Fontana City Council
June 25, 2024

Fontana/Rialto
Service Agreement active Facilities
Expansion Fee
Rialto Collection &
Treatment Fees Engineering Engineering $0.15/SQ.FT. $0.15/SQ.FT. Yes 639 Industrial Fee for properties provided sewer service by the City, with treatment by the City of Rialto.

Fontana/Rialto
Service Agreement active Facilities
Expansion Fee
Rialto Collection &
Treatment Fees Engineering Engineering $0.10/Sq.Ft. $0.10/Sq.Ft. Yes 640 Residential-Estate Fee for properties provided sewer service by the City, with treatment by the City of Rialto. Res. 2023-033 active Facilities
Expansion Fee
Rialto Collection &
Treatment Fees Engineering Engineering $269/Unit-Collection $1,265.00/Unit-Treatment
$276/Unit-Collection
$1,301.00/Unit-Treatment Yes
641 Residential-SFR Fee for properties provided sewer service by the City, with treatment by the City of Rialto. Res. 2023-033 active Facilities
Expansion Fee
Rialto Collection &
Treatment Fees Engineering Engineering $269/Unit-Collection $1,265.00/Unit-Treatment
$276/Unit-Collection
$1,301.00/Unit-Treatment Yes
642 Residential-MFR Fee for properties provided sewer service by the City, with treatment by the City of Rialto. Res. 2023-033 active Facilities
Expansion Fee
Rialto Collection &
Treatment Fees Engineering Engineering $210/Unit-Collection $983.00/Unit-Treatment
$216/Unit-Collection
$1,011.00/Unit-Treatment Yes
649 Hydrology Studies - Consultant This fee is for the Engineering Division's use of a consultant in the preparation of a hydrology study. Res. 99-108 active Engineering Studies Engineering Engineering Actual Cost + City-Wide G
& A rate ($7,500 Deposit
Required)
Actual Cost + City-Wide G & A
rate ($7,500 Deposit
Required)
Yes
650 Sewer Studies - Consultant This fee is for the Engineering Division's use of a consultant in the preparation of a sewer study. Res. 99-108 active Engineering Studies Engineering Engineering Actual Cost + City-Wide G
& A rate ($2,000 Deposit
Required)
Actual Cost + City-Wide G & A
rate ($2,000 Deposit
Required)
Yes
651 Parking Study Review Fee for review and analysis of a developer provided parking study. Res. 2023-033 active Engineering Reviews Engineering Engineering 275.00 282.00 Yes 720 Specific Focus Traffic Study
Review
Fee for the review of traffic studies performed specifically to focus on a traffic condition associated directly to a project site layout or its affect on exisiting traffic circulation.

Res. 2023-033 active Engineering Reviews Engineering Engineering 551.00 566.00 Yes 794 GIS Fee For A Custom Map Fee per hour to create a custom map to suit the customers specific need. Res. 2023-033 active Maps GIS Fee Engineering GIS 71.00 73.00 No 39 431
795 GIS Fee - Standard Maps 11x17 Fee to cover the cost of producing a standard 11x17 map of the City. Res. 2005-180 active Maps GIS Fee Engineering GIS 5.00 5.00 No 796 GIS Fee - Standard Maps 24x36 Fee to cover the cost of producing a standard 24x36 map of the City. Res. 2023-033 active Maps GIS Fee Engineering GIS 27.00 27.00 No 797 GIS Fee - Standard Maps 36x60 Fee to cover the cost of producing a standard 36x60 map of the City. Res. 2023-033 active Maps GIS Fee Engineering GIS 44.00 45.00 No 798 GIS Fee - Archive for
Maps/Plans
GIS fee to recover the cost of archiving tract maps and signed improvement plans in the public right of way. Res. 2023-033 active Archive GIS Fee Engineering GIS $54.00 per sheet $55.00 per sheet No 801
Building Moving & Oversized
Load Permit-Single Trip with
Special Services
Fee for services necessitated by applications for transportation permits for unusually large or heavy loads. (Fee is to research any conflicts with path of travel)
Res. 2023-033 active Permit Building Moving &
Oversize Load Engineering Engineering 110.00 113.00 No 955 Traffic Control Permit for lane
closures Fee for staff to process the traffic control and lane closure permit application fee. Res. 2023-033 active Permit Construction Engineering Inspection 107.00 110.00 Yes 1921 Construction Permit Processing Issuance fee, each permit. Res. 2023-033 active Off-Site
Constuction/Insp
ection Permits
Construction Engineering GIS 45.00 46.00 Yes
1922 Engineering Specs- Standard
Specs at Counter Fee to provide copies of Engineering Specifications at the public counter. Res. 2023-033 active Engineering Administration Engineering Land Development 66.00 67.00 No
1923 Engineering Specs- Standard
Specs by Mail Fee to provide copies of Engineering Specifications via the mail. Res. 2023-033 active Engineering Administration Engineering Land Development 71.00 73.00 No
1924 Reversion to Acreage
Fee for plan check review of Reversion to Acreage for a parcel map more than 10 parcels (fee is calculated by base amount plus incremental time increases as number of lots increase).

Res. 2023-033 active Plan Check Maps Engineering Engineering 1,984.00 2,041.00 Yes 1926 Xerox Copies- 24x36 Color Fee to cover the cost of copying a 24x36 print. Res. 2011-108 active Engineering Administration Engineering GIS $3.00 per sheet $3.00 per sheet No 1972 Real Property & Right of Way
Services
Hourly fee for City staff to obtain Right of way for a private developer for infrastructure; street vacations, easements and other Real Property functions.

Addt'l costs include document processing, research and recording.

Res. 2023-033 active Real Property Real Property
Services
Development
Services Administration $110.00/hour $113.00/hour Yes
1972 Real Property & Right of Way
Services
Hourly fee for City staff to obtain Right of way for a private developer for infrastructure; street vacations, easements and other Real Property functions.

Addt'l costs include document processing, research and recording.

Res. 2023-033 active Real Property Real Property
Services
Development
Services Administration $110.00/hour $113.00/hour No
1986 Film Permit Application Fee for Engineering staff to review and approve a Film Permit Application. (Fire District Special Events App Review fee of $110 is charged separately). Res. 2023-033 active Permit Film Permit Engineering Land Development 110.00 113.00 No
1987 Plan Check- Hourly Fee for plan check for which no fee is specifically indicated. Fee is per hour, 1 hour minimum. Res. 2023-033 active Plan Check Pulic Improvement Engineering Engineering 88.00 90.00 Yes 2012
Appeal of Community
Development Director's
Decision
Fee charged for services related to an appeal of the Community Development Director's decision regarding tree remocal and/or relocation Res. 2023-033 active Permit Tree Removal and/or Relocation Engineering Engineering 495.00 509.00 No 2022 Traffic Lane Closure per
WATCH Manual
Fee for the cost of inspection for a traffic lane closure per WATCH (Work Area Traffi cControl Handbook) Manual. Fee is per day. Res. 2023-033 active Permit Construction Engineering Engineering 40.00 41.00 Yes 2035 Plan Review Fee - Sites 5 Acres
or Less Plan check and inspection fee for Sites 5 acres or less Res. 2023-033 active Plan Check Landscape Engineering Inspection 1,433.00 1,474.00 Yes 2036 Plan Review Fee - Residential Fee for residential front yard plan check and inspection Res. 2023-033 active Plan Check Landscape Engineering Inspection 198.00 203.00 Yes 2037 Plan Review Fee - Sites Over 5
Acres Plan check and inspection fee for Sites over 5 acres Res. 2023-033 active Plan Check Landscape Engineering Inspection 2,756.00 2,835.00 Yes 2039 CFD Map Review Community Facilities District map review, in-house or consultant Res. 2023-033 active Plan Check Map Engineering Inspection 2,976.00 3,062.00 Yes 2040
Stormwater Plan Check Fee -
WQMP Rerquired -
Amendment
Amendment of edvelopment plans and inspection for NPDES Stormwater Permit Compliance, in-house or consultant Res. 2023-033 active Plan Check Studies Engineering Inspection 992.00 1,020.00 Yes 2060 Traffic Signal Operations -
Working Hours
Fee for the cost of placing a traffic signal on flash or for temporary power on a per day basis, during work hours. Res. 2023-033 active Permit Traffic Engineering 186.00 191.00 Yes 2061 Traffic Control - Utility Plans Fee for the cost to review traffic control utility plans Res. 2023-033 active Plan Check Traffic Engineering 110.00 113.00 Yes 2062 Traffic Control Plan Check Fee for the cost to review traffic control, signing/striping, interconnect and roadway allignment plans. Res. 2023-033 active Plan Check Traffic Engineering 441.00 453.00 Yes 2063 Traffic Signal Operations - After
Hours
Fee for the cost of placing a traffic signal on flash or for temporary power on a per day basis, after work hours. Fee is 150% of regular fee. Res. 2023-033 active Permit Traffic Engineering 275.00 282.00 Yes 2103 Final Inspection Fee Fee for conducting final inspection of building permits, verifying receipt of fees and water quality related agreement. Res. 2023-033 active Engineering Inspection Engineering 36.00 37.00 Yes 2104
Water Quality Managment Plan
Review Fee - Preliminary and
Final
Fee for review and approval Preliminary and Final Water Quality Management Plan to comply with the State mandate. Replaces fees 1925 and 2038. Res. 2023-033 active Engineering Studies Engineering 3,255.00 3,349.00 Yes 2105 Technology Fee Fee for computer software and hardware of permitting program. Res. 2023-033 active Engineering Permit Engineering 5% of All Permit Fee 5% of All Permit Fee No 2106 Technology Fee Fee for computer software and hardware of permitting program. Res. 2023-033 active Engineering Reviews Engineering 5% of All Permit Fee 5% of All Permit Fee No 2107 Trip Generation/VMT/TIA
Scoping Agreement Review Fee for review and approve of trip generation, VMT or TIA Scoping analysis. Res. 2023-033 active Engineering Reviews Engineering 136.00 139.00 Yes 40 432
User Fee Recommendations, City of Fontana
11 Detail Cost Analysis
Planning
41 433
ID# Title Description Latest Revision Fee Status Type Category Department Division Fee Amount FY25 Recommended Fee Development-Related? 44 Laser Imaging
Fee charged for laser imaging of all issued permits, plans or other related documents to keep as permanent archived records. (Fee is based on average of 15 sheets imaged)
Res. 2023-033 active Archive Miscellaneous Planning Planning 32.00 32.00 No 103 100% Consent Annexation Fee for 100% consent annexation. Res. 2023-033 active Planning Annexations Planning Planning $5,782.00 + LAFCO Fees $5,949.00 + LAFCO Fees Yes
105 Irrevocable Agreement
Annexation (Existing) Fee charged for irrevocable agreement annexation (existing). Res. 2023-033 active Planning Annexations Planning Planning $551.00 + LAFCO Fees $566.00 + LAFCO Fees Yes
106 Irrevocable Agreement
Annexation (New) Fee charged for Irrevocable Agreement Annexation (New). Res. 2023-033 active Planning Annexations Planning Planning $1,576.00 + LAFCO Fees $1,621.00 + LAFCO Fees Yes
107 Project Applicant Appeal Fee for processing project applicant appeal. Res. 92-60 active Planning Appeals Planning Planning 65% of Original
Filing Fee with
$485.00 maximum
65% of Original Filing Fee with
$485.00 maximum No
108 Aggrieved Person Appeal Processing fee for site & architectural review pursuant to Section 30- 113 of the Zoning & Development Code. Res. 2023-033 active Planning Appeals Planning Planning 313.00 322.00 No 110 Major GP Amend. - Greater
Than 10 Acres Fee for General Plan Amendment (Major) - Greater Than 10 Acres. Res. 2023-033 active Planning General Plan Amendment Planning Planning 9,619.00 9,897.00 Yes 111 Minor GP Amend. - Less
Than 10 Acres Fee for General Plan Amendment (Minor) - Less Than 10 Acres. Res. 2023-033 active Planning General Plan Amendment Planning Planning 7,276.00 7,487.00 Yes 112 Variance Fee for Variance. Res. 2023-033 active Planning Miscellaneous Planning Planning 3,609.00 3,713.00 Yes 113 Zone Change 0 - 5 Acres Fee for Zone Change 0 - 5 Acres. Res. 2023-033 active Planning Zone Change Planning Planning 6,696.00 6,890.00 Yes 114 Zone Change greater than 5
Acres Fee for Zone Change greater than 5 Acres. Res. 2023-033 active Planning Zone Change Planning Planning $7,607.00 + $54.00/acre $7,827.00 + $55.00/acre Yes
115 Development Code
Amendment Fee for zoning code amendment. Res. 2023-033 active Planning Zone Change Planning Planning 12,292.00 12,648.00 Yes 116 Density Bonus Fee for staff to review and approve Density Bonus applications. Res. 2023-033 active Planning Miscellaneous Planning Planning 6,284.00 6,466.00 Yes 117 Commercial/Industrial less
than 1 Acre Fee for C.U.P. - Commercial/Industrial one acre or less. Res. 2023-033 active Planning Conditional Use Permits Planning Planning 3,131.00 3,221.00 Yes 118 Commercial/Industrial - 1-
10 Acres Fee charged for C.U.P. for Commercial/Industrial - 1-10 Acres. Res. 2023-033 active Planning Conditional Use Permits Planning Planning $4,861 + $110/acre $5,001 + $113/acre Yes 119 Commercial/Industrial
greater than 10 Acres Fee charged for C.U.P. - Commercial/Industrial greater than 10 Acres Res. 2023-033 active Planning Conditional Use Permits Planning Planning $6,504 +
$54/acre>10 acres $6,692 + $55/acre>10 acres Yes
120 Residential <10 D.U. Processing fee for a residential conditional use permits with 10 or less dwelling units. Res. 2023-033 active Planning Conditional Use Permits Planning Planning 3,114.00 3,204.00 Yes 121 Residential 11-50 D.U. Processing fee for a residential Conditional Use Permit with 11-50 dwelling units. Res. 2023-033 active Planning Conditional Use Permits Planning Planning $4,961 + $38du $5,104 + $39du Yes 123 DRS Individual Sign Fee charged for Design Review for Individual Sign. Res. 2023-033 active Planning Design Review Planning Planning 412.00 423.00 No 124 DRS Planning Commission Fee charged for staff to review and appove design reviews for signs which will be reviewed by the Planning Commission Res. 2023-033 active Planning Design Review Planning Planning 1,681.00 1,729.00 No 125 Residential- 1-10 D.U. Fee for Design Review - Residential- 1-10 D.U. Res. 2023-033 active Planning Design Review Planning Planning 7,909.00 8,138.00 Yes 126 Residential- 11-50 D.U. Fee for Design Review - Residential- 11-50 D.U. Res. 2023-033 active Planning Design Review Planning Planning $9,150 + $44/du>10 $9,415 + $45/du>10 Yes 127 Residential- over 50 D.U's Fee for Design Review - Residential- over 50 D.U.s. Res. 2023-033 active Planning Design Review Planning Planning $10,060 + $22/du $10,351 + $22/du Yes 128 Commercial/Industrial less
than 1 Acre Fee for Design Review - Commercial/Industrial less than 1 Acre Res. 2023-033 active Planning Design Review Planning Planning 7,386.00 7,600.00 Yes 129 Commercial/Industrial (1-20
Acres) Fee for design review - Commercial/Industrial (1-20 Acres). Res. 2023-033 active Planning Design Review Planning Planning $8,356 + $330/acre $8,598 + $339/acre Yes 130 Commercial/Industrial > 20
Acres Fee for design review - commercial/industrial for more than 20 Acres Res. 2023-033 active Planning Design Review Planning Planning $12,044.00 + $110.00/Acre $12,393.00 + $113.00/Acre Yes
131 Consultant Fee for development agreement prepare by consultant. Billed at actual cost plus G&A with a $10,000 minimum deposit. Res. 2010-122 active Planning Development Agreement Planning Planning
Cost + G&A
w/$10,000 min
deposit
Cost + G&A w/$10,000 min
deposit No
133 Exemption Fee for staff to review and approve determinations of exemption. Res. 2023-033 active Planning CEQA Planning Planning 385.00 396.00 No 134 Initial Study Fee for staff to review and issue an initial study. Res. 2023-033 active Planning CEQA Planning Planning 2,646.00 2,722.00 No 138 De Minimis Finding
(Negative Declaration)
County Filing Fee for De Minimis finding (negative declaration) for Dept. of Fish & Game. Fee is established per County schedule. Res. 97-80 active Planning Department of Fish & Game Planning Planning $50.00 $50.00 No
139 Impact Project - Negative
Declaration
County filing fee for Impact Project - Negative Declaration for the Dept. of Fish & Game. Fee is established per County schedule. Res. 2009-105 active Planning Department of Fish & Game Planning Planning 2916.75 2,916.75 No 140
Impact Project -
Environmental Impact
Report
County filing fee for Environmental Impact Report for Dept. of Fish & Game. Fee is established per County schedule. Res. 2023-033 active Planning Department of Fish & Game Planning Planning 4051.25 4,051.25 No 141 Commercial/ Industrial Fee for minor modification to a tentative parcel maps- commercial/industrial. Res. 2023-033 active Planning Tentative Parcel Maps Planning Planning $7,204 + $110/Acre $7,412 + $113/Acre Yes 142
Tenetative Parcel Map -
Residential and Urban Lot
Splits
Fee for staff to administratively review and approve residential tentative parcel maps and urban lot splits Res. 2023-033 active Planning Tentative Parcel Maps Planning Planning $7,204 + $110/Acre $7,412 + $113/Acre Yes 144 Lot Line Adjustment Fee for lot line adjustment. Res. 2023-033 active Planning Tentative Parcel Maps Planning Planning 2,425.00 2,495.00 Yes 145 Minor Modification Fee for tentative tract map - minor modification. Res. 2023-033 active Planning Tentative Tract Maps Planning Planning 2,646.00 2,722.00 Yes 146 Major Modification Fee charged for tentative parcel map major modification. Res. 2023-033 active Planning Tentative Parcel Maps Planning Planning 5,677.00 5,841.00 Yes 147 Revert to Acreage Fee charged for tentative parcel map reversion to acreage. Res. 2023-033 active Planning Tentative Parcel Maps Planning Planning 2,315.00 2,382.00 Yes 148 Residential 1- 100 lots Fee charged for tentative tract maps 1- 100 lots- Residential. Res. 2023-033 active Planning Tentative Tract Maps Planning Planning $8,240.00 +
$32.00/Lot $8,478.00 + $32.00/Lot Yes
150 P.U.D. 1-100 lots Fee charged for tentative tract maps 1-100 lots- P.U.D.. Res. 2023-033 active Planning Tentative Tract Maps Planning Planning $7,689.00 +
$164.00/Acre $7,911.00 + $168.00/Acre Yes
151 Residential > 100 lots Fee charged for tentative tract maps greater than 100 lots- Residential Res. 2023-033 active Planning Tentative Tract Maps Planning Planning $11,300.00 +
$54/ac $11,627.00 + $55/ac Yes
152 Minor Modification Fee for minor modification to tentative parcel map. Res. 2023-033 active Planning Tentative Parcel Maps Planning Planning 2,094.00 2,154.00 Yes 153 Major Modification Fees charged for major modification of a tentative tract map. Res. 2023-033 active Planning Tentative Tract Maps Planning Planning 4,740.00 4,877.00 Yes 161 Building Relocation Fee for Planning Commission review of a building to be relocated or located into the City of Fontana. Res. 2023-033 active Planning Miscellaneous Planning Planning 1,223.00 1,258.00 Yes 162 Final Inspection -
Commercial/Industrial
Fee charged at time building permits are issued for
Commercial/Industrial. Res. 2023-033 active Planning Final Inspection Planning Planning 551.00 566.00 No 163 Home Occupation Fee for staff to review and approve Home Occupation permits. Res. 2023-033 active Planning Miscellaneous Planning Planning 275.00 282.00 No 164 Planning Commission
Interpretation
Fee for the interpretation given by the Planning Commission on an item. Res. 2023-033 active Planning Miscellaneous Planning Planning 633.00 651.00 No 166 Conditions, Covenants &
Restrictions (CC&R) Fee charged for conditions, covenants & restrictions review. Res. 92-60 active Planning Miscellaneous Planning Planning Actual Cost + City- Wide G & A rate.

Actual Cost + City-Wide G & A
rate. No
283 Certificate of
Appropriateness - Minor Processing fee for certificate of appropriatenss - minor. Res. 2023-033 active Planning Historical Preservation Planning Planning 247.00 254.00 Yes 284 Certificate of
Appropriateness - Major Fee to process Certificate of Appropriateness - Major. Res. 2023-033 active Planning Historical Preservation Planning Planning 677.00 696.00 Yes 285 Certificate of Economic
Hardship Fee to process Certificate of Economic Hardship. Res. 2023-033 active Planning Historical Preservation Planning Planning 782.00 804.00 Yes 302 Staff Review Fee charged for staff review of Specific Plan. Billed at actual cost with a minimum deposit of $10,000.00. Res. 2015-064 active Planning Specific Plan Planning Planning Cost + $20,000 min dep. Cost + $20,000 min dep. Yes
427
Reconsideration of
Environmental
Determination
Fee for staff to review and issue reconsideration of environmental determination. Res. 2023-033 active Planning CEQA Planning Planning 1,323.00 1,361.00 No 475 Amendment Proecessing fee for amending non-expired Administrative Site Plans currently not developed. Res. 2023-033 active Planning Administrative Site Plan Planning Planning 716.00 736.00 Yes
476 Administrative Site Plan -
Major Processing fee for project site and architectural review. Res. 2023-033 active Planning Administrative Site Plan Planning Planning 4,079.00 4,197.00 Yes 477 Modification
Processing fee for modifications to previously approved and developed Administrative Site Plans pursuant to Section 30-121 of the Zoning & Development Code.

Res. 2023-033 active Planning Administrative
Site Plan Planning Planning 980.00 1,008.00 Yes 478 Community Plan Fee charged for the processing of a community plan. Res. 95-16 active Planning Miscellaneous Planning Planning Planning &
Engineering Actual
Direct Cost Per
Hourly Billing Rate
Schedule.

Planning & Engineering Actual
Direct Cost Per Hourly Billing
Rate Schedule.

Yes
42 434
480 Inspection Fee -
C.U.P.Tattoo Establishments
Annual inspection fee of Tattoo Establishments in conjunction with the conditions of approval contained within the C.U.P Res. 2023-033 active Planning Final Inspection Planning Planning 302.00 310.00 Yes 481 DR Amendment Fee for Design Review Amendment. Res. 95-16 active Planning Design Review Planning Planning 50% of Original
Engineering &
Planning Design
Review Fee
50% of Original Engineering &
Planning Design Review Fee Yes
482 Amendment Fee Fee for Specific Plan Amendment. Billed at actual cost with a minimum deposit required of $5,000.00. Res. 2015-064 active Planning Specific Plan Planning Planning Cost + $5,000 min deposit Cost + $5,000 min deposit Yes
483 Temporary Use Permit
The City's amended Development Code includes a requirement for the City Staff to administratively review and approve temporary use permits
Res. 2023-033 active Planning Miscellaneous Planning Planning 98.00 100.00 Yes 525 Commercial/ Industrial >
100 Lots
Fee charged for tentative tract maps - commercial/ industrial > 100 lots. Res. 2023-033 active Planning Tentative Tract
Maps Planning Planning $10,611.00 +
110/Acre $10,918.00 + 113/Acre Yes
529 Model Homes Sales Deposit
Refundable deposit for model homes and associated parking areas.

Deposit is intended to recover the costs associated with converting model homes to saleable condition if required. Fee is per model & parking lot.

Res. 2010-122 active Planning Miscellaneous Planning Planning $2,500.00/Model & Parking Lot
$2,500.00/Model & Parking
Lot Yes
567 ABC License with Existing
C.U.P. Transfer of Alcoholic Beverage License with existing C.U.P. Res. 2023-033 active Planning Conditional Use Permits Planning Planning 148.00 152.00 Yes
589 Residential > 50 D.U. Processing fee for a residential conditional use permit with more than 50 dwelling units. Res. 2023-033 active Planning Conditional Use Permits Planning Planning $5,126.00 +
$22/D.U.>50 D.U. $5,274.00 + $22/D.U.>50 D.U. Yes
591 P.U.D. > 100 Units Fee charged for tentative tract maps - P.U.D. > 100 units. Res. 2023-033 active Planning Tentative Tract Maps Planning Planning $10,473+$164/Acre $10,776+$168/Acre Yes 594 Zoning Letter - Zoning
Determination
Fee associated with research, determination and issuance of a letter confirming a parcels zoning code. Res. 2023-033 active Planning Miscellaneous Planning Planning 142.00 146.00 No 595 Amendment Fee for the amendment of an existing Conditional Use Permit. Res. 98-117 active Planning Conditional Use Permits Planning Planning
50% of Original
Conditional Use
Permit Fee
50% of Original Conditional
Use Permit Fee Yes
652 Archive Fee - Oversize (>11 x
14) Plans
Fee for scanning plans greater than 11 x 14 for permanent archived records. Res. 99-108 active Archive Plans Planning Planning Actual Costs + City- Wide G & A rate
Actual Costs + City-Wide G & A
rate No
653 Minor Modification Fee for staff to review and approve minor modifications to design review applications. Res. 2023-033 active Planning Design Review Planning Planning 948.00 975.00 Yes 654 Surface Mining Reclamation
Act Fee for C.U.P. for mining operations. Res. 99-108 active Planning Conditional Use Permits Planning Planning Actual Costs + City-
Wide G & A rate
Actual Costs + City-Wide G & A
rate No
775 Final Inspection - Residential Fee is charged at the time building permits are issued for residential Res. 2023-033 active Planning Final Inspection Planning Planning 88.00 90.00 No 791 Appeal of Irrevocable
Agreement to Annex
Appeal of Irrevocable Agreement to Annex (Sewer Service for New Development) Res. 2023-033 active Planning Annexations Planning Planning 2,480.00 2,551.00 No 792 Plan Check Fee - Room
Additions Plan Check Fee - Planning- Room Additions Only Res. 2023-033 active Planning Plan Check Fee Planning Planning 93.00 95.00 Yes 793 Plan Check Fee - Other Than
Room Additions Plan Check Fee - Planning- Other Than Room Additions Res. 2023-033 active Planning Plan Check Fee Planning Planning 186.00 191.00 Yes 827 Pre-Annexation Agreement
This fee is that which a land owner pays to the City upon signing a Pre- annexation Agreement with the City of Fontana.This fee covers the additional costs of adding the property to the City and also allows the landowner use of the City's sewer system.

Res. 2015-064 active Annexation Pre- Annexation Planning Administration Cost + G&A Rate +
$5,000 Min Deposit
Cost + G&A Rate + $5,000 Min
Deposit Yes
828 Adult Oriented Business
Review
Review and processing of an Adult Oriented Business application which covers additional background investigation. This is in addition to the standard new business fees to operate in the City.

Res. 2023-033 active Planning Miscellaneous Planning Planning 6,615.00 6,806.00 No 839 Temporary Banner - 45 Day
Temporary Sign
The City's amended Development Code includes a requirement for the City Staff to administratively review and approve temporary banners. Res. 2023-033 active Planning Miscellaneous Planning Planning 54.00 55.00 No 842 Newspaper Public Notice Pass thru fee which recovers the cost of newspaper filings when required Res. 2023-033 active Planning Miscellaneous Planning Planning 192.00 197.00 No 843 Preapplication Conference The City's code requires City Staff to administratively review and conference with the applicant prior to submittal of an application. Res. 2023-033 active Planning Miscellaneous Planning Planning 1,102.00 1,133.00 Yes 844 ABC License
Administratively review and present to Planning Commission for approval of a conditional use permit for a new Alcoholic Beverage License.

Res. 2023-033 active Planning Conditional Use
Permits Planning Planning 2,563.00 2,637.00 Yes 845 Child Care Commercial 24
hours
Fee for staff to administratively review and present to Planning Commission for approval of a C.U.P. for commercial childcare facilities open 24 hours.

Res. 2023-033 active Planning Conditional Use
Permits Planning Planning 1,526.00 1,570.00 Yes 846 Commercial use in an
existing building
Proecessing fee for a conditional use permit application for commercial use in an existing building. Res. 2023-033 active Planning Conditional Use Permits Planning Planning 1,345.00 1,384.00 Yes 847 ABC License Transfer or
Revision
Administratively review and approve minor use permit for a transfer or revision of an Alcoholic Beverage License. Res. 2023-033 active Planning Review Fees
Minor Use
Permit Planning Planning 1,515.00 1,558.00 Yes 849 Commercial / Industrial
Administration Approval
Fee for review by engineering of planning applications for minor use permits Res. 2023-033 active Planning
Review Fees
Minor Use
Permit Planning Planning 1,791.00 1,842.00 Yes 850 Sign Variance Fee for City staff to review and approve sign variances. Res. 2023-033 active Planning Miscellaneous Planning Planning 1,245.00 1,281.00 No 851 Zoning Letters - Zoning
Rebuild
Fee associated with research, determination and issuance of a letter confirming a parcels zoning code. Res. 2023-033 active Planning Miscellaneous Planning Planning 330.00 339.00 Yes 961 Directors Determination
A discretionary action by the Director of Community Development to make determinations on proposed amendments to previously approve entitlements by the Planning Commission.

Res. 2023-033 active Planning Miscellaneous Planning Planning 358.00 368.00 Yes 962 Variance - Admiinistrative
Fee for permission to depart from zoning ordinances because of special circumstances unique to a specific property of project.

Approved administratively.

Res. 2023-033 active Planning Miscellaneous Planning Planning 2,425.00 2,495.00 Yes 963 Off Site Model Home
Complex
Fee for City staff to administratively review and approve minor use permits for Off Site Model Home Complex. Res. 2023-033 active Planning Review Fees
Minor Use
Permit Planning Planning 882.00 907.00 Yes
1255 Residential Child Care- more
than 7 children
Fee for staff to administratively review and present to Planning Commission for approval of a conditional use permit for Residential Child Care Facilities with more than 7 children.

Res. 2023-033 active Planning Conditional Use
Permits Planning Planning 882.00 907.00 Yes
1909 Massage Establishment
Permit
Consists of thoroughly reviewing the projects impact to the City and compliance with the municipal code. Res. 2023-033 active Planning Final Inspection Planning Planning 142.00 146.00 No 1910 Massage Technician Permit Consists of thoroughly reviewing the Technician is in compliance with the municipal code. Res. 2023-033 active Planning Final Inspection Planning Planning 142.00 146.00 Yes 1911 Time Extention for Planning
Cases Fee for time extention on Planning cases. Res. 2011-108 active Planning Miscellaneous Planning Planning 50% of Original Fee 50% of Original Fee No 1912 Traffic Study - Consultant Fee for a traffic study prepared by a Consultant and managed by Staff. Res. 2011-108 active Planning Miscellaneous Planning Planning Cost + G&A Cost + G&A No 1913
Traffic Study - Developer
Submitted Environmental
Related Studies
Fee for review of Environmental related Studies submitted by a Developer. Res. 2011-108 active Planning Miscellaneous Planning Planning Cost + G&A Cost + G&A No 1914 Traffic Study - Peer Review Fee for a traffic study submitted by a Developer which Staff will conduct a peer review on. Res. 2011-108 active Planning Miscellaneous Planning Planning Cost + G&A Cost + G&A No 2008 TUP Food Truck Event
The City's amended Development code inludes a requirement for staff to administratively review and approve temporary use permits for food truck events
Res. 2023-033 active Planning Miscellaneous Planning Planning 275.00 282.00 Yes 2009 Specific Plan Amendment -
Minor Fee for a minor Specific Plan amendment. Res. 2023-033 active Planning Specific Plan Planning Planning 7,276.00 7,487.00 Yes 2021 Plan Check Expedite - In
House
Cost to expedite a plan check in house. Fee is 1.5 times that of the original plan check fee which varies per type of plan check. Res. 2016-021 active Administrativ e Plan Check Planning Planning Plan Check + 50% Plan Check + 50% Yes 2068 Re-Inspection -
Commercial/Industrial
Fee charged for inspection after building permits are issued for Commercial/Industrial, subsequent to Final inspection. Res. 2023-033 active Planning Inspection Planning Planning 275.00 282.00 No 2069 Administrative Site Plan -
Minor
Processing fee for accessory structures, site and architectural review (parking, guard shack, trash enclosure, etc.) Res. 2023-033 active Planning Administrative Site Plan Planning Planning 1,102.00 1,133.00 No 2096 Recreational Indoor
Marijuana Cultivation
Annual permit fee for application and exterior inspection for recreational indoor marijuana cultivation. Res. 2023-033 active Planning Miscellaneous Planning 27.00 27.00 No 2101 Environmental Impact
Reports - Applicant Initiated
Fee for an Applicant Initiated Environmental Impact Report, Negative Declaration, Mitigated Negative Declarartion or Addendum Res. 2023-033 active Planning CEQA Planning Cost + 25% Admin
w/ Min $2k Deposit
Cost + 25% Admin w/ Min $2k
Deposit Yes
2102 Environmental Impact
Reports - City Initiated
Fee for a City Staff Initiated Environmental Impact Report, Negative Declaration, Mitigated Negative Declarartion or Addendum Res. 2023-033 active Planning CEQA Planning Cost + 25% Admin
w/ Min $5k Deposit
Cost + 25% Admin w/ Min $5k
Deposit No
2108 Cannabis Application
Fee Application fee for a new commercial cannabis business. active Planning Application Review Planning $17,500.00 18,007.00 No
43 435
2109 Cannabis Zoning Request Fee for a commercial business zoning request. active Planning Application Review Planning $300.00 308.00 Yes
2110 Cannabis Background Check Background checl for a new commercial cannabis business. active Planning Application Review Planning $300.00 308.00 No
2111 Cannabis Permit Fee for a commercial cannabis business permit. active Planning Permit Planning $9,100.00 9,363.00 No 2112 Cannabis Permit Renewal Fee for renewal of a commercial cannabis business. active Planning Renewal Planning $2,300.00 2,366.00 No 2113 Cannabis Change of
Ownership Fee for a change in ownership of a commercial cannabis business. active Planning Miscellaneous Planning $3,600.00 3,704.00 No 2114 Cannabis Name Change Fee for a name change only of a commercial cannabis business. active Planning Miscellaneous Planning $2,300.00 2,366.00 No 2115 Cannabis Appeal Deposit Deposit for the appeal of a commercial cannabis business decision. active Planning Security Deposit Planning $5,000.00 5,145.00 No 44 436
User
Fee Recommendations, City of Fontana

Det
ail Cost Analysis
Code Enforcement
45 437
ID# Title Description Latest Revision Fee Status Type Category Department Division Fee Amount FY25 Recommended Fee Development-Related? 438 Second Code
Reinspections Cost of second code reinspections Res. 2023-033 active Code Enforcement Inspection Development
Services 93.00 95.00 No
558 Abatement Hearing
Fee
Cost incurred for the preparation, notification and recording of appeals of abatement related issues. Res. 2023-033 active Code
Enforcement Abatement Development
Services 892.00 917.00 No
559 Board Up/Clean Up
Abatement Fee
Cost incurred for administering the program to monitor abandoned or neglected properties Res. 2023-033 active Code
Enforcement Abatement Development
Services 396.00 407.00 No
560 Illegal Sign
Abatement Fee
Cost incurred in removing illegally placed signs. Fee is for $52.00 for the first sign and $5 for each additional sign removed. Res. 2023-033 active Code Enforcement Abatement Development
Services
$88.00 for 1st
Sign & $5.00 for
each additional
sign thereafter
$90.00 for 1st Sign & $5.00
for each additional sign
thereafter
No
561 Nuisance Abatement
Fee
Fee for cost associaated with the program to abate nuisances plus the cost of the contractor. Res. 2023-033 active Code
Enforcement Abatement Development
Services
$442.00 +
Contractor Cost $454.00 + Contractor Cost No
562 Vehicle Abatement
Fee Cost incurred in abating non-operational vehicles from private property. Res. 2023-033 active Code Enforcement Abatement Development
Services 387.00 398.00 No
648 Administrative Lien
Fee
This fee is to recover costs for weed abatement services to private property owners of vacant or unmaintained properties. Res. 2023-033 active Code Enforcement Abatement Development
Services 223.00 229.00 No
722 Warrant Fee
Fee to recover cost associated with obtaining a warrant from the Superior Court to effectuate a Code Enforcement abatement order on private property.

Res. 2023-033 active Code
Enforcement Abatement Development
Services 173.00 178.00 No
46 438
User
Fee Recommendations, City of Fontana

Det
ail Cost Analysis
Environmental
47 439
ID# Title Description Latest Revision Fee Status Type Category Department Division Fee Amount FY25 Recommended Fee Development-Related? 410 Wastewater Discharge Class I
Permit Industrial/Commercial Fee for Wastewater Discharge Class I Permit Industrial/Commercial. Ord. 1127 active Permit Waste Water Environmental Support Services
$19.00/EDU Indust(30 EDU
Cap) $5.15/EDU Commercial
$19.00/EDU Indust(30 EDU
Cap) $5.15/EDU Commercial No
412 Laboratory Analysis of
Wastewater Sample Fee for Laboratory Analysis of Wastewater Sample. Res. 2003-127 active Permit Waste Water Environmental Support Services
Cost of State Certified
Laboratory plus City Overhead
$5.15/EDU Commercial+City
Overhead
Cost of State Certified
Laboratory plus City Overhead
$5.15/EDU Commercial+City
Overhead
No
413 Pretreatment- Non-Compliance
Meeting
Fee to offset the cost of conducting a meeting between the operator and City representative for the purpose of correcting the operator's non-compliance with permit requirements and/or violations of the Fontana Municipal Code.

Res. 2023-033 active Permit Waste Water Environmental Support Services $330.00 per meeting $339.00 per meeting No
2041 Electric Vehicle Charging Fee Fee to charge an electric vehicle at a City maintained facility. Fee is per Kwh. City may charge $5.00 per hour for any vehicle parked at a station 60 minutes after fully charged Res. 2018-013 active Equipment Equipent Usage Environmental Support Services $0.25 per Kwh $0.25 per Kwh No
48 440
User Fee Recommendations, City of Fontana
User Fee Recommendations
Fiscal Year 2024/2025
50 441
User Fee Recommendations, City of Fontana
Exhibit B
Summary Schedule of New User Fees
Fiscal Year 2024/2025
City of Fontana
Finance Department
June 25, 2024
442
User Fee Recommendations, City of Fontana
List of Principal Officials
Elected Officials
Acquanetta Warren, Mayor
Peter Garcia, Mayor Pro Tem
Phillip Cothran, Council Member
John Roberts, Council Member
Jesus “Jesse” Sandoval, Council Member
Janet Koehler-Brooks, City Treasurer
Germaine McCellan Key, City Clerk
Administrative Staff
Matt Ballantyne....................................................................... City Manager Ramon Ebert……...……. Deputy City Manager – Administrative Services Phillip Burum..................... Deputy City Manager – Development Services Jeff Birchfield………………....................................................... Fire Chief Jennifer Barcenas................................. Director of Information Technology Ashton R. Gout................................................................ Deputy City Clerk Michael Dorsey......................................................................... Police Chief Gia Kim............................................ Director of Public Works/Engineering Daniel Schneider....................................... Director of Community Services Jessica Brown........................................................... Chief Financial Officer Rakesha Thomas.............................................Director of Human Resources Patty Nevins...…………...…………………………….Director of Planning
443
User Fee Recommendations, City of Fontana
Table of Contents
________________________________________________
Sections Page

1. Overview .....................................................................................................................................................1

2. Summary Schedule of Fee Recommendations .........................................................3

3. Community Services..........................................................................................................................6

4. Hourly Billing Rates..........................................................................................................................9 Billing Rates by Position .................................................................................................10 Department/Division Overhead Rates...................................................................15 444
User Fee Recommendations, City of Fontana

Overview of Services/User Fees
1 445
User Fee Recommendations, City of Fontana
Overview
User/Service Fees
The terms "Service or User Fees" generally refer to fees paid by citizens, firms, or other parties to a local jurisdiction based upon the estimated reasonable costs incurred by the jurisdiction in providing specific services. In short, user fees are broadly defined as a charge to the user for a specific government service. The philosophy of assessing user fees is that while many services provided by local jurisdictions have broad public benefit, other services benefit only the individual receiving the service. If specific users do not pay for these services, general fund tax dollars must be used, depriving the use of tax dollars for other general benefiting services.

User fees fall into two categories. The first category, "charges for goods and services consumed" includes fees charged for the actual consumption of the results of government efforts by individuals, groups of individuals, businesses or organizations.

Fees in this category are charged for goods or services that improve the quality of life; these fees are intended to help pay costs and are not set in order to regulate activities.

The second category, "regulatory charges" include fees assessed to individuals, groups or organizations for the opportunity to participate in a government -regulated activity.

These may include fees for construction permits to build a home.

When implementing user fees , certain conditions must be met. The U.S. Supreme Court established a three -part test to determine whether a charge assessed by a community is a user fee.i For a user fee to be valid, it must comply with the following conditions:

1. The fee charged must provide a direct benefit to a party in exchange for payment in a way not shared by other members of society.ii

2. The fee must be optional with the party havi ng the option of not using the government service.iii

3. The charge must compensate the specific government office for the provided service only: the fees received must not be collected with the purpose of raising revenue beyond the cost of the provided service.iv The recommendations in this report follow these conditions.
iUnited States v. Tax commission of Mississippi, 421 U.S. 599 (1975) quoting United States v. LaFranca, 282 U.S. 568,572 (1931).
iiNational Cable Television Association v United States, 415 U.S. 336, 340 (1974). iiiVanceburg v. FERC, 571 F. 2d at 630, 640 n. 48 (D.C. Circular 1977, cert. denied, 439 U.S. 818 1978). ivOpinion of the Justices, 250 Mass. 591, 597 (1924).
2 446
User Fee Recommendations, City of Fontana

Page
Community Services ..................................................... 6 New User Fees
& Summary Schedule
3 447
User Fee Recommendations, City of Fontana
The following chart summarizes the City's various Departments’ new Service/User Fees. The summary schedule for new fees is supported by detail cost analysis worksheets for each fee which are separated by Department.

The summary schedule for new fees provides the fee descriptions, total cost of the City provided service, the current fee amount, and the organization’s recommended fee amount.
4 448
Page
No. Fee #
Department / Division
Fee Description Total Cost Current Recommended
% Recommended
Increase (Decrease)

COMMUNITY SERVICES
7 Vendor table and chairs at Senior Center Health
Fair Event. Includes logo on event program, name
and logo displayed on one slide shown during the
event.
$164.29 $150.00 NEW FEE
8 Annual fee for participation in one Senior Sports
program for participants 50-54 years old. $20.63 $20.00 NEW FEE Fee Amounts in Dollars
5 449
User Fee Recommendations, City of Fontana
Planning Divsion
3 Community Services
Detail Cost Analysis
6 450
ID# Date
NEW 3/27/2024
Fund Object Acct Form Type
New Fee
Description of Service, Demand, Subsidy and Other Comments:

Personnel Costs
Rates*
Position Straight Time
Hourly
Fringe Benefits
Hourly
Total Direct
Labor Cost
Dept. or Div.

Overhead
Total Burdened
Labor Cost / Hr.

Hours by Position or
Per Unit
Total Labor Cost per Unit of Service
Community Services Coordinator $34.27 $13.65 $47.92 21.74% $58.34 30.00 $1,750.13 Community Services Assistant* $19.46 $0.48 $19.94 21.74% $24.27 60.00 $1,456.50 Senior Community Services Assistant* $21.23 $0.52 $21.75 21.74% $26.48 45.00 $1,191.53 Total Burdened Personnel Costs per Unit of Service 4,398.16 Material & Rental Costs
Description Cost Each Quantity Required Unit Cost
Total Material & Rental Costs per Unit of Service
Other Costs (Equipment, Building Usage, Part-time Labor w/o Benefits) Description Cost Each Quantity Required Unit Cost
Total Other Costs per Unit of Service
Fee Comparison Data Total Service Direct Costs $4,398.16 Jurisdiction Fee per Unit City-Wide General &
Administrative* Rate @

12.06% $530.42
CITY OF FONTANA $150.00 Dollars Percentage Total Program Cost $4,928.58 Colton ($150.00) Number of Participants 30
Corona ($150.00) Cost/Participant $164.29
Moreno Valley ($150.00) Recommended Fee/Participant $150.00 Ontario ($150.00) Total Revenue $4,500.00
Rancho Cucamonga ($150.00) Total Cost Subsidy Program $428.58 Rialto ($150.00) Current Fee Amount
San Bernardino City ($150.00) Fee Increase/(Decrease) $150.00 *Note: Rates are per the City of Fontana G&A rates & Hourly Billing Rates in effect at the preparation date of this User Fee Analysis.

More or (Less) than Fontana's
Fee
per Unit of Service
Table/Chair Use
User Fee Determination By Participant
23/24 Cost Analysis Worksheet
Title Type Category
Community Vendor Fee Senior Programs Vendor
Department/Division Budget Unit
Community Services
Vendor table and chairs at Senior Center Health Fair Event. Includes logo on event program, name and logo displayed on one slide shown during the event. 7 451
ID# Date
NEW 3/27/2024
Fund Object Acct Form Type
New Fee
Description of Service, Demand, Subsidy and Other Comments:

Personnel Costs
Rates*
Position Straight Time
Hourly
Fringe Benefits
Hourly
Total Direct
Labor Cost
Dept. or Div.

Overhead
Total Burdened
Labor Cost / Hr.

Hours by Position or
Per Unit
Total Labor Cost per Unit of Service
Community Services Coordinator $34.27 $13.65 $47.92 21.74% $58.34 1.00 $58.34 Community Services Assistant* $19.46 $0.48 $19.94 21.74% $24.27 3.00 $72.82 Senior Community Services Assistant* $21.23 $0.52 $21.75 21.74% $26.48 2.00 $52.96 Total Burdened Personnel Costs per Unit of Service 184.12 Material & Rental Costs
Description Cost Each Quantity Required Unit Cost
Total Material & Rental Costs per Unit of Service
Other Costs (Equipment, Building Usage, Part-time Labor w/o Benefits) Description Cost Each Quantity Required Unit Cost
Total Other Costs per Unit of Service
Fee Comparison Data Total Service Direct Costs $184.12
Jurisdiction Fee per Unit City-Wide General &
Administrative* Rate @

12.06% $22.20
CITY OF FONTANA $20.00 Dollars Percentage Total Program Cost $206.32 Colton ($20.00) Number of Participants 10
Corona ($20.00) Cost/Participant $20.63
Moreno Valley ($20.00) Recommended Fee/Participant $20.00 Ontario ($20.00) Total Revenue $200.00
Rancho Cucamonga ($20.00) Total Cost Subsidy Program $6.32 Rialto ($20.00) Current Fee Amount
San Bernardino City ($20.00) Fee Increase/(Decrease) $20.00 *Note: Rates are per the City of Fontana G&A rates & Hourly Billing Rates in effect at the preparation date of this User Fee Analysis.

More or (Less) than Fontana's
Fee
per Unit of Service
Table/Chair Use
User Fee Determination By Participant
23/24 Cost Analysis Worksheet
Title Type Category
Senior Center Sports Membership Senior Programs Membership Department/Division Budget Unit
Community Services
Annual fee for participation in one Senior Sports program for participants 50-54 years old. 8 452
User
Fee Recommendations, City of Fontana
Hou
rly Billing Rates 24/25
- Billing Rates By Position
- Organization Overhead Rates
- General & Administrative Rates (aka G &A Rates)
9 453
Executive Staff (Rates Unique to Position at Time of the Adopted Budget) Budgeted Fringe Total Dept/Div Total
City Gen. &
Admin. Total
Position Benefit Direct Overhead Burdened Overhead Billing Rate POSITION TITLE Hourly Rate Hourly Rate Labor Cost Cost Labor Cost 12.06% Per Hour a b c d e f g
(a+b) ( O/H rate
times c)
(c+d) (G & A rate
times e)
(e + f)
City Manager $162.23 $59.08 $221.31 $46.20 $267.51 $32.26 $299.77

20.87%
Director of Planning $93.57 $45.28 $138.85 $25.48 $164.33 $19.82 $184.16

18.35%
Director of Building & Saftey $93.57 $42.62 $136.20 $25.00 $161.19 $19.44 $180.64

18.35%
Director of Community Services $93.63 $35.22 $128.85 $26.90 $155.75 $18.78 $174.54

20.87%
Deputy City Clerk $70.39 $27.88 $98.27 $20.51 $118.78 $14.33 $133.11

20.87%
Deputy City Manager - Development $136.65 $54.99 $191.63 $40.00 $231.64 $27.94 $259.57

20.87%
Deputy City Manager - Administration $136.65 $54.99 $191.63 $40.00 $231.64 $27.94 $259.57

20.87%
Director of Human Resources & Risk Management $90.48 $30.64 $121.12 $25.28 $146.40 $17.66 $164.05

20.87%
Director of Innovation & Technology $96.38 $34.66 $131.04 $27.35 $158.39 $19.10 $177.49

20.87%
Chief Financial Officer $102.93 $47.34 $150.27 $31.37 $181.63 $21.90 $203.54

20.87%
Chief of Police $136.89 $83.14 $220.03 $32.09 $252.12 $30.41 $282.52

14.59%
Director of Public Works/City Engineer $105.12 $33.47 $138.59 $25.44 $164.03 $19.78 $183.81

18.35%
Full Cost Allocation..CAP-1
Human Resources Director
10 454
Full Cost Allocation..CAP-1
City Total
Position Fringe Total Total Gen. & Admin. Billing Rate
Hourly Rate at Benefit Direct Dept./Div. Overhead Burdened Overhead Labor Rate/Hr.

Position Title "E" Step Hourly Rate Labor Cost Rate Cost Labor Cost 12.06% a b c
(a + b)
d e
(c times d)
f
( c + e)
g
(G & A rate times f)
h
(f + g)

DEVELOPMENT SERVICES
Community Development
Assistant Planner $42.68 $16.03 $58.71 18.35% $10.78 $69.48 $8.38 $77.86 Associate Planner $46.88 $15.79 $62.67 18.35% $11.50 $74.17 $8.95 $83.12 Building Inspector I $36.71 $12.54 $49.25 18.35% $9.04 $58.29 $7.03 $65.32 Building Inspector II $40.40 $18.96 $59.36 18.35% $10.89 $70.25 $8.47 $78.72 Building Permit Technician $36.71 $13.34 $50.05 18.35% $9.19 $59.24 $7.14 $66.38 Planning Technician $35.46 $13.58 $49.04 18.35% $9.00 $58.04 $7.00 $65.04 Building Official $68.21 $21.66 $89.87 18.35% $16.49 $106.36 $12.83 $119.19 Development Services Permit Aide $27.23 $12.14 $39.37 18.35% $7.23 $46.60 $5.62 $52.22 Development Services Supervisor $47.13 $25.24 $72.37 18.35% $13.28 $85.65 $10.33 $95.98 Planning Inspector $40.40 $13.86 $54.26 18.35% $9.96 $64.22 $7.74 $71.96 Assistant Building Official $57.81 $28.13 $85.94 18.35% $15.77 $101.71 $12.27 $113.98 Plans Examiner I $43.73 $24.15 $67.88 18.35% $12.46 $80.34 $9.69 $90.03 Plans Examiner II $48.09 $25.25 $73.34 18.35% $13.46 $86.80 $10.47 $97.27 Senior Planner $55.79 $23.81 $79.60 18.35% $14.61 $94.22 $11.36 $105.58 Engineering
Assistant Engineer $49.29 $14.80 $64.09 18.35% $11.76 $75.85 $9.15 $85.00 Associate Engineer $54.16 $16.25 $70.41 18.35% $12.92 $83.33 $10.05 $93.38 Development Services Permit Aide $27.23 $12.14 $39.37 18.35% $7.23 $46.60 $5.62 $52.22 Engineering Manager $73.08 $25.10 $98.18 18.35% $18.02 $116.20 $14.01 $130.21 Engineering Technician I $30.08 $16.47 $46.55 18.35% $8.54 $55.10 $6.64 $61.74 Principal Civil Engineer $72.84 $25.55 $98.39 18.35% $18.06 $116.45 $14.04 $130.49 Public Works Inspection Supervisor $56.19 $28.23 $84.42 18.35% $15.49 $99.91 $12.05 $111.96 Public Works Inspector $40.58 $13.14 $53.72 18.35% $9.86 $63.58 $7.67 $71.25 Senior Civil Engineer $67.22 $20.00 $87.22 18.35% $16.01 $103.22 $12.45 $115.67 Senior Engineer $64.01 $18.21 $82.22 18.35% $15.09 $97.32 $11.74 $109.05 Senior Public Works Inspector $49.77 $24.64 $74.41 18.35% $13.66 $88.07 $10.62 $98.69 Senior Traffic Signal Maintenance Technician $49.29 $26.00 $75.29 18.35% $13.82 $89.10 $10.75 $99.85 Supervising Traffic Systems Specialist $54.55 $20.52 $75.07 18.35% $13.78 $88.85 $10.72 $99.57 Traffic Engineering Technician $43.97 $17.64 $61.61 18.35% $11.31 $72.92 $8.79 $81.72 Traffic Signal Maintenance Technician I $39.97 $23.21 $63.18 18.35% $11.60 $74.77 $9.02 $83.79 Traffic Signal Maintenance Technician II $43.97 $15.19 $59.16 18.35% $10.86 $70.02 $8.44 $78.46 Senior Traffic Engineer $67.22 $19.17 $86.39 18.35% $15.85 $102.24 $12.33 $114.57 Public Works
Aquatics Maintenance Worker $29.60 $9.92 $39.52 18.35% $7.25 $46.78 $5.64 $52.42 Chief Equipment Mechanic $39.34 $17.02 $56.36 18.35% $10.34 $66.70 $8.04 $74.74 Environmental Control Assistant $25.54 $9.22 $34.76 18.35% $6.38 $41.14 $4.96 $46.10 Environmental Control Supervisor $49.03 $16.37 $65.40 18.35% $12.00 $77.40 $9.33 $86.73 Environmental Control Technician $33.91 $17.02 $50.93 18.35% $9.35 $60.28 $7.27 $67.55 Equipment Mechanic I $32.55 $10.54 $43.09 18.35% $7.91 $50.99 $6.15 $57.14 Equipment Mechanic II $35.79 $19.28 $55.07 18.35% $10.11 $65.18 $7.86 $73.04 Equipment Operator II $35.13 $14.53 $49.66 18.35% $9.11 $58.77 $7.09 $65.86 Facilities Maintenance Supervisor $49.03 $17.41 $66.44 18.35% $12.19 $78.63 $9.48 $88.11 Fleet Supervisor $49.03 $15.10 $64.13 18.35% $11.77 $75.90 $9.15 $85.05 Landscape Technician I $36.58 $12.23 $48.81 18.35% $8.96 $57.76 $6.97 $64.73 Maintenance Service Worker I $26.30 $9.68 $35.98 18.35% $6.60 $42.58 $5.14 $47.72 Maintenance Service Worker II $28.93 $15.83 $44.76 18.35% $8.22 $52.98 $6.39 $59.36 Maintenance Services Crew Chief $37.23 $24.66 $61.89 18.35% $11.36 $73.25 $8.83 $82.08 Parks Development Coordinator $52.33 $10.60 $62.93 18.35% $11.55 $74.48 $8.98 $83.46 Parks & Landscape Supervisor $49.03 $17.66 $66.69 18.35% $12.24 $78.93 $9.52 $88.45 Parks Maintenance Technician $34.56 $13.61 $48.17 18.35% $8.84 $57.01 $6.88 $63.89 Parks Technical Crew Chief $37.23 $10.86 $48.09 18.35% $8.83 $56.92 $6.86 $63.79 Project Coordinator $49.54 $12.45 $61.99 18.35% $11.38 $73.36 $8.85 $82.21 Public Works Manager $67.47 $13.92 $81.39 18.35% $14.94 $96.33 $11.62 $107.95 Pump Maintenance Assistant $31.91 $19.48 $51.39 18.35% $9.43 $60.82 $7.34 $68.16 Pump Maintenance Technician $37.23 $21.80 $59.03 18.35% $10.83 $69.87 $8.43 $78.30 Senior Environmental Control Tech $37.31 $14.84 $52.15 18.35% $9.57 $61.73 $7.44 $69.17 Senior Maintenance Service Worker $31.91 $13.64 $45.55 18.35% $8.36 $53.91 $6.50 $60.41 Tree Trimmer Specialist $33.89 $12.81 $46.70 18.35% $8.57 $55.27 $6.67 $61.94 Utilities & Streets Supervisor $49.03 $15.78 $64.81 18.35% $11.89 $76.70 $9.25 $85.95 Welder $35.13 $11.13 $46.26 18.35% $8.49 $54.75 $6.60 $61.35 Administrative
Administrative Aide $26.86 $10.09 $36.95 18.35% $6.78 $43.73 $5.27 $49.00 Administrative Analyst I $40.80 $10.65 $51.45 18.35% $9.44 $60.89 $7.34 $68.23 Administrative Analyst II $45.19 $14.46 $59.65 18.35% $10.95 $70.60 $8.51 $79.12 Administrative Clerk I $22.56 $15.51 $38.07 18.35% $6.99 $45.06 $5.43 $50.49 Administrative Clerk II $24.90 $9.80 $34.70 18.35% $6.37 $41.07 $4.95 $46.03 Administrative Secretary $33.72 $10.80 $44.52 18.35% $8.17 $52.70 $6.36 $59.05 Administrative Technician $30.27 $11.06 $41.33 18.35% $7.58 $48.91 $5.90 $54.81 Secretary $28.33 $9.68 $38.01 18.35% $6.98 $44.99 $5.43 $50.42 Senior Administrative Aide $37.62 $22.52 $60.14 18.35% $11.04 $71.18 $8.58 $79.76 Senior Administrative Analyst $52.33 $26.75 $79.08 18.35% $14.51 $93.60 $11.29 $104.88 11 455
Full Cost Allocation..CAP-1
City Total
Position Fringe Total Total Gen. & Admin. Billing Rate
Hourly Rate at Benefit Direct Dept./Div. Overhead Burdened Overhead Labor Rate/Hr.

Position Title "E" Step Hourly Rate Labor Cost Rate Cost Labor Cost 12.06% a b c
(a + b)
d e
(c times d)
f
( c + e)
g
(G & A rate times f)
h
(f + g)

ADMINISTRATIVE SERVICES
Community Services
Aquatics Coordinator $34.27 $13.59 $47.86 20.87% $9.99 $57.85 $6.98 $64.83 Cable Television Operations Asst. $28.35 $10.61 $38.96 20.87% $8.13 $47.10 $5.68 $52.78 Community Services Coordinator $34.27 $16.91 $51.18 20.87% $10.68 $61.86 $7.46 $69.32 Community Services Manager $64.17 $24.48 $88.65 20.87% $18.51 $107.16 $12.92 $120.08 Community Services Supervisor $45.51 $20.05 $65.56 20.87% $13.69 $79.25 $9.56 $88.81 Marketing Communications Specialist $37.65 $20.64 $58.29 20.87% $12.17 $70.45 $8.50 $78.95 Production Coordinator $40.40 $15.35 $55.75 20.87% $11.64 $67.39 $8.13 $75.51 Administrative (Includes IT and HR Positions)
Account Clerk I $24.68 $10.67 $35.35 20.87% $7.38 $42.73 $5.15 $47.88 Account Clerk II $26.71 $9.55 $36.26 20.87% $7.57 $43.83 $5.29 $49.12 Accountant I $38.40 $12.97 $51.37 20.87% $10.72 $62.09 $7.49 $69.58 Accountant II $42.68 $17.99 $60.67 20.87% $12.66 $73.33 $8.84 $82.18 Accounting Manager $72.14 $24.44 $96.58 20.87% $20.16 $116.75 $14.08 $130.83 Accounting Technician $35.83 $13.68 $49.51 20.87% $10.33 $59.84 $7.22 $67.06 Administrative Aide $26.86 $10.09 $36.95 20.87% $7.71 $44.66 $5.39 $50.05 Administrative Analyst I $40.80 $10.65 $51.45 20.87% $10.74 $62.19 $7.50 $69.69 Administrative Analyst II $45.19 $14.46 $59.65 20.87% $12.45 $72.11 $8.70 $80.80 Administrative Clerk I $22.56 $15.51 $38.07 20.87% $7.95 $46.02 $5.55 $51.57 Administrative Clerk II $24.90 $9.80 $34.70 20.87% $7.24 $41.95 $5.06 $47.01 Administrative Secretary $33.72 $10.80 $44.52 20.87% $9.29 $53.82 $6.49 $60.31 Administrative Technician $30.27 $11.06 $41.33 20.87% $8.63 $49.95 $6.02 $55.98 Budget Manager $72.14 $22.78 $94.92 20.87% $19.81 $114.73 $13.84 $128.57 (IT) Business Analyst II $49.27 $20.61 $69.88 20.87% $14.59 $84.46 $10.19 $94.65 *Communications & Marketing Manager $62.58 $20.37 $82.95 20.87% $17.32 $100.27 $12.09 $112.36 Customer Service Supervisor $47.13 $18.12 $65.25 20.87% $13.62 $78.87 $9.51 $88.38 (IT) Database Administrator $63.82 $20.69 $84.51 20.87% $17.64 $102.15 $12.32 $114.46 Executive Secretary to City Manager $45.42 $17.19 $62.61 20.87% $13.07 $75.67 $9.13 $84.80 (IT) GIS Administrator $63.82 $21.56 $85.38 20.87% $17.82 $103.20 $12.45 $115.65 (IT) GIS Analyst $41.20 $14.76 $55.96 20.87% $11.68 $67.64 $8.16 $75.80 GIS Engineering Technician $46.45 $11.70 $58.15 18.35% $10.67 $68.82 $8.30 $77.12 (IT) GIS Technician $34.97 $12.13 $47.10 20.87% $9.83 $56.93 $6.87 $63.80 Housing Development Manager $62.58 $16.83 $79.41 20.87% $16.58 $95.99 $11.58 $107.57 Human Resources Analyst $48.29 $16.78 $65.07 20.87% $13.58 $78.65 $9.49 $88.14 Human Resources Clerk $27.90 $19.49 $47.39 20.87% $9.89 $57.28 $6.91 $64.19 Human Resources Technician $34.95 $14.51 $49.46 20.87% $10.32 $59.78 $7.21 $66.99 (IT) Application Programmer/Developer $47.13 $16.49 $63.62 20.87% $13.28 $76.90 $9.27 $86.17 (IT) Senior Business Analyst $56.36 $27.77 $84.13 20.87% $17.56 $101.69 $12.26 $113.95 IT Senior Technician $38.40 $12.99 $51.39 20.87% $10.73 $62.12 $7.49 $69.61 (IT) Support Supervisor $63.82 $21.07 $84.89 20.87% $17.72 $102.61 $12.38 $114.99 (IT) Information Technology Manager $69.18 $29.13 $98.31 20.87% $20.52 $118.83 $14.33 $133.16 IT Technician I $29.18 $17.18 $46.36 20.87% $9.68 $56.04 $6.76 $62.79 IT Technician II $33.24 $11.69 $44.93 20.87% $9.38 $54.31 $6.55 $60.86 (IT) Network/Security Administrator $67.47 $28.51 $95.98 20.87% $20.04 $116.02 $13.99 $130.01 Marketing Communications Assistant $28.35 $12.03 $40.38 20.87% $8.43 $48.81 $5.89 $54.70 Payroll Technician $35.13 $22.42 $57.55 20.87% $12.01 $69.57 $8.39 $77.96 Payroll Coordinator $41.20 $20.99 $62.19 20.87% $12.98 $75.17 $9.07 $84.24 Project Specialist $35.13 $11.36 $46.49 20.87% $9.70 $56.19 $6.78 $62.97 (IT) Public Safety Systems Specialist $45.19 $23.09 $68.28 20.87% $14.25 $82.53 $9.95 $92.49 Purchasing Specialist $38.61 $14.89 $53.50 20.87% $11.17 $64.66 $7.80 $72.46 Purchasing Supervisor $47.13 $24.00 $71.13 20.87% $14.85 $85.98 $10.37 $96.35 Resources Budget Officer $57.81 $26.78 $84.59 20.87% $17.66 $102.25 $12.33 $114.59 Secretary $28.33 $9.68 $38.01 20.87% $7.94 $45.95 $5.54 $51.49 Senior Accountant $47.36 $17.34 $64.70 20.87% $13.51 $78.21 $9.43 $87.64 Senior Administrative Aide $37.62 $22.52 $60.14 20.87% $12.55 $72.69 $8.77 $81.46 Senior Administrative Analyst $52.33 $26.75 $79.08 20.87% $16.51 $95.59 $11.53 $107.12 (IT) Software Development Supervisor $63.82 $29.64 $93.46 20.87% $19.51 $112.97 $13.62 $126.60 (IT) Systems/Network Specialist $45.94 $25.14 $71.08 20.87% $14.84 $85.92 $10.36 $96.28 (IT) Systems Administrator $56.36 $27.77 $84.13 20.87% $17.56 $101.69 $12.26 $113.95 12 456
Full Cost Allocation..CAP-1
City Total
Position Fringe Total Total Gen. & Admin. Billing Rate
Hourly Rate at Benefit Direct Dept./Div. Overhead Burdened Overhead Labor Rate/Hr.

Position Title "E" Step Hourly Rate Labor Cost Rate Cost Labor Cost 12.06% a b c
(a + b)
d e
(c times d)
f
( c + e)
g
(G & A rate times f)
h
(f + g)
POLICE
Animal Services Officer $29.04 $15.78 $44.82 14.59% $6.54 $51.36 $6.19 $57.55 Code Compliance Inspector $40.40 $21.07 $61.47 14.59% $8.97 $70.44 $8.49 $78.93 Police Communications Supervisor $52.33 $20.01 $72.34 14.59% $10.55 $82.89 $10.00 $92.89 Community Improvement Program Manager $67.47 $28.59 $96.06 14.59% $14.01 $110.07 $13.27 $123.34 Community Policing Technician $33.41 $19.93 $53.34 14.59% $7.78 $61.12 $7.37 $68.49 Community Services Officer I $27.91 $12.71 $40.62 14.59% $5.92 $46.54 $5.61 $52.15 Community Services Officer II $30.40 $15.84 $46.24 14.59% $6.74 $52.98 $6.39 $59.37 Sr. Community Services Officer $33.41 $15.47 $48.88 14.59% $7.13 $56.00 $6.75 $62.76 Police Corporal w/Advanced Certificate $61.23 $30.67 $91.90 14.59% $13.40 $105.30 $12.70 $118.00 Police Computer Forensics Technician $49.35 $25.30 $74.65 14.59% $10.89 $85.53 $10.32 $95.85 Police Dispatch Call Taker $27.91 $15.78 $43.69 14.59% $6.37 $50.06 $6.04 $56.10 Police Dispatch Shift Supervisor $41.49 $18.04 $59.53 14.59% $8.68 $68.21 $8.23 $76.44 Police Dispatcher I $32.42 $13.15 $45.57 14.59% $6.65 $52.22 $6.30 $58.52 Police Dispatcher II $35.64 $15.36 $51.00 14.59% $7.44 $58.44 $7.05 $65.49 Police Evidence Technician $38.58 $21.58 $60.16 14.59% $8.77 $68.93 $8.31 $77.25 Lead Property Control Clerk $34.26 $19.32 $53.58 14.59% $7.82 $61.39 $7.40 $68.80 Police Lieutenant w/Advanced Certificate $91.56 $41.51 $133.07 14.59% $19.41 $152.47 $18.39 $170.86 Police Officer $49.12 $24.64 $73.76 14.59% $10.76 $84.52 $10.19 $94.72 Police Officer $49.12 $24.64 $73.76 14.59% $10.76 $84.52 $10.19 $94.72 Police Officer Trainee $36.73 $20.17 $56.90 14.59% $8.30 $65.20 $7.86 $73.07 Police Officer w/Advanced Certificate $53.70 $26.39 $80.09 14.59% $11.68 $91.77 $11.07 $102.83 Police Officer w/Intermediate Certificate $51.38 $26.36 $77.74 14.59% $11.34 $89.08 $10.74 $99.83 Police Captain $105.31 $38.92 $144.23 14.59% $21.04 $165.27 $19.93 $185.20 Police Property Control Clerk $31.25 $15.25 $46.50 14.59% $6.78 $53.29 $6.43 $59.71 Police Records Specialist I $23.80 $7.23 $31.03 14.59% $4.53 $35.56 $4.29 $39.85 Police Records Specialist II $26.20 $16.36 $42.56 14.59% $6.21 $48.77 $5.88 $54.65 Police Records Supervisor $33.03 $17.50 $50.53 14.59% $7.37 $57.89 $6.98 $64.88 Senior Code Enforcement Inspector $44.39 $19.81 $64.20 14.59% $9.36 $73.56 $8.87 $82.43 Police Sergeant w/Advanced Certificate $75.07 $36.56 $111.63 14.59% $16.28 $127.91 $15.43 $143.34 Supervising Animal Services Officer $38.76 $17.68 $56.44 14.59% $8.23 $64.68 $7.80 $72.48 Police Training Specialist $36.90 $11.27 $48.17 14.59% $7.03 $55.20 $6.66 $61.86 Police Support Services Supervisor $43.50 $23.30 $66.80 14.59% $9.74 $76.55 $9.23 $85.78 Police Administrative Support Services Manager $62.58 $20.44 $83.02 14.59% $12.11 $95.13 $11.47 $106.60 Administrative Analyst II $45.19 $14.46 $59.65 14.59% $8.70 $68.36 $8.24 $76.60 Senior Administrative Analyst $52.33 $26.75 $79.08 14.59% $11.53 $90.62 $10.93 $101.54 Administrative Technician $30.27 $11.06 $41.33 14.59% $6.03 $47.35 $5.71 $53.06 Secretary $28.33 $9.68 $38.01 14.59% $5.54 $43.56 $5.25 $48.81 Senior Administrative Secretary $34.62 $13.20 $47.82 14.59% $6.98 $54.80 $6.61 $61.41 13 457
Full Cost Allocation..CAP-1
City Total
Position Fringe Total Total Gen. & Admin. Billing Rate
Hourly Rate at Benefit Direct Dept./Div. Overhead Burdened Overhead Labor Rate/Hr.

Position Title "E" Step Hourly Rate Labor Cost Rate Cost Labor Cost 12.06% a b c
(a + b)
d e
(c times d)
f
( c + e)
g
(G & A rate times f)
h
(f + g)
Part-Time & Seasonal
After School Community Services Assistant I $22.63 $0.56 $23.19 20.87% $4.84 $28.03 $3.38 $31.41 After School Community Services Assistant II $24.04 $0.59 $24.63 20.87% $5.14 $29.77 $3.59 $33.36 After School Community Services Assistant III $25.55 $0.63 $26.18 20.87% $5.46 $31.64 $3.82 $35.46 Animal Services Assistant $19.46 $0.48 $19.94 14.59% $2.91 $22.85 $2.76 $25.60 Assistant Pool Manager* $23.81 $0.59 $24.40 20.87% $5.09 $29.49 $3.56 $33.04 Boards & Commission Secretary $19.23 $0.47 $19.70 20.87% $4.11 $23.82 $2.87 $26.69 Cashier $19.95 $0.49 $20.44 20.87% $4.27 $24.71 $2.98 $27.69 Community Services Assistant* $19.46 $0.48 $19.94 20.87% $4.16 $24.10 $2.91 $27.01 Senior Community Services Assistant* $21.23 $0.52 $21.75 20.87% $4.54 $26.29 $3.17 $29.46 Intern I* $19.46 $0.48 $19.94 18.35% $3.66 $23.60 $2.85 $26.44 Intern II* $21.23 $0.52 $21.75 18.35% $3.99 $25.74 $3.10 $28.85 Intern III* $23.10 $0.57 $23.67 18.35% $4.34 $28.01 $3.38 $31.39 Lifeguard* $20.05 $0.49 $20.54 20.87% $4.29 $24.83 $2.99 $27.83 Maintenance Assistant* $16.00 $0.39 $16.39 18.35% $3.01 $19.40 $2.34 $21.74 Office Assistant $20.61 $0.51 $21.12 20.87% $4.41 $25.53 $3.08 $28.60 On-Call Police Dispatcher $32.42 $0.80 $33.22 14.59% $4.85 $38.06 $4.59 $42.65 Police Background Investigator $36.88 $0.91 $37.79 14.59% $5.51 $43.30 $5.22 $48.52 Police Cadet $19.46 $0.48 $19.94 14.59% $2.91 $22.85 $2.76 $25.60 Police Reserve Officer $25.80 $0.63 $26.43 14.59% $3.86 $30.29 $3.65 $33.94 Pool Manager* $25.96 $0.64 $26.60 20.87% $5.55 $32.15 $3.88 $36.03 Transportation Specialist $21.92 $0.54 $22.46 14.59% $3.28 $25.74 $3.10 $28.84 Transportation Specialist Trainee $16.00 $0.39 $16.39 14.59% $2.39 $18.78 $2.27 $21.05 Senior Transportation Specialist $23.81 $0.59 $24.40 20.87% $5.09 $29.49 $3.56 $33.04 Student Trainee* $16.00 $0.39 $16.39 20.87% $3.42 $19.82 $2.39 $22.21 Water Safety Instructor (WSI)* $21.87 $0.54 $22.41 20.87% $4.68 $27.09 $3.27 $30.35 14 458
Police
Administrative
Services
COST FACTOR Development Planning / Public Works/Engineering Police Community Services Building and Safety Dept Dept. Services
Direct Salary & Benefits: Admin
Employee Salary & Benefits $861,920 $5,314,650 $5,770,780 65,435,250 $10,781,450 Less Administrative Salary & Benefits ($104,687) ($295,618) ($234,042) ($481,529) ($457,325) Total Direct Employee Salary & Benefits 757,233 5,019,032 5,536,738 64,953,721 10,324,125 Overhead Costs:

Operating Expenses 29,950 104,200 1,958,300 1,449,360 1,511,280 Contractual Services 625,860 803,000 3,450,830 4,247,090 1,851,870 Internal Service Charges 60,560 330,390 1,153,640 7,195,480 1,048,660 Admin. Salary & Benefits $104,687 295,618 234,042 481,529 457,325 Exclusions ($625,860) (297,000) (6,151,870) (3,899,190) (2,869,810) Total Overhead Costs 195,197 1,236,208 644,942 9,474,269 1,999,325 divided by divided by divided by divided by divided by
Total Direct Employee Salary & Benefits 757,233 5,019,032 5,536,738 64,953,721 10,324,125 equals equals equals equals equals
Overhead Rate As A Percent of
Direct Employee Salaries & Benefits 25.78% 24.63% 11.65% 14.59% 19.37% Prior Year Rate (equivalent) 18.90% 16.88% 26.81% 13.98% 17.46% Central Service Departments
COST FACTOR City Human Administrative Office of the Innovation and Finance Administration Resources Svcs Admin City Clerk Technology Direct Salary & Benefits:

Employee Salary & Benefits $1,770,520 $1,116,380 $493,160 $653,880 4,656,490 $3,584,480 Less Administrative Salary & Benefits ($130,219) ($25,193) ($96,168) ($213,224) ($374,963) ($403,898) Total Direct Employee Salary & Benefits 1,640,301 1,091,187 396,992 440,656 4,281,527 3,180,582 Overhead Costs:

Operating Expenses 433,160 121,900 96,000 37,000 13,600 80,850 Contractual Services 1,665,610 128,550 17,100 168,700 - 724,810 Internal Service Charges 125,220 38,550 16,970 23,840 178,110 127,120 Admin. Salary & Benefits $130,219 25,193 96,168 213,224 374,963 403,898 Exclusions ($1,877,340) (158,680) (17,100) (174,200) 0 (554,830) Total Overhead Costs 476,869 155,513 209,138 268,564 566,673 781,848 divided by divided by divided by divided by divided by divided by Total Direct Employee Salary & Benefits 1,640,301 1,091,187 396,992 440,656 4,281,527 3,180,582 equals equals equals equals equals equals
Overhead Rate As A Percent of
Direct Employee Salaries & Benefits 29.07% 14.25% 52.68% 60.95% 13.24% 24.58% Prior Year Rate (equivalent) 29.29% 10.97% 65.75% 45.62% 15.77% 22.04% Administrative Development Total
Blended Rates by Organization Services Services Police City Direct Salary & Benefits:

Employee Salary & Benefits 23,056,360 11,947,350 65,435,250 100,438,960 Less Administrative Salary & Benefits (1,700,990) (634,347) (481,529) (2,816,866) Total Direct Employee Salary & Benefits 21,355,370 11,313,003 64,953,721 97,622,094 Overhead Costs:

Operating Expenses 2,293,790 2,092,450 1,449,360 5,835,600 Contractual Services 4,556,640 4,879,690 4,247,090 13,683,420 Internal Service Charges 1,558,470 1,544,590 7,195,480 10,298,540 Admin. Salary & Benefits 1,700,990 634,347 481,529 2,816,866 Exclusions (5,651,960) (7,074,730) (3,899,190) (16,625,880) Total Overhead Costs 4,457,930 2,076,347 9,474,269 16,008,546 divided by divided by divided by divided by
Total Direct Employee Salary & Benefits 21,355,370 11,313,003 64,953,721 97,622,094 equals equals equals equals
Overhead Rate As A Percent of
Direct Employee Salaries & Benefits 20.87% 18.35% 14.59% 16.40% Prior Year Rate (equivalent) 20.22% 19.90% 13.98% 16.03% Based on the Proposed General Fund Budget Data for FY 2024/2025 Department/Division Overhead Rates
City Departments and/or Divisions
Development Services
Administrative Services
15 459
User Fee Recommendations, City of Fontana
New User Fees Fiscal
Year 2024/2025
16 460
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-3090 Agenda Date: 6/25/2024
Agenda #: A. Category: New Business
FROM:

Finance
SUBJECT:

Issuance of Special Tax Bonds for CFD #107 (Highland)
RECOMMENDATION:

Adopt Resolution No. 2024-055, of the City Council of the City of Fontana authorizing the issuance of City of Fontana Community Facilities District No. 107 (Highland) Special Tax Bonds, Series 2024, in an aggregate principal amount of not to exceed $3,595,000, 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:
· Practice sound fiscal management by developing long-term funding and debt management plans.

DISCUSSION:

On October 26, 2021, the City Council authorized the formation of Community Facilities District No. 107 (Highland) and conducted a special election to levy taxes within the District. This project consists of 107 residential lots located north of South Highland Avenue between San Sevaine Road and Hemlock 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. Preliminary Official Statement; and

5. Appraisal Report.

FISCAL IMPACT:

The fiscal impact associated with the approval of this item is $3.26 million in bond proceeds resulting from the issuance of the bonds to be made available for the approved infrastructure projects which also includes $649,121 in community benefit fees (20% of bond proceeds) to fund a defined community benefit project. Costs of issuance will be paid from gross bond proceeds. Debt service City of Fontana Printed on 6/20/2024Page 1 of 2
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File #: 21-3090 Agenda Date: 6/25/2024
Agenda #: A. Category: New Business
community benefit project. 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.

City of Fontana Printed on 6/20/2024Page 2 of 2
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4149-9076-6927.2

RESOLUTION NO. _______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

FONTANA AUTHORIZING THE ISSUANCE OF CITY OF
FONTANA COMMUNITY FACILITIES DISTRICT NO. 107
(HIGHLAND) SPECIAL TAX BONDS, SERIES 2024, IN AN

AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED
$5,000,000, 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. 107 (Highland) (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 a special tax (the “Special Tax”) to pay for the costs of certain public facilities (the “Facilities”) and to issue bonds payable from the Special Tax;
WHEREAS, in order to provide funds to finance certain of the Facilities, the Community Facilities District proposes to issue its City of Fontana Co mmunity Facilities District No. 107 (Highland) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”), in the aggregate principal amount of not to exceed $5,000,000;
WHEREAS, in order to provide for the authentication and delivery of the Series 2024 Bonds, to establish and declare the terms and conditions upon which the Series 2024 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 ente r 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 2024 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 2024 Bonds, the underwriter thereof must have reasonably determined that the Community Facilities District , as 463

2 4149-9076-6927.2

the issuer of the Series 2024 Bonds, has undertaken in a written agreement or contract for the benefit of the holders of the Series 2024 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 2024 Bonds has been prepared (such Preliminary Official Statement, in the form presented to thi s 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 May 31, 2024 (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 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 2024 Bonds, good faith estimates of (a) the true interest cost of the Series 2024 Bonds, (b) the sum of all fees and charges paid to third parties with respect to the Series 2024 Bonds, (c) the amount of proceeds of the Series 2024 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 2024 Bonds, and (d) the sum total of all debt service payments on the Series 2024 Bonds calculated to the final maturity of the Series 2024 Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Series 2024 Bonds;
WHEREAS, in compliance with Section 5852.1 of the California 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;
464

3 4149-9076-6927.2

WHEREAS, the Community Facilities District desires to proceed to issue and sell the Series 2024 Bonds and to authorize the execution of such documents and the performance of such acts as may be necessary or desira ble to effect the offering, sale and issuance of the Series 2024 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 2024 Bonds, in an aggregate principal amount of not to exceed $5,000,000, 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 2024 Bonds shall be dated, shall bear interest at the rates, shall mature on the dates, shall be subject to ca ll 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, Finance Department, 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 execut e 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 2024 Bonds in excess of $5,000,000, shall not result in a final maturity date of the Series 2024 Bonds later than September 1, 2055, and shall not result in a true interest cost for the Series 2024 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 2024 Bonds in excess of 2.00% of the aggregate principal amount of the Series 2024 Bonds. The City Council hereby finds and determines that the sale of the Series 465

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2024 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 Autho rized 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 th e 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 2024 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 2024 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 value of the property within the Community Facilities District reported in the Appraisal and the value -to-lien information for such property set forth in the Preliminary Official Statement, the City Council, for purposes of Section 53345.8 of th e 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 2024 Bonds will be at least three times the principal amount of the Series 2024 Bonds to be sold and the princ ipal 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 Cou ncil 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 2024 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 permitt ed under the California Uniform Electronic Transactions Act and digital signatures as may be permitted under Section 16.5 of the California 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 2024 Bonds, or in connection with or related to any of the agreements , documents, certificates or instruments referred to herein, are hereby approved, confirmed and ratified.

Section 12. The Authorized Officers and t he 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 agreements, documents, certificates or instruments that 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 t his Resolution not inconsistent with the provisions hereof.

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

PASSED AND ADOPTED the 25th day of June, 2024.
__________________________________
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 2024 Bonds in accordance with Section 5852.1 of the California Government Code. Such good faith estimates have been provided to the Community Facilities District by the Municipa l 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 m arket conditions, its good faith estimate of the aggregate principal amount of the Series 2024 Bonds to be issued and sold is $ 3,595,000 (the “Estimated Principal Amount”), which does not include approximately $103,000 of net premium estimated to be genera ted 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 $3,698,000 of gross proceeds.

True Interest Cost of the Series 2024 Bonds. The Municipal Advisor has informed the Community Facilities District that, a ssuming that the Estimated Principal Amount of the Series 2024 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 2024 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 2024 Bonds, is 4.90%.

Finance Charge of the Series 2024 Bonds. The Municipal Advisor has informed the Community Facilities District that, a ssuming that the Estimated Principal Amount of the Series 2024 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 c harge for the Series 2024 Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Series 2024 Bonds), is $337,000.

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 2024 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 2024 Bonds, less the finance c harge of the Series 2024 Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Series 2024 Bonds, is $3,118,000.

Total Payment Amount . The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2024 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 s um total of all payments the Community Facilities District will make to pay debt service on the Series 2024 Bonds, plus the finance charge for the Series 2024 Bonds, as described above, not paid with the proceeds of the Series 2024 Bonds, calculated to the final maturity of the Series 2024 Bonds, is $6,980,000, which 468

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excludes any reserves (or interest accrued thereon) or capitalized interest funded or paid with proceeds of the Series 2024 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 2024 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 2024 Bonds being different than the date assumed for purposes of such estimates , (b) the actual principal amount of Series 2024 Bonds issued and sold being different from the Estimated Principal Amount, (c) the actual amortization of the Series 2024 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 2024 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 2024 Bonds and the actual principal amount of Series 2024 Bonds issued and sold will be determined by the Community Facilities District based on the timing of the need for proceeds of the Series 2024 Bonds and other factors. The actual interest rates borne by the Series 2024 Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Series 2024 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. 469

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CITY OF FONTANA )

COUNTY OF SAN BERNARDINO )

STATE OF CALIFORNIA )

I, Germaine 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 June 25, 2024, 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. 107
(HIGHLAND)

and

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,

AS TRUSTEE

Dated as of ________ 1, 2024

Relating to
City of Fontana
Community Facilities District No. 107
(Highland)
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 ............................................................................................ 11 ARTICLE II THE BONDS ..................................................................................................... 12 Section 2.01. Authorization of Bonds; Special, Limited Obligations .............................. 12 Section 2.02. Terms of Series 2024 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 2024 BONDS; APPLICATION OF PROCEEDS; ADDITIONAL BONDS ............................................................. 18 Section 3.01. Issuance of Series 2024 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 ...................................... 21 Section 3.06. Procedure for the Issuance of Additional Bonds ....................................... 22 Section 3.07. Additional Bonds ....................................................................................... 23 ARTICLE IV REDEMPTION OF BONDS ............................................................................. 24 Section 4.01. Redemption of Series 2024 Bonds ............................................................. 24 Section 4.02. Notice of Redemption ................................................................................ 26 Section 4.03. Selection of Bonds for Redemption ........................................................... 26 Section 4.04. Partial Redemption of Bonds ..................................................................... 27 Section 4.05. Effect of Notice of Redemption ................................................................. 27 ARTICLE V SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS ................. 28 Section 5.01. Pledge ......................................................................................................... 28 Section 5.02. Special Tax Fund ....................................................................................... 28 472

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Section 5.03. Bond Fund .................................................................................................. 29 Section 5.04. Reserve Fund ............................................................................................. 29 Section 5.05. Redemption Fund ....................................................................................... 30 Section 5.06. Rebate Fund ............................................................................................... 31 Section 5.07. Administrative Expense Fund .................................................................... 31 Section 5.08. Investment of Moneys................................................................................ 32 ARTICLE VI COVENANTS ................................................................................................... 34 Section 6.01. Collection of Special Tax Revenues .......................................................... 34 Section 6.02. Foreclosure ................................................................................................. 34 Section 6.03. Compliance with Act ................................................................................. 35 Section 6.04. Punctual Payment....................................................................................... 35 Section 6.05. Extension of Payment of Bonds ................................................................. 35 Section 6.06. Against Encumbrances; Defense of Pledge ............................................... 35 Section 6.07. Tax Covenants ........................................................................................... 35 Section 6.08. Non-Cash Payments of Special Tax .......................................................... 36 Section 6.09. Reduction in Special Tax ........................................................................... 36 Section 6.10. Continuing Disclosure ............................................................................... 36 Section 6.11. Accounting Records ................................................................................... 36 Section 6.12. State Reporting........................................................................................... 37 Section 6.13. Annual Reports to the California Debt and Investment Advisory Commission ......................................................................................................... 37 Section 6.14. Further Assurances ..................................................................................... 37 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES .................................................... 38 Section 7.01. Events of Default ....................................................................................... 38 Section 7.02. Foreclosure ................................................................................................. 38 Section 7.03. Other Remedies .......................................................................................... 38 Section 7.04. Remedies Not Exclusive ............................................................................ 39 Section 7.05. Application of Net Special Tax Revenues After Default ........................... 39 Section 7.06. Power of Trustee to Enforce ...................................................................... 39 Section 7.07. Owners’ Direction of Proceedings ............................................................. 40 Section 7.08. Limitation on Owners’ Right to Sue .......................................................... 40 Section 7.09. Absolute Obligation ................................................................................... 40 473

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Section 7.10. Termination of Proceedings ....................................................................... 40 Section 7.11. No Waiver of Default ................................................................................. 41 ARTICLE VIII TRUSTEE; SECURITIES INTERMEDIARY ................................................. 42 Section 8.01. Duties and Liabilities of Trustee ................................................................ 42 Section 8.02. Qualifications; Removal and Resignation; Successors .............................. 42 Section 8.03. Liability of Trustee .................................................................................... 43 Section 8.04. Right to Rely on Documents and Opinions ............................................... 45 Section 8.05. Accounting Records and Financial Statements.......................................... 45 Section 8.06. Preservation and Inspection of Documents................................................ 45 Section 8.07. Compensation and Indemnification ........................................................... 45 Section 8.08. Securities Intermediary .............................................................................. 46 ARTICLE IX SUPPLEMENTAL INDENTURES .................................................................. 48 Section 9.01. Supplemental Indentures ............................................................................ 48 Section 9.02. Effect of Supplemental Indenture .............................................................. 49 Section 9.03. Endorsement of Bonds; Preparation of New Bonds .................................. 49 Section 9.04. Amendment of Particular Bonds ................................................................ 49 ARTICLE X DEFEASANCE ................................................................................................. 50 Section 10.01. Discharge of Indenture ............................................................................. 50 Section 10.02. Bonds Deemed To Have Been Paid ......................................................... 50 Section 10.03. Unclaimed Moneys .................................................................................. 51 ARTICLE XI MISCELLANEOUS .......................................................................................... 52 Section 11.01. Notices ..................................................................................................... 52 Section 11.02. Successor Is Deemed Included in All References to Predecessor ........... 52 Section 11.03. Limitation of Rights ................................................................................. 52 Section 11.04. Destruction of Bonds ............................................................................... 53 Section 11.05. Severability of Invalid Provisions ............................................................ 53 Section 11.06. Evidence of Rights of Owners ................................................................. 53 Section 11.07. Disqualified Bonds................................................................................... 53 Section 11.08. Money Held for Particular Bonds ............................................................ 54 Section 11.09. Funds and Accounts ................................................................................. 54 Section 11.10. Business Days .......................................................................................... 54 Section 11.11. Waiver of Personal Liability .................................................................... 54 474

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Section 11.12. Conflict with Act...................................................................................... 54 Section 11.13. Conclusive Evidence of Regularity ......................................................... 54 Section 11.14. Governing Laws ....................................................................................... 55 Section 11.15. Electronic Signature ................................................................................. 55 Section 11.16. Execution in Several Counterparts ........................................................... 55 EXHIBIT A PERMITTED INVESTMENTS .......................................................................... A-1 EXHIBIT B FORM OF SERIES 2024 BOND ......................................................................... B-1 475

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INDENTURE
THIS INDENTURE (this “Indenture”), dated as of ________ 1, 2024, is by and between CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND), 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 a special tax (the “Special Tax”) to pay for the costs of certain public facilities (the “Facilities”) and to issue bonds payable from the Special Tax;
WHEREAS, in order to provide funds to finance a portion of the Facilities, the Community Facilities District desires to provide for the issuance of its City of Fontana Community Facilities District No. 107 (Highland) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”), in the aggregate principal amount of not to exceed $__________; WHEREAS, the Community Facilities District desir es to provide for the issuance of additional bonds (the “Additional Bonds”) for refunding purposes payable from the Special Tax on a parity with the Series 2024 Bonds, provided that said issuance is in accordance with the Act and this Indenture (the Series 2024 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 an d 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 476

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Bonds by the owners thereof, and f or 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 or therein mentioned, have the meanings herein specified. “Accounts” means the accounts from time to time established pursuant to this Indenture in any of the Funds established and maintained by the Trustee pursuant hereto. “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 maintained by the Trustee pursuant to Section 3.04. “Acquisition Agreement” means the Acquisition and Funding Agreement, dated as of October 1, 2021, by and among the Community Facilities District, the City and Stratham Chow, LLC, 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 2024 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 maintained by the Trustee pursuant to Section 5.07.
“Administrative Expenses” means costs directl y related to the administration of the Community Facilities District, including: the costs of computing the Special Tax and preparing the annual Special Tax collection schedules and the costs of collecting the Special Tax, the costs of remitting the Specia l Tax 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 Tax and disclosures to Owners, the costs of the Community Facilities District related to an appeal of the Special Ta x, 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 any delinquent Special Tax. “Affiliate” of another Person means (a) each Person that, directly or indirectly, owns or controls, whether beneficially or as trustee, guardian, or other fiduciary, 50% or more of any class of equity securities of such other Person, and (b) each Person that controls, is controlled by or is under common control with or by such Person or any Affiliate of such Person. For the purpose of 478

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this definition, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise.
“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 sinki ng fund redemptions), and (b) the principal of the Outstanding Bonds due in such Bond Year (including by reason of mandatory sinking fund redemptions).
“Authorized Denominations” means (a) with respect to the Series 2024 Bonds, $5,000 and any integral mul tiple 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, Finance Department, 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 submitted to 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 Owne rs” 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 maintained 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, 2024. “Bonds” means the City of Fontana Community Facilities District No. 107 (Highland) Special Tax Bonds issued hereunder, and includes the Series 2024 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 d ay that 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. 479

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“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.
“Closing Date” means the date upon which the Series 2024 Bonds are delivered to the Original Purchaser, being __________, 2024.
“Code” means the Internal Revenue Code of 1986.
“Community Benefit Facilities Account” means the Account by that name within the Improvement Fund established and maintained by the Trustee pursuant to Section 3.04. “Community Benefit Facilities” means Construction Facilities, the costs of which are paid from the Community Benefit Facilities Account.
“Community Facilities District” means City of Fontana Community Facilities District No. 107 (Highland), 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 maintained 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 a bond insurance policy 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 maintained 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.
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“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. “Developer” means Richmond American Homes of Maryland, Inc. , a corporation organized and existing under the laws of the State of Maryland, and any successor thereto. “Developer Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated as of ________ 1, 2024, executed by the Developer, 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, 2024, 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 othe r twelve-month period hereafter selected and designated as the official fiscal year period of the Community Facilities District. “Funds” means the separate funds from time to time established and maintained by the Trustee pursuant hereto.
“Improvement Fund” means the Fund by that name established and maintained by the Trustee pursuant to Section 3.04.
“Indenture” means this Indenture, dated as of ________ 1, 2024 , 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 amended , supplemented or otherwise modified from time to time by any Supplemental Indenture.
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“Independent Consultant” means any consultant or firm of such consultants selected by the Community Facil ities 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 , the City, the Developer or any Affiliate there of, (c) does not have any substantial interest, direct or indirect (i) with or in the Community Facilities District, the City, the Developer or any Affiliate thereof , (ii) with or in any owner of real property in the Community Facilities District , or (iii) in any real property in the Community Facilities District, and (d) is not connected with the Community Facilities District , the City, the Developer or any Affiliate thereof 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 maintained by the Trustee pursuant to Section 5.03. “Interest Payment Dates” means March 1 and September 1 of each y ear, commencing [September 1, 2024].
“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 Trust ee 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” means any ordinance adopted by the City Council levying the Special Tax. “Original Purchaser” means the or iginal purchaser of the Series 2024 Bonds from the Community Facilities District.
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“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.
“Participant” means any entity that is recognized as a participant by DTC in the book - entry 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 maintained by the Trustee pursuant to Section 5.03. “Rate and Method” means the rate and method of apportionment of the Special Tax approved by the qualified electors of the Community Facilities District. “Rebate Fund” means the Fund by that name established and maintained 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 maintained 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. 483

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“Reserve Fund” means the Fund by that name established and maintained 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, with respect to the Bonds (excluding from such calculation Bonds refunded with the proceeds of subsequently issued Bonds), (b) Maximum Annual Debt Service, and (c) 125% of Average Annual Debt Service. “Resolution of Formation” means Resolution No. 2021-112, adopted by the City Council on October 26, 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.
“Securities Intermediary” means U.S. Bank National Association, as securities intermediary under the Indenture, or any successor thereto as Securities Intermediary under the Indenture substituted in its place as provided herein.
“Series” means the initial series o f Bonds executed, authenticated and delivered on the date of initial issuance of the Bonds and designated pursuant to this Indenture as the Series 2024 Bonds, and any Additional Bonds issued pursuant to a Supplemental Indenture and identified as a separate Series of Bonds.
“Series 2024 Bonds” means the City of Fontana Community Facilities District No. 107 (Highland) Special Tax Bonds, Series 2024, issued hereunder. “Special Tax” means the special tax described and defined in the Rate and Method as the “Facilities Special Tax” approved by the qualified electors to be levied within the Community Facilities District pursuant to the Act and the Rate and Method. “Special Tax Fund” means the Fund by that name established and maintained by the Trustee pursuant to Section 5.02.
“Special Tax Revenues” means the proceeds of the Special Tax received by or on behalf of the Community Facilities District, including any prepayments thereof, inte rest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Tax, which shall be limited to the amount of said lien and interest and penalties thereon.
“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.
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“Tax Certificate” means the Tax Certificate exec uted by the Community Facilities District at the time of issuance of the Series 2024 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 firm of such accountants, verifying th at 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 affe ct 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 485

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words and phrases used herein refer to this Indenture and not solely to the particular portion hereof in which any such word is used.
(i) Any reference to a Person, or a Person in a specified capacity, shall be construed to include such Person’s successors or such Person’s successors in such capacity, as the case may be.

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 that may from time to time be authorized, executed, issued and delivered hereunder, subject to th e 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, 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. 486

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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 denominations, 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. 107 (Highland) 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 here in, 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 2024 Bonds. (a) The Series 2024 Bonds shall be designated “City of Fontana Community Facilities District No. 107 (Highland) Special Tax Bonds, Series 2 024.” The aggregate principal amount of Series 2024 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 2024 Bonds shall be issued in fully registered form without coupons in Authorized Denominations, so long as no Series 2024 Bond shall have more than one maturity date. The Series 2024 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 2024 Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Series 2024 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 2024 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 2024 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 2024 Bonds at their respective addresses shown on the Registration Books a s of the close of business on the preceding Record Date. Notwithstanding the foregoing, interest on any Series 2024 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 2024 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 2024 Bonds shall be payable in lawful money of the United States of Am erica upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee.
(e) The Series 2024 Bonds shall be subject to redemption as provided in Article IV. (f) The Series 2024 Bonds shall be in substantially the form set for th 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 2024 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 488

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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 B ond (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 2024 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 that is, on the Record Date, shown for the Nominee in the Registration Books. (b) With respect to Book -Entry Bonds, the Community F acilities 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 489

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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 B ook-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 Book - Entry 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 i nterest 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 wr iting, 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 ha s 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 Faci lities 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 490

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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 deter mines 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 Bo ok-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 th e 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 Stol en. 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 491

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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, destroy ed 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 ful ly 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 Se ries 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 2024 BONDS; APPLICATION OF PROCEEDS;

ADDITIONAL BONDS
Section 3.01. Issuance of Series 2024 Bonds. The Community Facilities District may at any time execute the Series 2024 Bonds and deliver the same to the Trustee. The Trustee shall authenticate the Series 2024 Bonds and deliver the Series 2024 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 2024 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 Community Benefit Facilities Account.
(b) On the Closing Date, the amount transferred by the Community Facilities District to the Trustee , $__________, which consists of amounts of the Special Tax coll ected by the Community Facilities District, shall be deposited by the Trustee as follows:
(i) the Trustee shall deposit the amount of $__________ in the Community Benefit Facilities Account; and
(ii) the Trustee shall deposit the amount of $__________ in the Administrative Expense Fund.

Section 3.03. Costs of Issuance Fund . (a) The Trustee shall establish and maintain in trust in the name of the Trustee 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 493

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amount to be paid and instructions for such payment, (iii) the purpose for which the obligation was incurred, (iv) that such payment is a proper charge against the Costs of Issuance Fund, and (v) that payment of such amount has not been the subject of a prior disbursement from the Costs of Issuance Fund, in each case together with a stat ement 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 in trust in the name of the Trustee a separate Fund designated the “Improvement Fund.” Within the Improvement Fund, the Trustee shall establish and maintain in trust in the name of the Trustee a separate Account designated the “Acquisition Account ,” a separate Account designated the “Construction Account” and a separate Account designated the “C ommunity Benefit Facilities Account.” On the Closing Date, the Trustee shall deposit in the Acquisition Account and the Community Benefit Facilities 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 and instructions for such payment, (iii) the purpose for which the obligation was incurred, (iv) that such payment is for costs of the Acquisition Facilities and is a proper charge against the Acquisition Account, (v) that payment of such costs has not been the subject of a prior disbursement from the Acquisition Account, the Construction Account or the Community Benefit Facilities 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 Acquisit ion 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 o riginal 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 submission 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) th at 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 or the Community Benefit Facilities Account, as directed in a Written Certificate of the Community Facilities District submitted to the Trustee.
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(b) The m oneys 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 and instructions for such payment, (iii) the purpose for which the obligation was incurred, (iv) that such payment is for costs of the Construction Facilities and is a proper charge against the Construction Account , and (v) that payment of such costs has not been the subject of a prior disbursement from the Acquisition Account, the Construction Account or the Community Benefit Facilities Account, in each case together with a statement or invoice for each amount requ ested 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 Community Benefit Facilities Account, and (ii) the amount to be so transferred, the Trustee shall transfer such amount from the Construction Account to the Community Benefit Facilities Account.

Upon the submission 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 eq ual 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, i f 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.
(c) The moneys in the Community Benefit Facilities Account shall be used and withdrawn by the Trustee from time to time to pay the costs of Construction Facilities that constitute Community Benefit 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 and instructions for such payment, (iii) the purpose for which the obligation was incurred, (iv) that the Construction Facilities, the costs of which are to be paid, constitute Co mmunity Benefit Facilities and such payment is for costs of the Community Benefit Facilities and is a proper charge against the Community Benefit Facilities Account, and (v) that payment of such costs has not been the subject of a prior disbursement from the Acquisition Account, the Construction Account or the Community Benefit Facilities Account, in each case together with a statement or invoice for each amount requested thereunder . Additionally, upon su bmission of a Written Request of the Community Facilities District stating (i) that a portion of the amount on deposit in the Community Benefit Facilities Account is to be transferred to the Construction Account, and (ii) the amount to be so transferred, t he Trustee shall transfer such amount from the Community Benefit Facilities Account to the Construction Account.

Upon the submission of a Written Certificate of the Community Facilities District stating (i) that the portion of the Community Benefit Facilities to be financed from the Community Benefit Facilities Account has been completed and that all costs of such Community Benefit Facilities have been paid, or (ii) that such portion of the Community Benefit Facilities has been substantially 495

21 4144-5389-6015.2

completed and that all remaining costs of such portion of the Community Benefit Facilities have been determined and specifying the amount to be retained therefor, the Trustee shall (A) if the amount remaining in the Community Benefit Facilities 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 th e transfer, if any, required to be made pursuant to the preceding clause (A), transfer all of the amount remaining in the Community Benefit Facilities 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 condi tions, 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 m ay 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 (viii) 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 of, 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;
(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 sink ing 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;
496

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(v) the Authorized Denominations of such Additional Bonds; (vi) the redemption premiums and terms, if any, for such Additional Bonds;
(vii) the form of such Additional Bonds;
(viii) 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 (ix) such other provisions that are appropriate or necessary and are not inconsistent with the provisions hereof;
(c) The Community Facilities District shall have received a certificate from an Independent Consultant certifying that 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 the Special Tax 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 her eunder 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;
(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 497

23 4144-5389-6015.2

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. 498

24 4144-5389-6015.2

ARTICLE IV

REDEMPTION OF BONDS
Section 4.01. Redemption of Series 2024 Bonds. (a) Optional Redemption. The Series 2024 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 princ ipal amount of the Series 2024 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 2024 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 2024 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 Special Tax prepayments 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 2024 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

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(c) Mandatory Sinking Fund Redemption. The Series 2024 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 2024 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
$

(Maturity)

If some but not all of the Series 2024 Bonds maturing on September 1, 20__ are redeemed pursuant to Section 4.01(a), the principal amount of the Series 2024 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 submitted to the Trustee; provided, however, that the aggregate amount of such reductions shall not exceed the aggregate amount of the Series 2024 Bonds maturing on September 1, 20__ redeemed pursuant to Section 4.01(a). If some but not all of the Series 2024 Bonds maturing on September 1, 20__ are redeemed pursuant to Section 4.01(b), the principal amount of the Series 2024 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 2024 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 2024 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 2024 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
$

(Maturity)

500

26 4144-5389-6015.2

If some but not all of the Series 2024 Bonds maturing on September 1, 20__ are redeemed pursuant to Section 4.01(a), the principal amount of the Series 2024 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 submitted to the Trustee; provided, however, that the aggr egate amount of such reductions shall not exceed the aggregate amount of the Series 2024 Bonds maturing on September 1, 20__ redeemed pursuant to Section 4.01(a). If some but not all of the Series 2024 Bonds maturing on September 1, 20__ are redeemed pursuant to Section 4.01(b), the principal amount of the Series 2024 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 2024 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 R edemption. 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 and to the Original Purchaser , 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 501

27 4144-5389-6015.2

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 pursuan t to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity in any manner that the Trustee in its sole discretion shall deem appropriate. For purposes of such selection, all Bonds shall be deemed to be comp rised of the greatest number of separate denominations that would result in each such denomination being an Authorized Denomination and each such separate denomination shall be treated as a separate Bond 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 . (a) 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. (b) 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.
(c) All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof shall be canceled upon surrender thereof and destroyed. 502

28 4144-5389-6015.2

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 provisi ons 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 Fun d 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, pu rchasers 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 in trust in the name of the Trustee a separate Fund designated the “Special Tax Fund.” [On the Closing Date, the Trustee shall deposit in the Special Tax Fund the amount required to be deposited therein pursuant to Section 3.02.] As soon as practicable after the receipt by the Community Facilities District of any Special Tax Revenues, bu t in any event no later than the date ten Business Days 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 a Special Tax prepayment (i) said Special Tax prepayment shall be identified as such in a Written Certificate of the Community Facilities District submitted to the Trustee at the time such Special Tax prepayment is transferred to the Trustee, (ii) the portion of such Special Tax prepayment 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 Special Tax prepayment 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 Fac ilities 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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29 4144-5389-6015.2

(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 in trust in the name of the Trustee a separate Fund designated the “Bond Fund.” Within the Bond Fund, the Trustee shall establish and maintain in trust in the name of the Trustee 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 t he 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 in trust in the name of the Trustee a separate Fund designated the “Reserve Fund.” On the Closing Date, the 504

30 4144-5389-6015.2

Trustee shall deposit in the Reserve Fund the amount required to be deposited therein pursuant to Section 3.02. The Trustee shall deposit in the Reserve Fund from time to 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 t he 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 all 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 in trust in the name of the Trustee a separate 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 po rtion of Special Tax prepayments required to be deposited therein pursuant to Section 5.02(a), (iii) amounts required to be transferred to the Redemption Fund from the 505

31 4144-5389-6015.2

Improvement Fund (or Accounts therein) pursuant to Section 3.04, (iv) amounts required t o be transferred to the Redemption Fund from 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 2024 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 Additio nal Bonds are issued (other than mandatory sinking fund redemptions thereof).

Section 5.06. Rebate Fund. (a) The Trustee shall establish and maintain in the name of the Trustee a separate 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 i nto 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 upo n 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 in trust in the name of the Trustee a separate Fund designated the “Administrative Expense Fund.” [On the Closing Date, the Trustee shall deposit in the Administrative Expense Fund the amount required to be deposited therein pursuant to Section 3.02 .] 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 upo n 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 and instructions for such payment , (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 payment of 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. 506

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Section 5.08. Investment of Moneys . (a) Except as otherwise provided herein, all moneys in any of the Funds or Accounts shall be invested by the Trustee solely in Per mitted Investments, as directed in a Written Request 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 I nvestments 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 mat ure 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, 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 (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 (i) prior to the date on which a Written Certificate of the Community Facilities District is submitted to the Trustee pursuant to subsection ( b) of Section 3.04, be t ransferred to the Construction Account, and (ii) unless a Written Certificate of the Community Facilities District has been previously submitted to the Trustee pursuant to subsection (c) of Section 3.04, on and after the date such Written Certificate of th e Community Facilities District is submitted to the Trustee pursuant to subsection ( b) of Section 3.04 and prior to the date on which the Written Certificate of the Community Facilities District is submitted to the Trustee pursuant to subsection ( c) of Section 3.04, be transferred to the Community Benefit Facilities 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 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 util ize 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 m ay 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 507

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Fund or Account to which such Permitted Investments are credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment m ade or sold pursuant to this Section. For purposes of investment, the Trustee may commingle moneys in any of the Funds and Accounts. The Trustee, in making or disposing of any investment permitted by this Section, may deal with itself (in its individual ca pacity) 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.
(e) The Community Facilities District acknowledges that to the extent re gulations 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 w aives 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 Tax payments. (b) Prior to August 1 of each year, the Community Fac ilities District shall ascertain from the County Assessor the relevant parcels on which the Special Tax is 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 Tax each Fiscal Year in accordance with the Ordinance 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 Tax on the next real property tax roll.
(c) The Community Facilities District shall fix and levy the Special Tax 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 Tax that may be levied on each parcel, 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 es timated to be paid from such Special Tax Revenues, taking into account the balances in the Funds and Accounts. (d) The Special Tax 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 th at 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 the Special Tax levied thereon and, if such delinquenci es 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 the Special Tax 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 th e total amount of the Special Tax levied in such Fiscal Year, and (b) the amount then on deposit in the Reserve Fund is 509

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equal to the Reserve Requirement. Notwithstanding the foregoing, if the Community Facilities District determines that any single parcel in the Community Facilities District is delinquent in excess of $5,000 in the payment of the Special Tax, then the Community Facilities District shall diligently institute, prosecute and pursue foreclosure proceedings against such parcel.

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 Bon ds 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 that 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 encumbra nce 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 i nterest 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 2024 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 T ax Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive payment in full or defeasance of the Series 2024 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 in any of the Funds or Accounts, 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.
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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 2024 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 Tax. The Community Facilities District shall not authorize owners of taxable parcels within the Comm unity 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 Tax. 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 sh all, 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 Fa cilities 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% aggr egate principal amount of Outstanding Series 2024 Bonds, and upon receipt of indemnification reasonably satisfactory to the Trustee, shall) or any Owner or Beneficial Owner of the Series 2024 Bonds may, take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. (b) The Developer has executed the Developer Continuing Disclosure Certificate.

Notwithstanding any other provision of this Indenture, failure of the Developer 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 2024 Bonds, and upon receipt of indemnification reasonably satisfactory to the Trustee, shall) or any Owner or Beneficial Owner of the Series 2024 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 Tax, which records shall be available for inspection by the Trustee at reasonable hours and under reasonable conditions. 511

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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 Facilitie s 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, 202 5 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 Com munity 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 f or 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 principa l 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 delinquent in the payment of the Special Tax, 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; 513

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(b) by suit, action or proceeding in equity, to enjoin any acts or things that are unlawful, or the violation of any of the rights of the Trustee or the Owners; or (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 incurred by the Trustee 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 thereo n, 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, acc ording 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 514

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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.

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 Tru stee, and upon indemnification of the Trustee to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder; 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 that 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 shal l 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 receive d 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 hereu nder 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, o r 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 Comm unity 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 the refor 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 515

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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 Truste e 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 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; SECURITIES INTERMEDIARY
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 that may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture. The Trustee shall, duri ng the existence of any Event of Default that 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 p arent 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 condit ion 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. An y 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 517

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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 Owne r 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 appoi nted 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 furth er 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 mo re 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 successo r 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 f irst-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 Com munity 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. 518

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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 direc tors 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 that 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 d eem 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; 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 not ice 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. 520

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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 that 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 that 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 discharge and satisfaction of this Indenture.

Section 8.08. Securities Intermediary. (a) At all times during which the Trustee does not maintain hereunder securities accounts to which financial assets may be credited , there shall be a Securities Intermediary acting as such pursuant hereto. (b) U.S. Bank National Association is hereby appointed as the initial Securities Intermediary and U.S. Bank National Association hereby accepts such appointment. (c) The initial Securities Intermediary and any successor thereto (i) shall at all times be a trust company, national banking association or bank 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 f ederal or state agency , (ii) shall not be an affiliate of the Community Facilities District or the City , and (iii) shall, in the ordinary course of its business, maintain securities accounts for others and be so maintaining accounts hereunder. (d) Each Fund and Account shall be a securities account maintained with the Securities Intermediary to which financial assets may be credited and the Securities Intermediary shall treat the Trustee as entitled to exercise the rights that comprise such financial assets. (e) The Securities Intermediary shall not change the name or the account number of any Fund or Account without the prior written consent of the Trustee. (f) Each item of property credited to each Fund or Account shall be treated as a financial asset.
(g) The Securities Intermediary shall comply with entitlement orders originated by the Trustee, without the need for consent by the Community Facilities District or any other Person. (h) The Securities Intermediary shall not agree with any Person, other than the Trustee, that it will comply with entitlement orders originated by any Person other than the Trustee. (i) The Securities Intermediary shall not take any action inconsistent with this Section or any other provision of this Indenture applicable to it. The Securities Intermediary shall not be a party to any agreement that is inconsistent with this Section or any other provision of this Indenture or that limits or conditions any of its obligations under this Section or any other provision of this Indenture.
(j) Each item of property credited to each Fund or Account shall not be subject to, and the Securities Intermediary hereby waives, any security interest, lien, claim, encumbrance or right 521

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of setoff in favor of the Securities Intermediary or any Person claiming through the Securities Intermediary, other than the Trustee.
(k) For purposes of Article 8 of the Uniform Commer cial Code, the securities intermediary’s jurisdiction of the Securities Intermediary with respect to the Funds and Accounts shall be the State.
(l) It is the intent of the Community Facilities District, the Trustee and the Securities Intermediary that each Fun d and Account shall be a securities account of the Trustee and not an account of the Community Facilities District.
(m) The Securities Intermediary shall be entitled to all of the immunities, protections, limitations of liability and indemnities afforded to the Trustee pursuant to Article VIII hereof. (n) The Securities Intermediary may at any time resign by providing no less than 30 days’ written notice of such resignation to the Trustee and the Community Facilities District. The Trustee may remove the Securities Intermediary by providing no less than 20 days’ written notice of such removal to the Securities Intermediary. In case at any time the Securities Intermediary shall cease to be eligible in accordance with the provisi ons of subsection (b) of this Section, the Securities Intermediary shall resign immediately. The Trustee shall promptly remove the Securities Intermediary if at any time the Securities Intermediary shall cease to be eligible in accordance with the provisio ns of subsection (b) of this Section . The Trustee shall appoint a successor Securities Intermediary that satisfies the provisions of subsection (b) of this Section. The Trustee shall cause (i) each Fund and Account to be established and maintained with suc h successor Securities Intermediary in accordance with the terms hereof, and (ii) the successor Securities Intermediary to execute and deliver a written agreement between the Trustee and such successor Securities Intermediary, pursuant to which such succes sor Securities Intermediary agrees to be the Securities Intermediary hereunder and to be bound by the provisions of this Indenture applicable to the Securities Intermediary. The duties and obligations of the resigning or removed Securities Intermediary her eunder shall remain in effect until the successor Securities Intermediary has accepted its appointment and each Fund and Account and all property credited thereto have been transferred to the successor Securities Intermediary. 522

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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 amended, supplemented or otherwise modified 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 submitted to the Trustee the written consents of the Owners of a majority of the aggregate principal amount of the Bonds then Outstanding, exclusiv e 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 Inden ture 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 amended, supplemented or otherwise modified 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 ambi guity, 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 t his 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 523

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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 Faciliti es 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 de mand 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 S eries, 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 , supplement or other modification as to an y particular Bond owned by it, provided that due notation thereof is made on such Bond. 524

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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 Ow ners 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 Ne t 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 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 w ith 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 that shall be sufficient, or 525

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(B) 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 that 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 subsec tion (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 Verif ication 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 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. 526

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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. 107 (Highland)
c/o City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attention: Chief Financial Officer, Finance Department
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 shal l 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 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, (c) 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 (d) 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 Di strict 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, 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. 527

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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 Inva lid Provisions . If any term or provision of this Indenture or the Bonds, or the application of the term or provision to any Person or circumstance is, to any extent, held to be invalid or unenforceable in any jurisdiction, but the extent of such invalidity or unenforceability does not destroy the basis of the bargain between the parties as contained herein, the remainder of this Indenture or the Bonds, as applicable, or the application of the term or provision to Persons or circumstances other than those as to which the term or provision is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability, and each remaining term or provision of this Indenture and the Bonds shall be valid and will be enforced to the fullest extent permitted by law.

Section 11.06. Evidence of Rights of Owners . (a) 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 conc urrent 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. (b) The fact and date of the execution by any Pers on 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 s uch 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.
(c) The ownership of Bonds shall be proved by the Registration Books. (d) 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 concurr ed 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 directl y 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 disregarded and deemed not to be Outstanding for the purpose of any such determinat ion; provided, however, that if 100% of the Bonds are so owned or held, such Bonds shall be deemed to be Outstanding . Bonds so owned that 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 528

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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 submitted 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 b y 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 i ts 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 an y 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.

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 to the levy of the Special Tax.
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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.

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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. 107 (HIGHLAND)

By:
___________________,
_________________
of the City of Fontana

U.S. BANK TRUST COMPANY,

NATIONAL ASSOCIATION, AS

TRUSTEE

By:

Authorized Officer

U.S. BANK NATIONAL ASSOCIATION HEREBY ACCEPTS APPOINTMENT AS

SECURITIES INTERMEDIARY UNDER THIS INDENTURE AND AGREES TO BE BOUND

BY THE PROVISIONS OF THIS INDENTURE APPLICABLE TO THE SECURITIES INTERMEDIARY.

U.S. BANK NATIONAL ASSOCIATION

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 matur ing 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 a nd “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 obligation s 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 e ntries 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 533

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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 ag reement, 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 Com munity 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 petiti on 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 2024 BOND

No. ___ $____________

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107
(HIGHLAND)
SPECIAL TAX BOND, SERIES 2024

INTEREST RATE MATURITY DATE DATED DATE CUSIP
% September 1, 20__ __________, 2024
REGISTERED OWNER:

PRINCIPAL AMOUNT:

City of Fontana Community Facilities District No. 107 (Highland) (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 Amer ica; 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 [September 1, 2024] (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. 107 (Highland) Special Tax Bonds, Series 2024” (the “Series 2024 Bonds”) in the aggregate principal amount of $__________. The Series 2024 Bonds are issued pursuant to the Indenture, dated as of ________ 1, 2024 (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 2024 Bonds. The Series 2024 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. 535

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Interest on the Series 2024 Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (a) a Series 2024 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 2024 Bond is authenticated on or before the first Reco rd Date, in which event interest thereon shall be payable from the Closing Date, or (c) interest on any Series 2024 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 2024 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 2024 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 2024 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 rec ord date. The principal of the Series 2024 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, subje ct 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 2024 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 2024 Bond or any portion thereof shall be given as provided in the Indenture.

The Series 2024 Bonds are issuable as fully registered Bonds without coupons in Authorized Denominations ($5,000 and any integral multiple thereof). 536

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4144-5389-6015.2

Any Series 2024 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 2024 Bond to the Trustee for cancellation, accompanied by d elivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Series 2024 Bond or Series 2024 Bonds shall be so surrendered for transfer, the Community Facilities District shall execute and the Trustee shall authenticate and shall deliver a new Series 2024 Bond or Series 2024 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 2024 Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Series 2024 Bonds of the same maturity of other Authorized Denominations. The Trus tee 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 Owners and the Trustee 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. 107
(HIGHLAND)

By:

Mayor of the City of Fontana

ATTEST:

By:

City Clerk of the City of Fontana

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CERTIFICATE OF AUTHENTICATION
This is one of the Series 2024 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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4135-8148-0783.1

CONTINUING DISCLOSURE AGREEMENT

by and among

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107
(HIGHLAND)

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,

AS TRUSTEE

and

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,

AS DISSEMINATION AGENT

Dated as of ________ 1, 2024

City of Fontana
Community Facilities District No. 107
(Highland)
Special Tax Bonds, Series 2024

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CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (this “Disclosure Agreement”), dated as of ________ 1, 2024 , is by and among CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND), a community facilities district organized an d existing under the laws of the State of California (the “Community Facilities District”), U.S.

BANK TRUST COMPANY, NATIONAL ASSOCIATION , a national banking association organized and existing under the laws of the United States of America, in its capacity as Trustee (the “Trustee”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION , a national banking association organized and existing under the laws of the United States of America, 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. 107 (Highland) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”), in the aggregate principal amount of $__________, pur suant to the Indenture, dated as of ________ 1, 2024 (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 2024 Bonds and in order to assist the underwriter of the Series 2024 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 Commu nity 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. 107 (Highland), a community facilities district organized and existing under the laws of the State, and its successors.
“Disclosure Representative” means the Chief Financial Officer, Finance Department, 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. 542

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“Dissemination Agent” means U.S. Bank Trust Company, National Association , acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Community Facilities District and that 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 in to 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, 2024 , 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 s ubsection (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 2024 Bonds required to comply with the Rule in connection with the offering of the Series 2024 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, comme ncing with the report for the 2023-24 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 s ubmitted 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, th e 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 de termine 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 a ccordance 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 2024 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 (A) the Acquisition Account, (B) the Construction Account, and (C) the Community Benefit Facilities 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 Tax is 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 othe r property owners, grouped 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 the Special Tax 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 the Special Tax 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 Dist rict or related public entities that have been made available to the public on the MSRB’s website . The 545

5 4135-8148-0783.1

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 2024 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 opi nions 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 o f 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 2024 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 2024 Bonds or other material events affecting the tax status of the Series 2024 Bonds.
(ii) Modifications to rights of holders of the Series 2024 Bonds. (iii) Series 2024 Bond calls.
(iv) Release, substitution, or sale of property securing repayment of the Series 2024 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 terminat ion 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 2024 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 subs ection (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 ne ed not be given any earlier than the notice (if any) of the underlying event is given to holders of affected Series 2024 Bonds pursuant to the Indenture. 547

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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 2024 Bonds. If such termination occurs prior to the final maturity of the Series 2024 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 su ch 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, th e 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 Fa cilities 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 arise s 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 2024 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 2024 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 2024 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 n ationally recognized bond counsel, materially impair the interests of Owners or Beneficial Owners of the Series 2024 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 548

8 4135-8148-0783.1

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 t his 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 Agr eement, 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 2024 Bonds, shall, upon receipt of indemnification reasonably satisfactory to the Trustee), or any Owner or Beneficial Owner of the Series 2024 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 limitat ions 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 that any such Person may incur in the exercise or performance of the Dissemination Agent’s powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, and that are not due to such Person’s 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.
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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 C ommunity Facilities District, the Trustee, the Dissemination Agent, the Participating Underwriter and the Owners and Beneficial Owners from time to time of the Series 2024 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. 107 (HIGHLAND)

By:
___________________,
_________________
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

551

A-1
4135-8148-0783.1

EXHIBIT A

NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Fontana Community Facilities District No. 107 (Highland) Name of Issue: City of Fontana Community Facilities District No. 107 (Highland) Special Tax Bonds, Series 2024
Date of Issuance: ___________, 2024

NOTICE IS HEREBY GIVEN that City of Fontana Community Facilities District No. 107 (Highland) (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, 2024, by and among the Community Facilities District , U.S. Bank Trust Company, National Association , in its capacity as Trustee , and U.S. Bank Trust Company, National Association, 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.
107 (Highland)

cc: City of Fontana
Community Facilities District
No. 107 (Highland)
552
Anzel Galvan Draft of 6/8/2024

BOND PURCHASE AGREEMENT

$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)
SPECIAL TAX BONDS, SERIES 2024

[Pricing Date]

City of Fontana Community Facilities
District No. 107 (Highland)
c/o City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attention: Chief Financial Officer, Finance Department

Ladies and Gentlemen:

Stifel, Nicolaus & Company, Incorporated, as underwriter (the “ Underwriter”) offers to enter into this Bond Purchase Agreeme nt (this “ Agreement”) with City of Fontana Community Facilities District No. 107 (Highland) (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 re spective 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 purch ase price (the “ Purchase Price”) of $___________ (equal to the par amount of the Bonds ($ [PAR].00), [plus/less] [net] original issue [premium/discount] of $___________, and 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 June 25, 2024 (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 tax that provides a source of payment for the Bonds (the “ Special Tax”) will be levied under Ordinance No. 1875 adopted by the City Council on November 9, 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 Tax: (i) Resolution No. 2021-096 (the “ Resolution of Intention to Form the District ”), ( ii) Resolution No. 2021-097 (the “Resolution of Intention to Incur Bonded Indebtedness ”), (i ii) Resolution No. 2021-112 (the “Resolution of Formation ”), (i v) Resolution No. 2021-113 (“Resolution Declaring Necessity to Incur Bonded Indebtedness ”), (v) Resol ution No. 2021-114 (the “Resolution Calling Election ”), 553
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and (vi) Resolution No. 2021-115 (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.”

The Bonds will be issued under the terms of an Indenture (the “ Indenture”), dated as of [Month] 1, 2024, by and between the Issuer and U.S. Bank Trust Company, National Associat ion, 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 Bon ds, [(iii) pay interest on the Bonds through September 1, 20__,] and (i v) 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 Un derwriter 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 t herewith 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 U.S. Securities and Exchange Commission (the “SEC”) 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 co nnection 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 t he 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 SEC (“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. 554
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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 [Month] 1, 2024 (the “ District Continuing Disclosure Agreement ”), substantially in the form of the Appendix G to the Preliminary Official Statement.

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, deliver y 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 th e 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 exe cuted 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.

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(f) The information (excluding information under first three paragraphs of the caption “INTRODUCTION – The District”, information under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT,” and inform ation 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 Statement will not as of the Closing Date contain any untrue or misleading statement of a material fact (excluding information under the first three paragraphs of t he 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 first three pa ragraphs of 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 l ight 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 circumstanc es 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 del ivered 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 conf lict 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 556
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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 subjec t, 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, in cluding 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 not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the Special Tax.

(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 Is suer 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 Tax may lawfully be levied in accordance with the rate and method of apportionment of the Special Tax relating to the District , as amended by the Certificate to Amend Facilities Special Tax dated ______, 2024 (as so amended, the “ Rate and Method ”), the Resolutions and Or dinance as described in the Preliminary Official Statement and the Final Official 557
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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 Sp ecial 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 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 docu ments 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 th is 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 a s 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 time of Closing:

(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 558
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by any similar body under the Ind enture 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 legislati on, in the Underwriter’s reasonable judgment, 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 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 judgment 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 regist ration, 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 , no-action letter , or official statement by the SEC 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 is suance, 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

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(e) any event shall have occurred o r 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 materia l 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 se curities 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 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 SEC 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; or

(k) the New York Stock Exchange or other national securities exchange, the SEC, any other federal or State agency or the Congress of the United Sta tes, or Executive Order , shall impose, as to the Bonds or obligations of the general character of the Bonds, any restrictions on transactions in securities materially affecting the market for securities (including the imposition of any limitation on interest rates) 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; or

(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, 560
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income or securities (or interest thereon), the validity or enforceability of th e 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 c ourt of competent jurisdiction which enjoins or restrains the Issuer from issuing permits, licenses or entitlements within the District or which order, in the reasonable judgment 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 o f 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 satis factory 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.

(c) At or prior to the Closing, the Un derwriter 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 as Appendix D 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
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BONDS” (except information in the sections entitled “ – Special Tax” 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 oth er 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 ex ecuted 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 LLP, Newport Beach, California, 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 Stateme nt 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 included in the Preliminary Official Stat ement 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 omi ts 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 Anzel Galvan LLP, San Francisco, California (“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.
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(vi) A certificate of the City Clerk of the City to the effect that the Resolutions and Ordinance have not been amended, modified or rescinded since the date of their adoption and remain in full force and effect as of the Closing Date.

(vii) Evidence of recordation in the real pro perty 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 David Taussig and Associates, Inc. doing business as DTA, 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 Con stitution 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 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, pu blic 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 563
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respective offices, or seeking to restra in 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 Tax to pay the principal of and interest on the Bonds, or in any way co ntesting 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 breac h 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.

(xvi) A c ertificate 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 from Richmond American Homes of Maryland, Inc. , a Maryland corporation (the “ Developer”) addressed to the District and the Underwriter in connection with the printing of the 564
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Preliminary Official Statement dated the date of the Preliminary Official Statement, in the form attached hereto as Exhibit G.

(xviii) A Closing Certificate from 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;

(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 prepared by the Appraiser (the “Appraisal Report”) are reasonable; (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 Tax ; (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 t o 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 resp ect 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 th e 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 Preliminary Official Statement and the Offici al Statement provided by Empire Economics, Inc. and all information supplied by it for use in the Preliminary Official Statement and the Official Statement were as of their respective dates and are as of the Closing Date true and correct, and do not contai n 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, pr oceedings, instruments and other documents as the Underwriter, Disclosure Counsel or Bond Counsel 565
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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 repr esentations 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 her eunder 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 Prelimin ary 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 i ts 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 t he 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 s et 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, 2121 Avenue of the Stars, Suite 2150, Los Angeles, California 90067, 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 Bond s, shall acquire or have any right hereunder or by virtue hereof. This Agreement supersedes and replaces all prior negotiations, agreements and understanding among the parties hereto in relation to the sale of the Bonds by the Issuer.

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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 A dvisor 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”). identified under the column “10% Test Used” in Exhibit A , 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 mat urity 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 int erest 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, identified under the column “Hold the Offering Price Rule Used,” 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 sel l 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.
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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. (d) The Underwriter confirms that:
(i) any selling g roup 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 ea ch broker-dealer 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-offering-price 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 advis ed 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 re lated 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 part y 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 b een 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 t hat, in making the representation s 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 568
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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-offering-price rule, if applicable to the Bonds , as set forth in the third-party distribution agreement and the related p ricing 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 cor responding 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-offering- price rule if applicable to the Bonds.
(f) The Underwriter acknowledges that sale s 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 wr itten 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 tota l 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 ow nership 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 ot her 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. This Agreement shall become effective and bin ding upon the respective parties hereto upon the execution of the acceptance hereof by the District and shall be valid and enforceable as of the time of such acceptance. 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 agreeme nt, and any of the parties hereto may execute the Agreement by signing any such counterpart. Each of the parties hereto agrees that the transaction consisting of this 569
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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 Agreement using an electronic signature, it is signing, adopting, and accepting this Agreement and that signing this Agreement using an electronic signature is the legal equivalent of having placed i ts handwritten signature on this agreement on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Agreement in a usable format.

[Signature Page Follows]
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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. 107
(HIGHLAND)

By:

Authorized Officer

Time of Execution: _____ a.m./p.m. California Time
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A-1

EXHIBIT A

Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Used
Hold-The-
Offering-
Price Used

_________________
T: Term Bond.

C: Priced to optional redemption date of September 1, 20__, at par.

572
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 fu nds, 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 Special Tax prepayments 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)

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, 573
A-3
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)

574
B-1

EXHIBIT B

$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)
SPECIAL TAX BONDS, SERIES 2024

CERTIFICATE OF SPECIAL TAX CONSULTANT

David Taussig and Associates, Inc. doing business as DTA (“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 as amended by the Certificate to Amend Fac ilities Special Tax dated ______, 2024 (as so amended, 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. 107 (Highland) (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 colle cted 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 s chedule, 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 wi th 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 sourc ed 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 t he Preliminary Official Statement and the Official Statement as Appendix A.

Dated: [Closing Date]
DAVID TAUSSIG AND ASSOCIATES, INC. dba
DTA

By:

575

C-1

EXHIBIT C

$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)
SPECIAL TAX BONDS, SERIES 2024

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. 107 (Highland) (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 res pect 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 f or 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, wit h 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 Stateme nt 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 stat e 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

576

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. 107
(HIGHLAND)

By:

Name:

Title:

577

D-1

EXHIBIT D

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)
SPECIAL TAX BONDS, SERIES 2024

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. 107 (Highland) (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 delive red 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 Pe rmitted Omissions, deemed final within the meaning of Rule 15c2-12.

IN WITNESS WHEREOF, I have hereunto set my hand as of [POS Date].

CITY OF FONTANA COMMUNITY
FACILITIES DISTRICT NO. 107
(HIGHLAND)

By:

Name:

Title:

578

E-1

EXHIBIT E

$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)
SPECIAL TAX BONDS, SERIES 2024

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 [Month] 1, 2024 (the “ Indenture”), between City of Fontana Community Facilities District No. 107 (Highland) (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 or ganized 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 a ffect 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
579

F-1

EXHIBIT F

$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)
SPECIAL TAX BONDS, SERIES 2024

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. 107 (Highland) (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

580

G-1

EXHIBIT G

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)
SPECIAL TAX BONDS, SERIES 2024

LETTER OF REPRESENTATIONS
(Richmond American Homes of Maryland, Inc.)

[POS Date]

City of Fontana Community Facilities
District No. 107 (Highland)
8353 Sierra Avenue
Fontana, California 92335
Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, California 90067
Reference is made to the City of Fontana Community Facilities District No. 107 (Highland) Special Tax Bonds, Series 2024 (the “Bonds”) and to the Bond Purchase Agreement to be entered into in connection therewith (the “ Bond Purchase Agreement ”). This Letter of Representations (Richmond American Homes of Maryland, Inc. ) (the “ Letter of Representations ”) is delivered pursuant to and in satisfactio n 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 ce rtified and is authorized and qualified to certify the same as an authorized officer or representative of Richmond American Homes of Maryland, Inc., a Maryland corporation (the “Developer”), and the undersigned, on behalf of the Developer, further certifies as follows:

1. The Developer is a corporation duly formed, validly existing and in good standing under the laws of the State of Maryland 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. 107 (Highland) (the “ Community Facilities District ”) as described in the Preliminary Official Statement.

2. As set forth in the Preliminary Official Statement, title to a certain p ortion of the property within the Community Facilities District is held, or has from time to time been held, in the name of the Developer (collectively, 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. The Developer has not entered into an agreement for development or management of the Property by any other entity, except such subcontracts, consultant agreements and similar agreements for land development activities associated with the Developer’s devel opment plan as are entered into 581

G-2

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 Undersigned, 1 is pending against any current Affiliate2 (with proper service of process to such Affi liate 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 the special tax levied on the Property by the Community Facilities District (the “Special Tax”) 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) in any way contesting or affecting the validity of the Special Tax, or (d) which is reasonably likely to materially and adversely affect the Developer’s ability to acquire, develop, and sell the Property as described in the Preliminary Official Statement or to pay the Special Tax 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 t he 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 Developer’s development plan or 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 othe r 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 Develop er’s development plans with respect to the Property and ability to pay its Special Tax on the Property (to the extent the responsibility of the Developer) prior to delinquency, or (b) such Person’s assets or funds that would materially affect the Developer ’s ability to develop the Property as described in the Preliminary Official Statement or to pay its Special Tax on the Property (to the extent the responsibility of the Developer). “Person” means an individual, a corporation, a partnership, a limited liabi lity 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.

Due to the recent merger between a subsidiary of Sekisui House Ltd. (“Sekisui House”) and M.D.C. Holdings, Inc., a Delaware corporation (“MDC”) as described in the Preliminary Official Statement, and for purposes of this Letter of Representations, the term Affiliate shall exclude Sekisui H ouse and its direct and indirect subsidiaries, other than MDC and the Developer.

582

G-3

Developer’s financing plan, other loans of such Affiliates) as set forth under the se ctions of the Preliminary Official Statement captioned “INTRODUCTION – The District” (the first three paragraphs only), and “PROPERTY OWNERSHIP AND THE DEVELOPMENT” (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 abilit y to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax 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, ot her 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 Environme ntal 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 o r 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 Tax within the Community Facilities District, to invali date 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 Tax has not been levied in accordance with the methodologies contained in the Rate and Method of Apportionment of Special Tax pursuant to which Special Tax is levied, (b) an action or suit with respect to the application or use of the Special Tax levied and collected or (c) 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.

8. The Developer consents to the issuance of the Bonds. The Developer acknowledges and agrees that the pr oceeds of the Bonds will be used as described in the Preliminary Official Statement.
583

G-4

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 Gover nment Code Section 53341.5 in connection with the sale of the Property to homeowners, 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. To the Actual Knowledge of the Undersigned, Af filiates 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, th reatened 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 readju st 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 P reliminary Official Statement, or to pay the Special Tax 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.

12. The Developer has been developing or has been involved in the development of numerous projects over an extended period of time. It is likely that the Developer and its Affiliates have been delinquent at one time or another in the payment of ad valorem property taxes, special assessments or special taxes. However, 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 an y 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 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.

13. 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.

14. 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, or the payment of the Special Tax due wi th respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.

15. 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 584

G-5

have sufficient funds to deve lop the Property as described in the Preliminary Official Statement and to pay Special Tax 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 Facilitie s 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 Tax. However, neither the Developer nor any of its Affiliates are obligated to make any ad ditional 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.

16. An appraisal of the taxable properties within the Comm unity Facilities District, dated [May 21 ], 2024 (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 April 15, 2024 (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 yell ow or circled in Exhibit A attached hereto, was true and correct in all material respects as of the Date of Value.

17. Solely as to the limited information described in the sections of the Preliminary Official Statement indicated in Paragraph 4 herein (and su bject 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, 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 expen se 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 st atements 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 relie ve 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 re lated to such proceeding, as incurred. In any such proceeding, 585

G-6

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 th e 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 ther e 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 e xtent 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 conse nt, 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 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 Develop er. 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 su ch 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 proceedi ng , 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.

18. If between the date hereof and the Closing Date any event relating to or affecting the Developer, its Af filiates, 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 Stat ement 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 li ght 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 preparat ion 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.
586

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19. The Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bo nds 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 m odify the Closing Certificate, the Developer agrees to deliver a new Closing Certificate revised to reflect such event.

20. 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 ot her action, may not fully discharge all duties and obligations of the Developer under such securities laws.

The undersigned has executed this Letter of Representations solely in his or her capacity as an authorized officer or representative of the Develop er 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.

RICHMOND AMERICAN HOMES OF
MARYLAND, INC.,
a Maryland corporation

By:

Name:

Title:

587

G-8

[SIGNATURE PAGE TO LETTER OF REPRESENTATIONS OF
RICHMOND AMERICAN HOMES OF MARYLAND, INC.]
588

G-9

EXHIBIT A
TO

LETTER OF REPRESENTATIONS
(Richmond American Homes of Maryland, Inc.)

DEVELOPER PROVIDED INFORMATION IN APPRAISAL REPORT

See attached.

589

H-1

EXHIBIT H
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)
SPECIAL TAX BONDS, SERIES 2024

CLOSING CERTIFICATE
(Richmond American Homes of Maryland, Inc.)

[Closing Date]
City of Fontana Community Facilities
District No. 107 (Highland)
8353 Sierra Avenue
Fontana, California 92335
Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, California 90067
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 ( Richmond American Homes of Maryland, Inc. ) (the “ Closing Certificate”) is delivered pursuant to Section 8(c)(xviii) of the Bond Purchase Agreement.

Capitalized terms used herein and not ot herwise defined have the meanings ascribed to them in the Letter of Representations ( Richmond American Homes of Maryland, Inc. ), dated [POS Date] (the “Letter of Representations ”), delivered by Richmond American Homes of Maryland, Inc. , a Maryland 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 Develop er’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any 590

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Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loa ns 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 p eriod 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, ot her 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 u nder 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] 591

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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.

RICHMOND AMERICAN HOMES OF
MARYLAND, INC.,
a Maryland corporation

By:

Name:

Title:
592

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EXHIBIT I

FORM OF ISSUE PRICE CERTIFICATION
$[PAR]

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)
SPECIAL TAX BONDS, SERIES 2024

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. Sale of the General Rule Maturities . As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.

2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) 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.
(b) As set forth in the Bond Purchase Agreement, dated [Pricing Date], by and among Stifel, as the Underwriter (as defined below), the City of Garden Grove and the Issuer (as defined below), 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 pri ce that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold -the-offering-price rule”); and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the sel ling group, and any third -party distribution agreement shall contain the agreement of each broker -dealer who is a party to the third -party distribution agreement, to comply with the hold -the-offering-price rule. Pursuant to such agreement, no Underwriter has offered or sold any Maturity of the Hold -the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.

3. Defined Terms.
(a) General Rule Maturities means th ose 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 593

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Sale Date (which Sale Date is [Pricing Date]), or (ii) the date on which Stifel has sold at least 10% of such Hold -the-Offering-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. 107 (Highland). (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, t rust, 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) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [Pricing Date]. (h) 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 directl y 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 third -party distribution agreement participating in the initial sale of the Bonds to the Public).

4. 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 marketing of the Bonds at an interest rate comparable to that of bonds and oth er tax- exempt obligations of a similar type, and is not in excess of the amount necessary for such purpose.

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretati on 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
Dated: [Closing Date]
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SCHEDULE A

SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING PRICES

OF THE HOLD-THE-OFFERING-PRICE MATURITIES
(Attached)

595

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SCHEDULE B

PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)

596
Stradling Yocca Carlson & Rauth
Draft of June 10, 2024
4864-2187-6670v3/022777-0042
PRELIMINARY OFFICIAL STATEMENT DATED _____, 2024
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 individual alternative minimum tax. Bond Counsel observes that interest on the Bonds included in adjusted financial statement income of certain corporations is not excluded from the federal corporate alternative minimum tax. Bond Counsel expresses no opinion regarding any other tax consequences related to the owners hip or disposition of, or the amount, accrual or receipt of interest on, the Bonds. See “TAX MATTERS” herein.
$3,595,000

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)
SPECIAL TAX BONDS, SERIES 2024
Dated: Date of Delivery Due: September 1, as shown on the inside cover page The City of Fontana Community Facilities District No. 107 (Highland) Special Tax Bonds, Series 2024 (the “Bonds”) are being issued and delivered by the City of Fontana Community Facilities District No. 107 (Highland) (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 _____ 1, 2024, by and between the District and U.S. Bank Trust Company, National Association, as Trustee. The Bonds ar e 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 f urther described herein. The Special Tax (as defined herein) is 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 $5,0 00 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, 2024. 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 Append ix H — “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 OR ADDITIONAL BONDS. EXCEPT FOR THE

NET SPECIAL TAX REVENUES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS OR ADDITIONAL BONDS. THE BONDS AND ANY ADDITIONAL 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 herei n, 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 a dvised 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 Orr ick 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 LLP, Newport Beach, California, as Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by its counsel, Anzel Galvan LLP, 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 _____, 2024.
[STIFEL LOGO]
Dated: _____, 2024

 Preliminary, subject to change.

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. 597

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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, 20__, Yield: _____% Price: _____ CUSIP No. _____†

$___________ _____% Term Bonds due September 1, 20__, 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© 2024 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Glob al 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.

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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 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 LLP
Newport Beach, California

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

SPECIAL TAX CONSULTANT
David Taussig and Associates, Inc. dba DTA
Irvine, 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 perso n 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 inf ormation 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 a ny 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 C ity plans to issue any updates or revisions to the forward-looking statements set forth in this Official Statement. 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 MAINTAI N 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. 600

TABLE OF CONTENTS
Page
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INTRODUCTION ................................................................................................................................................ 1 The District .................................................................................................................................................... 1 Security and Sources of Payment for the Bonds ............................................................................................ 3 Description of the Bonds ................................................................................................................................ 3 Appraisal Report ............................................................................................................................................ 4 Price Point Study ............................................................................................................................................ 4 Professionals Involved in the Offering .......................................................................................................... 5 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 .................................................................. 12 General ......................................................................................................................................................... 12 Special Tax ................................................................................................................................................... 13 Rate and Method of Apportionment ............................................................................................................ 14 Collection and Application of the Special Tax ............................................................................................ 19 Covenant for Superior Court Foreclosure .................................................................................................... 20 Special Tax Fund ......................................................................................................................................... 20 Reserve Fund ............................................................................................................................................... 21 Investment of Moneys .................................................................................................................................. 22 No Additional Bonds Except for Refunding Bonds ..................................................................................... 22 THE COMMUNITY FACILITIES DISTRICT ................................................................................................. 22 General Information Regarding the District ................................................................................................ 22 Assigned Special Tax and Development Summary ..................................................................................... 24 Direct and Overlapping Debt ....................................................................................................................... 25 Property Values ............................................................................................................................................ 26 Value-to-Lien Ratios .................................................................................................................................... 27 Delinquency History .................................................................................................................................... 31 PROPERTY OWNERSHIP AND THE DEVELOPMENT ............................................................................... 32 Richmond American .................................................................................................................................... 32 Development Plan ........................................................................................................................................ 33 Financing Plan ............................................................................................................................................. 35 SPECIAL RISK FACTORS ............................................................................................................................... 36 Risks of Real Estate Secured Investments Generally – Declines in Value .................................................. 37 Levy of the Special Tax ............................................................................................................................... 37 Collection of the Special Tax ....................................................................................................................... 38 Failure to Develop Properties ...................................................................................................................... 38 Concentration of Property Ownership ......................................................................................................... 40 Exempt Properties ........................................................................................................................................ 40 Constitutional Limitations on Taxation and Appropriations ........................................................................ 40 Ballot Initiatives; Initiative 1935 ................................................................................................................. 43 Maximum Special Tax ................................................................................................................................. 44 Payment of the Special Tax is Not a Personal Obligation of the Owners .................................................... 45 Disclosures to Future Purchasers ................................................................................................................. 45 Parity Taxes and Special Assessments ......................................................................................................... 45 Depletion of Reserve Fund .......................................................................................................................... 45 601

TABLE OF CONTENTS
(continued)
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Bankruptcy and Legal Delays ...................................................................................................................... 46 FDIC/Federal Government Interests In Properties ....................................................................................... 46 Geologic, Topographic and Climatic Conditions ......................................................................................... 47 Hazardous Substances .................................................................................................................................. 48 No Acceleration Provision ........................................................................................................................... 48 Bonds Are Limited Obligations ................................................................................................................... 49 Loss of Tax Exemption ................................................................................................................................ 49 Potential Early Redemption of Bonds from Special Tax Prepayments ........................................................ 49 Cybersecurity ............................................................................................................................................... 49 Impact of Economic Conditions on the Development in the District .......................................................... 50 CONTINUING DISCLOSURE .......................................................................................................................... 50 TAX MATTERS................................................................................................................................................. 51 ABSENCE OF LITIGATION ............................................................................................................................ 53 ABSENCE OF RATINGS .................................................................................................................................. 53 CERTAIN LEGAL MATTERS ......................................................................................................................... 53 UNDERWRITING ............................................................................................................................................. 54 FINANCIAL INTERESTS ................................................................................................................................. 54 MUNICIPAL ADVISOR ................................................................................................................................... 54 ADDITIONAL INFORMATION ....................................................................................................................... 54

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 FORM OF DISTRICT CONTINUING DISCLOSURE AGREEMENT .......................... G-1

APPENDIX H INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM ................................................................................ H-1

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$3,595,000

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)
SPECIAL TAX BONDS, SERIES 2024

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 Stateme nt, 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. 107 (Highland) Special Tax Bonds, Series 2024 (the “Bonds”) by the City of Fontana Community Facilities District No. 107 (Highland) (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 _____ 1, 2024 (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 det ailed 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 11.1 gross acres and is located in the northwestern portion of the City of Fontana (the “City”), approximately one mile west of Interstate 15 and along the south side of Interstate 210. The District is located at the northwest corner of Highland and Hemlock Avenues. The District is being developed into a gated residential community known as “ Highland Park” by Richmond American Homes of Maryland, Inc., a Maryland corporation (“Richmond American” or the “Developer”), and is expected to consist of a total of 107 detached condominium residential units in two product lines known as “Talise” and “Cascade”.

Talise is proposed for 61 single family detached cluster residential units and Cascade is proposed for 46 single family detached alley-loaded residential units. Talise is located on Tract Map No. 20349 and Cascade is located on Tract Map. No. 20297, both of which recorded on August 25, 2022.

Richmond American purchased the property within the District in December 2021 for $18,805,676 from Stratham Chow, LLC, a California limited liability company (“Stratham Chow”) and home closings began in

 Preliminary, subject to change.
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April 2023 . A s of April 15, 2024 , 62 residential units had been completed and conveyed to individual homeowners, Richmond American owned seven completed model units (none of which were in escrow), seven homes over 95% complete (four of which were in escrow), 27 residential units under construction and less than 95% complete (seven of which were in escrow), and four finished pads (none of which were in escrow). As of June 1 , 202 4, within the District, 79 residential units had been completed and conveyed to individual homeowners, Richmond American owned seven completed model units (none of which were in escrow), two homes over 95% complete (none of which were in escrow), 15 residential units under construction and less than 95% complete (eight of which were in escrow), and four finished lots (none 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. Within the District, building permits had been obtained for 103 planned residential units within the District as of May 1, 2024; accordingly, 103 parcels will be classified as Developed Property and four parcels will be classified as Undeveloped Property for the Fiscal Year 2024 -25 Special Tax levy. Since May 1, 2024, Richmond American has obtained building permits for the four parcels which will be classified as Undeveloped Property for the Fiscal Year 2024-25 Special Tax levy and, therefore, all 107 parcels within the District will be classified as Developed Property beginning with the Fiscal Year 2025-26 Special Tax levy. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
The District was formed to finance certain public facilities and services and costs with respect thereto related to the development within the District. 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 whic h 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 a special election to submit the levy of the special taxes and the incurring of bonded indebtedness to the qualified voters of the District. On October 26, 2021, at an election held pursuant to the Act, the then sole landowner who comprised the qualified voters of the District, Stratham Chow, authorized the District to incur bonded indebtedness in the aggregate principal amount of not to exceed $5,000,000 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 “Original Rate and Method” and, as amended by the Certificate to Amend described herein under the captio “—Price Point Study,” 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 Rat e 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 Se rvices 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 the Special Tax and the Indenture and in accordance with th e Rate and Method. The lien of the Special Tax will be co-equal with the lien of the Services Special Tax. 606

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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 prev iously 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 pay Administrative Expenses. The term “Special Tax Revenues” is defined in the Indenture to mean the proceeds of the Special Tax 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 Tax, 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 Tax and preparing the annual Special Tax collection schedules and the costs of collecting the Special Tax, the costs of remitting the Special Tax 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 Tax and disclosures to Owners, the costs of the District related to an appeal of the Special Tax, any amounts required to be rebated to the federal government in orde r 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 administrat ive overhead related thereto, and the costs of foreclosure of any delinquent Special Tax.

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 wh en due, the only sources of funds available to pay the debt service on the Bonds and any Additional Bonds will be the amounts held 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 OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE BONDS OR ADDITIONAL BONDS. EXCEPT FOR THE NET SPECIAL TAX

REVENUES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS OR ADDITIONAL BONDS. THE BONDS AND ANY ADDITIONAL BONDS ARE NOT GENERAL OR

SPECIAL OBLIGATIONS OF THE CITY BUT ARE SPECIAL, LIMITED OBLIGATI ONS 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 H — “INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY AND ITS BOOK -ENTRY SYSTEM” herein.
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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. S ee Appendix H — “INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY AND ITS BOOK -ENTRY SYSTEM” herein.

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 May 21, 2024, with a date of value as of April 15, 2024 (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 April 15, 2024 the minimum market value of the Taxable Property within the District was not less than $ 46,757,035 (the “Appraised Value”). See “THE COMMUNITY FACILITIES DISTRICT — Property Values” and “THE COMMUNITY FACILITIES DISTRICT — 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. However, the Appraiser has not performed any procedures since the date of value to obtain knowledge of such events or occurrences nor is it obligated to do so in the future.

Price Point Study
In connection with the formation of the District, the City hired Empire Economics, Inc., Capistrano Beach, California (the “Price Point Consultant”) to prepare a price point study of the prices of the homes planned within the District, dated July 21, 2021 (the “Original Price Point Study”). The Special Tax rates set forth in the Original Rate and Method were based in part on the prices set forth in the Original Price Point Study. In connection with and in preparation for the issuance of the Bonds, the City hired the Price Point Consultant to conduct an update to the Original Price Point Study within the District, dated April 15, 2024 (the “Updated Price Point Study”). Pursuant to Section C of the Original Rate and Method, prior to the issuance of Bonds, the City is required to amend the Assigned Facilities Special Tax (as defined in the Rate and Method) to the extent necessary to cause the total effective tax burden for residential property in the District to not exceed 1.95% of the minimum sales prices set forth in the Updated Price Point Study. A copy of the Updated Price Point Study is included as Appendix C to this Official Statement. Based on the conclusions of the Updated Price Point Study, and pursuant to Section C of the Original Rate and Method, the City has reduced certain of the Assigned Facilities Special Tax Rates set forth in Section C of the Original Rate and Method pursuant to a Certificate to Amend Facilities Special Tax dated _____, 2024 (the “Certificate to Amend”) to cause the total effective tax burden for residential property in the District to not exceed 1.95% of the minimum sales prices set forth in the Updated Price Point Study. The Original Rate and Method and the Certificate to Amend are attached as Appendix A.

The Original Rate and Method as amended by the Certificate to Amend is referred to herein as the Rate and Method. The Fiscal Year 2024-25 Special Tax rates shown in this Official Statement reflect such reductions.

See “THE COMMUNITY FACILITIES DISTRICT — Direct and Overlapping Debt.” See also “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — Rate and Method of Apportionment.” 608

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Professionals Involved in the Offering
U.S. Bank Trust Company, National Association, Los Angeles, California, will act as Trustee under the Indenture and as the initial Dissemination Agent under the District Continuing Disclosure Agreement. Stifel, Nicolaus & Company, Incorporated is the Underwriter of the Bonds. The validity of the Bonds and certain other legal matters are subject to the approving opinion of Orrick Herrington & Sutcliffe LLP, Bond Counsel to the District. CSG Advisors Incorporated, San Francisco, California, is acting as Municipal Advisor for the City in connection with the Bonds. Kitty Siino & Associates, Inc., Tustin, California, is acting as the Appraiser to the District. David Taussig and Associates, Inc. dba DTA is acting as the Special Tax Consultant to the District.

Empire Economics, Inc. is acting as the Price Point Consultant to the District. 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 Stradling Yocca Carlson & Rauth LL P, Newport Beach, California , as Disclosure Counsel.

Certain legal matters will be passed upon for the Underwriter by its counsel, Anzel Galvan LLP, San Francisco, California.

For information concerning respects in which certain of the above -mentioned professionals, advisors, counsel and agents may have a financial or other interest in the offering of the Bonds, see “FINANCIAL INTERESTS” herein.

Continuing Disclosure
The District will agree to provide, or cause to be provided, to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system available on the Internet at http://emma.msrb.org (“EMMA”) certain annual financial information and operating data. The District will further agree to provide notice of certain listed events. These covenant s will be made in order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the “Rule”). See the form of District Continuing Disclosure Agreement attached as Appendix G hereto (the “District Continuing Disclos ure Agreement”) for a description of the specific nature of the annual reports to be filed by the District and notices of listed events to be provided by the District. See “CONTINUING DISCLOSURE” herein.

Bond Owners’ Risks
Certain events could affect the ability of the District to pay the principal of and interest on the Bonds when due. See the section of this Official Statement entitled “SPECIAL RISK FACTORS” for a discussion of certain factors which should be considered, in addition to other matters s et forth herein, in evaluating an investment in the Bonds.

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

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

Copies of the Indenture, the District Continuing Disclosure Agree ment and other documents and information referred to herein are available for inspection and (upon request and payment to the City of a charge for copying, mailing and handling) for delivery from the City at 8353 Sierra Avenue, Fontana, California 92335, Attention: Jessica Brown.
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ESTIMATED SOURCES AND USES OF FUNDS
The following table sets forth the expected sources and uses of Bond proceeds and certain other amounts.

Sources:

Principal Amount of the Bonds
[Plus/Less]: [Net] Original Issue [Premium/Discount]
Less Underwriter’s Discount
Plus Funds on Hand
Total
Uses:

Improvement Fund(1)
Reserve Fund(2)
Costs of Issuance Fund
Special Tax Fund(3)
Administrative Expense Fund
Total

(1) Consists of $___________ to be deposited into the Acquisition Account, $__________ to be deposited into the Construction Account and $___________ to be deposited into the Community Benefit Facilities Account. (2) Equal to the initial Reserve Requirement.
(3) Represents interest on the Bonds through _____ 1, 20__.

THE BONDS
General Provisions
The Bonds will be issued in fully registered form without coupons in denominations of $5,000 and any integral multiple thereof (“Authorized Denominations”). The Bonds will be dated the date of issuance thereof.

The Bonds are scheduled to mature on September 1, in the years and in the principal amounts, and will bear interest at the rates per annum, shown on the inside front cover page of this Official Statement. Inter est on the Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months and will be payable on March 1 and September 1 of each year, commencing March 1, 2025 (each an “Interest Payment Date”).

Interest on each Bond will be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) such Bond is authenticated on or before an Interest Payment Date and after the close of business on the fifteenth calendar day of the month preceding such Inter est Payment Date, whether or not such day is a Business Day (the “Record Date”) in which event interest thereon will be payable from such Interest Payment Date, (ii) such Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date or (iii) interest on such Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been previously paid or duly provided for.

The interest on, and principal of and redemption premiums, if any, on the Bonds are payable in lawful money of the United States of America. Interest is payable by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Owners of the Bonds at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date (except that interest on any Bond which is not punctually paid or duly provided for on any Interest Paym ent Date will, if and to the extent that amounts subsequently become available therefor, be payable on a payment date established by the Trustee to the Person in whose name the ownership of such Bond is registered on the Registration Books at the close of business on a special record date to be established by the Trustee pursuant to the Indenture). Payment of principal of any Bond will be made only upon presentation and surrender thereof at maturity or upon earlier redemption at the Office of the Trustee.
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The Bonds will initially be issued in book -entry form, and DTC will act as securities depository. So long as the Bonds are held in book-entry form, principal of, premium, if any, and interest on the Bonds will be paid by the Trustee directly to DTC for di stribution to the Beneficial Owners of the Bonds in accordance with procedures adopted by DTC. See Appendix H — “INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM.”
The Bonds are not general obligations of the District but are special, limited obligations of the District payable solely from Net Special Tax Revenues and the other amounts held under the Indenture in the Special Tax Fund, the Bond Fund and the Reserve Fund. Neither the faith and credit nor the taxing power of the District (except to the limited extent set forth in the Indenture), the City, the State, or any political subdivision thereof, is pledged to the payment of the Bonds or Additional Bonds. See “SPECIAL RISK FACTORS — Bonds Are Limited Obligations.”
Redemption
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 are subject to mandatory redemption, in whole, or in part in Authorized Denominations, on any Interest Payment Date, from and to the extent of Special Tax prepayments required to be applied thereto and any related proportional amounts in the Reserve Fund required to be applied the reto pursuant to the Indenture (see “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — Reserve Fund” and “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — Special Tax Fund”) 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

 Preliminary, subject to change.
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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:

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

(Maturity)
If some but not all of the Bonds maturing on September 1, 20__ are redeemed pursuant to the optional redemption provisions of the Indenture described above, the principal amount of the Bonds maturing on September 1, 20__ to be redeemed by mandatory sinking fund redemption as described above on any subsequent September 1 shall be reduced, by $5,000 or an integral multiple thereof, as designated by the District in a Written Certificate of the District submitted to the Trustee; provided, however, that the aggregate amount of such reductions shall not exceed the aggregate amount of the Bonds maturing on September 1, 20__ so optionally redeemed. If some but not all of the Bonds maturing on September 1, 20 __ are redeemed pursuant to the mandatory redemption from Special Tax prepayments provisions of the Indenture, the princ ipal amount of the Bonds maturing on September 1, 20__ to be redeemed by mandatory sinking fund redemption as described above on any subsequent September 1 shall be reduced by the aggregate principal amount of the Bonds maturing on September 1, 20 __ so mandatorily redeemed from Special Tax prepayments, 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 District.

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:

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

(Maturity)
If some but not all of the Bonds maturing on September 1, 20__ are redeemed pursuant to the optional redemption provisions of the Indenture described above, the principal amount of the Bonds maturing on September 1, 20__ to be redeemed by mandatory sinking fund redemption as described above on any subsequent September 1 shall be reduced, by $5,000 or an integral multiple thereof, as designated by the District in a Written Certificate of the District submitted to the Trustee; provided, however, that the aggr egate amount of such reductions shall not exceed the aggregate amount of the Bonds maturing on September 1, 20__ so optionally redeemed. If some but not all of the Bonds maturing on September 1, 20__ are redeemed pursuant to the mandatory redemption from Special Tax prepayments provisions of the Indenture, the principal amount of the Bonds maturing on September 1, 20__ to be redeemed by mandatory sinking fund redemption as described above 612

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on any subsequent September 1 shall be reduced by the aggregate prin cipal amount of the Bonds maturing on September 1, 20__ so mandatorily redeemed from Special Tax prepayments, 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 District.

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:

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

(Maturity)
If some but not all of the Bonds maturing on September 1, 20__ are redeemed pursuant to the optional redemption provisions of the Indenture described above, the principal amount of the Bonds maturing on September 1, 20__ to be redeemed by mandatory sinking fund redemption as described above on any subsequent September 1 shall be reduced, by $5,000 or an integral multiple thereof, as designated by the District in a Written Certificate of the District submitted to the Trustee; provided, however, that the aggregate amount of such reductions shall not exceed the aggregate amount of the Bonds maturing on September 1, 20__ so optionally redeemed. If some but not all of the Bonds maturing on September 1, 20__ are redeemed pursuant to the mandatory redemption from Special Tax prepayments provisions of the Indenture, the principal amount of the Bonds maturing on September 1, 20__ to be redeemed by mandatory sinking fund redemption as described above on any subsequent September 1 shall be reduced by the aggregate principal amount of the Bonds maturing on September 1, 20__ so mandatorily redeemed from Special Tax prepayments, su ch 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 District.

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:

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

(Maturity)
If some but not all of the Bonds maturing on September 1, 20__ are redeemed pursuant to the optional redemption provisions of the Indenture described above, the principal amount of the Bonds maturing on September 1, 20__ to be redeemed by mandatory sinking fund redemption as described above on any subsequent September 1 shall be reduced, by $5,000 or an integral multiple thereof, as designated by the District in a Written Certificate of the District submitted to the Trustee; provided, however , that the aggregate amount of such reductions shall not exceed the aggregate amount of the Bonds maturing on September 1, 20__ so optionally redeemed. If some but not all of the Bonds maturing on September 1, 20__ are redeemed pursuant to the mandatory redemption from Special Tax prepayments provisions of the Indenture, the principal amount of the 613

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Bonds maturing on September 1, 20__ to be redeemed by mandatory sinking fund redemption as described above on any subsequent September 1 shall be reduced by the aggregate principal amount of the Bonds maturing on September 1, 20__ so mandatorily redeemed from Special Tax prepayments, 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 District.

Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the Bonds and Additional Bonds, the Trustee will select the Bonds and Additional Bonds to be redeemed from all Bonds and Additional Bonds not previously called for redemption (a) with respect to any optional redemption of Bonds and Additional Bonds of a Series, among maturities of the Bonds and Additional Bonds of such Series as directed in a Written Request of the District (b) with respect to any mandatory redemption of Bonds or Additional Bonds from prepayments of the Special Tax, among maturities of all Series of Bonds and any Additional 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. The Trustee shall select for redemption the Bonds and any Additional Bonds of the same Series with the same maturity by lot in any manner that the Trustee, in its sole discretion, shall deem appropriate. For purposes of such selection, all Bonds and Additional Bonds shall be deemed to be comprised of the greatest number of separate denominations that would result in each such denomination being an Authorized Denomination and each such separate denomination shall be treated as a separate Bond or Additional Bond that may be separately redeemed.

Notice of Redemption. If the Bonds are held in book-entry form, notice of redemption will be mailed to DTC and not to the Beneficial Owners of the Bonds under the DTC book-entry system. Neither the District nor the Trustee is responsible for giving notice of redemption to the Beneficial Owners. See Appendix H — “INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY AND ITS BOOK -ENTRY SYSTEM” herein.

The Indenture provides that the Trustee on behalf and at the expense of the District will give notice of any redemption (by first-class mail) to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books and to the Original Purchaser, at least 30 but not more than 60 days prior to the date fixed for redemption. Such notice of redemption will 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). The notice of redemption will require that the Bonds to be red eemed be surrendered at the Office of the Trustee for redemption at the Redemption Price, and give notice 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, will 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 the Indenture, such notice will state that such redemption is conditional upon receipt by the Trustee, on or prior to the da te 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 District will 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 will not be made and the Trustee will, 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. 614

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Effect of Notice of Redemption. If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be redeemed, togeth er with interest to said date, is held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof will have been mailed as aforesaid and not canceled, then, from and after said date, interest on said Bonds will cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds will 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.

Debt Service Schedule
Year Ending
September 1 Principal(1) Interest Total

TOTAL:

(1) Includes mandatory sinking fund redemption.

Source: The Underwriter.

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SECURITY AND SOURCES OF PAYMENT FOR THE BONDS
General
The Bonds are special, limited obligations of the District, and, except as otherwise provided in the Indenture, they are payable solely fro m Net Special Tax Revenues. The Indenture defines “Net Special Tax Revenues” to mean Special Tax Revenues less amounts required to pay Administrative Expenses. The term “Special Tax Revenues” is defined in the Indenture to mean the proceeds of the Specia l Tax 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 Tax (which shall be limited to the amount of said lien and interest and penalties thereon). The Indenture defines the term “Special Tax” as the special tax described and defined in the Rate and Method as the “Facilities Special Tax” approved by the qualified electors to be levied within the District pursuant to the Act and the Rate and Method. “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 Tax a nd preparing the annual Special Tax collection schedules and the costs of collecting the Special Tax, the costs of remitting the Special Tax to the Trustee, the fees and costs of the Trustee (including its legal counsel) in the discharge of the duties requ ired 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 Tax and disclosures to Owners, the costs of the District related to an appeal of the Special Tax, 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 any delinquent Special Tax.

Under the Rate and Method, parcels of Taxable Property, exclusive of Taxable Public Property and Taxable Property Owner Association Property, are classified as Developed Property if a building permit has been obtained for such parcel by May 1 of the fiscal year preceding the Special Tax levy. For the projected Fiscal Year 2024-25 Special Tax levy, based on the development status within the District as of May 1, 2024, 103 parcels of Taxable Property within the District will be classified as Developed Property and four parcels of Taxable Property within the District will be classified as Undeveloped Property. Since May 1, 2024, Richmond American has obtained building permits for the four parcels which will be classified as Undeveloped Property for the Fiscal Year 2024-25 Special Tax levy and, therefore, all 107 parcels within the District will be classified as Developed Property beginning with the Fiscal Year 2025 -26 Special Tax levy. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” Under no circumstances may the amount of Special Tax levied by the District in any year exceed the maximum rates approved by the qualified electors within the District, as set forth in the Rate and Method. A copy of the Rate and Method is attached to this Official Statement as Appendix A.

In addition to the Net Special Tax Revenues, any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund are pledged pursuant to the Indenture to secure the payment of the principal of, premium, if any, and interest on the Bonds and any Additional Bonds in accordance with their respective terms, the Indenture and the Act. However, those amounts are pledged subject to the provisions of the Indenture permitting the application thereof for the purposes set forth in the Indenture. Amounts on deposit in the Improvement Fund, the Costs of Issuance Fund, the Redemption Fund, the Administrative Expense Fund and the Rebate Fund are not pledged to the payment of any of the Bonds or any Additional Bonds.

NEITHER THE FAITH AND CREDIT NOR T HE 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 OR ADDITIONAL BONDS. EXCEPT FOR THE NET SPECIAL TA X

REVENUES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS OR ADDITIONAL BONDS. THE BONDS AND ANY ADDITIONAL BONDS ARE NOT GENERAL OR 616

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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.

Special Tax
Pursuant to the Act, the City Council adopted a resolution on September 14, 2021 stating its intention to establish the District and to l evy a special tax within the District. In accordance with the provisions of the Act, the City Council established the District on October 26, 2021 for the purpose of, among other things, financing certain public infrastructure improvements necessary for the proposed development within the District.

At a special election held on October 26, 2021 , the then sole landowner of the property within the District, Stratham Chow , authorized the District to incur indebtedness in an amount not to exceed $ 5,000,000 an d approved the Rate and Method. The Rate and Method is set forth in Appendix A hereto.

Pursuant to Section C of the Original Rate and Method, prior to the issuance of Bonds, the City is required to amend the Assigned Facilities Special Tax (as defined in the Rate and Method) to the extent necessary to cause the Total Tax Burden (as defined in the Rate and Method) for residential property in the District to not exceed 1.95% of the Minimum Sales Prices (as defined in the Rate and Method) set forth in the Updated Price Point Study. A copy of the Updated Price Point Study is included as Appendix C to this Official Statement.

Based on the conclusions of the Updated Price Point Study, and pursuant to Section C of the Original Rate and Method, the City has reduced certain of the Assigned Facilities Special Tax Rates set forth in Section C of the Original Rate and Method pursuant to the Certificate to Amend to cause the Total Tax Burden for residential property in the District to not exceed 1.95% of the Minimum Sales Prices set forth in the Updated Price Point Study. The Original Rate and Method and the Certificate to Amend are attached as Appendix A. The Original Rate and Method as amended by the Certificate to Amend is referred to herein as the Rate and Method . The Fiscal Year 2024 -25 Special Tax rates shown in this Official Statement reflect such reductions. See “THE COMMUNITY FACILITIES DISTRICT — Direct and Overlapping Debt.” See also “— Rate and Method of Apportionment.”
Pursuant to the Indenture, the District has covenanted that it will fix and levy the Special Tax within the District in each Fiscal Year in accordance with the Rate and Method in an amount sufficient (subject to the limitations contained in the Rate and Method as to the maximum Special Tax that may be levied on each parcel) to yield Special Tax Revenues in the amount required for (i) the payment of principal of and interest on any Outstanding Bonds and any Additional 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. See Appendix F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — Certain Covenants Under the Indenture.” Notwithstanding this covenant, the amount of Special Tax actually collected each year may be less than the amount described for a variety of different reasons. See “SPECIAL RISK FACTORS — Levy of the Special Tax.”
The Bonds have been structured so that, beginning in Fiscal Year 2024-25, the Assigned Facilities Special Tax rates set forth in the Rate and Method that may be levied within the District, based on the expected buildout of the Distr ict, are at least 110% of debt service on the Bonds in each Bond Year net of estimated Administrative Expenses of $ 30,000 escalating 2% each fiscal year beginning July 1, 2025. The Special Tax levied in any fiscal year may not exceed the maximum rates aut horized pursuant to the Rate and Method. See Appendix A ⎯ “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” There is no assurance that the Special Tax proceeds will, in all circumstances, be adequate to pay the principal of and interest on the Bonds when due. Pursuant to the Act, the Special Tax levied in any Fiscal Year against any parcel of residential property in the District may not be increased as a consequence of delinquency or default by the owners of any other parcels within the District by more than 10% above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults. See “SPECIAL RISK FACTORS ⎯ Levy of the Special Tax” and “SPECIAL RISK FACTORS ⎯ Exempt Properties.” 617

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Rate and Method of Apportionment
General. The Rate and Method is to be applied by the District each year for the purpose of determining the amount of the Special Tax to be levied against each Assessor’s Parcel of Taxable Property within the District.

For purposes of the discussion of the Rate and Method only, terms with initial capital letters that are not otherwise defined in this Official Statement shall have the respective meanings assigned to them in the Rate and Method, a copy of which appears in Appendix A to this Official Statement.

Under the terms of the Indenture, prior to A ugust 1 of each year, the District will ascertain from the County of San Bernardino Assessor the relevant parcels on which the Special Tax are to be levied, taking into account any parcel splits during the preceding and then current year. The District will levy the Special Tax by August 10 of each Fiscal Year that the Bonds are Outstanding, or otherwise such that the computation of the levy is complete before the final date on which the auditor (the “Auditor”) of the County of San Bernardino (the “County”) will accept the transmission of the Special Tax amounts for the parcels within the District for inclusion on the next real property tax roll. Upon the completion of the computation of the amounts of the levy, the District will prepare, or cause to be pre pared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Tax on the next real property tax roll.

The Special Tax levied in any Fiscal Year may not exceed the maximum rates authorized pursuant to the Rate and Method. See Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX” hereto. Although the Bonds have been structured so that, beginning in Fiscal Year 2024-25, the Assigned Facilities Special Tax rates set forth in the Rate and Method that ma y be levied based on expected build out of the District are at least 110% of debt service on the Bonds net of estimated Administrative Expenses of $30,000 escalating 2% each fiscal year beginning July 1, 2025, there is no assurance that the proceeds of the Special Tax will, in all circumstances, be adequate to pay the principal of and interest on the Bonds when due. See “SPECIAL RISK FACTORS — Levy of the Special Tax” herein.

Rate and Method of Apportionment of Special Tax . The District is legally authori zed and has covenanted to cause the levy of the Special Taxes in an amount determined according to a methodology, i.e., the Rate and Method, which the City Council and the qualified electors within the District have approved. The Rate and Method apportions the total amount of the Facilities Special Tax and Services Special Tax to be collected among the Taxable Property in the District as more particularly described below. The Facilities Special Tax is referred to herein as the “Special Tax” or the “Specia l Taxes.” The Services Special Tax is not pledged to the repayment of the Bonds and is not available to pay debt service on the Bonds.

The following is a synopsis of the provisions of the Rate and Method, which should be read in conjunction with the complete text of the Rate and Method which is attached as Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” The meaning of the defined terms used in this section are as set forth in Appendix A. This section provides only a summary of the Rate and Method, and is qualified by more complete and detailed information contained in the Rate and Method attached as Appendix A. As used in the Rate and Method, “Bonds” means the Bonds and any Additional Bonds. “CFD Administrator” means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement for Facilities and the Special Tax Requirement for Services, providing for the levy and collection of the Special Taxes, and performing other duties as set forth in the Rate and Method of Apportionment of Special Tax.
“Developed Property” means, for each Fiscal Year, (i) with respect to the Facilities Special Tax, all Taxable Property, exclusive of Taxable Public Property and Taxable Property Owner Association Property, for which a building permit for new construction, other than the construction of a garage, parking lot, or parking structure, was issued after January 1, 2021 and on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Facilities Special Tax es are being levied, and (ii) with respect to the Services Special Tax, all Taxable Property, exclusive of Taxable Public Property and Taxable Property Owner Association Property, 618

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(a) for which the Final Residential Subdivision was recorded prior to the Fi scal Year for which the Services Special Taxes are being levied, or (b) for which a building permit has been issued with respect to Non-Residential Property on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Services Special Taxes are being levied.
“Facilities Special Tax” means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Taxable Property within the District to fund the Special Tax Requirement for Facilities as set forth in the Rate and Method of Apportionment of Special Tax.
“Lower Income Households Welfare Exemption Property” means, for each Fiscal Year, an Assessor’s Parcel within the boundaries of the District that is entitled to a welfare exemption under subdivision (g) of Section 214 of the California Revenue and Taxation Code (or any successor statute), as indicated in the County’s assessment roll finalized as of the last preceding January 1. “Residential Floor Area” means all of the square footage of living area within th e perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area.

The determination of Residential Floor Area for an Assessor’s Parcel shall be as set forth in the building permit(s) issued for such Assessor’s Parcel and/or as set forth in the appropriate records kept by the Building and Safety Department of the City, or other applicable City department, as determined by the CFD Administrator. “Residential Property” means all Assessor’s Pa rcels of Developed Property for which a building permit(s) has been issued by the City permitting the construction thereon of one or more residential dwelling units.
“Services Special Tax” means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Developed Property within the District to fund the Special Tax Requirement for Services as set forth in the Rate and Method of Apportionment of Special Tax. The Services Special Tax is not pledged to the repayment of the Bonds and is not available to pay debt service on the Bonds. “Special Tax Requirement for Facilities” means, for any Fiscal Year, that amount required, after taking into account available amounts held in the funds and accounts under the Indenture, for the following items:
(i) debt service on all Outstanding Bonds due in the calendar year commencing in such Fiscal Year; (ii) periodic costs with respect to the Bonds, including but not limited to, costs of credit enhancement and federal rebate payments due in the calendar year commencing in such Fiscal Year; (iii) pay all or a portion of Administrative Expenses; (iv) any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) without duplicating any amounts described in clause (iv) above, reasonably anticipated Facilities Special Tax delinquencies based on the delinquency rate for the Facilities Special Tax in the previous Fiscal Year, as said levy for delinquencies shall be limited by the Act; and (vi) pay directly for the acquisition or con struction of Authorized Facilities, provided that the inclusion of such amount does not cause an increase in the Facilities Special Tax levy on Undeveloped Property.
“Taxable Property” means all of the Assessor’s Parcels within the boundaries of the District which are not exempt from the Special Tax pursuant to law or described below under the subheading “ — Exempt Property.” Each Fiscal Year, all Taxable Property within the District will be classified as Developed Property, Undeveloped Property, Taxable Property Owner Association Property, or Taxable Public Property, and will be subject to Special Taxes in accordance with the Rate and Method described below under the subheading “Maximum Special Tax, Assigned Special Tax and Backup Special Tax.” “Taxable Pro perty Owner Association Property ” means all Assessor’s Parcels of Property Owner Association Property that are not exempt from the Special Tax described below under the subheading “— Exempt Property ,” and further described in Section E of the Rate and Meth od attached hereto as Appendix A.
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“Taxable Public Property” means all Assessor’s Parcels of Public Property that are not exempt from the Special Tax described below under the subheading “— Exempt Property,” and further described in Section E of the Rate and Method attached hereto as Appendix A.
“Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Public Property or Taxable Property Owner Association Property.

Exempt Property. No Facilities Special Tax will be levied on up to 7.7 Acres of Public Property and/or Property Owner Association Property in the District. Tax -exempt status will be assigned by the CFD Administrator in chronological order in which property in the Distr ict becomes Public Property or Property Owner Association Property. However, should an Assessor’s Parcel no longer be classified as Public Property or Property Owner Association Property, it will, from that point forward, be subject to the Facilities Special Tax.

Notwithstanding the above, an Assessor’s Parcel in the District that is transferred to a public agency or property owner’s association prior to the issuance of the first series of bonds that causes the Acreage of Public Property and Property Owner Association Property to exceed the 7.7 Acreage limit that can be designated by the CFD Administrator under the Rate and Method will also be exempted from the Special Tax.

Public Property or Property Owner Association Property that is not exempt from the Facilities Special Tax as described above will be subject to the levy of the Facilities Special Tax and will be taxed Proportionately as part of the fourth step described under the heading “ Method of Apportionment of Special Tax ” below. The District will n ot levy a Services Special Tax on Undeveloped Property, Taxable Public Property, Taxable Property Owner Association Property or Public Property and Property Owner Association Property described below under the subheading “— Exempt Property,” and further described in Section E of the Rate and Method attached hereto as Appendix A.

Under the Rate and Method, no Special Tax shall be levied on Lower Income Household Welfare Exemption Property; provided that if, in any Fiscal Year, applicable law does not require that an Assessor’s Parcel that is Lower Income Households Welfare Exemption Property be exempt from the Facilities Special Tax, then the Facilities Special Tax shall be levied on such Assessor’s Parcel in accordance with the Rate and Method as if such Ass essor’s Parcel were not classified as Lower Income Households Welfare Exemption Property.

Senate Bill 1473, the “Local Government Omnibus Act of 2020,” amended Government Code Section 53340(c) to provide that in a community facilities district in which the levy of a special tax is authorized by an ordinance adopted on or after January 1, 2020, a property receiving a welfare exemption under subdivision (g) of Section 214 of the California Revenue and Taxation Code shall be exempt from the special tax unless debt is outstanding and the property was subject to the special tax prior to receiving the exemption, in which case the property shall remain subject to the special tax and the special tax shall be enforceable against the property.

Therefore, pursuant to the Rate and Method and California law, and given that no property is subject to the welfare exemption as of the date hereof, the Special Tax will be applicable to Lower Income Household Welfare Exemption Property so long as the Bonds are outstanding.

Maximum Special Tax, Assigned Special Tax and Backup Special Tax. The Maximum Special Tax, Assigned Special Tax and Backup Special Tax for the Facilities Special Tax provided for in the Rate and Method are as follows:

Facilities Special Tax.

Developed Property. The Maximum Facilities Special Tax for each Assessor’s Parcel classified as Developed Property will be the greater of (i) the amount derived by application of the Assigned Facilities Special Tax or (ii) the amount derived by application of the Backup Facilities Special Tax.

Assigned Facilities Special Tax. Residential Property will be assigned to Land Use Classes 1 through 7, as identified in Table 1 in Section C of the Rate and Method based on the Residential Floor Area for each 620

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residential dwelling unit. Non-Residential Property will be assigned to Land Use Class 8. The Assigned Facilities Special Tax applicable to an Assessor’s Parcel classified as Residential Property ranges from $3,002 per taxable unit with a Residential Floor Area of 2,150 square feet or greater to $2,339 per taxable unit with a Residential Floor Area of less than 1, 400 square feet. The Assigned Facilities Special Tax applicable to an Assessor’s Parcel classified as Non -Residential Property is $ 89,796 per acre. As described ab ove under the captions “INTRODUCTION—Price Point Study” and “—Special Tax,” the rates set forth in the Original Rate and Method have been reduced pursuant to the Certificate to Amend in connection with the issuance of the Bonds based on the Updated Price P oint Study. The Fiscal Year 2024 -25 Special Tax rates shown in this Official Statement reflect such reductions. A copy of the Updated Price Point Study is included as Appendix C to this Official Statement and the Certificate to Amend is included in Appendix A.

Backup Facilities Special Tax. The Backup Facilities Special Tax for an Assessor’s Parcel of Developed Property upon adoption of the Original Rate and Method equaled the lesser of (a) $118,270 per Acre, or (b) in connection with any reduction in the Assigned Facilities Special Tax as set forth in Section C.1 of the Rate and Method, the reduced amount per Acre calculated pursuant to Section C.1.a.(3) of the Rate and Method. As described above, pursuant to the Updated Price Point Study provided by the Price Point Consultant, the Assigned Facilities Special Tax has been reduced pursuant to the Certificate to Amend; accordingly, the Backup Facilities Special Tax has also been reduced to $105,643 per Acre. The Fiscal Year 2024-25 Special Tax Rates shown in this Official Statement reflect such reductions.

The Assigned Facilities Special Tax and Backup Facilities Special Tax are not subject to escalation.

Multiple Land Use Classes. In some instances an Assessor’s Parcel of Developed Property may contain both Developed and Undeveloped Property. In such cases, the Acreage of the Assessor’s Parcel will be allocated between Developed Property and Undeveloped Property based on the portion of the Assessor’s Parcel for which building permits had been issued prior to May 1 of the prior Fiscal Year and the portion of the Assessor’s Parcel for which building permits had not been issued prior to May 1 of the prior Fiscal Year. Furthermore, Developed Property may contain more than one Land Use Class. In such cases, the Acreage that is considered Developed Property will be allocated between Residential Property and Non -Residential Property based on the amount of Acreage designated for each land use as determined by reference to the site plan approved for such Ass essor’s Parcel. The Maximum Facilities Special Tax that can be levied on such Assessor’s Parcel will be the sum of the Maximum Facilities Special Tax that can be levied on each type of property located on that Assessor’s Parcel.

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

Undeveloped Property, Taxable Public Property and Taxable Property Owner Association Property .

The Maximum Facilities Special Tax for each Assessor’s Parcel of Undeveloped Property, Taxable Public Property and Taxable Property Owner Association Property is $ 118,270 per Acre. The Maximum Facilities Special Tax rates for Undeveloped Property, Taxable Public Property and Taxable Property Owner Association Property are not subject to escalation.

Method of Appo rtionment of Special Tax . Commencing with Fiscal Year 202 2-23, and for each following Fiscal Year, the CFD Administrator will determine the Special Tax Requirement for Facilities and, subject to the Maximum Facilities Special Tax rates described above, wi ll provide for the levy the Facilities Special Tax as follows:

First: The Facilities Special Tax shall be levied on each Assessor’s Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Facilities Special Tax; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property at up to 100% of the Maximu m Facilities Special Tax for Undeveloped Property;
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Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the levy of the Facilities Special Tax on each Assessor’s Parcel of Developed Property whose Maximum Facilities Special Tax is determined through the application of the Backup Facilities Special Tax shall be increased in equal percentages from the Assigned Facilities Special Tax up to the Maximum Facilities Special Tax for each such Assessor’s Parcel; Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Taxable Public Property and Taxable Property Owner Association Property at up to 100% of the Maximum Facilities Special Tax for Taxable Public Property and Taxable Property Owner Association Property, as needed to satisfy the Special Tax Requirement for Facilities.

Notwithstanding the above, the CFD Administrator will, in any Fiscal Year, calculate a levy Proportionately less than 100% of the Assigned Facilities Special Tax in step one above, when (i) the CFD Administrator is no longer required to provide for the levy of the Facilities Specia l Tax pursuant to steps two through four above in order to meet the Special Tax Requirement for Facilities; and (ii) all authorized Bonds for the District have already been issued or the City Council has covenanted that it will not issue any additional District bonds (except refunding bonds) to be supported by the Facilities Special Tax. The District has covenanted in the Indenture not to issue any Additional Bonds except to refund the Bonds or outstanding Additional Bonds. See “— No Additional Bonds Except For Refunding Bonds” below.

Further, notwithstanding the above, under no circumstances shall the Facilities Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued (in accordance with Section 53321(d)(3) of the California Government Code), be increased as a consequence of delinquency or default by the owner of any other Assessor’s Parcel within the District by more than 10% above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults. To the extent that the levy of the Facilities Special Tax on Residential Property is limited by the provision in the previous sentence, the levy of the Fac ilities Special Tax on each Assessor’s Parcel of Non-Residential Property shall continue in equal percentages up to 100% of the applicable Maximum Facilities Special Tax.

Prepayment of Special Taxes . The Facilities Special Tax obligation for an Assessor’s Parcel of Developed Property or Undeveloped Property for which a building permit has been issued, may be prepaid in full, or in part, and only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment, provided that the terms set forth under Section H of the Rate and Method are satisfied. The Prepayment Amount is calculated based on the Bond Redemption Amount plus Redemption Premium plus the Future Facilities Amount plus the Defeasance Amount plus the Administrative Fees and Expenses, less a credit for the resulting reduction in the Reserve Requirement for the Bonds (if any) and less an allocable share of capitalized interest (if any), all as specified in Appendix A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX — Section H.”
Mandatory redemption of Bonds from Special Tax prepayments may result in the reduction in the otherwise expected yield on such Bonds if the Bonds were purchased at a price greater than par. See “SPECIAL RISK FACTORS — Potential Early Redemption of Bonds from Special Tax Prepayments.” Term of Special Taxes. Pursuant to the Rate and Method, the Facilities Special Tax levy is authorized to be levied for a period not to exceed fifty years commencing with Fiscal Year 2022-23.

Estimated Debt Service Coverage. Based on the expected buildout of the District, Assigned Special Tax rates set forth in the Rate and Method are at least 110% of debt service on the Bonds in each Bond Year plus estimated Administrative Expenses of $30,000 escalating 2% each fiscal year beginning July 1, 2025. The District may levy up to the Maximum Special Tax rates on Taxable Property within the District. See “ — Rate 622

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and Method of Apportionment — Maximum Special Tax, Assigned Special Tax and Backup Special Tax ” and “— Rate and Method of Apportionment — Exempt Property.” Pursuant to the Rate and Method, the status of Developed Property is based on building permits issued as of May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Tax is levied. As of May 1, 2024, building permits had been issued for 103 residential parcels within the District; accordingly, 103 parcels of Taxable Property within the District will be classified as Developed Property and four parcels of Taxable Property within the District will be classified as Undeveloped Property for the Fiscal Year 2024-25 Special Tax levy. Since May 1, 2024, Richmond American has obtained building permits for the four parcels which will be classified as Undeveloped Property for the Fiscal Year 2024-25 Special Tax levy and, therefore, all 107 parcels within the District will be classified as Developed Property beginning with the Fiscal Year 2025-26 Special Tax levy. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
Collection and Application of the Special Tax
The Special Tax is levied and collected by the Treasurer-Tax Collector of the County in the same manner and at the same time as ad valorem property taxes; provided, however, that the District may directly bill the Special Tax, may collect the Special Tax at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.

The District has made certain covenants in the Indenture for the purpose of ensuring that the current maximum rates and method of collection of the Special Tax are not altered in a man ner that would impair the District’s ability to collect a sufficient amount of the Special Tax to pay debt service on the Bonds and Administrative Expenses when due. First, the District has covenanted that, to the extent it is legally permitted to do so, it will not initiate proceedings under the Act to modify the Rate and Method if such modification would adversely affect the security for the Bonds and any Additional Bonds and if an initiative is adopted that purports to modify the Rate and Method in a ma nner that would adversely affect the security for the Bonds and any Additional Bonds, the 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 and any Additional Bonds. Second, the District has covenanted not to authorize owners of taxable parcels within the District to satisfy Special Tax obligations by the tender of Bonds and any Additional Bonds unless the District shall have first obtained a report of an Independent Consultant certifying that doing so would not result in the District having insufficient Special Tax Revenues to pay the principal of and interest on all Outstanding Bonds and any Additional Bonds when due.

Although the Special Tax constitutes a lien on Taxable Property within the District, it does not constitute a personal indebtedness of the owners of such property within the District. Moreover, other overlapping general obligation de bt already exists on the property located within the District and other future special tax and assessment liens and overlapping general obligation debt could come into existence in the future in certain situations without the consent or knowledge of the Ci ty or the landowners therein. See “SPECIAL RISK FACTORS — Parity Taxes and Special Assessments” herein. There is no assurance that property owners will be financially able to pay the annual Special Tax or that they will pay such taxes even if financially able to do so, all as more fully described in the section of this Official Statement entitled “SPECIAL RISK FACTORS.” Under the terms of the Indenture, the Trustee shall establish and maintain a separate Fund designated the “Special Tax Fund.” As soon as practicable after the receipt by the District of any Special Tax Revenues, but in any event no later than the date ten Business Days after such receipt, the District shall transfer such Special Tax Revenues to the Trustee for deposit in the Special Tax Fu nd; provided, however, that any portion of any such Special Tax Revenues that represents Special Tax prepayments that are to be applied to the payment of the redemption price of Bonds and any Additional Bonds in accordance with the provisions of the Indent ure shall be identified to the Trustee as such by the District and shall be deposited in the Redemption Fund. See “ — 623

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Special Tax Fund” below, “THE BONDS — Redemption — Mandatory Redemption from Special Tax Prepayments” and Appendix F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.” Covenant for Superior Court Foreclosure
Pursuant to Section 53356.1 of the Act, the District has covenanted in the Indenture 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 District are delinquent in the payment of the Special Tax levied thereon and that, if such delinquencies exist, the 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 the Special Tax or installment thereof not paid when due.

Notwithstanding the foregoing, the District is not required under the Indenture to order the commencement of foreclosure proceedings if (a) the total Special Tax delinquency in the District for such Fiscal Year is less than 5% of the total amount of the Special Tax levied in such Fiscal Year, and (b) the amount then on deposit in the Reserve Fund is equal to the Reserve Requirement. Notwithstanding the foregoing, if the District determines that any single parcel is delinquent in excess of $5,000 in the payment of the Special Tax, then the District will diligently institute, prosecute and pursue foreclosure proceedings against such parcel.

The mere commencement of foreclosure proceedings will not assure a prompt and favorable resolution of Special Tax delinquencies. The ability of the District to foreclose the lien of delinquent unpaid Special Tax may be limited. See “SPECIAL RISK FAC TORS — Bankruptcy and Legal Delays” and “SPECIAL RISK FACTORS — FDIC/Federal Government Interests in Properties.” Moreover, even if a judgment of foreclosure and order of sale is obtained, the District must cause a notice of levy to be issued. Under current law, the property owner has 120 days from the date of service of the notice of levy in which to redeem the subject property. If the property owner fails to redeem the property and it is sold, the property owner’s only remedy is an action to set aside the sale, which action must be brought within 90 days of the date of sale. If such an action results in the setting aside of the foreclosure sale, the judgment is revived, and the District would be entitled to receive interest on the revived judgment as if the sale had not been made. Under former law a property owner had a period of one year within which to redeem property to be sold, and the constitutionality of the legislation that eliminated the one year redemption period has not been tested.

There can be no assurance that, even if the subject property is sold, the proceeds from such sale will be sufficient to pay the delinquent installments of the Special Tax. The Act does not require the District or any other governmental agency to purchase or otherwise acquire any Assessor’s Parcel being sold if there is no other purchaser at such sale. The Act does require that property being sold pursuant to foreclosure under the Act must be sold for not less than the judgment amount (which must include reasonable attorneys’ fees, together with interest, penalties, and other authorized charges and costs) plus post judgment interest and authorized costs, unless a lower bid price is authorized by the Owners of not less than 75% by value of the Bonds and any Additional Bonds Outstanding.

Special Tax Fund
The Indenture provides that the Trustee will establish and maintain a separate Fund designated the “Special Tax Fund.” The Indenture requires that the District transfer Special Tax Revenues (other than Special Tax prepayments) to the Trustee for deposit into the Special Tax Fund as soon as practicable after the District’s receipt thereof, but in any event no later than ten Business Days after such receipt. No later than the Business Day immediately preceding each Inte rest Payment Date, after having made any requested transfers to the Administrative Expense Fund, as requested by the District, to have sufficient amounts available therein to pay Administrative Expenses, the Trustee is required by the Indenture to make transfers from the Special Tax Fund to the Interest Account in the Bond Fund, the Principal Account in the Bond Fund and the Reserve Fund in the amounts and in the priority specified in the Indenture. See Appendix F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
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As soon as practicable after the District’s receipt of Special Tax prepayments, but in any event no later than ten Business Days after such receipt, the District is required to transfer any Special Tax prepayment to the Trustee and, in connection therewith, submit to the Trustee a Written Certificate identifying such amounts as Special Tax prepayment, identifying the portion of such Special Tax prepayments so transferred that is to be applied to the Redemption Price of the Bonds and any Additional Bonds and identifying the portion of such Special Tax prepayment that is to be applied to the payment of interest on the Bonds and any Additional Bonds to be so redeemed. The portion of such Special Tax prepayment that is to be applied to the Redemption Price will be deposited by the Trustee in the Redemption Fund and will be applied to the redemption of the Bonds and any Additional Bonds pursuant to the Indenture. The portion of such Special Tax prepayment that is to be applied to the payment of interest on the Bonds and any Additional Bonds to be so redeemed will be deposited by the Trustee in the Interest Account and will be applied to the payment of such interest.

Reserve Fund
The Indenture provides that the Trustee will establish and maintain a separ ate Fund designated the “Reserve Fund.” On the Closing Date, the Trustee will deposit in the Reserve Fund the amount specified under the Indenture. See “ESTIMATED SOURCES AND USES OF FUNDS.” The Trustee is also required, not later than the Business Day immediately preceding each Interest Payment Date, to transfer from the Special Tax Fund (after the requisite transfers to the Administrative Expense Fund, the Interest Account and the Principal Account) the amount, if any, necessary to cause the amount on deposit in the Reserve Fund to be equal to the Reserve Requirement. The Indenture defines “Reserve Requirement” to mean, as of the date of any calculation, the least of (i) “10% of the proceeds of the issue,” within the meaning of Section 148 of the Code, with respect to the Bonds (excluding from such calculation Bonds and any Additional Bonds refunded with the proceeds of subsequently issued Additional Bonds secured by the Special Tax on a parity with such Bonds and Additional Bonds), (ii) Maximum Annual Debt Service and (iii) 125% of Average Annual Debt Service.

Except as otherwise provided in the Indenture, all amounts deposited in the Reserve Fund are to be used and withdrawn by the Trustee solely for the purpose of (i) making transfers to the Interest Account in accordance with the Indenture in the event that, on the Business Day prior to an Interest Payment Date, amounts in the Interest Account are insufficient to pay the interest on the Bonds and any Additional Bonds due and payable on such Interest Payment Date, (ii) making transfers to the Principal Account in accordance with the Indenture in the event that, on the Business Day prior to a September 1 on which principal of the Bonds and any Additional Bonds is due and payable (including principal due and payable by reason of mandatory sinking fund redemption of the Bonds and any Additional Bonds), amounts in the Principal Account are insufficient to pay such principal, and (iii) redeeming Bonds and any Additional Bonds in accordance with the Indenture as described in the following paragraph.

Whenever Bonds or any Additional 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 will, on the date on which amounts to redeem such Bonds and any Additional Bonds are deposited in the Redemption Fund or otherwise deposited with the Trustee, be transferred by the Trustee from the Reserve Fund to the Redemption Fund or to such deposit held by t he Trustee and will be applied to the redemption of said Bonds and any Additional Bonds; provided that, such amount will 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 Rese rve Requirement (excluding from the calculation thereof said Bonds and any Additional Bonds to be redeemed). Such proportionate share will be equal to the largest integral multiple of the minimum Authorized Denomination for said Bonds and any Additional B onds 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 and any Additional Bonds to be so red eemed and the denominator of which is the principal amount of Bonds and any Additional Bonds to be Outstanding on the day prior to the date on which such Bonds and any Additional Bonds are to be so redeemed. 625

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Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay all Outstanding Bonds and any Additional Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Trustee will, upon receipt of a Written Request of the Distr ict, 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 and any Additional Bonds. If, as a result of the scheduled payment of principal of or interest on the Bonds and any Additional Bonds, the Reserve Requirement is reduced, the Trustee will transfer an amount equal to the amount of such reduction to the Interest Account.

Investment of Moneys
All moneys in any of the Funds or Accounts are required to be invested by the Trustee solely in Permitted Investments, as directed in writing by the District. As used in the Indenture, the phrase “Permitted Investments” includes a variety of investments, some of which may not be rated by a national rating service.

See Appendix F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — Definitions.” No Additional Bonds Except for Refunding Bonds
So long as any of the Bonds and any Additional Bonds remain Outstanding, the District will not issue any obligations payable from Net Special Tax Revenues senior to the Bonds. The District may issue Additional Bonds or obligations payable on a parity with the Bonds and any Additional Bonds, if, among other things:
(i) upon the issuance of such Additional Bonds, no Event of Default will occur or be continuing under the Indenture; (ii) the proceeds of the Additional Bonds will be applied to refund the Bonds or any Additional Bonds previously issued under the Indenture, pay Costs of Issuance incurred in connection with the issuance of such Additional Bonds, and/or make any requisite deposit to the Reserve Fund; and (iii) the District shall have received a certificate from an I ndependent Consultant certifying that the Annual Debt Service in each Bond Year, calculated for all Bonds and any Additional 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 and any Additional Bonds that are Outstanding immediately prior to the issuance of such Additional Bonds.

The District may issue obligations payable from Net Special Tax Revenues on a basis subordinate to the Bonds and any Additional Bonds.

THE COMMUNITY FACILITIES DISTRICT
General Information Regarding the District
The District was organized by the City Council under the Act to provide for the financing of public improvements to meet the needs of new development relat ed to the District. The qualified electors within the boundaries of the District, being the then owners of all property in the District, authorized the District to incur bonded indebtedness to finance certain public facilities to meet the needs of new development within the District and approved the Rate and Method for and authorized the levy of the Special Tax.

Appendix F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE ⎯ Definitions” herein.

The District includes approximately 11.1 gross acres and is lo cated in the northwestern portion of the City, approximately one mile west of Interstate 15 and along the south side of Interstate 210. The District is located at the northwest corner of Highland and Hemlock Avenues. The District is being developed into a gated residential community known as “Highland Park” by Richmond American, and is expected to consist of a total of 107 detached condominium residential units in two product lines known as “Talise” and “Cascade”. Talise is proposed for 61 single family detached cluster residential units and Cascade is proposed for 46 single family 626

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detached alley-loaded residential units. Talise is located on Tract Map No. 20349 and Cascade is located on Tract Map. No. 20297, both of which recorded on August 25, 2022.

Richmond American purchased the property within the District in December 2021 for $18,805,676 from Stratham Chow and home closings began in April 2023. A s of April 15, 2024, 62 residential units had been completed and conveyed to individual homeowners, Richmond American owned seven completed model units (none of which were in escrow), seven homes over 95% complete (four of which were in escrow), 27 residential units under construction and less than 95% complete ( seven of which were in escrow), and four finished pads (none of which were in escrow). As of June 1, 2024, within the District, 79 residential units had been completed and conveyed to individual homeowners, Richmond American owned seven completed model units (none of which were in escrow), two homes over 95% complete (none of which were in escrow), 15 residential units under construction and less than 95% complete (eight of which were in escrow), and four finished lots (none 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. Within the District, building per mits had been obtained for 103 parcels within the District as of May 1, 2024; accordingly, 103 parcels will be classified as Developed Property and four parcels will be classified as Undeveloped Property for the Fiscal Year 2024 -25 Special Tax levy. Since May 1, 2024, Richmond American has obtained building permits for the four parcels which will be classified as Undeveloped Property for the Fiscal Year 2024-25 Special Tax levy and, therefore, all 107 parcels within the District will be classified as Developed Property beginning with the Fiscal Year 2025- 26 Special Tax levy. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” The District is zoned Medium Density Residential (R-2), which is a medium intensity, multiple-family zoning district that permits the development of attached and detached single-family, duplex and multiple-family dwellings, as well as condominiums. Tract Map Nos. 20349 and 20297, each of which recorded on August 25, 2022, subdivided the Talise and Cascade communities, respectively, into one numbered lot each, and subsequent condominium maps further divided the property into 107 single family units (each of which is a separate Assessor’s Parcel subject to the levy of the Special Tax pursuant to the Rate and Method).

Water service to the property within the District will be supplied by the Fontana Water Company and sewer service to the property within the District will be supplied by the Inland Empire Utilities Agency.

Electricity will be supplied by Southern California Edison Company, gas by the Southern California Gas Company and schools by the Fontana Unified School District.

Like all of Southern California, the land within the District is subject to seismic activity. The District is not located in a County Designated Fault Zone or an Earthquake Fault Zone Boundary. However, faults that have the potential to generate the strongest ground shaking in the Fontana area include the Cucamonga (thrust fault), the San Jacinto (strike -slip fault), and the San Andreas (strike -slip) fault. The Cucamo nga fault is an active fault that crosses the northern portion of the City, trending northwest along the foot of the San Gabriel Mountains. The Lytle Creek Branch of the San Jacinto Fault is an active fault that crosses the extreme northeast portion of the City in a southeastern direction. There are several other faults that border the Lytle Creek alluvial basin, including the Chino, San Andreas and San Jacinto faults.

In recent years, wildfires have caused extensive damage throughout the State. The last major wildfire in the vicinity of the City was the Grand Prix Fire in October 2003. There have been smaller fires, such as the 147-acre Sierra Fire that burned in November 2018 and the 277-acre Karen Fire in July 2020. While the District is not aware of any particular risk of wildfire within the District, there can be no assurances that wildfires won’t occur within the District. See “SPECIAL RISK FACTORS — Geologic, Topographic and Climatic Conditions.”
The Federal Emergency Management Agency has determined that the District is located in a Zone “X” flood area (an area determined to be outside of the 0.2 percent annual chance floodplain), and flood insurance will not be required.
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An aerial photo showing the taxable property within the District and a map showing the general location of the District and the surrounding area appears on the pages before page 1. More detailed information about the property therein is contained in Appendix B — “APPRAISAL REPORT,” and information about the ownership of such prop erty is set forth under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” General information about the City is set forth in Appendix E.

Assigned Special Tax and Development Summary
The following table sets forth the Assigned Special Tax that are projected to be levied on the property within the District at buildout of the development.

TABLE 1

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)

SPECIAL TAX AND DEVELOPMENT SUMMARY
Rate and Method Land Use Classes
Number of
Permitted
Units/Acres as of
May 1, 2024(1)
Remaining
Number of
Units/Acres(2)
Assigned
Facilities
Special Tax(3)
Assigned Facilities
Special Taxes at
Buildout
Developed Property
Residential Property (2,150 sq. ft. or greater) 0 0 $ 3,002 $ 0 Residential Property (2,000 to less than 2,150 sq. ft.) 17 0 2,974 50,558 Residential Property (1,850 to less than 2,000 sq. ft.) 42 1 2,882 123,926 Residential Property (1,700 to less than 1,850 sq. ft.) 17 1 2,834 51,012 Residential Property (1,550 to less than 1,700 sq. ft.) 13 1 2,731 38,234 Residential Property (1,400 to less than 1,550 sq. ft.) 14 1 2,427 36,405 Residential Property (less than 1,400 sq. ft.) 0 0 2,339 0 Non-Residential Property 0.00 0.00 89,796 0
TOTAL 103 4 NA $ 300,135

(1) Represents the classification of 103 parcels of Taxable Property as Developed Property for Fiscal Year 2024-25 based upon the building permits that had been obtained for such properties prior to the May 1, 2024 development cutoff date rel ating to the Fiscal Year 2024-25 Special Tax levy.
(2) Represents the projected Developed Property classification of four parcels of Taxable Property, comprised of approximately 0. 1 acres that will be classified as Undeveloped Property for Fiscal Year 2024-25, assuming such properties are constructed at the home sizes identified in the development plan submitted by the Developer.
(3) Represents the amended Assigned Facilities Special Tax levels. See the captions “INTRODUCTION—Price Point Study” and “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS—Special Tax.”
Source: David Taussig and Associates, Inc. dba DTA.

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Direct and Overlapping Debt
The District is included within the boundaries of numerous overlapping local agencies providing governmental services. Some of these local agencies have outstanding bonds, and/or the authority to issue bonds, payable from taxes or assessments. The existing indebtedness payable from taxes and assessments that may be levied upon the property within t he District is shown in Table 2 below. In addition to current debt, new community facilities districts and/or special assessment districts could be formed in the future encompassing all or a portion of the property within the District; and such districts or the agencies that formed them could issue more bonds and levy additional special taxes or assessments.

TABLE 2

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)

DIRECT AND OVERLAPPING DEBT SUMMARY (TAXABLE PROPERTY)
Overlapping District
Percent of Levy on
Taxable Parcels
in the District(1)
Total Debt
Outstanding(2)
District Share
of Total Debt
Outstanding
Etiwanda Elementary School District G.O. Bonds 0.11879% $105,000,740 $ 124,740 Chaffey Joint Union School District G.O. Bonds 0.02423 587,088,250 142,260 Chaffey Community College District G.O. Bonds 0.01248 278,160,000 34,720 Metropolitan Water District Mid-Valley G.O. Bonds 0.00038 19,215,000 80 Estimated Share of Overlapping Debt Allocable to District $ 301,800 Plus: The Bonds 3,595,000*
Estimated Share of Direct and Overlapping Debt Allocable to District $ 3,896,800*

* Preliminary, subject to change.
(1) Based on the District’s estimated share of the Fiscal Year 2023-24 levy for each applicable overlapping district. (2) Based on the overlapping tax and assessment debt as of May 1, 202 4. Excludes debt secured by any tax or assessment established and levied on an individual Assessor’s Parcel pursuant to a contractual agre ement or other voluntary consent by the owner thereof.

Source: David Taussig and Associates, Inc. dba DTA, San Bernardino County. 629

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As shown in Table 3, the projected total effective tax rate for residential units within the District ranges from approximately 1.935% to approximately 1.950% of the recommended price points identified in the Updated Price Point Study.

TABLE 3

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)

PROJECTED TOTAL EFFECTIVE TAX RATES
Plan Types within Cascade Plan Types within Talise
DESCRIPTION Plan 1 Plan 2 Plan 3 Plan 1 Plan 2 Plan 3 Plan 4 Number of Anticipated Units 15 14 17 15 14 18 14
Number of Units Sold(1) 8 9 13 9 8 9 6
Unit Sizes(1) 1,861 1,933 2,065 1,419 1,653 1,713 1,957 Recommended Base Prices(2) $564,000 $571,300 $584,500 $492,100 $536,900 $548,400 $573,700

AD VALOREM PROPERTY TAXES(3)
Property
Tax Rate
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Base Property Tax 1.0000% $ 5,640 $ 5,713 $ 5,845 $ 4,921 $ 5,369 $ 5,484 $ 5,737 Etiwanda Elementary School District G.O. Bonds 0.0238 134 136 139 117 128 131 137 Chaffey Joint Union High School District G.O. Bonds 0.0316 178 181 185 156 170 173 181 Chaffey Community College District G.O. Bonds 0.0100 56 57 58 49 54 55 57 Metropolitan Water District G.O. Bonds 0.0035 20 20 20 17 19 19 20 Subtotal Ad Valorem Property Tax Rate/Taxes 1.0689% $ 6,028 $ 6,107 $ 6,247 $ 5,260 $ 5,740 $ 5,862 $ 6,132

PARCEL CHARGES, ASSESSMENTS AND SPECIAL TAXES (4)
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Projected
Amount
Fontana Vector Control Charge $ 6 $ 6 $ 6 $ 6 $ 6 $ 6 $ 6 Metropolitan Water District Water Standby Charge 8 8 8 8 8 8 8 City of Fontana Sewer User Fee(5) NA NA NA NA NA NA NA Etiwanda Elementary School District CFD No. 10 1,701 1,701 1,790 1,522 1,611 1,611 1,701 Fontana CFD No. 107 (Highland) Services Special Tax (6) 373 373 373 373 373 373 373 Fontana CFD No. 107 (Highland) Facilities Special Tax (7) 2,882 2,882 2,974 2,427 2,731 2,834 2,882 Subtotal Parcel Charges, Assessments and Special Taxes $ 4,970 $ 4,970 $ 5,151 $ 4,336 $ 4,729 $ 4,832 $ 4,970

PROJECTED TOTAL PROPERTY TAXES $ 10,998 $ 11,077 $ 11,398 $ 9,596 $ 10,469 $ 10,694 $ 11,102 PROJECTED EFFECTIVE TAX RATE (% OF BASE PRICE) 1.950% 1.939% 1.950% 1.950% 1.950% 1.950% 1.935%

(1) Number of units sold and unit sizes based on the Appraisal. (2) Based on the Updated Price Point Study.
(3) Based on the Fiscal Year 2023-24 ad valorem rates for the tax rate area(s) within the District. Rates subject to change in future years. (4) Represents special assessments, special taxes for any overlapping community facilities district(s), and any other taxes, fees and charges payable from and secured by the property as identified on the current property tax bill(s) for the project and discussions wi th overlapping taxing jurisdictions. Charges subject to change in future years. (5) Excluded from the effective tax rate determination pursuant to the City of Fontana Community Facilities and Assessment District Policy Guidelines.
(6) Based on the levy of the Assigned Services Special Tax. (7) Based on the levy of the amended Assigned Facilities Spec ial Tax. See the captions “INTRODUCTION —Price Point Study” and “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS—Special Tax.” Source: David Taussig and Associates, Inc. dba DTA, Kitty Siino & Associates, Inc., Empire Economics, Inc., City of Fontana, County of San Bernardino.

Property Values
Appraisal. In order to provide information with respect to the value of the land within the District, the District engaged Kitty Siino & Associates, Inc. to prepare the Appraisal. The principal of the Appraiser, who was actively involved in the preparation of the Appraisal, has an “MAI” designation from the Appraisal Institute and has prepared numerous appraisals for the sale of land secured municipal bonds. The Appraiser was selected by the District and has no material relationships with the City, the District o r the owners of the land within the District other than the relationship represented by the engagement to prepare the Appraisal and other similar engagements for the City. The City instructed the Appraiser to prepare its analysis and report in conformity with City-approved guidelines and the Appraisal Standards for Land Secured Financings published in 1994 and revised in 2004 by the commission now known as California Debt and Investment Advisory Commission. A copy of the Appraisal is included as Appendix B to this Official Statement. 630

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The purpose of the Appraisal was to estimate the minimum market value of the fee simple estate, subject to special tax and special assessment liens, of the property within the District in its current condition. As of April 15, 2024, 62 residential units had been completed and conveyed to individual homeowners, Richmond American owned seven completed model units (none of which were in escrow), seven homes over 95% complete (four of which were in escrow), 27 residential units un der construction and less than 95% complete (seven of which were in escrow), and four finished pads (none of which were in escrow).

Subject to the contingencies, assumptions and limiting conditions set forth in the Appraisal, the Appraiser concluded that, as of April 15, 2024, the minimum market value of the Taxable Property within the District was not less than $ 46,757,035, consisting of $ 35,352,482 for the 62 completed units conveyed to individual homeowners and $11,404,553 for the 14 completed or near completed homes and 31 finished pads and homes under construction owned by Richmond American. See Appendix B — “APPRAISAL REPORT.” Reference is made to Appendix B for a complete list and full discussion of the applicable contingencies, assumptions and limiting conditions and the methodology employed by the Appraiser. In the event that any of the contingencies, assumptions and limiting conditions are not actually realized, the value of the property within the District may be less than the amount reported in the Appraisal. In any case, there can be no assurance that any portion of the property within the District would actually sell for the amount indicated by the Appraisal.

The Appraisal merely indicates the Appraiser’s opinion as to the minimum market value of the property referred to therein as of the date and under the conditions specified therein. The Appraiser’s opinion reflects conditions prevailing in the applicable market as of the date of value. The Appraiser’s opinion does not predict the future value of the subject property, and there can be no assurance that market conditions will not adversely change in the future.

The Appraiser has specifically consented to the inclusion of the Appraisal in this Official Statement.

Nevertheless, the Appraisal contains the following statement:

The acceptance of and/or use of this appraisal report by the client or any third party constitutes acceptance of the following conditions:

The liability of Kitty Siino &Associates, Inc. and the appraisers responsible for this report is limited to the client only and to the fee actually received by the appraisers. Further, there is no accountability, obligation or liability to any third -party. If the appraisal report is placed in the hands of anyone other than the client for whom this report was prepared, the client shall make such party and/or parties aware of all limiting conditions and assumptions of this assignment and related discussions. Any party who uses or relies upon any information in this report, without the preparer’s written consent, does so at his own risk.

If the client or any third party brings legal action against Kitty Siino &Associates, Inc. or the signer of the Appraisa l and the appraisers prevail, the party initiating such legal action shall reimburse Kitty Siino &Associates, Inc. and/or the appraisers for any and all costs of any nature, including attorneys’ fees, incurred in their defense.

It is a condition precedent to the issuance of the Bonds that the Appraiser deliver to the District a certification to the effect that nothing has come to the attention of the Appraiser subsequent to the date of value of the Appraisal that would cause the Appraiser to believe that th e value of property in the District is less than the minimum value reported in the Appraisal. However, the Appraiser has not performed any procedures since the date of value to obtain knowledge of such events or occurrences nor is it obligated to do so in the future.

Value-to-Lien Ratios
The value of the property within the District is significant because, in the event of a delinquency in the payment of the Special Tax, the District may foreclose only against delinquent parcels. Likewise, the ratio of the value of a parcel to its “share” of the Bonds is important because it provides an indication of the extent of 631

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the relative burden imposed on each parcel by the applicable Special Tax. As indicated above, the minimum market value of the property within th e District is not less than $ 46,757,035. The ratio of that value to the $3,595,000 total principal amount of the Bonds is approximately 13.01*-to-1. This ratio does not include other overlapping general obligation debt within the District. At this time there is no other overlapping land secured special tax or assessment debt within the District. See “ — Direct and Overlapping Debt.” Taking the $3,595,000* principal amount of the Bonds and $301,800 in other overlapping general obligation debt within the District into account, the ratio of the minimum market value to the total amount of direct and overlapping bonded debt for the District of $ 3,896,800* is approximately 12.00*-to-1. Table 4 sets forth the minimum market value-to-lien ratios of all the taxable property within the District by development status as of April 15, 2024 based on the projected Fiscal Year 2024-25 Special Tax levy.

Each of the aforesaid value -to-lien ratios is for the entire District, however, the ratios of the value of individual lots within the District to their respective shares of the principal amount of the Bonds can be expected to vary substantially depending upon the selling price thereof. The following Table 5 sets forth the value-to-lien ratios within the District by land use class under the Rate and Method using the principal amount of the Bonds allocated based on the projected Fiscal Year 2024-25 Special Tax levy.

Additionally, the following Table 6 sets forth the stratification of value-to-liens of the parcels within the District, based on the appraised value of such parcels set forth in the Appraisal and such parcels’ respective shares of the principal amount of the Bonds (allocated to each parcel based upon its respective share of the total projected Fiscal Year 2024-25 Special Tax levy) and the ratio of the appraised value to its share of the Bonds.

Taxable property within the District will be classified as “Developed Property” for purposes of the Fiscal Year 2024-25 Special Tax levy if a building permit for such p roperty was obtained by May 1, 2024. Based on the development status within the District as of May 1, 2024, building permits had been issued for 103 residential parcels of Taxable Property within the District ; accordingly, 103 residential parcels within the District will be classified as Developed Property and four residential parcels within the District will be classified as Undeveloped Property for purposes of the projected Fiscal Year 2024-25 Special Tax levy.

 Preliminary, subject to change.
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TABLE 4

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)

ESTIMATED MINIMUM MARKET VALUE-TO-LIEN RATIOS BASED ON BONDS ONLY

ALLOCATED BY PROPERTY OWNER/DEVELOPMENT STATUS
(Projected Fiscal Year 2024-25 Special Tax Levy)
Property Owner/
Development Status(1)
Number of
Taxable
Parcels
Projected
Fiscal Year
2024-25
Facilities
Special Tax(2)
Percent of
Projected
Fiscal Year
2024-25
Facilities
Special Tax
Pro Rata
Share of
Bonds(3)*
Minimum
Market Value(1)
Estimated
Minimum Market
Value-to-Lien
Ratios(4)*
Richmond American Homes
Model Homes 7 $ 17,813 6.78% $ 243,742 $ 2,834,246 11.63 95%+ Completed Homes 7 18,280 6.96 250,130 2,670,778 10.68 Homes Under Construction 27 68,463 26.06 936,815 5,138,299 5.48 Finished Lots (Undeveloped Property)(5) 4 0 0.00 0 761,230 NA Subtotal 45 $ 104,556 39.80% $ 1,430,687 $ 11,404,553 7.97

Individual Homeowners 62 $ 158,169 60.20% $ 2,164,313 $ 35,352,482 16.33 TOTAL 107 $ 262,725 100.00% $ 3,595,000 $ 46,757,035 13.01

* Preliminary, subject to change.
(1) Based on the Appraisal with a date of value as of April 15, 2024. (2) Based on the levy to fund Administrative Expenses and debt service on the Bonds, and the development status for the Fiscal Year 2024-25 Special Tax levy. (3) There are currently no overlapping assessment districts and/or other community facilities districts with outstanding debt en cumbering the District (excluding debt secured by any tax or assessment established and levied on an individual Assessor’s Parcel pursuant to a contractual agreement or other voluntary consent by the owner thereof). The Bonds are allocated based on a proportionate share of the projected Fiscal Year 2024-25 Facilities Special Tax. (4) Calculated by dividing the Minimum Market Value column by the Pro Rata Share of Bonds column. (5) Under the Rate and Method, parcels of Taxable Property are classified as Developed Property if a building permit has been obtained for such parcel by May 1 of the fiscal year preceding the Special Tax levy. Accordingly since the four parcels identified in the Appraisal as finished pads have not obtained building permits prior to May 1, 2024, all such lots will be classified as Undeveloped Property for the Fiscal Year 2024-25 Special Tax levy.

Source: David Taussig and Associates, Inc. dba DTA.
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TABLE 5

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)

ESTIMATED MINIMUM MARKET VALUE-TO-LIEN RATIOS BASED ON BONDS ONLY

ALLOCATED BY LAND USE CLASSES
(Projected Fiscal Year 2024-25 Special Tax Levy)
Rate and Method Land Use Classes
Number of
Units/
Acres(1)
Fiscal Year
2024-25
Assigned/
Maximum
Facilities
Special Tax(2)
Projected
Fiscal Year
2024-25
Facilities
Special Tax(3)
Pro Rata
Share of
Bonds(4)*
Minimum
Market
Value(5)
Estimated
Minimum
Market
Value-to-
Lien
Ratios(6)*
Developed Property
Residential Property (2,150 sq. ft. or greater) 0 $ 0 $ 0 $ 0 $ 0 N/A Residential Property (2,000 to less than 2,150 sq. ft.) 17 50,558 45,920 628,345 9,205,884 14.65 Residential Property (1,850 to less than 2,000 sq. ft.) 42 121,044 109,940 1,504,361 18,804,837 12.50 Residential Property (1,700 to less than 1,850 sq. ft.) 17 48,178 43,758 598,768 6,745,473 11.27 Residential Property (1,550 to less than 1,700 sq. ft.) 13 35,503 32,246 441,240 5,444,438 12.34 Residential Property (1,400 to less than 1,550 sq. ft.) 14 33,978 30,861 422,286 5,795,173 13.72 Residential Property (less than 1,400 sq. ft.) 0 0 0 0 0 N/A Non-Residential Property 0.0 0 0 0 0 N/A
Subtotal 103 $ 289,261 $ 262,725 $ 3,595,000 $ 45,995,805 12.79

Undeveloped Property 0.1 $ 14,778 $ 0 $ 0 $ 761,230 N/A TOTAL N/A $ 304,039 $ 262,725 $ 3,595,000 $ 46,757,035 13.01

* Preliminary, subject to change.
(1) Based on the development status for the Fiscal Year 2024-25 Special Tax levy. Under the Rate and Method, parcels of Taxable Property are classified as Developed Property if a building permit has been obtained for such parcel by May 1 of the fiscal year preceding the Special Tax levy. (2) Based on the amended Assigned Special Tax revenues generated by residential dwellin g units for which building permits have been obtained as of May 1, 2024, and the Maximum Special Tax revenues generated by four parcels of Taxable Property, comprised of approximately 0.1 acres that will be classified as Undeveloped Property for Fiscal Year 2024 -25, for which building permits had not been obtained as of May 1, 2024. See the captions “INTRODUCTION —Price Point Study” and “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS—Special Tax.”
(3) Based on the levy to fund Administrative Expenses and debt service on the Bonds, and the development status for the Fiscal Year 2024-25 Special Tax levy. The District does not expect to levy the Special Tax on four parcels classified as Undeveloped Property for purposes of the Fiscal Year 2024-25 Special Tax levy. (4) There are currently no overlapping assessment districts and/or other community facilities districts with outstanding debt enc umbering the District (excluding debt secured by any tax or assessment established and levied on an individual Assessor’ s Parcel pursuant to a contractual agreement or other voluntary consent by the owner thereof). The Bonds are allocated based on a proportionate share of the projected Fiscal Year 2024-2025 Facilities Special Tax. (5) Based on the Appraisal.
(6) Calculated by dividing the Minimum Market Value column by the Pro Rata Share of Bonds column.

Source: David Taussig and Associates, Inc. dba DTA.

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TABLE 6

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 107 (HIGHLAND)

ESTIMATED MINIMUM MARKET VALUE-TO-LIEN STRATIFICATION

BASED ON BONDS ONLY
(Projected Fiscal Year 2024-25 Special Tax Levy)
Estimated
Minimum Market
Value-to-Lien Ratio
Category
Number
of
Parcels
Subject to
Facilities
Special
Tax(1)
Projected
Fiscal Year
2024-25
Facilities
Special Tax(2)
Percent of
Projected
Fiscal Year
2024-25
Facilities
Special Tax
Pro Rata
Share of
Bonds(3)*
Minimum
Market
Value(4)
Estimated
Minimum
Market
Value-to-Lien
Ratios(5)*

14.00:1 and above 62 $ 158,169 60.20% $ 2,164,313 $ 35,352,482 16.33

11.00:1 to 13.99:1 6 15,239 5.80 208,520 2,447,255 11.74

8.00:1 to 10.99:1 8 20,854 7.94 285,352 3,057,769 10.72

5.00:1 to 7.99:1 27 68,463 26.06 936,815 5,138,299 5.48 Less than 5.00:1 (6) 0 0 0.00 0 0 NA
TOTAL 103 $ 262,725 100.00% $ 3,595,000 $ 45,995,805 12.79

* Preliminary, subject to change.
(1) The Facilities Special Tax levied against 10 3 parcels of Taxable Property classified as Developed Property for Fiscal Year 2024-25 is sufficient to fund Administrative Expenses and debt service on the Bonds. Therefore, no Facilities Special Tax is anticipated to be levied against the remaining four parcels of Taxable Property that will be classified as Undeveloped Property for the Fiscal Year 2024-25 Special Tax levy.
(2) Based on the levy to fund Administrative Expenses and debt service on the Bonds, and the development status for the Fiscal Year 2024-25 Special Tax levy.
(3) There are currently no overlapping assessment districts and/or other community facilities distri cts with outstanding debt encumbering the District (excluding debt secured by any tax or assessment established and levied on an individual Assessor’s Parcel pursuant to a contractual agreement or other voluntary consent by the owner thereof). The Bonds a re allocated based on a proportionate share of the Projected Fiscal Year 2024-2025 Facilities Special Tax. (4) Based on the Appraisal.
(5) Calculated by dividing the Minimum Market Value column by the Pro Rata Share of Bonds column. (6) No parcel has a value-to-lien of less than 5:00:1*.

Source: David Taussig and Associates, Inc. dba DTA.

Delinquency History
Fiscal Year 2023-24 was the first year in which Facilities Special Taxes were levied in the District. For Fiscal Year 2023-24, Facilities Special Taxes totaling $132,102 were levied on 42 dwelling units (encompassed within 2 taxable parcels that have since been subdivided) classified as Developed Property with respect to the Facilities Special Tax based on building permits obtained as of May 1, 2023. As of April 10, 2024, the entire $132,102 in Facilities Special Taxes has been paid. As of April 10, 2024, the entire Fiscal Year 2023-24 Services Special Tax levy in the amount of $15,666 has also been paid.

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PROPERTY OWNERSHIP AND THE DEVELOPMENT
Representatives of Richmond American have provided the information in this section regarding Richmond American and its development in the District. Neither the Underwriter nor the City has independently confirmed or verified the information in this section of the Official Statement nor does any such party make any representation as to accuracy or adequacy of this information. Further, there may be material adverse changes in this information after the date of this Official Statement.

The information in this section of the Official Statement regarding ownership of certain taxable property in the District has been included because it is considered relevant to an informed evaluation of the Bonds. The inclusion in this Official Statement of inform ation related to Richmond American should not be construed to suggest that the Bonds, or the Special Tax that will be used to pay the Bonds, are recourse obligations of Richmond American, or any other property owner in the District. A property owner may s ell or otherwise dispose of land within the District or a development or any interest therein at any time.

No assurance can be given that the proposed development within the District will occur as described below. As the proposed land development progresses and parcels are sold, it is expected that the ownership of the land within the District will become more diversified. No assurance can be given that development of the land within the District will occur in a timely manner or in the configuration or in tensity described herein, or that any landowner described herein will obtain or retain ownership of any of the land within the District.

The Bonds and the Special Tax are not personal obligations of Richmond American or any other current or subsequent property owners and, in the event that Richmond American or any other current or subsequent property owner defaults in the payment of the Special Tax, the City may proceed with judicial foreclosure but has no direct recourse to the assets of Richmond American or any other current or subsequent property owner.

As a result, other than as provided in the Official Statement, no financial statements or information is, or will be, provided about Richmond American or any other current or subsequent property owner. T he Bonds are secured solely by the Net Special Tax Revenues and other amounts pledged under the Indenture. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” and “SPECIAL RISK FACTORS.” Richmond American
As previously defined in this Official Statement, the Developer is Richmond American Homes of Maryland, Inc., a Maryland corporation. The Developer is a wholly-owned subsidiary of M.D.C. Holdings, Inc., a Delaware corporation (“MDC”). The Developer and its predecessor entity have been building homes in California since 1986. The Developer’s Southern California division based in Irvine, California, is responsible for the development of the Developer’s project in the District.

On January 17, 2024, MDC entered into an Agreement and Plan of Merger (“Merger Agreement”) with SH Residential Holdings, LLC, a Delaware limited liability company (“SH Residential”), Clear Line, Inc., a Delaware corporation and indirect wholly owned subsidiary of SH Residential (“Merger Sub” and together with SH Residential, the “Buyer Parties”) and, solely for the purposes of Section 6.2, Section 6.17 and Section 9.15 of the Merger Agreement, Sekisui House, Ltd., a Japanese kabushiki kaisha (“Sekisui House”). On April 19, 2024, the Buyer Parties completed the acquisition of MDC, with Merger Sub merging with and into MDC and MDC continuing as an indirect wholly owned subsidiary of SH Residential and Sekisui House.

Also on April 19, 2024, Sekisui House (TSE: 1928) issued a press release announcing that, through SH Residential, its U.S. business controlling company, it had completed its acquisition of MDC, adding MDC to Woodside Homes, Holt Homes, Chesmar Homes and Hubble Homes in its Sekisui House Group. Sekisui House is a house manufacturer in Japan, engaging in custom detached houses, rental housing, architectural/civil engineering, remodeling, real estate management, houses for sale, condominiums, urban redevelopment and overseas business. Having delivered 2,662,183 homes worldwide since its establishment (as of January 31, 2024), Sekisui House has footprints in Japan, the U.S., Australia, Singapore, and the U.K. 636

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MDC has two primary operations, homebuilding and financial services. MDC’s homebuilding operations consist of wholly-owned subsidiary companies that build and sell homes under the name “Richmond American Homes.” MDC’s financial services operations include subsidiary companies that provide mortgage financing, place title insurance and homeowner insurance for the Developer’s homebuyers, and provide general liability insurance for MDC subsidiaries and most of the Developer’s subcontractors.

Development Plan
General. Richmond American is developing a gated residential community known as “Highland Park,” which is expected to consist of a total of 107 detached condominium residential units in two product lines known as “Talise” and “Cascade”. Talise is proposed for 61 single family detached cluster residential units and Cascade is proposed for 46 single family detached alley-loaded residential units. Highland Park features seven different floorplans (four for Talise and three for Cascade), each of which are two-stories with three to four bedrooms and two to three-car garages. Homes within Talise range in size from 1, 419 to 1,957 square feet and homes within Cascade range from 1,861 to 2,065 square feet. The homes within Highland Park have exteriors featuring dual glazed windows, insulated roll- up sectional garage doors, roof tiles and drought tolerant front yard landscaping.

Homes typically include tankless water heaters, media e nclosures and a smart thermostat. Interiors include bullnose corners, panel interior doors, LED downlights, light switches and a form of tile at entry. Kitchens typically include countertops and flat panel cabinets, stainless steel sink and stainless-steel appliances. Master suites typically include undermount sinks with faucets, semi-frameless clad enclosures and walk-in closets.

Talise is located on Tract Map No. 20349 and Cascade is located on Tract Map. No. 20297 , each of which recorded on August 25, 2022 and subdivided the Talise and Cascade communities, respectively, into one numbered lot each, and subsequent condominium maps further divided the property into 107 single family units (each of which is a separate Assessor’s Parcel subject to the levy of the Special Tax pursuant to the Rate and Method). Richmond American purchased the property within the District in December 2021 for $18,805,676 from Stratham Chow and home closings began in April 2023. As of April 15, 2024, 62 residential units had been completed and conveyed to individual homeowners, Richmond American owned seven completed model units (none of which were in escrow), seven homes over 95% complete (four of which were in escrow), 27 residential units under construction and less than 95% complete (seven of which were in es crow), and four finished pads (none of which were in escrow). As of May 1, 2024, the Developer had obtained building permits for 103 residential units within the District, and the Developer has since obtained the four remaining building permits. As of J une 1, 2024, within the District, 79 residential units had been completed and conveyed to individual homeowners, Richmond American owned seven completed model units (none of which were in escrow), two homes over 95% complete (none of which were in escrow), 15 residential units under construction and less than 95% complete (eight of which were in escrow), and four finished lots (none 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 . Sales contracts are subject to cancelation and, therefore, homes currently in escrow may not result in closed escrows with the prospective homebuyers. 637

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The following table describes the development and ownership status as of April 15, 2024 by floor plan within the development.

TABLE 7

HIGHLAND PARK

DEVELOPMENT AND OWNERSHIP STATUS
(AS OF APRIL 15, 2024)
Floor Plan
Total Units
Planned Home Size
Owned by
Individuals
Completed
Homes(1)
Homes Under
Construction
Finished
Lots
Homes in
Escrow
Base Home
Prices(2)
Talise
1 15 1,419 9 1 $525,990
2 14 1,653 8 1 $556,990
3 18 1,713 9 2 $547,990
4 14 1,957 6 3 $601,990
Total Talise 61 32 7 18 4 6

Cascade
1 15 1,861 8 4 0 $586,990
2 15 1,933 9 2 0 $618,990
3 16 2,065 13 1 0 $659,990
Total Cascade 46 30 7 9 0 5

Total 107 62 14 27 4 11

(1) Includes one model home for each floor plan.
(2) Base sales prices are subject to change and exclude any lot premiums, options, upgrades, incentives, and any selling concessi ons, mortgage rate buydowns or price reductions currently being offered. Richmond American is offering varying concessions, including rate buy downs, on a case-by-case basis. As of April 15, 2024, the net closing cost and rate buy down concessions for the 62 residential units conveyed to individual homeowners and the 11 residential units in escrow within the District ranged from $ _____ to $_____, and averaged $_____ per residential unit.

Source: The Developer.

Talise at Highland Park. The 61 single family detached cluster residential units within Talise are being constructed in phases, as described in the table below. As of May 1, 2024, the Developer had obtained building permits for 57 of the residential units planned for Talise, and the Developer has since obtained the four remaining building permits within Talise. The Talise homes within Highland Park range in size from 1,419 square feet to 1,957 square feet and feature four floorplans, which include three or four bedrooms and two and o ne-half or three bathrooms.

Construction
Phase
Number of
Units Start Date Completion Date
Models 4 11/14/2022 1/23/2023
1 8 12/15/2022 5/18/2023
2 11 4/28/2023 9/29/2023
3 8 6/8/2023 11/9/2023
4 8 6/8/2023 11/9/2023
5 8 9/13/2023 2/14/2024
6 8 10/27/2023 3/29/2024
7 2 2/23/2024 7/26/2024(1)
Buildout 4 5/28/2024(1) 10/29/2024(1)

(1) Estimated.

Source: The Developer.
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Cascade at Highland Park. The 46 single family detached cluster residential units within Cascade are being constructed in phases, as described in the table below. As of April 15, 2024, the Developer had obtained building permits for all 46 of the residential units planned for Cascade. The Cascade homes within Highland Park range in size from 1,861 square feet to 2,065 square feet and feature three floorplans, which include three or four bedrooms and two and one-half or three bathrooms.

Construction
Phase
Number of
Units Start Date Completion Date
Models 3 8/23/2022 11/1/2022
1 4 11/28/2022 5/1/2023
2 4 3/16/2023 8/17/2023
3 8 5/4/2023 10/5/2023
4 9 6/26/2023 10/24/2023
5 8 8/24/2023 1/25/2024
6 3 9/15/2023 2/16/2024
7 6 9/15/2023 2/16/2024
Buildout 1 2/23/2024 7/26/2024(1)

(1) Estimated.

Source: The Developer.

Required Infrastructure. All backbone infrastructure required to build-out all 107 residential units has been completed.

Entitlement Status. Other than certain permits required in the normal course of home construction, all discretionary entitlements required to complete the development and sales of homes in the District have been received. All environmental approvals have been secured in order to complete the development in the District.

Conditions of Appr oval. None of the remaining infrastructure improvements are required to be completed as a condition of receiving building or occupancy permits.

Except as described in this Official Statement and except for those consents, permits, authorizations, certifications and approvals of governmental entities required in the ordinary course of development, Richmond American has no actual knowledge of any impediment to construction or obtaining land use entitlements which could be reasonably expected to have a material adverse effect on its ability to complete the planned development of its property within the District as described in the Official Statement.

While the information set forth in this Official Statement reflects Richmond American ’ current development expectations, no assurance can be given that final home construction and conveyance to individual home buyers will be carried out as described in this Official Statement.

Financing Plan
To date, Richmond American has financed its land acquisition and various s ite development costs related to its property in the District through internally generated funds (which may include home sales revenue and funding from its parent company MDC). As of May 3 , 2024 , Richmond American has expended approximately $60,672,000 on land acquisition, site development and home construction costs (exclusive of marketing, sales and other soft and carrying costs) related to its development within the District. Richmond American expects to incur approximately $ 2,948,695 on remaining site development costs and approximately $2,143,217 on remaining home construction costs (exclusive of marketing, sales and other soft and carrying costs) to complete its development within the District. 639

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Richmond American expects to use internally generated funds (which may include home sales revenue and funding from its parent company MDC) to complete its development within the District, and believes that it will have sufficient funds available to complete its planned development as described in this Official Statement.

Although Richmond American expects to have sufficient funds available to complete its development in the District as described in this Official Statement, there can be no assurance that amounts necessary to finance the remaining development costs will be available to Richmond American when needed. While MDC has made such internal funding available in the past, there can be no assurance whatsoever of its willingness or ability to do so in the future. Neither Richmond American, nor any other entity or person is under any legal obligation of any kind to expend funds for the development of and construction of homes on Richmond American’s property in the District or the payment of ad valorem property taxes or the Special Taxes. Any contributions by Richmond American or any other entity or person to fund the costs of such development are entirely voluntary.

If and to the extent that the aforementioned sources are inadequate to pay the costs to c omplete the planned development by Richmond American within the District and other financing is not put into place, there could be a shortfall in the funds required to complete the planned development by Richmond American or to pay ad valorem property taxes or Special Taxes related to Richmond American’s property in the District, and the remaining portions of such development may not be completed. Many factors beyond Richmond American’s control, or a decision by Richmond American to alter its current plans, may cause the actual sources and uses to differ from the projections. See “SPECIAL RISK FACTORS” herein for a discussion of risk factors.” Although the information in this Official Statement reflects the current development expectations of Richmond American, no assurance can be given that home construction and sales will be carried out on the schedule and according to the plans described herein, or that the home construction and sale plans or base prices set forth above will not change after the date of this Official Statement. Richmond American reserves the right to change its development at any time without notice. Additionally, homes under contract to be sold may not result in closed escrows as sales contracts are subject to cancellation. See “SPECIAL RISK FACTORS — Concentration of Property Ownership” and “ — Failure to Develop Properties.”

SPECIAL RISK FACTORS
The principal source of payment of debt service on the Bonds will be payments of the Special Tax made with respect to the Taxable Property. As discussed under “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — Special Tax,” the Special Tax is to be levied annually against all such Taxable Property either at the maximum rate authorized by the Rate and Method or at such lower rates as are determined by the District Administrator to raise sufficient funds to comply with the agreements, conditions, covenants and terms contained in the Indenture, and in accordance with the Act. The Special Tax is to be collected on the tax roll of the District at the same time and in the same manner as general ad valorem real property taxes are collected. The Special Tax cannot be levied at a tax rate higher than the maximum tax rate even if the maximum tax rate will not produce sufficient Net Special Tax Revenues t o pay the principal and interest then payable with respect to the Bonds. See discussions below under “— Levy of the Special Tax” and “— Collection of the Special Tax.” Payment of the Special Tax levied on a parcel is secured by a continuing lien against s uch parcel. In the event an installment of the Special Tax included in the tax bill for a parcel of Taxable Property is not paid when due, the District has covenanted to institute foreclosure proceedings in court to cause the parcel to be sold in order to attempt to recover the delinquent amount from the sale proceeds. Foreclosure and sale may not always result in the recovery of the full amount of delinquent installments of the Special Tax. See “— Collection of the Special Tax.” The sufficiency of the foreclosure sale proceeds to cover the delinquent amount depends in part upon the market for and the value of the parcel at the time of the sale. Sufficiency of the foreclosure sale proceeds to cover a delinquency may also depend upon the value of prior or parity liens and similar claims. Further, other governmental claims, such as hazardous substance claims, may affect the realizable value even though such claims may not rise to the status of liens. See “— Hazardous Substances.” 640

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Timely foreclosure and sale proceedings with respect to a parcel of Taxable Property may be forestalled or delayed by a stay in the event the owner of the parcel becomes the subject of bankruptcy proceedings. Not only may foreclosure and sale proceedings be forestalled or delayed, but the sale of a parcel may also be similarly affected by a bankruptcy stay. Further, should the stay not be lifted, payment of the Special Tax may be subordinated to bankruptcy law priorities. See “— Bankruptcy and Legal Delays.” Although bankruptc y proceedings may forestall or delay a foreclosure and sale or a tax sale of a delinquent parcel of Taxable Property, the Special Tax is secured by a lien which, assuming proper procedures are followed, may be enforced against the parcel. There may not be any recourse against a bankrupt property owner since the owner is not personally obligated to pay the Special Tax. Further, if proper disclosure of the authorization of the Special Tax is not made to the owner, the willingness or ability of an owner to p ay the Special Tax may be adversely affected. See “— Payment of the Special Tax is Not a Personal Obligation of the Owners.”
The District is not obligated to advance funds to pay such debt service except from moneys on deposit in the Reserve Fund. See “— Bonds Are Limited Obligations.” Even if debt service is timely paid, interest on the Bonds may have to be included in the gross income of the owner of the Bonds by reason of some circumstance occurring subsequent to issuance of the Bonds, thereby reducing the after-tax yield. See “— Loss of Tax Exemption.” Risks of Real Estate Secured Investments Generally – Declines in Value Purchasers of the Bonds will be subject to the risks generally incident to an investment secured by real estate, including, without limitation, (i) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of the District, the supply of or demand for competitive properties in such area, and the market value of property in the even t of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, governmental rules and fiscal policies; and (iii) natural disasters (including, without limitation, earthquakes, wildfires and floods), which may result in uninsured losses. See the caption “— Increasing Mortgage Interest Rates” below.