(c) “Public” means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.

The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) “Underwriter” means (1) any person that agrees pursuant to a written contract with the Issuer (or with the lead Underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (2) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (1) of this paragraph 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).
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3. The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate of the Issuer dated [Closing Date] and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Managing Director
By:

Director
Dated:
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EXHIBIT A
TO
SUPPLEMENTAL ISSUE PRICE CERTIFICATE**]
1038
Stradling Yocca Carlson & Rauth
Draft dated June 27, 2022
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This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

PRELIMINARY OFFICIAL STATEMENT DATED JULY __, 2022
NEW ISSUE – BOOK-ENTRY-ONLY NO RATING
In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the District, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds. See “TAX MATTERS” herein.
$6,785,000*

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022
Dated: Date of Delivery Due: September 1, as shown on the inside cover page The City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds, Series 2022 (the “Bonds”) are being issued and delivered by the City of Fontana Community Facilities District No. 106 (Mountainview) (the “District”) to (i) provide financing for certain public facilities and costs with respect thereto related to the development within the District, (ii) fund a reserve fund with respect to the Bonds, and (iii) pay the costs of issuance with respect to the Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS” herein. The District has been formed by and is located in the City of Fontana, California (the “City”).

The Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California), and pursuant to an Indenture, dated as of July 1, 2022, by and between the District and U.S. Bank Trust Company, National Association, as Trustee. The Bonds are special, limited obligations of the District and are payable solely from Net Special Tax Revenues (as defined herein), and the other assets pledged therefor under the Indenture, all as further described herein. Special Taxes (as defined herein) are to be levied according to the rate and method of apportionment approved by the City Council of the City and the qualified electors within the District. The City Council is the legislative body of the District.

The Bonds are issuable in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Individual purchases of Bonds may be made in principal amounts of $5,000 and integral multiples thereof. Purchasers of Bonds will not receive certificates representing their beneficial ownership of the Bonds but will receive credit balances on the books of their respective nominees. Interest on the Bonds will be payable on each September 1 and March 1, commencing March 1, 2023. Principal of and interest on the Bonds will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants who are expected to remit such payments to the beneficial owners of the Bonds. See “THE BONDS — General Provisions” and Appendix I — “INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM” herein.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT (EXCEPT TO THE LIMITED

EXTENT SET FORTH IN THE INDENTURE), THE CITY OR THE STATE OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE NET SPECIAL TAX REVENUES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL

OR SPECIAL OBLIGATIONS OF THE CITY BUT ARE SPECIAL, LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE

SOLELY FROM NET SPECIAL TAX REVENUES AND THE OTHER ASSETS PLEDGED THEREFOR UNDER THE INDENTURE AS MORE FULLY DESCRIBED HEREIN.

The purchase of the Bonds involves certain risks. See the section of this Official Statement entitled “SPECIAL RISK FACTORS” for a discussion of certain risk factors that should be considered, in addition to the other matters set forth herein, in evaluating the investment quality of the Bonds.

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

The Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Orrick Herrington & Sutcliffe, LLP, Los Angeles, California, as Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the City and the District by Best Best & Krieger LLP, Riverside, California, in its capacity as City Attorney, and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by its counsel, Jones Hall, A Professional Law Corporation, San Francisco, California. It is anticipated that the Bonds will be available for delivery to DTC or its agent in book-entry form on or about August __, 2022. [STIFEL LOGO]
Dated: July __, 2022
* Preliminary, subject to change.
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MATURITY SCHEDULE
BASE CUSIP†: 344630
Maturity Date
(September 1)
Principal
Amount
Interest
Rate Yield Price CUSIP† No.
$________ ____% Term Bonds due September 1, 20__, Yield: ____% Price: _______ CUSIP† No. ___ $________ ____% Term Bonds due September 1, 20__, Yield: ____% Price: _______ CUSIP† No. ___ $________ ____% Term Bonds due September 1, 2052, Yield: ____% Price: _______ CUSIP† No. ___ † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright© 2022 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database.

CUSIP® numbers are provided for convenience of reference only. None of the District, the City, the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers. 1040
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CITY OF FONTANA

CITY COUNCIL
Acquanetta Warren, Mayor
Peter Garcia, Mayor Pro Tem
Phillip Cothran, Council Member
John Roberts, Council Member
Jesus “Jesse” Sandoval, Council Member
STAFF
Matthew C. Ballantyne, City Manager
Jessica Brown, Chief Financial Officer, Management Services Janet Koehler-Brooks, City Treasurer
Germaine McClellan Key, City Clerk
Best Best & Krieger LLP, City Attorney

BOND COUNSEL
Orrick Herrington & Sutcliffe LLP
Los Angeles, California

MUNICIPAL ADVISOR
CSG Advisors Incorporated
San Francisco, California

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

TRUSTEE
U.S. Bank Trust Company, National Association
Los Angeles, California

SPECIAL TAX CONSULTANT
DTA, Inc.

Newport Beach, California

APPRAISER
Kitty Siino &Associates, Inc.

Tustin, California

PRICE POINT CONSULTANT
Empire Economics, Inc.

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

This Official Statement is not to be construed as a contract with the purchasers or owners of the Bonds.

Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.

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

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

The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District or any other parties described herein since the date hereof.

All summaries of the Indenture or other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the District for further information in connection therewith.

Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as a “plan,” “expect,” “estimate,” “project,” “budget” or similar words. Such forward-looking statements include, but are not limited to certain statements contained in the information under the captions “THE COMMUNITY FACILITIES DISTRICT” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as set forth in the District’s Continuing Disclosure Agreement, a form of which is attached hereto as Appendix G, neither the District nor the City plans to issue any updates or revisions to the forward-looking statements set forth in this Official Statement. D.R. Horton Inc. has agreed to provide certain continuing disclosure information concerning D.R. Horton Inc. and its property within the District in the form attached hereto as Appendix H. See “CONTINUING DISCLOSURE.”
A wide variety of other information, including financial information, concerning the City, is available from publications and websites of the City and others. No such information is a part of or incorporated into this Official Statement.

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

OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE

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

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. 1042

TABLE OF CONTENTS
Page
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INTRODUCTION ................................................................................................................................................ 1 The District .................................................................................................................................................... 1 Security and Sources of Payment for the Bonds............................................................................................ 2 Description of the Bonds................................................................................................................................ 3 Appraisal Report ............................................................................................................................................ 4 Price Point Study............................................................................................................................................ 4 Professionals Involved in the Offering .......................................................................................................... 4 Continuing Disclosure.................................................................................................................................... 5 Bond Owners’ Risks ...................................................................................................................................... 5 Other Information .......................................................................................................................................... 5 ESTIMATED SOURCES AND USES OF FUNDS ............................................................................................ 6 THE BONDS........................................................................................................................................................ 6 General Provisions......................................................................................................................................... 6 Redemption.................................................................................................................................................... 7 Debt Service Schedule ................................................................................................................................. 11 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS .................................................................. 11 General......................................................................................................................................................... 11 Special Taxes............................................................................................................................................... 12 Rate and Method of Apportionment ............................................................................................................ 13 Collection and Application of Special Taxes............................................................................................... 18 Covenant for Superior Court Foreclosure .................................................................................................... 19 Special Tax Fund ......................................................................................................................................... 20 Reserve Fund ............................................................................................................................................... 20 Investment of Moneys.................................................................................................................................. 21 No Additional Bonds Except for Refunding Bonds..................................................................................... 21 THE COMMUNITY FACILITIES DISTRICT ................................................................................................. 22 General Information Regarding the District................................................................................................. 22 The Acquisition Facilities............................................................................................................................ 23 Assigned Special Taxes and Development Summary.................................................................................. 24 Direct and Overlapping Debt ....................................................................................................................... 24 Property Values............................................................................................................................................ 27 Value-to-Lien Ratios.................................................................................................................................... 28 Delinquency History .................................................................................................................................... 31 PROPERTY OWNERSHIP AND THE DEVELOPMENT............................................................................... 31 General Description of the Development..................................................................................................... 32 Fontana 37.................................................................................................................................................... 32 D.R. Horton.................................................................................................................................................. 32 Development Plan........................................................................................................................................ 33 Financing Plan ............................................................................................................................................. 34 SPECIAL RISK FACTORS ............................................................................................................................... 35 Risks of Real Estate Secured Investments Generally – Declines in Value .................................................. 36 Levy of the Special Tax ............................................................................................................................... 36 Collection of the Special Tax....................................................................................................................... 37 Failure to Develop Properties ...................................................................................................................... 38 Concentration of Property Ownership ......................................................................................................... 38 Exempt Properties........................................................................................................................................ 39 Constitutional Limitations on Taxation and Appropriations........................................................................ 39 Maximum Special Tax................................................................................................................................. 42 Payment of the Special Tax is Not a Personal Obligation of the Owners.................................................... 43 Disclosures to Future Purchasers................................................................................................................. 43 1043

TABLE OF CONTENTS
(continued)
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Parity Taxes and Special Assessments......................................................................................................... 43 Depletion of Reserve Fund .......................................................................................................................... 44 Bankruptcy and Legal Delays...................................................................................................................... 44 FDIC/Federal Government Interests In Properties....................................................................................... 44 Hazardous Substances.................................................................................................................................. 46 No Acceleration Provision ........................................................................................................................... 46 Bonds Are Limited Obligations................................................................................................................... 47 Loss of Tax Exemption................................................................................................................................ 47 Potential Early Redemption of Bonds from Special Tax Prepayments........................................................ 47 Cybersecurity ............................................................................................................................................... 47 COVID-19 (Coronavirus) Pandemic............................................................................................................ 48 Increasing Mortgage Interest Rates.............................................................................................................. 48 CONTINUING DISCLOSURE.......................................................................................................................... 48 Community Facilities District...................................................................................................................... 48 The Developer.............................................................................................................................................. 49 TAX MATTERS................................................................................................................................................. 50 ABSENCE OF LITIGATION ............................................................................................................................ 52 ABSENCE OF RATINGS.................................................................................................................................. 52 CERTAIN LEGAL MATTERS ......................................................................................................................... 52 UNDERWRITING ............................................................................................................................................. 52 FINANCIAL INTERESTS................................................................................................................................. 53 MUNICIPAL ADVISOR ................................................................................................................................... 53 ADDITIONAL INFORMATION....................................................................................................................... 53 APPENDIX A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX ............................A-1 APPENDIX B APPRAISAL REPORT......................................................................................................B-1 APPENDIX C UPDATED PRICE POINT STUDY..................................................................................C-1 APPENDIX D FORM OF OPINION OF BOND COUNSEL...................................................................D-1 APPENDIX E GENERAL INFORMATION CONCERNING THE CITY OF FONTANA.................... E-1 APPENDIX F SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.................................F-1 APPENDIX G DISTRICT CONTINUING DISCLOSURE AGREEMENT.............................................G-1 APPENDIX H DEVELOPER CONTINUING DISCLOSURE CERTIFICATE ......................................H-1

APPENDIX I INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM ................................................................................. I-1 1044
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$6,785,000*

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 106 (MOUNTAINVIEW)
SPECIAL TAX BONDS, SERIES 2022

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

The purpose of this Official Statement, which includes the cover page, the table of contents and the attached appendices, is to provide certain information concerning the issuance of the City of Fontana Community Facilities District No. 106 (Mountainview) Special Tax Bonds, Series 2022 (the “Bonds”) by the City of Fontana Community Facilities District No. 106 (Mountainview) (the “District”), in the aggregate principal amount set forth on the front cover page. The proceeds of the Bonds will be used to finance certain public facilities and costs with respect thereto related to the development within the District, to fund a reserve fund for the Bonds (the “Reserve Fund”), and to pay costs of issuance of the Bonds.

The Bonds are being issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Act”), and pursuant to the Indenture, dated as of July 1, 2022 (the “Indenture”), by and between the District and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Bonds are secured under the Indenture by a pledge of, constituting a lien on and security interest in, the Net Special Tax Revenues (as defined herein) and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund established pursuant to the Indenture.

This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described herein. A full review should be made of the entire Official Statement. The sale and delivery of the Bonds to potential investors is made only by means of the entire Official Statement. All capitalized terms used in this Official Statement and not defined shall have the meaning set forth in Appendix F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE ⎯ Definitions” herein.

The District
The District includes approximately 37.19 gross acres and is located in the northern portion of the City of Fontana (the “City”). The District is generally bounded by Lytle Creek Road to the west and existing residential and vacant lands to the east, north and south. The District is being developed into a community known as “Mountainview” by D.R. Horton Los Angeles Holding Company, Inc., a California corporation (“D.R. Horton” or the “Developer”), consisting of a total of 156 single family detached homes. The District is located in Tract Map No. 20018, recorded on December 10, 2020.

As of May 1, 2022, the date of value of the Appraisal (defined herein), within the District, 75 single family detached homes had been completed and conveyed to individual homeowners and D.R. Horton owned 3 completed model homes, 11 homes over 95% complete (all of which were in escrow), 61 homes under construction (19 of which were in escrow) and 6 lots in a finished lot condition (none of which were in * Preliminary, subject to change.
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escrow). As of July 1, 2022, within the District, __ single family detached homes had been completed and conveyed to individual homeowners and D.R. Horton owned 3 completed model homes, __ homes over 95% complete (__ of which were in escrow), __ homes under construction (__ of which were in escrow) and __ lots in a finished lot condition (__ of which were in escrow). Sales contracts are subject to cancelation and, therefore, homes currently in escrow may not result in closed escrows with the prospective homebuyers. 150 building permits had been obtained within the District as of May 1, 2022. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
The District was formed to finance certain public facilities and costs with respect thereto related to the development within the District. A portion of the proceeds of the Bonds will be used to pay the costs of eligible facilities under the Act to be constructed by the City and to reimburse the Original Landowner (as defined herein) for permit fees paid in connection with its development within the District and for the Facilities described under the caption “THE COMMUNITY FACILITIES DISTRICT — The Acquisition Facilities.” The Act was enacted by the California legislature to provide an alternative method of financing certain public capital facilities and services, especially in developing areas of the State of California (the “State”). Any local agency (as defined in the Act) may establish a community facilities district to provide for and finance the cost of eligible public facilities and services. The legislative body of the local agency which forms a community facilities district acts on behalf of such district as its legislative body. Subject to approval by two-thirds of the votes cast at an election and compliance with the other provisions of the Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness.

Pursuant to the Act, the City Council adopted the necessary resolutions stating its intent to establish the District, to authorize the levy of special taxes on taxable property within the boundaries of the District, and to have the District incur bonded indebtedness for the purpose of financing authorized facilities (the “Facilities”). Following public hearings conducted pursuant to the provisions of the Act, the City Council adopted resolutions establishing the District and calling special elections to submit the levy of the special taxes and the incurring of bonded indebtedness to the qualified voters of the District. On July 13, 2021, at an election held pursuant to the Act, the then sole landowner who comprised the qualified voters of the District, Fontana 37, LLC, a Delaware limited liability company (the “Original Landowner” or “Fontana 37”), authorized the District to incur bonded indebtedness in the aggregate principal amount of not to exceed $8,500,000 to be secured by the levy of Special Taxes (as defined below) on taxable property within the District for the purpose of financing the Facilities, and approved the rate and method of apportionment of the special taxes for the District (the “Rate and Method”).

The Rate and Method provides for a Facilities Special Tax (as defined in the Rate and Method) (the “Facilities Special Tax”) to be levied for the Special Tax Requirement for Facilities (as defined in the Rate and Method) and a Services Special Tax (as defined in the Rate and Method) (the “Services Special Tax”) to be levied for services described in the Rate and Method. As used in this Official Statement, the terms “Special Tax” or “Special Taxes” refer only to the Facilities Special Tax and does not include the Services Special Tax.

The Services Special Tax is not pledged under the Indenture nor is the Services Special Tax available to pay debt service on the Bonds. The Special Tax will be levied against certain property within the District pursuant to the Act, the Ordinance approving the levy of Special Taxes and the Indenture and in accordance with the Rate and Method. The lien of the Special Tax will be co-equal with the lien of the Services Special Tax.

Security and Sources of Payment for the Bonds
Under the Indenture, the City has pledged to repay the Bonds and any additional bonds issued under the Indenture (the “Additional Bonds”) from Net Special Tax Revenues and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund. Proceeds of any Additional Bonds may only be applied to refund the Bonds or any Additional Bonds previously issued under the Indenture. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — No Additional Bonds Except for Refunding Bonds.” The Indenture defines “Net Special Tax Revenues” to mean Special Tax Revenues less amounts required to 1048
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pay Administrative Expenses. The term “Special Tax Revenues” is defined in the Indenture to mean the proceeds of the Special Taxes received by or on behalf of the District, including any prepayments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes, which will be limited to the amount of said lien and interest and penalties thereon. “Administrative Expenses” is defined in the Indenture to mean costs directly related to the administration of the District, including, but not limited to: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules and the costs of collecting the Special Taxes, the costs of remitting the Special Taxes to the Trustee, the fees and costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture, the costs incurred by the District in complying with the disclosure provisions of any continuing disclosure undertaking and the Indenture, including those related to public inquiries regarding the Special Taxes and disclosures to Owners, the costs of the District related to an appeal of the Special Taxes, any amounts required to be rebated to the federal government in order for the District to comply with the tax covenants in the Indenture, an allocable share of the salaries of the City staff providing services on behalf of the District directly related to the foregoing and a proportionate amount of City general administrative overhead related thereto, and the costs of foreclosure of delinquent Special Taxes.

Net Special Tax Revenues are the primary security for the repayment of the Bonds and any Additional Bonds. In the event that Net Special Tax Revenues are not paid when due, the only sources of funds available to pay the debt service on the Bonds and any Additional Bonds will be the amounts held by the Trustee for such purpose in the Special Tax Fund, the Bond Fund and the Reserve Fund. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” herein.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT (EXCEPT TO THE LIMITED EXTENT SET FORTH IN THE INDENTURE), THE CITY OR THE

STATE, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE DISTRICT

PAYABLE SOLELY FROM NET SPECIAL TAX REVENUES AND THE OTHER ASSETS PLEDGED THEREFOR UNDER THE INDENTURE AS MORE FULLY DESCRIBED HEREIN.

Description of the Bonds
The Bonds will be issued and delivered as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to actual purchasers of the Bonds (the “Beneficial Owners”) in the denominations of $5,000 and any integral multiples thereof under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery of the Bonds. In the event that the book-entry only system described herein is no longer used with respect to the Bonds, the Bonds will be registered and transferred in accordance with the Indenture. See Appendix I — “INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM” herein.

Principal of, premium, if any, and interest on the Bonds is payable by the Trustee to DTC.

Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants. In the event that the book-entry only system is no longer used with respect to the Bonds, the Beneficial Owners will become the registered owners of the Bonds and will be paid principal and interest by the Trustee, all as described herein. See Appendix I — “INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM” herein.
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The Bonds are subject to optional redemption, mandatory redemption from Special Tax prepayments and mandatory sinking fund redemption as described herein. For a more complete description of the Bonds and the basic documentation pursuant to which they are being sold and delivered, see “THE BONDS” and Appendix F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE” herein.

Appraisal Report
The District has obtained an appraisal of the Taxable Property (as defined herein) included in the District dated June 27, 2022 with a date of value as of May 1, 2022 (the “Appraisal”). The Appraisal was prepared for the District by Kitty Siino & Associates, Inc., Tustin, California (the “Appraiser”). Subject to the limitations set forth in the Appraisal, the Appraiser is of the opinion that, as of May 1, 2022, the minimum market value of the Taxable Property within the District was not less than $77,634,098 (the “Appraised Value”). See “THE COMMUNITY FACILITIES DISTRICT — Property Values” and “— Value-to-Lien Ratios.” A copy of the Appraisal is included as Appendix B to this Official Statement. It is a condition precedent to the issuance of the Bonds that the Appraiser deliver a certificate stating that nothing has come to the attention of the Appraiser subsequent to the date of the Appraisal that would lead the Appraiser to believe that the value of the Taxable Property (as defined in the Rate and Method) in the District is less than the minimum market value of such property reported in the Appraisal.